Volatility soared across markets on Monday, with a gauge of potential swings in the euro-dollar exchange rate at the highest since November 2020 and a key measure of equity swings rising to the highest in more than two weeks.
Markets took fright late on Friday after a US warning that a Russian invasion of Ukraine could come “any day”. On Sunday, the US said Russia might create a surprise pretext for an attack. Stock markets fell heavily on Monday, while oil prices headed towards $100 a barrel. Assets such as government bonds and the Swiss franc caught a bid.
The VIX equity volatility measure — often known as Wall Street's ‘fear gauge’ — rose to the highest since Jan. 28 at 32 points, having fallen below 20 points last week. Its European counterpart hit its highest since January 24 to trade above 33 points.
The volatility surge enveloped currency and bond markets too, with euro-dollar one-month implied volatility at 7.6 per cent. It had been below 6 per cent at the end of January. As the euro fell against the safe-haven Swiss franc, euro-franc one-month implied volatility jumped to 5.7 per cent, the highest since May 2020.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU