After battles with the courts and with Senate, it’s started to look like President Trump will struggle to generate any real change domestically. Last week suggests that the US President might switch his attention to geopolitics:
Markets responded to Trump’s new effort at exerting his influence with apprehension rather than panic. The VIX index (measuring implied variance) jumped to the highest level since November (north of 16%). However, realised volatility remained very low at around 5% for the week. Similarly, risk aversion prompted a rally in bonds, with the US 10-year yield at a 2.23% 5-month low, but the S&P 500 lost only 1.13%.
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