Equity Markets Are The Most Complacent Since The Fed Stopped Printing Money

  • Naira
  • March 4, 2016
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Having risen to its highest level ever in August 2015, the volatility of volatility has collapsed. As traders position increasingly for negative interest rates in the US, the last month has seen ‘uncertainty’ crash to its most complacent in over 18 months.. and all this as well-chosen data corners The Fed (if it was truly data-dependent) to hike rates (or at best make hawkish over tones). Perhaps this is peak complacency ahead of tomorrow’s do-or-die jobs data?

VVIX (the estimate of the uncertainty of the cost of insuring equity risk) has tumbled to its lowest level since the end of QE3…

Chart: Bloomberg

As we noted recently, it seems the VIX derivative market is expecting more easing. QE? Unlikely. But NIRP maybe… as bets on The Fed going negative soar to record highs…

Chart: Bloomberg

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