Prepare for a perilous summer in markets

FINANCIAL markets are rolling into the summer with a near-perfect set-up for some outbreaks of madness.

The summer months in the northern hemisphere are always a fertile time for market shake-ups. When senior traders and investors head to the beach, often leaving a more junior crew behind, trading volumes tend to shrink, and the lubrication behind markets evaporates.

Gaps open up where lots of tradeable prices used to be, making it easier for stocks, bonds, currencies and everything in between to swing around based on little to no new information.