After a run-up in risk assets from the middle of May, broad consolidation was the main feature of the capital markets last week. Markets were calmer. The three-month implied volatility of all the major currencies fell, led by the usually high-beta dollar bloc. The VIX, which measures the volatility of the S&P 500, snapped a five-day decline ahead of the weekend. The volatility of the Treasury market ((MOVE)) also eased. The risk is of higher volatility into the end of what has been an historic first half.
The continued support that central banks and governments