The Week in Markets
Wilmington Trust's Luke Tilley and Nash Peyton note that pricing for an October hike fell from 70% to 20% in ten days, yet the 10-year briefly touched 5.36% on 7 October, the highest since 2002. They blame real yields and a global glut of debt, say Treasury buybacks brought "only momentary relief", and have added investment grade bonds.
Income Research + Management sees buyers at these levels: non-dealer bidders took more than 97% of the latest 10-year auction. Man Group's systematic team argues bonds still hedge equities: since 1900, with inflation between 2% and 4% and steady, 10-year Treasuries returned about 4% a year above inflation. On their numbers, the damage comes when inflation is above 4% and rising fast, as in 2022.
France: forced selling, says J.P. Morgan, but no rush to buy
The French-German 10-year spread peaked at about 160bp, a level last seen 14 years ago, according to J.P. Morgan Asset Management. It blames banks hedging structured products and hedge funds forced out of leveraged positions, and says the selling looked largely exhausted by 6 October.
It still stays neutral on OATs. Muzinich's Erick Muller points out that Italian and Spanish spreads widened too, and Rothschild & Co's Victor Balfour calls it "a politically precarious moment, but not yet a sovereign-debt crisis", while warning that momentum argues against moving too early.
The AI question is moving from how much to who pays
Amova Asset Management's Iain Fulton notes AI capex has beaten expectations by about $300bn this year, and argues the 2027 and 2028 wave could need trillions. By his count, Alphabet, Amazon and Microsoft hold more than $2tn of contracted future revenue, with a significant share tied to OpenAI and Anthropic.
He calls OpenAI "a material credit-risk consideration" and thinks capex assumptions may be near their peak.
Private marks lag, and long-term investors are less patient than they say
StepStone Real Estate says appraisal values for many non-core property funds still assume much lower cap rates than trading prices. Assets those funds sold in 2025 realised an average loss of 28%, and distributions have run at about half the long-term average for three years.
Invesco's study of 144 sovereign wealth funds and central banks finds around 40% of the wealth funds run a shorter horizon in practice than their mandates state. Its answer is governance: liquidity policies that stop the long-term book becoming a forced seller in stress. The survey data are as at 31 March.
Economic calendar
Tue 13 Oct
12:00 US bank Q3 results begin: JPMorgan Chase, Goldman Sachs, Citigroup, Wells Fargo. Bank of America and Morgan Stanley follow on Wednesday.
Wed 14 Oct
13:30 US CPI (Sep) prev 3.4% YoY headline, 2.4% core
Thu 15 Oct
07:00 UK GDP (Aug) prev 0.4% MoM
13:30 US retail sales and PPI (Sep) prev 1.2% MoM retail sales; 5.4% YoY PPI
Fri 16 Oct
Euro area HICP, final (Sep) flash 3.8% headline, 2.5% core
Further out
FOMC, 27 to 28 Oct; UK Budget, 28 Oct; ECB, 29 Oct; US midterms, 3 Nov; Bank of England, 5 Nov
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