Citi warned on Friday that bond market volatility has entered a more dangerous phase for risky assets, with the latest selloff driven by the long end of the curve rather than Fed expectations. The bank said the MOVE index broke above two standard deviations on a one-year lookback last Thursday, a day after strong PMI data and a weak auction pushed the 10-year Treasury yield above 5%. Citi noted that high MOVE readings have historically coincided with weakness in the S&P 500, though the index has typically fallen back below that threshold within days and calms once investors work out the Fed's hiking cadence, usually about two months after the first hike. Citi said that comfort relies on monetary policy being the driver, and its rates strategists pointed to a buyer's strike that has made auction weeks notably worse than normal. The bank's best guess is that the neutral rate is moving higher alongside a strong growth outlook, and it sees no clear catalyst to break the buyer's strike in the short term, suggesting MOVE could stay elevated. Beneath a steady S&P 500, Citi noted small caps have sold off more sharply.
Movano Inc
NVIDIA Corporation
Seagate Technology PLC
Western Digital CorporationCitigroup Inc.Citi warns bond market volatility and a buyer's strike are dangerous for risky assets, with no clear catalyst to break it.
