The economic calendar for Asia on Tuesday, July 29, 2025, is quite empty, featuring only a few data points and events. The UK’s BRC inflation indicator for shop prices in July is expected to have minimal effect on the market. Japan’s Ministry of Finance will auction 2-year Japanese Government Bonds (JGBs) at 2335 GMT, which is 1955 US Eastern Time. This auction may attract bond traders, as yields in Japan have settled for now.

Opportunity In Sparse Event Schedule

With the light calendar, as noted by Sheridan, we see this as a chance rather than a time to tune out. Fewer scheduled events often lead to lower implied volatility, making options contracts more affordable. This is a great time for us to position ourselves for future market movements at a bargain before the next big event. The phrase “for now” regarding the stabilization of Japanese bond yields is essential for derivative traders. The Bank of Japan’s gradual shift from its very loose monetary policy has created some tension. Historical data indicates that calm periods in USD/JPY frequently precede sudden market shifts. With 3-month implied volatility for this currency pair currently around 8.5%, it’s wise to buy long-dated strangles to prepare for the upcoming changes. While the BRC report from the UK may seem minor, the broader trend of ongoing inflation and central bank reactions is still the main driver of the market. Even small reports can lead to significant market reactions if they disrupt the prevailing narrative, especially when trading volume is low. We can take advantage of this quiet time by setting up cost-effective calendar spreads on FTSE 100 options, selling cheaper front-week options while buying positions in the following month.

Market Volatility Observations

The current state of low realized volatility is reflected in major indices like the S&P 500, which has a 10-day historical volatility of under 10%. This situation is unusual and usually doesn’t last long. Periods of low activity have often preceded sharp market corrections, as seen in late 2019 before the crash in 2020. Therefore, we view this as an ideal time to build a portfolio of inexpensive out-of-the-money puts on major indices or to purchase VIX calls as a hedge. Create your live VT Markets account and start trading now.

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