Goldman Sachs discusses the latest FX move post this week's US September CPI print.

"The FX moves post CPI are also telling. The currencies most exposed to AI -- USD KRW TWD are all weaker whilst funding currencies EUR CHF JPY all stronger.

Rather than 'classic risk off', this looks more like a Terms of Trade repricing as currencies tied to AI capex financing and supply chains are being sold together, regardless of their usual risk-off/risk-on betas,"GS notes.

"To help frame this it's worth also dusting off the 2022 concept of R -- the level of rates above which financial stability/credit concerns start to bite.

Given the scale of leverage now embedded in the AI capex ecosystem, we may be approaching a level of yields (R) where that ecosystem becomes materially more rate-sensitive than it was even six months ago," GS adds.