Oil → Rates → Bond Vol. The next link in the chain may be equities.
Bond Vol Waking UpThe recent rise in oil has spilled over into rates, with bond volatility beginning to respond. While the MOVE Index remains well below panic levels, the recent acceleration is worth monitoring given its historical relationship with equities.On the MOVE
Bond volatility is beginning to diverge from both the VIX and the S&P 500. Still early, but worth watching.
Rates traders are getting nervous. Equity traders aren't. That divergence rarely lasts.
The melt-up can probably survive higher yields. Aggressively accelerating rates volatility is a different story.
History suggests the valuation headwind becomes much stronger once the 10-year moves meaningfully above 4.5%.
Everyone Saw The Oil Rally. Few Are Positioned For The Spillover. The biggest opportunity isn't in crude itself. It's in the…
The bond market is waking up. Equities are still asleep.
