BCA Research analyst Felix Vezina-Pouliot said government bond yield volatility
is likely to become a key driver of risk asset prices. Sovereign yields have
risen to multi-year highs as elevated oil prices stoke inf concerns. "For
equities, the absolute level of yields matters less than the speed of change;
implied interest-rate volatility is a more useful gauge of equity risk," he
said. Fed chair KEVIN WARSH signaled last week readiness to act to curb inf,
which should help keep yield volatility relatively contained.
