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VIX Calls Most Shunned Since 2012 as Volatility Ignored
(Bloomberg) -- Even with stock swings nearly doubling since 2014 and U.S. equities poised for their worst month in a year, traders aren't signaling too much concern.
Investors own about 2.4 million options betting on a rise in the Chicago Board Options Exchange Volatility Index, compared to about 1.6 million contracts wagering on a drop. That's around the lowest ratio of calls to puts in more than two years, data compiled by Bloomberg show, indicating traders don't anticipate an increase in market turbulence anytime soon.
Traders have abandoned options betting on jumps in the VIX since November, even as the gauge spiked at least 18 percent three times this month. Stocks' tendency to power past declines at the end of 2014 encouraged traders to shed hedges and speculative bets in VIX options they weren't profiting from, according to Todd Salamone of Schaeffer's Investment Research Inc.
BOJ set to watch and wait as Abe team urges caution on fresh easing
(Reuters) - The Bank of Japan has put monetary policy on hold and found backing for its wait-and-see stance from advisors to Prime Minister Shinzo Abe, who worry more easing could send the yen to damagingly low levels, according to officials in the administration and central bank.
This newfound caution from some of the same Abe advisors who urged the BOJ to launch its massive stimulus in 2013, meansJapan is set to be an outlier at a time when central banks from Canada to the euro zone to Singapore have shocked markets by easing policy in recent days.
Concerns about the yen, along with a belief among central bank officials - including Governor Haruhiko Kuroda - that coming wage increases will support higher prices, suggest the BOJ could hold policy steady until October, months after many economists expect it to be eased.
Lower gas prices seen fueling U.S. consumer spending in fourth quarter
(Reuters) - The U.S. economy likely grew at a brisk clip in the fourth quarter as lower gasoline prices buoyed consumer spending, in a show of resilience despite a darkening global outlook.
Gross domestic product probably expanded at a 3 percent annual pace, according to a Reuters survey of economists. While that would be a step down from the third quarter's breakneck 5 percent rate, it would be the fifth quarter out of the last six that the economy has grown at or above a 3 percent pace.
"The consumer did the heavy lifting and I don't think there is any reason to expect that to change in the first half of this year because of the enormous tailwind from lower gasoline prices," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania.
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