Shifts in monetary policy stances by systemically important central banks—such as the US Federal Reserve, ECB, and Bank of Japan—catalyze macro liquidity reallocations that directly influence market positioning on the National Stock Exchange of India.

Global Monetary Policy Transmission Channels

Widening bond yield spreads between US Treasuries and Indian Government Bonds alter Foreign Portfolio Investor hedging requirements, frequently observed as shifts in Out-of-the-Money (OTM) Put and Call open interest clusters.

Observing Implied Volatility Expansion

Prior to major global macro announcements, option contracts across both Call and Put wings often experience an IV inflation phenomenon, as market participants demand higher premium compensation for overnight event risk.