Chart of the day: Low expectations

DBS says the market "has become increasingly worried about the state of the global economy with the Fed's inaction focusing the market's attention on China". These concerns have kept the volatility index elevated. (The index has been above 20 for the most part of the period since the yuan's devaluation last month.) Needless to say, commodity prices remained depressed and this has had knock-on effects on inflation expectations, which are close to the record low (as measured by the five-year inflation swap, five-year forward). DBS says the worries have not abated and for now, high frequency indicators on the mainland are likely to factor heavily on US treasury yields.