Risk Assets Will See Greater Volatility: Cavenagh

The video discusses the importance of timing in market trends, particularly in relation to the dollar's strength and volatility in risk assets. It explores the potential impact of a dovish taper from the Fed on the dollar and the implications for emerging markets, drawing comparisons to the 2013 market scenario. The discussion also covers central bank divergences, focusing on the RBNZ and RBA's differing approaches to interest rates and bond buying, and their effects on currencies like the Aussie and Kiwi.

Why is timing considered important in market trends?

• It determines the exact value of the dollar.

• It affects how much is priced into market outlooks.

• It predicts the future of global money supply.

• It ensures stability in commodity prices.

What could a dovish taper from the Fed mean for the DXY index?

• It would have no effect on the index.

• It would stabilize the index at 95.

• It could lead to a drop below 93.

• It might cause the index to rise above 100.

How are emerging markets better prepared now compared to 2013?

• They have higher current account balances.

• They have lower FX reserves.

• They have increased their debt levels.

• They have reduced their dependency on exports.

Why is the Kiwi favored over the Aussie in currency preferences?

• Because the Kiwi is less affected by global trends.

• Because the RBA has already raised interest rates.

• Due to Australia's strong economic performance.

• Due to the RBNZ's proximity to raising interest rates.

What factor might delay the RBA's planned taper of its bond-buying program?

• A rise in global commodity prices.

• The COVID-19 situation in Australia.

• An increase in the DXY index.

• A strong employment report in the US.