Global Forex Markets Brace for Fed Decision as Yen Extends Weakness 
Asian Stocks Slip Ahead of Fed Decision as China Deflation Concerns Deepen 
Oil Prices Rebound in Asia as Venezuela Sanctions Risks Offset Ukraine Peace Hopes 
Australia’s Labour Market Weakens as November Employment Drops Sharply 
Oil Prices Edge Higher as U.S. Seizes Sanctioned Venezuelan Tanker 
Wall Street Futures Slip as Oracle Earnings Miss Reignites AI Spending Concerns 
Wall Street Futures Dip as Broadcom Slides, Tech Weighed Down Despite Dovish Fed Signals 
Modi and Trump Hold Phone Call as India Seeks Relief From U.S. Tariffs Over Russian Oil Trade 
Asian Currencies Steady as Fed Delivers Hawkish Rate Cut; Aussie and Rupee Under Pressure 
Indonesia–U.S. Tariff Talks Near Completion as Both Sides Push for Year-End Deal 
US Signals Openness to New Trade Deal as Brazil Shows Willingness, Says USTR Greer 
ADB Approves $400 Million Loan to Boost Ease of Doing Business in the Philippines 
Asian Currencies Hold Steady as Indian Rupee Slides to Record Low on Fed Outlook 
Fed’s Dovish Tone Sends Dollar Lower as Markets Price In More Rate Cuts 
The CBOE Volatility Index (VIX) is showing signs of a possible rise in market volatility, according to the latest Sevens Report. After peaking significantly in August and subsequently falling to around 15, the VIX has started forming a series of higher lows. This pattern has not been seen since late 2021, a period that led to notable market instability. This was also further explained by CNBC in this in-depth analysis.
Unusual VIX Futures Structure Raises Concern
Sevens Research highlights the abnormal structure in VIX futures. The futures curve is currently in backwardation, where the October contract is trading at a premium to the November contract, as further explained by Reuters. This is uncommon, as typically, longer-duration futures trade at higher prices due to their greater associated risk. The inversion suggests that traders are preparing for a significant increase in market volatility before the October contract’s expiration in mid-October.
Indicators to Monitor for Market Movement
The Sevens Report advises investors to monitor three key developments: a rise in the VIX above the 24 level, which would indicate heightened volatility; normalization of the VIX futures curve, a potential positive signal for equities; or a growing premium between the October and November contracts. If the premium between the two contracts widens, it may indicate increasing risk of a market selloff that could send the S&P 500 back to its early September levels or potentially revisit early August lows.
Conclusion: Be Alert for Volatility Signs
The Sevens Report suggests keeping a close eye on these indicators over the next few weeks, as they may serve as early warning signs for market changes. With potential volatility on the horizon, investors should stay alert for potential shifts in market dynamics.
