​Weekly Bulletin: Jan 5-9

This week saw elevated volatility levels on the CBOE VIX, as the S&P 500 dipped and then rallied steadily. The market movements have caused a flattening of the term structure, indicating more short-term vol is expected. The tightening of the front-month Jan. vol, while beneficial for brokers and traders, has left some liquidity providers with a tough environment to offload inventory or hedge positions. In Asia, South Korea is being tipped as this year’s market to watch, with some investors shifting attention from Japan. Last month, institutional investors bought up to one-year out-of-the-money calls on the Kospi 200 index in size in an effort to profit from an expected rally in the Korean equity market over the next 12 months. In Europe, An announcement by Santander that dividends from 2015 earnings would be cut to EUR0.20 per share could prove positive for mid-to-long-term dividend futures as the risk associated with Spanish financials dividend policy reduces, while Nemours Capital Management, the global event driven investment company founded by Olivier Leherle, David Benayoun and Marc Ohayon, have rebranded Edmond de Rothschild Active Strategies to Nemours Event Driven Strategies.