Market resilience welcome but caution in order: BIS

London

FINANCIAL markets have been remarkably resilient to rising bond yields and the sudden shift in outlook following last month's shock US election result, but the sheer scale of uncertainties ahead means the adjustment will be "bumpy", the Bank for International Settlements (BIS) said on Sunday.

While the resilience to recent market swings following the US election and Brexit vote have been welcome, investors should be prepared for further bouts of extreme volatility and "flash crash" episodes like the one that hit sterling in October, the BIS said.

"We do not quite fully understand the cause of such unusual price moves . . . but as long as such moves remain self-contained and do not threaten market functioning or the soundness of financial institutions, they a…