Today's sudden 'Minsky Moment' in markets has pushed US equity risk perceptions to their highest relative to Europe since August 2015, back to old 'norms'.
As Bloomberg notes, U.S. politics are taking center stage as risks recede in Europe following the French presidential election. With Donald Trump facing the deepest crisis of his presidency, the CBOE Volatility Index surged on Wednesday, while Europe’s VStoxx Index rose less than 5 percent.
Volatility expectations for the S&P 500 Index are near their highest since August 2015 relative to the Euro Stoxx 50 Index.
And it is starting at the short-end of the VIX curve (i.e. this is systemic and not an event-timing risk issue).
And has pushed Equity risk back to its old pre-Trump 'norms' against bond risk...