Stress test turns real as virus vol hits fever pitch

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By David Rothnie, Jon Hay, Max Adams, Ross Lancaster
12 Mar 2020

Financial market participants were left wondering this week if what felt to many like a very vivid stress test had become a complete meltdown, as searing volatility puts all players into crisis preparation mode, write Ross Lancaster, Jon Hay, Max Adams and David Rothnie. Strains are appearing in places where they were not expected, such as the US Treasury market. But markets are continuing to function and some traders have enjoyed exceptional volume.

Crisis moved from the future tense to the present on Thursday, as Italy’s stockmarket plunged 17%, European blue chips 12% and London 11%, while the US Treasury market was wracked by stress, before the Federal Reserve Bank of New York stepped in with an emergency offer of $500bn ...

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