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Implied Volatility Subdued Despite US Debt Ceiling Impasse & Slowing US Economy

FOREX

1 Month Implied volatility in FX markets, measured using the JP Morgan G-10 Volatility Index, sits a touch off the lowest levels seen since early 2022.

  • The index prints at 8.05%, having printed its lowest level since March 2022 on Wednesday at 7.78%.
  • Option markets remain calm with vol well below elevated levels seen in the wake of the SVB crisis despite the impasse over the US debt ceiling, a slowing US economy and continuing concerns over the US regional banking sector.

Fig 1: JPMorgan G10 FX Volatility

Source: JP Morgan/Bloomberg/MNI

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