The prevailing trend across trading floors this morning is a rare lack of conviction. One contact said, “It is silent here, everyone is just sitting staring at their screens, no one has any convictions”. This loss in confidence could lead to oversized reactions—volatility—to breaking news; especially further negative developments in Europe. The VIX Index, which […]
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VIX
Fear is beginning to seep into the European financial system with LIBOR rates edging up; leading to a sharp rise in the three month TED Spread (tracking 3M LIBOR against 3M US Treasuries). While nowhere near its crisis high of over 450bps, the TED Spread has enlarged to 32bps from just 19bps on May 3rd. […]