On Wednesday October 3rd , I made an appearance on Bloomberg T.V. to talk about the CBOE Volatility index(VIX). I noted that the VIX November futures are trading above fair value, meaning sentiment is predicting an increase in volatility. Investors are uncertain whether the FOMC will change rates. Another pressing issue on the minds of investors is how the fall in housing prices will affect holiday retail sales. Less cash liquidity, combined with falling housing prices will typically result in higher volatility in the market.
ECB officials said last night that ECB President Mario Draghi will likely wait to hear Germany’s Constitutional Court’s ruling on the EFSM before publicly unveiling his plans. Many were hoping Draghi would unveil his plan after the ECB’s September 6th meeting, but this is becoming increasingly unlikely. Today Reuters is reporting that Germany is the latest European nation to begin studying the possible impact of a Greek exit from the Euro. This comes ahead of Chancellor Merkel’s meeting with Greece’s Prime Minister today. Merkel has repeatedly said that she would like Greece to remain in the common currency, though clearly someone in Germany believes a Greek exit is possible outcome worth preparing for. This morning US new durable goods orders numbers we released for July, coming in at a gain of 4.2% M/M. Though this was strong than expected, it was primarily driven by strong aircraft sales. Non-defense orders excluding aircraft were down a sharp 3.4% M/M versus a 0.2% decline expecte...
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