A good but unspectacular GDP report left rates in a comfort zone this morning. Stocks are suffering mildly in the US after a strong run earlier in the week, while EU stocks are in danger of producing a month-to-date losses. The dollar has locked in a July loss...the question is whether it will break through Thursday’s intra-month low during next week’s US data releases. Certainly the euro doesn’t lack for confidence, one thing weighing on the mind of EU equity investors. It’s not clear what the ECB’s Draghi thinks about the rally. VIX increased slightly today but remains historically low. “History” and volatility is the subject to this week’s first article. Each environment creates its own volatility pattern. Current circumstances lend themselves to calmer market moves, even excluding the impact of central bank QE portfolios. Matching the impact of economic cycles and investment flows on volatility is key to the best possible reading of market valuations, particularly the interplay of bonds and stocks. The 10-yr is stuck in a range, but the 5s/30s curve provides plenty of tension and serves as the best barometer on bond sentiment through mid-August. We explain why a spread near 100bp is a neutral area for bonds while 107+ should represent an chance to successfully extend duration. Plus, a quick review of the week’s rate moves, including a look at corporate supply.