The new covid variant injected a new dynamic into the foreign exchange market. The World Health Organization cautioned against the need to impose travel restrictions, but policymakers, by and large, do not want to be bitten by the same dog twice. To err on the side of caution is to minimize one's biggest regret. The risk is that the uncertainty is not lifted quickly but lingers, which would likely unpin volatility. US and European benchmark 10-year yields fell sharply ahead of the weekend. In the US, the market unwound some of its aggressive pricing in of Fed policy. This is reflected in the commensurate drop at the ... (full story)