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ABN AMRO: Investors seeking refuge from AI-related volatility may turn to euro-denominated bonds
ING Bank stated that European government bonds may be attractive to investors seeking to avoid the volatility in the U.S. stock market triggered by the development of artificial intelligence. Michel Tuk, the bank’s senior European interest rate strategist, noted that as volatility in the U.S. stock market has risen, the eurozone bond market has remained relatively stable, offering attractive yields relative to risk. The so-called “AI panic trading” flared up again this week, with shares of logistics and software companies falling amid concerns that the technology could disrupt business models. In this environment, even seemingly minor announcements and product launches can trigger sharp volatility in individual stocks. Tuck said that AI-related market jitters are unlikely to subside overnight. The relative volatility of U.S. stocks compared to eurozone government bonds is making bonds look increasingly attractive.
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