Global forex market

WE saw spectacular divergence between risk assets and the global economy.

Depressing bond yields, rising financial volatility were counter-reacting to rising deflationary risk, free-falling commodity prices and retreating equity markets. Rich equity valuation, crowded forex positioning and illiquid markets were the latest additionals to the worrying list alternating between poor economic numbers, Fed fears, geopolitical news, eurozone jitters and simply self-fulfilling fear. The difficult thing to do, of course, is to identify when it will be the right time to jump out – and in again – and, which trading to become more tactical at lofty valuation levels.