The Turkish Economic data came out relatively well and in support with the global synchronized growth narrative.
Here are the 🔑 data prints:
< strong>Gross Domestic Product (GDP) increased by 11.1% in the chain linked volume index< strong>Final consumption expenditure of resident households and consumption of NPISH increased by 11.7%< strong>Exports of goods and services increased by 17.2%, imports increased by 14.5%< strong>Compensation of employees increased by 14.4%< strong>The share of compensation of employees in gross value added was 32.7%<
hat surprised me and I supposed it shouldn’t have, was the muted if not non-existence of a reaction in the USD/TRY.
Serendipitously though, after watching the cross exchange rate for thirty minutes after the economic data release, Bloomberg’s Alexandria Arnold updated her piece entailed, Traders Lament Death of FX Volatility as Torpor Tanks Returns.
Ms. Arnold notes 📝:
For FX-focused funds, the lack of price swings has stung particularly hard. The Citi Parker Global Currency Manager Index, which tracks the performance of 14 FX programs representing nine distinct investment styles, has declined almost 4 percent this year, the most since 2011.
Forex was the last bastion of an environment where significant price swings by a financial assets created opportunities for those willing to take risk in the face of the “Central Bank Put.”
Darren Wolf,head of hedge-fund solutions for the Americas at Aberdeen Standard Investments is quoted in the piece by informing us that,
The most frequently traded currencies — the dollar, the euro and the pound — “are characterized by somewhat strange political backdrops that are just creating confusion in the market and creating a little bit of a wait-and-see landscape,”
However, as traders and market participants look through the Global Risk Events more and more ; I believe that at a point we’ll have looked through one too many and the events that in times passed would have created a sufficient profit opportunity in markets, will return with “Fire and Furry.”
That was the impotence for the graph above, provided by Goldman, in which it explains that the 3 STD days are still lurking around he corner despite the QE vacuum. Which did it job almost too effectively.
For instance, SPX behaves like a well-fed kitten,
the “market” goes up, no drama, however under the surface is where drama is unfolding, or at least at 1530 when all ETF need to do their daily rebalancing.
Therefore,I contend that ATR (Average True Range) is a cleaner measure now and volatility, as a market indication, is in a out-of order holding pattern.
We all will be asked to break from this holding pattern, when the increasing number of Global Risk Events, and the inherent underlying market risks are all at once seen with 20/20 vision and we are forced to look through them no more.