By Tyler Durden
The global rout resulting from tensions over the North Korean nuclear standoff continued on Friday following a third day of escalating verbal exchanges between Trump and Kim, with European and Asian shares tumbling as volatility across the globe spiked, with the selloff in US futures continuing albeit at a more modest pace. In addition to North Korea, attention will be focused on today’s US CPI print, which could result in even more currency volatility, should it surprise significantly in either direction.
All eyes remained on the sharp short squeeze in the VIX, which exploded above 16 on Thursday from single digits the day before – the highest print since Trump’s election victory – and extended gains on Friday rising 4% to 16.74, after briefly topping 17, a potential “margin calling” nightmare for countless vol sellers over the past year. Thursday also saw the highest VIX volume day on record as 937K VIX futures traded across the curve. The Global Financial Stress Indicator surged positive after trading in negative territory since April.
The global rout that sent the Nasdaq lower by 2% on Thursday, spread to China which saw the Shanghai Composite tumble by 1.6% to 3,208, its biggest drop this year, …read more