Nikolaos Panigirtzoglou, JPMorgan: volatility might be a positive factor
JPMorgan Chase’s strategist Nikolaos Panigirtzoglou believes, that changes in prices are becoming less dramatic. Central banks and authorities are giving out extraordinary relief packages to help the companies survive the pandemic. These factors are helping the funding markets, improve liquidity, as well as deleveraging anxious traders, which are the three major indexes of volatility.
After the heavy impact of the pandemic that markets saw in March, now the liquidity is demonstrating significant signs of improvement. Panigirtzoglou has stated, that the market is negating earlier “negative feedback loops.”
The Cboe Volatility Index has closed down under 40 on April 15, following the surge that brought the index up to 85 while the most chaotic period of the market’s dynamic last month. The ICE BofA MOVE Index, that serves as a measurement of Treasury options swings, fell below 70 on April 15 after surpassing 160 on March 9.
According to JPMorgan’s data, the global decline since the end of March has changed about 50% of risk-parity funds’ earlier sales of about US$90 billion in bonds, as well as around US$30 billion in equities and US$30 billion in commodities.