Reading the market's monetary policy signals from the FOMC minutes released tomorrow

ZenZKPlayer · 2026-01-13T08:59:53+00:00

The upcoming FOMC minutes are expected to reveal detailed discussions on economic conditions, inflation, and interest rate directions, essential for market participants. Current market conditions show low liquidity with dominant block trading and a negative investor sentiment. A defensive options selling strategy is recommended this week.

ZenZKPlayer

2026-01-13 08:59:53

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The FOMC minutes of the Federal Reserve(Fed) scheduled to be announced tomorrow at 03:00 are expected to reveal in detail the economic conditions discussed by the committee, inflation trends, and the direction of interest rates. This information is essential for market participants seeking to gauge the future monetary policy stance of the Federal Reserve.

Low Market Liquidity and Dominance of Block Trades

Since the annual options settlement on Friday, the spot market has exhibited unusual patterns. During the holiday period, retail trading volume has been subdued, while institutional investors’ block trades have become the primary trading form. This phenomenon stems from the demand to establish new positions after settlement, indicating limited trading opportunities within this week.

Delayed Volatility Recovery and Market Sentiment

Despite the high proportion of put options in blocks due to sluggish Q4 earnings, implied volatility(IV) has yet to show signs of rebound. Volatility recovery is expected to begin around market close, but currently, overall investor sentiment remains predominantly negative.

Current Investment Strategy

In this market environment, option selling strategies aimed at theta profit are preferred. With liquidity shortages and pessimistic sentiment dominating this week, a conservative approach focusing on time decay rather than aggressive buying is a practical strategy.

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