One of the clear harbingers of the sharp rally last week was not just very negative sentiment, or the CPI print itself, it was the overly calm VIX index.
The VIX spent most of October falling, despite the bearish drum beat.
“Here’s the US junk bond CDS credit spread index, which remains well below its 2008, 2011 and 2020 peaks, and the shape of the CDS curve, which tends to invert [Pictured] as markets freak out about a rash of near-term defaults.“
