Rates Volatility Lacks Optimism on Global Reflation Trade
- Sentiment drives recent moves with no clear turn in data
- Swaption grid implies the potential for range-bound yields
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U.S. volatility markets are showing a lack of confidence in the global bond reflation trade.
After a huge rally over the first eight months of the year gave way to a sell-off on trade optimism, bond markets are yet to see a decisive turning point in the economic data. Recent moves are being driven by sentiment rather than a definitive trend in fundamentals.