Trump Administration Sued Over Suspension of Critical Hudson River Tunnel Funding 
Oil Prices Climb as Middle East Tensions and U.S. Inventory Data Boost Market Sentiment 
Trump Extends AGOA Trade Program for Africa Through 2026, Supporting Jobs and U.S.-Africa Trade 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
Australia’s December Trade Surplus Expands but Falls Short of Expectations 
U.S. Stock Futures Edge Lower as Tech and AI Stocks Drag Wall Street Ahead of Key Earnings 
India Services Sector Rebounds in January as New Business Gains Momentum: HSBC PMI Shows Growth 
Australia’s Corporate Regulator Urges Pension Funds to Boost Technology Investment as Industry Grows 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
Thailand Inflation Remains Negative for 10th Straight Month in January 
China Services PMI Hits Three-Month High as New Orders and Hiring Improve 
Gold Prices Rebound Near Key Levels as U.S.-Iran Tensions Boost Safe-Haven Demand 
Oil Prices Slip as U.S.–Iran Talks Ease Supply Disruption Fears 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
Asian Currencies Trade Sideways as Dollar Stabilizes, Yen Weakens Ahead of Japan Election 
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.
