Volatility Spikes After Fed’s Cryptic Jackson Hole Comments

From Tyler Durden: Market confusion remains following Fischer’s hawkish tone yesterday at Jackson Hole. Market-implied rate-hike odds have barely budged, but the U.S. Dollar, stocks, VIX, bonds, and commodities are moving notably.

Rate-hike odds barely budged after Fischer – 16% chance of Sept hike (slight rise) and 32% of Dec (so a 48% cumulative chance of a 2016 cut)…

The Dollar is now falling – having risen after Fischer’s comments…

Bond yields are tumbling (even 2Y) – having risen after Fischer’s comments…

Stocks are fading fast – having risen after Fischer’s comments…

Oil’s drop is being driven by three main factors – Iraq boosting exports 5%, Niger Delta Avengers backing off, and the Fischer-effect on the USD.

And VIX is surging…


Charts: Bloomberg

The iPath S&P 500 VIX Short Term Futures TM ETN (NYSE:VXX) rose about 1% in Monday morning trading. The largest ETN tied to the VIX fear gauge has fallen 54% year-to-date, amid low interest rates and rising levels of investor complacency.

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