Bond volatility surges while bitcoin and Wall Street stay calm

The MOVE index, which gauges expected volatility in U.S. Treasury markets, jumped from around 80 on Tuesday to 104 on Thursday, marking its highest level since March. The rise reflects heightened concerns over inflation as energy prices and bond yields climb.

Bitcoin and equity volatility remain low

Despite the surge in Treasury volatility, volatility indices for bitcoin and the S&P 500 stayed subdued. The 30‑day Bitcoin Volatility Index (BVIV) hovered near 37, close to its year‑to‑date low of 35, while the Cboe VIX for the S&P 500 remained near its year‑to‑date low of 14.

Weak correlation between bond and equity markets

Over a recent 20‑day window, the correlation between MOVE and the VIX slipped to –0.06, turning slightly negative for the first time since April 2024. The correlation between MOVE and BVIV was more pronounced at –0.37, one of the lowest readings in recent years, indicating that rising bond volatility has not yet spilled over into crypto or equity markets.

Broader market context

Global government bond yields have risen, with the U.S. 10‑year Treasury briefly touching 5.2% before easing to 5.163%. The increase follows higher oil and diesel prices linked to Middle‑East tensions, adding to inflation worries and prompting speculation about further central‑bank tightening.

When MOVE last reached similar levels in March, the S&P 500 was near 6,350; it has since climbed to roughly 7,704, a gain of about 21%. Nonetheless, bond traders are now paying more for protection against interest‑rate swings.