Last Friday, when looking at the historic, record lows in September volatility and the daily highs in US and global equity markets, BofA's chief investment strategist Michael Hartnett said that the "best reason to be bearish in Q4 is there is no reason to be bearish."
Back in mid-July, Bank of America chief investment strategist Michael Hartnett wrote "The Most Dangerous Moment For Markets Will Come In 3 Or 4 Months" in which he warned that "further upside in risk assets will create problems later in the year" and concluded that "ultimately, we believe the extremely strong performance by equities and bonds in H1 is very unlikely to be repeated in H2" because "monetary policy will have to tighten to raise volatility, reduce Wall St inflation, and reduce inequality.
From Garfield Reynolds, Bloomberg FX, bonds and commodities macro commentator
Trading a Market That’s Both Beautiful and Damned
Authored by Kevin Muir via The Macro Tourist,
Another day, another record low for volatility gauges, with Bank of America’s MOVE Index (considered Treasury Market 'VIX') falling to an unprecedented 48.26.
As Bloomberg notes, the slide back down in volatility comes as the Treasury term premium looks to be failing in its latest attempt to climb back above zero.