Market Conditions: Basis Points and Markets Strategist

market conditions: In a Friday research note, the global markets strategist for JPMorgan said one of the consequences of low interest rate policies by major central banks has been the increased frequency of surges in volatility as ill-prepared market participants, who made wagers assuming volatility would remain low, scrambled to cap their risk exposures from sharp bond-market moves, according to Market Watch. The 10-year Treasury note yield TMUBMUSD10Y, 1.85% was down 2.9 basis points to 2.015% on Monday, around 60 basis points lower from the beginning of the year, Tradeweb data show. Nikolaos Panigirtzoglou of JPMorgan said, like 2013 and 2016, bond-market bulls who piled up long positions on Treasurys and other sovereign debt earlier this year during placid market conditions could all rush for the exit door at the same time, exacerbating the next selloff. The benchmark rate tumbled after the Federal Reserve pivoted to a more dovish stance as rising U.S.-China trade tensions stalled global economic momentum. See How the quietest Treasury market in decades could take investors by surprise The same investors are forced to cut their positions when volatility rises or hit by a shock, triggering self-reinforcing, volatility induced selling Nikolaos Panigirtzoglou Panigirtzoglou said there were more market participants who were particularly sensitive to shocks to Value-at-Risk, an indicator of risks around traders' positions on any given day, such as hedge funds, risk-parity managers and commodity trading advisors. Bond prices move in the opposite direction of yields. (news.financializer.com). As reported in the news.