Jesus Jimenez
Vice President
This week’s chart of the week takes a closer look at the CBOE volatility index (“VIX”) and the German implied volatility index (“VDAX”) in light of recent geopolitical events. Volatility indices are often described as “fear indices” that tend to increase with market uncertainty. As uncertainty increases, investors typically prefer the safety of U.S. Treasuries, driving up bond prices and pushing yields lower.
• On August, 1st, President Obama announced sanctions on Russia; VIX and VDAX reached their highest levels in more than five months over concern of Russian retaliation.
• On August, 7th, President Obama authorized a targeted strike against Iraq; triggering the VDAX to reach the highest level of the year as concern over global equity markets lead investors to push the 10-Year Treasury yield to 2.43%.
• Finally, August, 15th marked the fall of the 10 Year-U.S. Treasury yield to the lowest in 14 months at 2.34%, due in part to the global tension in Ukraine and conflict in the Middle East.
After spiking in early August on geopolitical worries, the VIX has returned to more normal levels seen throughout most of the year. However, with many of the geopolitical hotspots right on Germany’s doorstep, German market volatility has remained elevated. While U.S. investors may have put the latest crisis behind them, it is worth noting that markets closer to the epicenter of the conflict are not as sanguine.
11.30.2023
The holiday spending frenzy is well underway as some of the biggest shopping days of the year, including Black Friday…
11.16.2023
October proved tumultuous for investors as all major U.S. equity indices were negative and the CBOE VIX Index, which serves…
11.08.2023
Earlier this year, the regional banking crisis and eventual collapses of Silicon Valley Bank, Signature Bank, First Republic Bank, and…
11.01.2023
U.S. equities declined for the third consecutive month in October amid an environment of higher yields and underwhelming earnings reports…
10.13.2023
This video is a recording of a live webinar held on October 26 by Marquette’s research team, featuring in-depth analysis…
10.26.2023
Coming into 2023, investors were cautiously optimistic about 2023 market returns; cautious considering the broad losses across asset classes during…
Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.
We respect your privacy. We will never share or sell your information.
If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.
Contact Us >