There is a connection in the erratic behavior of these two asset classes that normally go their own ways, and its implications could really shake up investors of all kinds the rest of the summer.
The story goes back to late May, when a friend who runs a buy-side firm's research team told me that the MOVE Index, which is a weighted index of two-year, five-year, 10-year and 30-year Treasury bond volatility, appeared set up to shoot higher after years of calm. The MOVE is essentially the credit-market equivalent of the VIX, and thus, it tends to move higher in conjunction with a jittery move lower in bond prices.
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