New York
JANUARY was an unusual and exciting month for financial markets.
Volatility returned to the equity markets. To use a rather unsophisticated measure, almost three-quarters of the trading days showed moves of more than 100 points in the Dow Jones Industrial Average. Yields on higher quality government bonds plummeted; 10-year Treasuries ended the month at 1.64 per cent and Germany's 10-year rate touched a record low of 0.298 per cent.
Meanwhile, the foreign exchange markets were marked not only by notable fluctuations in currency values, but also by changes in exchange rate systems for stability-obsessed countries such as Singapore and Switzerland.
Many of these developments reflect the effect...
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