The coronavirus has forced us to confront the likelihood of potentially severe economic dislocations and the risk of higher realised volatility across risk assets as politicians muddle through myriad healthcare and fiscal “fixes”.
(Mar 13): The Tantallon India Fund closed down 2.85% in February with markets skewered by pandemic and recession fears. The extreme volatility in the last two weeks are a stark reminder of the speed and intensity of global market corrections when sheer panic drives algorithmic and high-frequency trading strategies.
With US 10-year treasury yields at sub-1%, and crucially, given the sharp decline in the policy-sensitive two-year note, expectations would seem to have shifted squarely towards more global monetary easing.
