Important Information for Visitors

Privacy Policy    Disclaimer   Contact Us

Home

© Copyright 2016 Topdown Charts Limited

Chart: Cross Asset Volatility

August 22, 2018

This unassuming chart contains a wealth of information about the challenges we currently face with active asset allocation and the global macro backdrop.  Basically what it shows is an alternative measure of the average volatility across stocks, bonds, commodities, and currencies.  The bottom line is volatility across asset classes is starting to wake up from a deep sleep. 

 

What's driving this?  We can talk about how you should expect higher volatility as the market/business cycles mature (and indeed they are), but a big driver is and will continue to be politics and policy.  We're in the middle of a major monetary policy experiment (quantitative tightening or QT) - if QE was a force for volatility suppression, it's pure logic that QT should work in the opposite direction.  So investors need to start thinking about how to deal with this in their investment process, because with greater volatility comes greater opportunity.

 

BONUS CHART: Here's the breakdown of the components in the chart above.  You can see a slight tick up in the US dollar and commodity volatility measures, but treasuries volatility is still slumbering by our numbers.  So I think it's fair to say that bond volatility is going to be what really shakes things up here... more on that next time (yes I'm holding out, sitting on a couple of charts here!).

    

 

 

Looking for deeper insights?  Try taking a free trial of our institutional research service 

Please reload

Follow us for updates:
  • Twitter Social Icon
  • LinkedIn Social Icon
Subscribe:

Top 5 Charts Of The Week

Institutional Reports

-Weekly Macro Themes

-Global Cross Asset Monitor

-Monthly Chartbook

access our exclusive research for deeper insights:

 

>>  Become a Client  <<

Search By Tags
Archive
Please reload

Important Notice

We offer exclusive insights for institutional clients with our suite of multi-asset investment research reports, personalized service, & global perspective.

Take a trial today...

Become a Client