After months of historically low realised volatility levels, February saw a sharp rise in the volatility of equity markets. All major equity indices posted losses for the month of between 3% and 5%. The main eurozone benchmark posted one of the heaviest monthly falls, while UK equity markets lost just over 3%. Whilst the main UK government bond benchmark posted a marginal gain in February, it is still down 2% year to date. The GBP lost ground against all major currencies in February, and UK inflation remained relatively steady in January. There were some spikes in equity volatility risk premium at the start of February that have subsequently subsided, and in the case of the FTSE, turned negative.