Archive - Sep 26, 2011 - Story

It may not be quite the Lehman weekend when the first ever Sunday CDS trading allowed pros to get out of Dodge early, but those who can't wait to put some insurance on against the market crash that is currently roiling the world, with everything tumbling in what is becoming a carbon copy replica of 2008, will be able to do so 20 minutes earlier. The CBOE has announced that"beginning on Monday, September 26, the CBOE Volatility Index (VIX) futures contract opening time moves to 7:00 a.m. from 7:20 a.m., pending regulatory approval. The 3:15 p.m. closing time for VIX futures remains unchanged. The earlier opening offers market participants more time to establish or offset VIX futures positions surrounding potential market-moving events - overnight news, banking actions or key economic reports - before the general market opens." Judging by /ES, something tells us the line around the block to put these on will be longer than for the new iPhone if and when it comes.

In the upcoming week, debate and speculation about any “grand” Eurozone plan will certainly dominate FX markets and risk sentiment. Goldman is cautious. On one hand, it continues to believe that USD downside pressures remain the dominating medium trend in FX, and hence the current rise in risk premia creates attractive opportunities to position for renewed US weakness. On the other, it still sees plenty of Eurozone headline risk. For example, the tug-of-war over the next Greek tranche will likely continue for at least another 10 days. And important parliamentary votes are still outstanding in a number of EMU nations, in particular those with unclear majorities to implement the enhanced EFSF.

While Friday's dramatic skid lower in the precious metals was later blamed somewhat on a leaked margin hike (as well as the simultaneous and anti-empirical sell-off in 30Y), it seems the liquidations that were rumored (whether hedgie or central banker) are in play once again as both gold and silver (the latter very significantly!) are finding little support. After some early weakness (EUR strength), the China news we noted earlier and general lack of any actionable rescue plan or large-scale money-printing has markets in a decidedly risk-off mode for the last few hours as ES shifts into the red and very early credit runs show 2-3bps widening in the front-end of the European indices.

UPDATE: Silver is now -16%!