Week InReview
Friday | Apr 29, 2022
Home, Sweet... Whatever
The "Barnaby" concept home for post-pandemic living. Image: Garman Homes and Dahlin Group.
OVERALL FOOTPRINTS are getting bigger as builders add on more smaller rooms, which may need to function as offices, play rooms, home gyms or dens, depending on the family. Bathrooms are getting bigger, in part because we use them more often when we’re home all day. And every room of the house is more wired — builders are adding power outlets and USB ports to accommodate the devices essential to working or attending school from home.

— Axios
let's recap...
Photo: Kim Kyung-Hoon | Reuters
The U.S. dollar touched a two-decade high against rivals on Thursday, as Wall Street rallied and European shares rose from six-week lows with strong earnings reports offseting gloomy U.S. economic data. (Reuters | Apr 28) see also Soaring dollar pushes euro to five-year low (Financial Times | Apr 27)

Global bonds are closing in on their worst month on record as investors brace for a flurry of rate hikes in the coming week, including the most aggressive U.S. tightening since May 2000. The Bloomberg Global-Aggregate Total Return Index has lost 4.9% in April, putting it on track for the biggest monthly drop since its inception in 1990. Australia’s three-year yields climbed as much as seven basis points to 2.74%. (Bloomberg Markets | Apr 28)

Wall Street dealers are increasingly reluctant to trade corporate bonds that they can’t immediately offload, and their hesitation has contributed to sharp moves in prices this year. Banks’ reticence to buy company debt from investors is showing up in inventory data, which tallies the securities that firms hold on their books rather than sell quickly. Dealer inventories of high-grade corporate bonds averaged just $3.3 billion this year through April 13, according to data from the Federal Reserve Bank of New York. These figures have broadly been falling for years, but 2022 levels are nearly 50% below the 2015-2021 average. (Bloomberg Markets | Apr 28)

The world of commodity traders has long been a secretive one. The merchants who buy and sell the world’s resources have a massive global reach but are mostly privately owned and tend to operate away from public and regulatory view. Suddenly, it seems that everyone is talking – and worrying – about them. (Bloomberg Markets | Apr 26)

U.S. Securities and Exchange Commission Chair Gary Gensler wants to slash the amount of time that traders have to report many bond transactions as part of a bid to increase visibility into fixed-income markets. Not only does Gensler see the benefit of cutting the current 15-minute window, he says transaction data sent to Trace should be broader. (Bloomberg Markets | Apr 26)
Currency volatility nears pandemic levels
(Apr 28) — Currency traders anticipate policy makers will make mistakes and that is pushing expectations of future swings to the highest since just after the pandemic panic of 2020.

The JP Morgan G7 FX volatility index is 9.7%, the highest since April 2020. The bank’s measure of global volatility is also at spring of 2020 levels.

The rise in implieds coincides with a stronger dollar and rising credit risks as a Fed meeting nears. Greenback gains, while helping slow U.S. inflation, tighten financial conditions and can cause trade deficitsthat undermine growth. This is a problem for a Fed that wants to hike rates.

Free-floating currencies were once viewed as the great equalizer. But the link between the dollar and trade has broken down recently as countries source and invest locally and geopolitical tensions rise. Traders have also become accustomed to central bank interventions via quantitative easing.

In coming sessions, traders will get a bird’s-eye view of how governments and central banks deal with these problems. The Bank of Japan felt compelled to keep priming the pump. The PBOC is not far behind. Europe’s gas-supply issue will probably worsen over time unless peace prevails or rubles are bought. And the Fed has to juggle several balls to avoid stagflation.

Currency traders are buying options to not only cover short volatility or long greenback positions, but to hedge policy outcomes. This may help explain why bullish dollar skews have not moved as much as at-the-monies.

 A measure of yen five-year volatility is 9.7%, highest level in four years, while one-year euro-yen volatility is 11.4%, the highest since the peak of the pandemic.

Source: Robert Fullem | Bloomberg Government
the cyber cafe
NIST's new draft practice guide is intended to help with the cybersecurity of 5G networks, which could enable applications from telemedicine to autonomous vehicles. Illustration: N. Hanacek | NIST
NIST's 5G cyber tools
The National Institute of Standards and Technology plans to set up a 5G network to demonstrate and test cybersecurity capabilities under different scenarios. NIST, part of the Commerce Department, seeks comments as it builds the network, which is intended to help organizations assess the risks of the high-speed wireless tech. “Understanding what’s available can be critical to help operators and users of 5G understand and manage their cybersecurity risk when it comes to 5G,” said Jeff Cichonski, a NIST information technology specialist.
— NIST

New ransomware on the prowl
The BlackCat malware was launched against at least 60 companies globally, including Swiss airport services company Swissport in February and two oil companies in Germany in January, according to the Federal Bureau of Investigation. Critical infrastructure is a favored target, the FBI said, including in the U.S.
— ZDNet

Cyber researchers get $12 million to devise defenses for U.S. energy providers
The U.S. Department of Energy made grants to researchers at six universities to work on projects to protect hybrid cyber-physical systems, power substation resiliency and threat detection, among other ideas.
binge reading disorder
Photo illustration: Ryan Trefes | WSJ
What the duck: Why your iPhone adds annoying typos while fixing others
Complaining about autocorrect feels very 2000-and-late. Yet here in 2022, nearly 15 years since the iPhone’s debut, Apple's smart typing software can still make us want to break the Guinness World Record for phone throwing. The system still introduces annoying — OK, sometimes hilarious — typos, misspellings and grammatical errors. Perhaps even more than ever before.

Virtual meetings sap creativity
Although the Covid-19 pandemic highlighted some of the benefits of working remotely, one apparent drawback is a drain on innovation. According to a recent study, more creative ideas are generated when colleagues meet in person rather than via videoconference. It's tougher for workers to pick up visual and environmental cues that could foster ideas in virtual meetings, study authors say, and most people remain stationary during online meetings, which can also curb creativity.
— Axios

6 Covid mysteries experts hope to unravel
More than two years after SARS-CoV-2 appeared, there are still many mysteries about the virus and the pandemic it caused. They range from the technical — what role do autoantibodies play in long Covid? Can a pan-coronavirus vaccine actually be developed? — to the philosophical, such as how can we rebuild trust in our institutions and each other?
— Stat
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