Bond Volatility as a Leading Indicator

Goldman Sachs trader Rich Privorotsky warns that bond volatility (MOVE index) is the primary indicator to watch as the market navigates a battle between high AI capital expenditures and rising global rates.

Key Takeaways

• 1.Bond volatility, specifically the MOVE index, is currently the most reliable leading indicator for broader market risk.
• 2.Japan is struggling with an 'impossible triangle' of maintaining stable FX, stable rates, and robust growth, with JPY likely bearing the brunt of future adjustments.
• 3.Massive AI infrastructure buildouts are creating a 'crowding out' effect on longer-duration sovereign paper as credit markets prioritize funding AI capex.

Table of Contents

• Oil Impact
• Japan/JPY
• Rates
• AI/NVDA
• Risk

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