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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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- Low levels of underlying FX volatility persist – with 3m implied vols across both G10 and emerging markets uniformly holding close to multi-year lows. We have written in recent weeks that low vols have helped fuel carry trade dynamics - keeping downward pressure on JPY despite expected BoJ policy normalisation.
- CHF, ZAR and CLP are the sole exceptions as the currencies capture CB uncertainty in Switzerland, election risk premium in South Africa and a strong string of economic data in Chile.
- Standard Chartered write that low levels of implied and realized vols are tied partly to the lack of CB policy rate changes over the past five months and that while global yield curves are erratic, they are moving erratically together - meaning FX volatility can remain low.
- Looking ahead they see an upward normalization of FX volatility - however this is unlikely to damage existing carry trades as risk appetite may pick up on rate cuts - but recent tight ranges across global currency rates could break out.
Figure 1: 3m implied vols hold at cycle lows 
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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