MOVE rising

Can VIX remain low?

Chart of the Day

The MOVE index of implied volatility in the US bond market has continued to rise in the past week and is now at its highest since the first set of lockdowns in early 2020. As it increases, there is a worry that volatility in other markets also rises, prompting investors to seek downside protection that in the end acts to push equities lower.

Macro

The eurozone goods trade balance has suffered as vehicle exports have fallen sharply, and may explain some of the recent weakness in the euro.

The Empire State manufacturing survey rose to 30.9 in November, which could put some upward pressure on the ISM manufacturing index this month.

Canadian manufacturing sales fell by 3.0% MoM in September. Growth was weaker on a volumes basis.

Markets

The US and Canadian 10-year bond yields have mostly rebounded.

The increase in the 10-US is mostly because of higher inflation breakevens.

The commodity currencies have been fairly volatile lately.

While Turkey’s lira has now fallen past ten per USD.

It was a weaker day for gold and silver yesterday as yields rose. Over the past week, gold is up by 2.1% while silver is up by 2.5%.

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