Just when it seemed like financial markets might get a bit more interesting during a few days of volatility last week, the market has resumed its quiet ways. 5 day SPX index realized volatility is below 2 for the second time this year, a very low reading, even for this high frequency measure. Globally, implied volatility has come back down to near the lows of the year after last week’s brief pop.
Here is this week’s Vol Around the World snapshot, courtesy of Bloomberg:
The only asset that has shown a substantial increase in volatility pricing from last week to this week is the GBPUSD cross, the British pound. The pound actually made a 6 month low today, trading around 1.55, as traders expect more aggressive easing action from the new central bank president, Mark Carney. Brian Kelly also has a good post on our site today detailing the ongoing economic struggles in the U.K.
As for other asset classes though, the low volatility doldrums continue, Japan notwithstanding. If realized volatility remains this low, then don’t expect any bid to vol to last for long.