Global Bonds Between a Tightening Macro & an AI Supply Flood
Three shocks are hitting the bond market at once — a re-inflation regime that has turned every major central bank hawkish, an AI-capex issuance wave concentrated in a handful of names, and a fiscal repricing at the long end. Credit is priced as if none of them exists.
The dim sum / panda / kangaroo issuance records are the market routing around a congested USD/EUR core. Two forces overlap: cyclical crowding (hyperscalers absorbing core-market capacity) and structural reserve fragmentation (genuine Asian and diversifying demand). Portugal swapping dim-sum proceeds back to euros at a saving is the tell — diversification has crossed from vanity trade to treasury-desk default.
Read together, the funding-side internationalization of the renminbi, the reach for 40–100-year maturities, and the flight into Australian and offshore-yuan markets are all the same story: capital finding the path of least resistance when the traditional core is both expensive in duration terms and crowded with mega-supply. It is happening through the funding side, not the reserve side — which is exactly why it is under-covered.
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