October 09, 2026

AI's rate-insensitive boom is triggering "Dutch disease" in the US economy by draining capital, power and labor from vulnerable sectors like housing and autos. Trapped between inflation driven by the AI boom and weakness in rate-sensitive industries, the Fed will have to keep interest rates higher for longer, see chart below. Because monetary policy cannot resolve this sectoral imbalance, the only durable fix is expanding the supply of power, chips and infrastructure. For more discussion, see also here.

October 08, 2026

We've put together a chart book on France and the ECB, it is available here. It shows French spreads over Germany at their widest since the 2011 euro crisis, with fiscal pressures building ahead of the October 13 budget debate. At the same time, the macro backdrop remains solid, European banks are in their best health in decades and the ECB has several options available should financial stability be threatened.

October 07, 2026

Hyperscalers have raised $48 billion in bonds in European currencies this year, which is already more than triple the entire amount of 2025. This is spread across €27 billion, £13 billion and CHF7.5 billion. Hyperscalers now account for 3% of euro IG issuance, 10% of sterling IG issuance and 22% of Swiss franc IG issuance this year, compared with 8% of US IG corporate issuance, see the first chart below. There are few signs of crowding out, yet. Non-hyperscaler IG issuance remains strong and is little changed YoY, and corporate spreads remain tight. Rather, hyperscaler issuance is adding highly rated US borrowers (AA- or higher) to European credit indices that have traditionally had more A to BBB exposure. Hyperscalers account for 7% of euro issuance with maturities of 10 years or more, compared with 3% across all maturities. They also account for 3% of the 10-year-plus euro IG index, compared with 1% of the overall index. This is adding some additional depth for longer-dated maturities, which has been thin outside of sovereign issuance, and what’s more, some governments (like the UK) have been shortening duration of bond issuance, see the second and third charts below. The bottom line is that the scale of hyperscaler financing, which is forecast to rise a further 25% in 2027, will have an even bigger impact on European bond markets, with hyperscalers becoming a larger part of European credit indices. The scale also calls for tapping all markets, public and private. Written by Huw van Steenis