HIGHLIGHTS:
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The VIX®, which began August in the high teens, has returned to ground and closed last night at 11.8. Although above the lows of early July, volatility expectations for the U.S. remain below long- and short-term averages. |
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Sanctions announced last month against Russia have troubled the European equity markets and the travails of Portugal’s Espírito Santo have impacted confidence in the region's financial sector. More worryingly, France missed a third annual target budget deficit and halved its economic growth expectations for 2014. |
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Despite an enhanced geopolitical risk environment, global volatility measures remain muted while the price of crude oil - normally a bell-weather for Russian and Middle Eastern political tension - has fallen over 10%. |