Insights

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Market Update , Multi Asset

The return of volatility

Equity markets sold off heavily over the last 24 hours with the S & P 500, the Nikkei and the Hang Seng Index losing around 4 percent each. European equity markets have opened down 1.5 percent today, adding to Wednesday’s 1.5 percent pullback. Volatility as measured by the VIX index – Wall Street’s so-called fear barometer – has surged by 40 percent to 23 percent.

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Italy’s budget deficit caught markets off guard

The new Italian government announced it would allow its budget deficit to increase to 2.4 percent for the next three years, catching markets off guard as they anticipated a maximal increase to 2 percent. European markets sold off with Italian and Italy-related assets suffering the most but international contagion was not observed.

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