UK election prompts vol spike

摘要

The approaching UK general election has led to an increase in volatility across asset classes, as investors look to hedge against uncertainty and speculators take positions in rates, FX and, to a lesser extent, equities. As rate markets have rallied - 10-year gilt yields are near their lowest since 2009 -implied and realised volatility has risen sharply in recent weeks, with options markets reflecting views on the potential impact of wins for the ruling Conservative party (now in coalition), the Labour opposition or a hung parliament following no clear majority.