Here we have the MOVE index.

This expresses the volatility in bond yields, and to an extent, 'fear' in the bond market.

It seems to be quite under the radar right now, but I want to outline why this is important.

The index is currently above the March 2020 settlement high...

And yet US equities haven't necessarily reacted to this move just yet.

But we're seeing signs of stress now in the credit market...

This chart is showing the BAML high yield options adjusted spread BAMLH0A0HYM2 .

This is important, as it's showing the difference in yield between the treasury curve and all bonds rated BB and below, weighted by market cap...

And we can currently see that this is rising, trading at the highest price since December 2020.

This is where the real risk degradation will come from, and it is starting to follow the overall move in sovereign bond yields (identified by the MOVE index) as global central banks become more and more hawkish.

For firms with a lot of high yield debt, this is not good, considering their margins are likely to be very thin and they could be defined as 'zombies', or firms that are only surviving because they can service their current debt levels.

If this debt cost increases, they will face even more hardship.

Make sure to keep an eye on both of these indices going forward.

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