While the equity market swings have garnered most of the attention this week with markets notching extreme highs and lows, Barclays argued on Friday that swings in the bond market have been the “most worrisome part of price action” that took place so far this week.

The investment institution went on to add that “until Treasuries stabilize and start to behave normally, risk assets will struggle, in our view.” 

Barclays analysts say the recent volatility in the bond market remains somewhat of a mystery. One possible explanation the institution pointed to is investors who may have entered swap spread widening positions, expecting relief on the Supplementary Leverage Ratio, only to face pressure as those bets moved against them. 

Another theory involves the unwinding of the "basis trade." There's also ongoing speculation that foreign investors—particularly from Asia—may be behind the selling activity.

“But whatever the reason, right now, bond markets are in trouble,” Barclays added. 

As of Friday, traders watched the benchmark U.S. 10-year Treasury yield (US10Y) hit a two-month high as the instrument tagged 4.58%. See how bond yields are shaping up below on Friday afternoon: 

• U.S. 2 Year Treasury yield (US2Y) is at 3.94%.
• U.S. 5 Year Treasury yield (US5Y) is at 4.14%.
• U.S. 10 Year Treasury yield (US10Y) is at 4.47%.
• U.S. 20 Year Treasury yield (US20Y) is at 4.91%. 
• U.S. 30 Year Treasury yield (US30Y) is at 4.86%. 

Fixed Income Tracking ETFs: (NASDAQ:TLT), (NYSEARCA:TLH), (NASDAQ:IEF), (NASDAQ:IEI), (NASDAQ:SHY), (NYSEARCA:SGOV), (NYSEARCA:SCHO), (NYSEARCA:BIL), (NYSEARCA:AGG), (NASDAQ:BND), (NASDAQ:VCIT), (NYSEARCA:MUB), (NASDAQ:MBB), (NYSEARCA:JNK), (NYSEARCA:LQD), (NYSEARCA:HYG), and (NYSEARCA:TIP).