Fear indicator: Uncertainty increased in the Greek market in May

The fear index of the Centre of Planning and Economic Research (KEPE), which reflects the estimates regarding the expected short-term course of the Greek market, recorded an increase in May.

After consecutive months of downtrends, the KEPE GRIV Implied Volatility Index, or “fear” index calculated based on options prices on the FTSE/X.A. Large Cap rose to 27.25% on 5/31/2023 from 26.67% on 4/28/2023. However, it is noted that the average daily price of the index decreased reaching 26.43% in May 2023 from 27.40% in April 2023.

Of course, the index remained at levels lower than its historical average (since January 2004) for the Greek market, which is 32.48%, according to KEPE.

KEPE Composite Forecast Index

The KEPE Composite Forecast Index, which provides preliminary indications of the course and transformations in Greek economic activity, before being reflected in the current figures of overall economic activity, rose for the sixth consecutive period, reaching a new highest level for the whole of the examination period.

This development is a continuation of the overall upward trend followed by the Composite Forecast Index from the middle of 2020 onwards. On this basis, it is considered to reflect the strengthening of positive expectations and assessments of participants in economic activity, providing early indications of improving economic conditions. At the same time, it demonstrates that the negative effects and resulting uncertainty related to the evolution of inflation and interest rates do not prevail.

In any case, it becomes necessary to reassess the Composite Forecast Index with the aim of obtaining additional evidence, as the integration of new data is expected to demonstrate the continuation or otherwise of the observed trends regarding the course of future domestic economic activity.