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BofA Financial Stress Index Spikes As Central Bank Fears Mount (Fed Hike In Play For December)

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.

It is Monday afternoon and markets are still processing the news from Mario Draghi and the ECB.

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Here is what we know. The BofA Merrill Lynch Global Financial Stress Index just soared upwards by the most since China’s yuan devaluation in August last year.

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And the VIX short index fell as well.

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The VelocityShares VIX Short Volatility Hedged ETN is an exchange traded note issued by UBS AG (London branch). The Note will provide a cash payment at the scheduled maturity or early redemption based upon the performance of the underlying index, the S&P 500 VIX Futures Short Volatility Hedged Index – Short Term.

And the interest rate volatility cube (which resembles the Flux Capacitor from “Back To The Future” is … fluxing.

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The implied probability of a Fed Funds hike is less than 50% until after the Presidential election.

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Fed Governor Lael Brainard (aka, Paulette Bunyon) will deliver remarks at 1 p.m. EDT, and the market is on edge over what she will say. Considered a close ally of Fed Chair Janet Yellen, Brainard’s remarks likely will go a long way toward indicating where the Federal Open Market Committee stands on interest rates.

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Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. I may receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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