AI-generated
In 2012, Greece paid close to 40% for ten-year money. Today it borrows more cheaply than France, and French government debt is riskier than a large slice of the country's own company bonds. Yet the spread over Bunds is still below its euro-crisis peak, and nobody is pricing a break-up. So is the market calm – or is it simply measuring the wrong thing?
Wall Street sets records while American homebuyers face the sharpest jump in mortgage rates in four years. Same week, same pool of savings, opposite outcomes. Paris braces for a budget it cannot pass, Magdeburg breaks a German taboo, and Moscow rattles its arsenal over Kaliningrad. Who is really paying for the AI boom – and when does the bill reach Europe?
German factory orders just fell 10.6% – and that is almost the good news. The money for defence, infrastructure and AI is there, and not even an AfD government would take it away. So why is the boom Germany cannot avoid arriving so slowly, and what does it mean for the Bund's role as Europe's safe haven?
The US ten-year yield is at its highest since 2002, and the curve is steepening. In the old playbook, that meant investors were bracing for recession. But September's ISM surveys show no downturn in sight, and inflation expectations remain elevated. So if the bond market is not pricing a slump, what exactly is it pricing?
Four straight weeks of euro losses. France now pays more than Italy to borrow, and money is running to Germany, the country that looked like Europe's weakest link only a month ago. Everyone is reaching for the 2012 playbook. But does it still work when the ECB is fighting inflation and nobody in Berlin is volunteering to be the anchor?
US payrolls rose just 29,000 in September, and the reflex is to read it as dovish. Yet in the same week, a consultancy the market had priced for AI redundancy posted its best day ever, and factories reported orders doubling and steel running short. Two very different signals from the same economy. Which one should the bond market be listening to?
Washington is weighing a diesel export ban that would hurt its own refiners, push up the petrol prices voters care about and squeeze its closest allies, five weeks before an election. Whether it happens is almost secondary. Europe should be asking a harder question: what happens when the export Washington decides to switch off is not fuel, but AI?
Yields at multi-decade highs, a curve that refuses to invert, and households saving as if bracing for something. The inflation debate is looking in the wrong place.
China's 30-year bond now yields less than Japan's. In an open economy, that gap would empty the savings accounts. So what happens if Beijing ever opens the door?
Bond markets love the 1994 precedent. But back then, the Berlin Wall, a China nobody feared and a shrinking Pentagon did much of the Fed's work. Who does it in 2026?
