Fearless VIX is pulling global equity risk down but its optimism is not universal
The VIX dipped below 10 Monday, near a historic floor, as it has closed below 10 only nine days since 1990. More remarkably, US realized vol has only been lower 3% of the time since 1928. Absent regional catalysts, global equity vol has fallen in sympathy and is among the most depressed components in our Global Financial Stress Indicator. But this is an exception as global cross-asset vol still remains well above long-term lows.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
