With a jam-packed calendar in September, no asset class is immune from potential event risk.
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Now, Wall Street strategists are warning of an end to the unusual calm that's characterized markets in August, advising clients to go long volatility, citing, in part, the prospect of rising cross-asset correlations.Incoming central bank decisions will drive global markets in September, given the potential for a rate hike from the Fed and the impact of large asset-purchasing schemes in the U.K., Japan, and the euro area, for foreign exchange and credit markets in particular.Analysts say the ECB might extend the horizon of its asset purchase program from March to September 2017 .Although analysts don't foresee a coordinated plan at the G-20 level for a large fiscal stimulus plan, markets will be keenly focused on the extent to which policy makers talk up the growth-boosting efficacy of fiscal policy, in general, a development that could reshape trading investments over financial assets, particularly high-grade bonds.September is also the start of the school year in global primary capital markets and analysts expect a busy pace of U.S. investment-grade issuance despite unusually strong supply in August. Analysts at Bank of America, for example, expect $120 billion in new high-grade bonds.
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