Goldman Notes Odd Volatility Divergence In Bonds, Stocks

Implied volatility levels throughout Europe and China, where in part a stimulus-fueled rally has created a higher degree of upside deviation relative to downside volatility, the U.S. markets have been fairly well contained. This can most interestingly be seen in comparing volatility correlations across bond and stock markets. While the benchmark ten-year U.S. Treasury yield has been following Europe’s yields, going against another Bill Gross relative value trade recommendation, what is perhaps most interesting, pointed out in a June 8 Goldman Sachs research piece, is that the real relative value spread in ten-year note / stock market volatility, with high bond volatility but…