Volatility in the foreign-exchange market will stay near quarter-century lows this summer before a potential late-year “shock,” according to Deutsche Bank AG's Alan Ruskin.

“The market is extremely complacent, and we will get some sort of shock, probably in quarter four,” Ruskin, global head of Deutsche Bank's Group of 10 foreign exchange, said in an interview on Bloomberg Radio's “Surveillance” with Tom Keene and Michael McKee. “We'll see the kind of employment numbers, particularly the decline in the employment rate well below 6 percent, that are going to trigger a reconfiguration in terms of rate expectations.”

Implied volatility and realized volatility are at 25-year lows, Ruskin said, as investors gauge the Federal Reserve's pace of raising borrowing costs from the all-time low they have been at since 2008.

“The Fed is slowly approaching a tightening cycle from a point in which it's been historically extraordinarily accommodative and where it has been distorting the price of money,” Ruskin said. “It's probably best to keep one's powder dry and wait for that opportunity in two or three months.”

The best prospects for profit will come in shorting the front end of the curve—Treasury bills and notes with maturities less than five years—with the Fed increasing interest rates as soon as the second quarter of 2015 on jobs growth, Ruskin said. A short is a bet that prices will drop.

“The fact that the Fed will have to respond at some juncture means that, eventually, those shorts are going to make money,” Ruskin said.

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