Markets are volatile and flows are moving rapidly towards risk havens. A surprise 6.5% hike from the Russian central bank, oil falling to fresh lows, building dovishness at global central banks and increasingly nervous markets are creating major shifts across currency markets into the open. The highly liquid EUR, GBP, CHF and JPY are all well support as currencies like NOK have dropped a shocking 4% and investors shift rapidly away from the vulnerable currencies towards deeper ones. All of which puts the Fed in a difficult position. Shifting to a more hawkish stance in the midst of this type of market activity is a chal-lenge.
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