The biggest threat to investors may come from the foreign exchange market rather than directly from the stretched prices of equity and bond markets. Judging by recent policy and technical signals, the forex market may be about to exit an unusual phase of low volatility.

After a prolonged period of monetary policy alignment, advanced economies are embarking on increasingly contrasting paths. This “multi-track” world of central banks reflects notable divergence in economic performance.

The UK and US have the economic lead, registering solid economic growth and consistent job gains. Already frail, the eurozone’s recovery is stalling, doing little to counter alarmingly high unemployment in countries struggling to maintain the gap with the UK and US, let alone close it. Meanwhile, the burst of Japanese growth is starting to feel like a memory.