Current Market Condition Are ‘Abnormal’; What’s Next? – ANZ

Volatility has been quite quiet during 2017, with very few spikes. This may not last too long. 2018 could be quite different. Here is the view from ANZ:

Here is their view, courtesy of eFXnews:

ANZ FX Strategy Research discusses the current financial market conditions and notes that while markets remain largely in a bullish mood, it is hard not to acknowledge that the ‘current conditions are abnormal’. 

‘This doesn’t mean a major drawdown is in sight. Rather, it suggests that it’s crucial to strike the right balance between optimism and caution – as even a simple reversion to more normal levels could have large implications for portfolio management,” ANZ argues.

“…This means that, near term, structuring currency portfolios around high and low yielders and the risk appetite cycle will generate the most consistent gains.

Looking ahead, our framework continues to suggest that the cycle is getting into its late stage and a more sustained move in volatility is on the horizon for 2018,” ANZ adds.

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