A confluence of events has increased volatility which could turn systemic in nature. With correlations bunching up once again and trending towards 1.0, the message from the markets is loud and clear that systemic risk is rising and liquidity is poor, which is being reflected in higher volatility and risk premia.
Click on chart to enlarge, courtesy of BNP Paribas.
If this is not enough, one should consider - what has made US markets "so weak" recently?
Click on chart to enlarge, courtesy of BNP Paribas.
Well, ECRI tells us not to blame Japan for slowdown ...
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