Oil, Bonds, The Yen: The Macro Shock Is Spreading

The energy shock is spreading

Energy is beginning to infect the rest of macro. China is rebuilding rather than releasing reserves, oil volatility is spilling into bonds and demand for upside rates protection is approaching extremes.

Equities still treat it as noise. The risk is the sequence: another leg higher in energy ignites rates volatility, negative convexity amplifies the move and broader asset beta finally breaks, with the yen potentially adding a second deleveraging channel.