Bond Volatility Just Woke Up — Stocks Usually Don't Like It

Still trapped

US 10 year remains trapped inside the massive triangle like formation.

Source: LSEG Workspace

 

Blame oil

Rates looked ready to break below the magical 4% level — but oil had other plans.

Source: LSEG Workspace

 

Bond vol wakes up

Even before the Iran war, bond volatility had started catching bids despite rates moving lower. The latest move back above 4% has triggered a rather aggressive MOVE squeeze.

Source: LSEG Workspace

 

Gone

The reset in bond volatility, irrespective of what the VIX was doing, is definitely gone. Bond volatility has recently been trading in tandem with global “fear.” Equities tend to struggle when bond volatility rises.

Source: LSEG Workspace

 

Divergence

SPX doesn’t like rising bond volatility. The short-term gap between SPX and MOVE (inverse) is getting wide. Watch this closely.

Source: LSEG Workspace