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More volatility expected as Fed rate rise looms – Cumberland Advisors’ David Kotok

October 1, 2014

David Kotok, Cumberland Advisors

David Kotok, Cumberland Advisors

A healthy dose of fear has re-entered financial markets in the final three months of the year. The Chicago Board Options Exchange VIX, a widely tracked measure of market volatility, rose to a two-month high on Wednesday.

Inflated worries

July 8, 2014

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After the European Central Bank’s July meeting Thursday, Mario Draghi announced the central bank would maintain its historically low interest rates — a 0.15% main lending rate and -0.1% on funds deposited at the ECB — to try to get inflation up to 2% from the current 0.5%. Draghi reiterated the ECB’s stance on quantitative easing: it’s in the toolbox, but it’s not coming out yet. Despite a report released last week by the Bank for International Settlements that urged austerity and higher interest rates, central bankers from Draghi to Janet Yellen to the Bank of England’s Jon Cunliffe seem united in their desire to keep rates low and push consumer prices higher.

Carney in control

June 26, 2014

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Today, Bank of England governor Mark Carney announced two new rules implemented by the BoE to curb the possible risk of a UK housing bubble. Only 15 percent of new home loans made by mortgage lenders can be made at 4.5 times above the borrower’s income. Banks also “must decline loans to borrowers who fail a new stress test that assumes an immediate 3 percentage-point increase in the benchmark rate,” says Bloomberg’s Ben Moshinsky.

MORNING BID – Europe and the bond market

May 16, 2014

The markets are in a bit of an odd spot right now, with the biggest quandary that of the bond market, where U.S. yields have gone into a dive in recent days to touch their lowest levels since October.

MORNING BID – Hi Janet, Here’s a Selloff.

March 20, 2014

Welcome Madame Chair, here’s a market selloff for you.

Fed Chair Janet Yellen made some news that she didn’t expect yesterday. She perhaps thought she was offering some clarity when she answered the question from Reuters’ Ann Saphir as to when the Fed might start raising interest rates. That’s not how it worked, although at least in this case she didn’t mouth off to Maria Bartiromo the way Ben Bernanke did eight years ago.