Opportunity knocked

Christian Alibert, RBS

Inflation volatility has been relatively subdued over the past decade, thanks mainly to the success of central banks in keeping inflation within a predictable range. But after the implosion of Lehman Brothers in September last year, deflationary fears caused inflation expectations to collapse. Meanwhile, implied inflation volatility spiked, forcing market participants to stand up and take note.

"We had a major correction in the inflation markets last October. That caused a very quick move down i