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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.
FOREX
- This week was marked by a sharp drawdown in Chinese tech stocks amid regulatory crackdowns concerns.
- Tech stocks (CQQQ) were down over 15% from peak to trough in the past week before starting to recover.
- In addition, the contraction in Chinese 'liquidity' has also been weighing on EM risky assets, especially cyclicals stocks (i.e. financials).
- Hence, investors should be prepare to hold some risk off assets in case price volatility starts to shift to the West.
- This chart shows the average monthly performance of the G9 currencies (vs. USD) when the VIX rises above 20 since January 1990 (VIX inception); the choice is arbitrary but a VIX higher than 20 has generally been defined as a 'high-volatility regime'.
- Interestingly, the British pound is the weakest currency in high-volatility regime, with GBP averaging -30bps in monthly returns.
Source: Bloomberg/MNI
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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