No. 1Bonds
IMF warns of disorderly bond yield spike
The IMF's Global Financial Stability Report, released Tuesday in Bangkok, warns of a sharp rise in sovereign yields. Yields in several advanced economies are already at multidecade highs, driven by Middle East energy costs and expectations of tighter policy. Two pressure points stand out. Hyperscalers' share of global investment-grade issuance has climbed to 10% from under 1% since 2024, and hedge funds hold about 9% of Treasuries, up from about 4% in 2022. The fund also flagged 14 circular AI deals: about $300 billion of equity and $650 billion of debt, tied to $1.4 trillion of future revenue commitments. Liquidity has held in the U.S., Europe and U.K. Japan is the exception. The IMF urges debt managers to lengthen maturities.
Why it mattersTreat this as a checklist of where a rates shock would spread: Treasury basis trades, AI-linked credit and thin Japanese liquidity.
Full story at Economy →No. 2Outlook
IMF nudges 2026 growth forecast up to 3.1%
The IMF raised its 2026 global growth forecast to 3.1% from 3.0% in July, still below last year's 3.5%. The 2027 forecast is unchanged at 3.4%. The AI investment boom is offsetting the energy shock from the Middle East war. The fund now assumes the Strait of Hormuz reopens in March and returns to its pre-war state by October. 2027 inflation is seen at 4.1%, up from 3.9%, and the 2026 forecast holds at 4.7%. Global oil reserves are being drawn down by about 2.7 million barrels a day, and the odds of 2027 inflation above 5% are about 35%, up from 30% in April. Economic counsellor Silvana Tenreyro said resilience is "reaching its limits."
Why it mattersYou should read the upgrade as modest: the buffers that kept energy and markets calm are "rapidly narrowing," and risks lean to the downside.
Full story at Economy →No. 3Divergence
IMF outlook points to a K-shaped global economy
MarketWatch reads the IMF's latest outlook as a split, K-shaped global economy. Countries less exposed to the oil shock and benefiting from AI demand are pulling ahead. The rest are lagging. The piece also sets out winners and losers and where the U.S. fits. We have only a summary of it, so the country-level detail is not covered here.