Global Financial Market Fears Rise: Here Are the Indicators

Russia's attack on Ukraine heightened fears in the global financial market. This is reflected in the rise of the Volatility Index (VIX) after the invasion.

According to Yahoo Finance data, the volatility index stood at 35.13 on Tuesday, February 8, 2022. This figure is down 3.62% from the previous day's close.

However, compared to the end of last year, the volatility index, often called the "fear index," has doubled or increased by 104% (Year to Date/YTD). Similarly, compared to March 8, 2021, the fear index has risen by 37.93% (Year on Year/YoY).

The volatility index reached its highest level in the past year at 36.45 on March 7, 2022. Russia's invasion of Ukraine and the various sanctions imposed by Western countries on Russia have increased financial market anxieties.

Investors are withdrawing their investments from assets considered risky and shifting to assets considered safe, such as the US dollar, gold commodities, and energy commodities. This has strengthened the US dollar against world currencies and caused energy commodity prices to surge.

The VIX is a derivative investment instrument that provides an overview of market sentiment or market participants' fears over the next 30 days. This volatility index is derived from index option prices based on short-term price changes of the S&P 500 (SPX) index and is traded on the Chicago Board Options Exchange (CBOE).