JPMorgan Cautions on Fragile Markets

The video discusses the current state of bond and equity markets, highlighting that while bond markets are near normal levels, equity markets remain significantly below. It examines the Chicago Fed's measure of market depth for S&P futures, noting its low levels despite broader market recovery, indicating vulnerabilities in the US equity market. Additionally, the video addresses FX market issues, with JP Morgan and the Reserve Bank of Australia noting only partial recovery in FX liquidity, which could heighten market stress if volatility increases.

What does JP Morgan indicate about equity markets in relation to their normal levels?

How does the Chicago Fed measure of market depth behave during market sell-offs?

What is the current state of FX liquidity according to the Reserve Bank of Australia?

What potential issue could arise from the dearth of liquidity in the FX market?

What does the text suggest about the relationship between FX volatility and market stress?