Why Volatility Is Likely to Remain High This Week

Equity markets found no respite as global indexes struggled for a second straight week in the week ended February 9. Two days saw a 4% drop in indexes, leading to a huge surge in volatility in equity and bond markets around the world. The week started off with a drop in bond yields, whose rise was a key trigger for the recent market rout. The brief US government shutdown, which ended with the approval of the US budget, is likely to add to the US deficit and affect bond markets.