UPDATE 1-Market stress signals start to flash amber

Adds MOVE index, NEW YORK dateline; updates prices

- A surge in oil prices to more than $100 a barrel, as investors brace for a more drawn-out war in the Middle East, rippled across markets on Monday, sending various stress indicators to multi-month highs.

Here are some of the notable levels in midday New York trade.

  • Benchmark Brent crude rose as high as $119.50 a barrel, and was last up 10% on the day at $102.53. LCOc1 O/R

  • Short-dated government bond yields surged, especially in Britain. The two-year gilt yield was up 117 basis points on the day, set for its biggest daily increase since late August 2024. GB2YT=RR GB/

  • Two-year euro swap spreads, which capture the premium on the fixed side of an interest-rate swap, used by investors to hedge against rates risk relative to bond yields, narrowed to as little as -19 basis points, the lowest since July 2025.

  • U.S. two-year swap spreads USDSR2YOTS=TWEB tightened, or turned more negative, on Monday to -18 basis points, the lowest level since December. That number reflected lower demand for Treasuries as opposed to interest rate swaps, another risk-free asset.

  • Wall Street's fear gauge - the VIX index of U.S. stock market volatility - jumped to as high as 35.3, its highest since April 2025's tariff turmoil .VIX. The European equivalent reached 38.12, again its highest since April. .V2TX MKTS/GLOB

  • The MOVE index, the benchmark for U.S. rate volatility, was 81.26 last Friday, the highest since mid-November. The move reflected expectations that Treasury yields across most maturities will move an average of five bps per day in either direction over the next 30 days.

  • In corporate bonds markets, the cost of insuring against defaults jumped. The iTraxx Europe main index, for investment-grade bonds, jumped to 66 bps, its highest since May 2025. ITEEU5Y=MG The crossover index for high yield, or junk debt, rose to over 300 bps, its highest since June. ITEEU5Y=MG

  • The euro dropped past 0.90 Swiss francs EURCHF=EBS for the first time since 2015's volatility around the franc's depegging. FRX/

  • Three-month euro cross-currency basis swaps, or the relative premium for swapping foreign currencies into dollars, fell to 5.5 bps from 9.88 bps on Friday, the lowest since mid-December. Late last week, that was at nearly 12 bps. EURCBS3M=PMID.

  • Three-month euro risk reversals, which indicate trader demand for the euro versus the dollar, hit their lowest since February 2025 EUR3MRR=.