US Bonds: a week dominated by refunding mechanics, AI credit stress, and a stubborn tug-of-war over the 10-year.
Several research threads argued the 10-year may have put in its 2026 high near 5.31%, pointing to fading tax-loss selling, softer oil into next year (one baseline sees crude at $75-80 by end-2027, pulling yields toward the mid-4s), and a cyclical peak in nominal growth. A separate strand tied the recent rally to the AI trade wobbling, echoing the 2000 pattern.
Pushing the other way, other analysts flagged sticky inflation from AI-driven scarcity, a building term premium under limited Fed guidance, and an unsustainable fiscal path with 7.5%-of-GDP deficits. One forecast table had the 10-year drifting to 5.05% by December.
On refunding, researchers highlighted event risk that Treasury trims long-end auction sizes — bullish for the long end, flattening 10s30s — while shifting supply into the belly. Bills were called structurally cheap to SOFR.
Credit commentary zeroed in on AI: CoreWeave CDS has nearly tripled, and hyperscaler hedging demand is rising.