The weakness in the financial markets today is a result of Central Bank policy concerns:
- ECB Chief Draghi deferred (for now) on incremental easing measures
- Fed governor jawboning has driven up the odds of September rate increase (per chart below)
Interestingly, both stocks and bonds are down in value today. In contrast, volatility figures have spiked from low levels and likely will remain elevated leading up to the September 21st Fed decision release.