Volatility and Uncertainty

The drivers and the implications

KATINA STEFANOVA, CEO & CIO, MARTO CAPITAL, and BLU PUTNAM, CME GROUP

Volatility in equities, bonds, and other asset classes remained at very low levels compared to historical norms in 2017, as measured by the standard deviation of daily market price movements. Yet, at the same time, uncertainty was exceptionally high concerning a wide-ranging array of potentially market-moving events which were often in the daily news and getting considerable attention. The co-existence of relatively low volatility and high uncertainty presented an interesting conundrum.

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