POPA ReconExplaining the Massive Divergence Between Bond Volatility (MOVE), Equity Volatility (VIX), and Credit Risk (CDX IG)
Explaining the Massive Divergence Between Bond Volatility (MOVE), Equity Volatility (VIX), and Credit Risk (CDX IG) - The primary driver is growing uncertainty surrounding future Federal Reserve policy, with the U.S. 10-year yield hovering around 5.2% - Last week, rate-sensitive sectors ( small caps, utilities, and real estate) declined, while AI giants rallied. This heavy dispersion within the S&P 500 indicates that broader systematic risk is not being repriced. - Corporate bond spread movements have remained minimal. While the CDX index ticked higher, this is largely a technical artifact…
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