Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

Equity Derivatives

<ul>
<li>A volatile week for HSI, with sharp moves in price, volume, and implied volatility concentrated around Monday’s gap lower.</li>
<li>We discuss the shift in spot-vol dynamics and how it may influence short-term vol trading.</li>
<li>Changes in open interest and vol structure are examined in the context of ongoing global tensions.</li>
</ul>


A volatile week for HSI, with sharp moves in price, volume, and implied volatility concentrated around Monday’s gap lower.
We discuss the shift in spot-vol dynamics and how it may influence short-term vol trading.
Changes in open interest and vol structure are examined in the context of ongoing global tensions.


HSI Index Options Weekly (Apr 07–11): Vol Shifts and Early Signs of USD Toxicity

<ul>
<li>We revisit key cross-asset signals as traditional safe havens fail to respond in familiar ways.</li>
<li>The past 8 days have delivered a combination of asset moves with few, if any,  historical parallels.</li>
<li>With trust in U.S. safe haven assets under pressure, we explore emerging themes and ramifications.</li>
</ul>


We revisit key cross-asset signals as traditional safe havens fail to respond in familiar ways.
The past 8 days have delivered a combination of asset moves with few, if any,  historical parallels.
With trust in U.S. safe haven assets under pressure, we explore emerging themes and ramifications.


Global Markets: Why This Sell-Off Is Different. UPDATE

Metals, Ores, and Mining Firms, Mint Finance

Pranay Yadav

Metals, Ores, and Mining Firms

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Cross Asset Strategy

<ul>
<li>The July Nonfarm Payroll report showed only 114k jobs added, increasing the unemployment rate to 4.3%, the highest since 2021.</li>
<li>The Sahm rule, a reliable recession indicator, was triggered with a current value of 0.53, signaling a potential recession on the horizon.</li>
<li>FedWatch indicates a &gt;90% probability of a 50 basis point rate cut in September, up from 10% last week, due to recession fears.</li>
</ul>


The July Nonfarm Payroll report showed only 114k jobs added, increasing the unemployment rate to 4.3%, the highest since 2021.
The Sahm rule, a reliable recession indicator, was triggered with a current value of 0.53, signaling a potential recession on the horizon.
FedWatch indicates a &gt;90% probability of a 50 basis point rate cut in September, up from 10% last week, due to recession fears.


Recession Fears Resurface Triggering Yield Curve Normalization

Macroeconomics

<ul>
<li>The likelihood of imminent rate cuts has increased due to recent cooling in core CPI, driving anticipatory normalization of the yield curve.</li>
<li>According to FedWatch, expected rate cuts totaling 100 basis points by March 2025 are driven by cooling inflation, improving economic data, and the increasing fiscal burden of U.S. debt.</li>
<li>Historical data shows yield spread between 2Y and 10Y treasuries recovered just before and after rate cuts, signaling investor expectations front-running monetary easing. </li>
</ul>


The likelihood of imminent rate cuts has increased due to recent cooling in core CPI, driving anticipatory normalization of the yield curve.
According to FedWatch, expected rate cuts totaling 100 basis points by March 2025 are driven by cooling inflation, improving economic data, and the increasing fiscal burden of U.S. debt.
Historical data shows yield spread between 2Y and 10Y treasuries recovered just before and after rate cuts, signaling investor expectations front-running monetary easing. 


Yield Curve Normalisation on Rate Cut Anticipation

<ul>
<li>Discrepancies between establishment and household job surveys highlight economic stress; full-time employment declines, indicating households remain stressed even as non-farm payrolls rise.</li>
<li>Subsequent bond yield movements, particularly the persistent inversion of the 30Y-2Y spread, reflect investor skepticism about long-term economic stability and delayed rate cuts.</li>
<li>Upcoming U.S. elections and this week's economic reports, including the May CPI and revised Federal Reserve projections, may push rate cut expectations even further ahead.</li>
</ul>


Discrepancies between establishment and household job surveys highlight economic stress; full-time employment declines, indicating households remain stressed even as non-farm payrolls rise.
Subsequent bond yield movements, particularly the persistent inversion of the 30Y-2Y spread, reflect investor skepticism about long-term economic stability and delayed rate cuts.
Upcoming U.S. elections and this week's economic reports, including the May CPI and revised Federal Reserve projections, may push rate cut expectations even further ahead.


Yield Curve Inverts Further on Rising Recession Risk

United States

Legacy Government (Sovereign) Generic Index-key ticker

US 30Y (USGG30YR INDEX)

HSI Index Options Weekly (Apr 07–11): Vol Shifts and Early Signs of USD Toxicity

This Insight analyzes the recent volatility in HSI and its impact on short-term vol trading, highlighting shifts in spot-vol dynamics and changes...

John Ley

Global Markets: Why This Sell-Off Is Different. UPDATE

Traditional safe havens are not responding as expected, leading to unprecedented asset moves and questioning trust in U.S. safe haven assets.

John Ley

Recession Fears Resurface Triggering Yield Curve Normalization

The recent market turmoil and dismal job reports have led to significant yield curve movements, with the 10Y-2Y spread showing substantial...

Mint Finance

Yield Curve Normalisation on Rate Cut Anticipation

Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Mint Finance

Yield Curve Inverts Further on Rising Recession Risk

Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...

Mint Finance

HSI Index Options Weekly (Apr 07–11): Vol Shifts and Early Signs of USD Toxicity

​This Insight analyzes the recent volatility in HSI and its impact on short-term vol trading, highlighting shifts in spot-vol dynamics and changes...

John Ley

Global Markets: Why This Sell-Off Is Different. UPDATE

​Traditional safe havens are not responding as expected, leading to unprecedented asset moves and questioning trust in U.S. safe haven assets.

John Ley

Recession Fears Resurface Triggering Yield Curve Normalization

The recent market turmoil and dismal job reports have led to significant yield curve movements, with the 10Y-2Y spread showing substantial...

Mint Finance

Yield Curve Normalisation on Rate Cut Anticipation

​Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Mint Finance

Yield Curve Inverts Further on Rising Recession Risk

​Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...

Mint Finance

This Insight analyzes the recent volatility in HSI and its impact on short-term vol trading, highlighting shifts in spot-vol dynamics and changes...

Traditional safe havens are not responding as expected, leading to unprecedented asset moves and questioning trust in U.S. safe haven assets.

Recent cooling in core CPI has increased the likelihood of rate cuts, driving anticipatory normalization of the yield curve with expected cuts...

Discrepancies in job surveys show economic stress, full-time employment drops despite rising payrolls. Bond yield inversion signals investor doubt...