UST Volatility Index Falls to Over Three-Year Low, Hinting at Market Stabilization After Months of Turmoil.

An indicator of US Treasury bond volatility has dropped to its lowest level in nearly three and a half years, further indicating that the market is stabilizing after several months of turmoil. The ICE BofA MOVE Index closed on Thursday at its lowest level since the beginning of 2022. Another positive signal is the strong demand for US 10-year and 30-year Treasury bond auctions this week. This year, US Treasury bonds have been impacted by concerns over President Donald Trump's trade tariffs and worries that increased fiscal spending could lead to an unsustainable budget deficit. However, these unfavorable factors have not completely subsided, as the yield on the 10-year Treasury bond rose slightly on Friday, causing Treasury bonds to decline for the second consecutive week. Mohit Kumar, Chief European Strategist at Jefferies International, wrote in a report that the 30-year bond auction on Thursday had a "positive response, alleviating some concerns." He added that due to fiscal concerns, he is still avoiding long-term bonds in the US, Europe, and the UK markets.