The Closing Bell-Volatility and Investment Grade Bonds Drop as Equities and BTC Rally

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It was a day that tilted more in favor of a slight risk on sentiment. Volatility continued it’s multi-week decline into bearish extremes, closing -9.6% on the day, while bonds saw a lack of demand, led by the short end of the curve.

The key closes were as follows;

VIX -9.66%
DXY +0.03%
LQD -0.37%
HYG +0.33%
$SPX +1.80%
$NDAQ +2.38%
$DOW +1.39%
YEN -0.37%
EURO -0.14%
AUSSIE +0.57
BITCOIN +3.70%

WTI +0.62
BRENT +0.68%

US30Y +1.32%
US10Y +2.14%
US02Y +3.11%

The key events were the spike in volatility, the drop in investment grade corporate bonds in tandem with a rise in high yield corporate bonds, which were bullish for equities.

The $NDAQ led the gains as dropping volatility and a sideways dollar enabled the equity markets to go bid.

Also noteworthy was what was going on in the world of corporate bonds.

A chart comparing $SPX, High Yield Corporate Bonds, Investment Grade Corporate Bonds and Volatility
A chart comparing $SPX, High Yield Corporate Bonds, Investment Grade Corporate Bonds and Volatility

Investors bought more high yield riskier corporate bonds than investment grade bonds, on a day with declining volatility. This was a bullish brew.

The oil benchmarks were mostly sideways and closed up by +0.62% and +0.68%, after 2 weeks of declines.

 

 

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