Looking back over the year it’s clear that one of the key themes that’s developed is that of FX markets being increasingly shaped by political rather than economic factors. The dominant example of this dynamic in play currently is the way that markets have responded in the run up to, and in immediate response to, the US elections. What is it that has caused this shift in focus from economic to political factors? The main reasons appear to be: That QE has stifled the bond markets That QE has distorted equity markets Zero and negative interest rate regimes QE’s Effect On Bond Markets Looking first at all at how QE has ... (full story)