Treasury Volatility Dips to Lowest Since 2014 on Steady Fed View
- U.S. debt extends gains after $23 billion 10-year note auction
- Tepid growth keeps yields at levels deemed pricey by Goldman
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A measure of expected price swings in Treasuries dropped to levels last seen in 2014, signaling a growing conviction among traders the Federal Reserve will maintain a gradual monetary policy path.
The Merrill Lynch Option Volatility Estimate MOVE Index reached its lowest in 16 months on Tuesday, after a persistent slide from a one-year peak reached in February. That was when 10-year Treasury yields touched their lowest level in more than three years, amid a global stock-market selloff and slump in commodity prices triggered by concern that China’s economy was slowing more than forecast.