Shhh. The markets are asleep, with major currencies undershooting forecasts of crushing dullness.

In a note to clients titled ‘Vol be crazy‘, Deutsche Bank’s Oliver Harvey notes that expectations of market moves have “collapsed” from already depressed levels three months ago, both in terms of implied vol (expectations) and realised vol (real-life market shifts).

Currency pairs most sensitive to bouts of nervousness have been particularly soporific, he noted. “Every G10 pair is now below five-year averages,” he said. Many key emerging-market currency pairs are snoozing too.

Something has to give, Mr Harvey thinks. A shift in the “global data pulse”, generally less crowded currency bets and “underpriced” policy risks are all “increasing signs a turning point is close”, he says.

The market anticipates a slow US hiking cycle, but benign financial conditions could encourage the Fed to be more aggressive. The fall in offshore dollar funding costs also imply a relaxed market attitude towards balance sheet reduction later this year. More important is the recent weakening in Chinese data. Strong global growth around the turn of the year was largely a lagged effect of Chinese stimulus. It will be crucial whether slowing translates into more outflows or a shift in Chinese authorities’ FX policy.

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