Swiss National Bank Event

Highlights

• What's moving?

• Swiss National Bank Event

• Bank of England Interest Rates

Please note: All data, figures & graphs below are valid as of September 15th. CFD trading carries risk to capital and lossese may exceed deposits.

 

Overview

The VIX is the usual benchmark that we use for volatility in these updates, but today I want to point your attention to a few others so that we can get a better understanding of what's going on.

In this chart we'll see 4 different volatility indices.

White = Currencies (CVIX)
Yellow = Stocks (VIX)
Green = Crude Oil (OVX)
Purple = Gold (GVZ)

(Click/tap the image to enlarge)

This chart shows from the beginning of the year, so we can really get a feel for what happened during the massive sell-off and recovery that many of you will recall happened in the 1st quarter of the year. The moves were largely surrounding Oil, and Gold moved strongly on the fear factor.

Then you will notice the volatility leading up to the EU referendum on June 24th. In this event oil took a back seat, while gold and currencies provided the larger movements. The stocks only really spiked at the beginning of June and on the day of the vote itself.

Now take a look at what's happened in the last few days. The sudden movement has begun with the stock market, largely attributed to Fed speculations, but the volatility seems to be spreading now to the other markets as well. Let's keep a close eye on this over the next few days.

Today we have 2 major central banks who'll be meeting, which could definitely add to the fun.

 

Swiss National Bank

For all information about this event, please see this beautiful post from our popular investor@Minumero11...

To read the full post please click here.

In his analysis Jesus Dominguez invokes the memory of one of the largest market movements of our time and asking very clearly if this can happen again. I really couldn't have written this better myself.

 

Bank of England

Six weeks ago the Bank of England switched to emergency monetary policy measures by cutting their interest rates and released Billions in monetary stimulus.

The thing is, we haven't really seen any real emergency in the UK. There was no run on the bank, nor any major companies that went out of business due to the brexit. In fact, aside from the devaluation of the British Pound, there doesn't seem to be any extreme repercussions in the finance markets in response to the brexit.

In today's meeting it isn't very likely that any major changes will be announced. However, investors will be listening very closely to try and gauge the BoE's next possible move. Will they unwind, or will they continue adding stimulus? For the time being they're more than likely to just hold their position while waiting for clearer signs from the market and politicians.