VaR Shocked: How Much HIgher Can Yields Rise Before Crashing Stocks

Markets continued bleeding lower on Friday with geopolitics remaining at the forefront: the immediate trigger for the risk off mood were rehashed reports (this time from Axios) that the US is considering a high-risk move to take over Iran’s Kharg Island (which was reported before) as well as the US making preparations (this time from CBS) for potential ground troops in Iran (which was also reported before). But as the market now has a 15 millisecond memory as HFTs have taken over, even an hour-old headline sparks renewed selling (or in more rare cases, buying) panic. 

But while stocks did slide, the big story of the week was the sharp spike on global yields, with US 10Y Treasuries (+13bps to 4.38%) having their second biggest 1 day move higher since Liberation Day...