With less traders on their desks and most investors planning where to spend their New Year’s Eve, markets have clearly entered the holiday mood. We can barely see any significant moves in equities, fixed income, or even currency markets today as trading volumes shrank, suggesting that more consolidation is expected throughout the remaining days of 2016.
Besides form the obvious question of what the actual hell happened to sterling overnight, there are so many other questions marks participants will be asking themselves. Has the pound now bottomed out, what exactly was the overnight “low,” what will the Bank of England do now?
Financial markets may experience extreme levels of volatility in the coming weeks as the catalytic combination of sporadic oil prices, ongoing Brexit anxieties and anticipation ahead of the U.S. presidential election leave investors on edge.