BofA On How To Benefit On “Rates-Slaved” Trades

US Ten Year Treasury notes are exhibiting a highly unusual correlation with a number of global assets. This abnormality is setting up a variety of potential trades, an October 3 Bank of America Merrill Lynch report notes. Many of these trades are based on “rates-slaved” low volatility assets, the Global Equity Volatility Insights report noted, pointing to long convexity trades and strategies that benefit from a pick-up in interest rate volatility. [timeless] Interest rate volatility is at interesting, if not troubling lows, depending on who one listens to. The Bank of International Settlements, whose financial stability warnings are closely monitored,…