Not Only The Vix, (Lack of) Bond Volatility Could Lead To A Shock: HSBC

Low bond volatility is sending a message, Lawrence Dyer observes with a degree of wariness. In a May 30 HSBC US Rates research note, Dyer draws a correlation to causation between volatility and interest rate moves that has been drawn in other markets. He says the strange quiet in bond markets will result in a dramatic move. But it’s not the stock market to which he refers. His technical outlook on the world of rate hikes comes as mostly fundamentally-driven Fed watchers attempt to handicap the central bank’s rate hike schedule and the related balance sheet impact that could be felt along the yield curve.

Low bond volatility has been...

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