Deep liquidity. Fast execution.

Having only recently traded through the most volatile (vol) environments in interest rates and bond markets since the GFC, we are now seeing far more subdued conditions in vol. Many have expressed disbelief at how the VIX index (S&P500 30-day implied volatility) is below 17% when the US is eyeing a possible recession this year, the credit crunch is yet to really bite, earnings estimates are likely due to be revised lower, and Treasury yields curves are still deeply inverted.

As we look ahead at the landmines to navigate exposures through in the week ahead, we see growth data points and US corporate earnings getting the focus. Certainly, there will be great focus on US banks, notably on the smaller, regional side and the intel being reported on deposit trends, costs and liquidity could spill over into volatility across asset classes.

Earnings season is upon us once more, and with it a chance for traders and investors alike not only to gauge company performance, but also to hear how business leaders view the economy in a time of still too-high inflation, and slowing growth momentum. While ‘big tech’ releases are still a few weeks away, the banks kick things off on 14th April, likely proving to be a key driver of sentiment, as jitters over financial stability persist.