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If there was ever a black or grey swan it has to be the COVID pandemic. No-one, not even us, had put that down a potential risk for 2020. It goes to show how important it is to prepare for these extreme events and even if you don’t get them spot on, at least you had stretched your mind to think that strange things could happen. So, we’re continuing our tradition of picking potential grey swan events for the upcoming year. As a reminder Grey Swans are those low probably high impact events that few expect. This year, we have identified ten. We plan to release two a day this week.
For today, our two grey swans are very markets-oriented. The first is a Grey Swan I wrote on US yields going negative. I can’t find anyone who is expecting that. I lay out the path of how that could come about. I have to say after writing that, I am almost persuaded myself! Our second Grey Swan is written by investment veteran, Karl Massey. He writes about the possibility of a meaningful rise in FX volatility even in the face of monetary policy converging around the world.
I hope you enjoy the Grey Swans – and look out for the next set tomorrow. We’ll also be having a webinar on them on Wednesday at 4pm GMT/11am ET – click here to register.
(1) US Yields Go Negative (2 min read) My four scenarios for a major rally in US bonds into negative territory.
(Bilal Hafeez│ 7th December, 2020)
(2) FX Volatility Spikes (2 min read) Markets veteran, Karl Massey, writes on why the policy response to COVID could trigger a surge in currency volatility.
(Karl Massey│ 7th December, 2020)
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)