Investors are closely watching today's US Consumer Price Index (CPI) data, which could significantly impact market volatility. Bank of America derivatives strategists have noted that the options market is pricing in the smallest implied reaction to CPI data since 2021, indicating a level of complacency among traders. This complacency comes amid a backdrop of a resilient economy, falling inflation, and rate cuts, which have been favorable for equities. However, the potential for new tariffs and expansionist fiscal policies could increase inflationary pressures, potentially disrupting the current economic environment. The CBOE Volatility Index (VIX) has seen a slight uptick, reflecting cautious sentiment as investors await the CPI figures.
The VS TR -1x Short VIX Futures ETF (SVIX) has experienced a modest increase, rising 0.95% to $29.63 as of 7:00 AM on Wednesday, December 11.