Volatility is here to stay

In the short term, continuing pressure could trigger a collapse in global markets, and it may be sooner rather than later

- JAMAL MECKLAI

VOLATILITY, PARTICULARLY WHEN it is high and rising sharply, feels almost physical—talk to any trader and indeed, to companies that have to plan their businesses in the face of high uncertainty. The pain can get pretty intense over a period of time, after which, in general, the market itself gets exhausted and things calm down.

But not this time.

Before today, the volatility of the DXY has suffered four sharp peaks since 2002, lasting an average of 253 trading sessions (289, 102, 240, 381), after which, in all cases, it came down, sometimes sharply, and occasionally steadily. Today, the volatility of the DXY has been rising for 261 trading days (since May last year), suggesting it may be coming close to a turning point. However, with Donald Trump becoming increasingly unable to always get what he wants, his petulance will continue to jerk markets (and businesses) around, sustaining this insane volatility pattern beyond "normal" timelines.