Eagle Letter: Midterm elections, oil prices, bond yields, and much more…

What moved markets: The Democratic sweep in the U.S. midterms lowered oil and Treasury yields on hopes of fiscal restraint and Middle East de-escalation, but also raised concern about tighter AI regulation. A technology sell-off spread from Wall Street to Japan, South Korea and Taiwan before a partial Friday rebound.

What did not: Europe was resilient, China advanced and the dollar firmed after the U.S. jobs report. This was a concentrated repricing of AI exposure, leverage and duration, not a generalized loss of confidence in global growth.

The Bottom Line on Economic Data

United States: October payrolls rose by 165,000 versus a 65,000 Reuters consensus; unemployment fell to 4.1 percent and prior months were revised up by 84,000. ISM remained expansionary – manufacturing at 55.5 and services at 54.5 – but both price indexes exceeded 70. Productivity has grown at a 2.2 percent annual rate in the current business cycle.

Policy implications: The jobs report pushed the probability of a December Fed hike back toward 80 percent. Resilient activity and persistent price pressure leave little room to react to equity volatility alone. Lower oil would help; an upside CPI surprise would strengthen the case for tightening.

Europe and Asia: The Bank of England raised Bank Rate to 4 percent and expects energy-driven inflation near 5 percent next year. Australia lifted its cash rate to 4.85 percent but wants time to assess prior increases. Central banks cannot ignore supply shocks when underlying inflation and demand remain firm.

Cross Asset Signals and Market Debate

The key signal was the split between energy, rates and technology. Brent fell as political risk eased; the 10-year Treasury yield ended near 4.86 percent, while gold and the dollar rose. Lower oil can ease inflation without recession, but strong data keep discount rates high just as investors question AI financing and regulation. That better explains the severe losses in crowded technology exposures.

Market Snapshot

Equities: The S&P 500 fell 2.7 percent for the week, the Nasdaq 3.4 percent and the Russell 2000 2.1 percent. The Nikkei and Kospi suffered much larger weekly losses as Thursday’s AI sell-off reached Asia; European benchmarks were broadly steadier.

Rates and FX: The U.S. 10-year yield closed Friday near 4.86 percent and the dollar index near 102.3. EUR/USD ended around 1.114 and USD/JPY near 158.5.

Commodities: Brent closed near USD 97.8 per barrel after a steep weekly decline; WTI ended near USD 90.4. Gold finished around USD 4,074 per ounce after gaining over the week.

Other risk indicators: The VIX ended at 25.6, still about one-fifth higher over five sessions. Bitcoin traded near USD 75,700, offering little evidence of a broad safe-haven rotation.

The Week Ahead

U.S. CPI on Tuesday is the central test. A softer print would validate the fall in oil and yields and could stabilize long-duration equities; another upside surprise would reinforce expectations of a December Fed hike. Markets will also watch whether the Nikkei and Kospi stabilize when Asia reopens and whether credit spreads confirm or contradict the equity correction.

Forecast benchmarks: Barclays expects headline CPI to rise 0.2 percent month on month in October, helped by lower gasoline prices. A separate market calendar places the consensus at 0.3 percent for headline CPI and 0.2 percent for core CPI. The disagreement is small in level but important for a market already sensitive to the path of rates.

The constructive scenario is selective repricing: oil remains below its pre-election level, inflation moderates and earnings outside the AI complex hold up. The adverse scenario is a renewed energy shock combined with sticky core inflation, forcing higher rates while the AI investment cycle is already losing valuation support.

Monetary Policy and Inflation

1. Bank of England Raises Bank Rate to 4%

The MPC voted 8-1 to raise Bank Rate by 25 basis points to 4.0%; the dissenter preferred a 50-basis-point increase. UK inflation was 3.5% in September and is projected to approach 5% by mid-2027 as elevated energy prices pass through, although evidence of broader second-round effects remains limited.

Why it matters: The decision shows how a persistent energy shock can force renewed tightening even before wage and price spillovers become clearly visible.

2. Reserve Bank of Australia Raises the Cash Rate to 4.85%

Reserve Bank of Australia | Australia | Monetary policy | Published November 3 2026 | Primary source

The RBA increased the cash rate to 4.85%, its fifth rise of 2026. Governor Michele Bullock stressed that the move addresses domestic capacity pressure rather than the direct oil-price shock; weak productivity and stronger investment, including data-center construction, have constrained non-inflationary growth.

Why it matters: Australia illustrates how AI investment can support demand while also intensifying inflation when productive capacity and labor supply are tight.

3. Bank of Japan Minutes Reveal a Broader Normalization Debate

The minutes show that most members supported the September increase to 1.25% and expected further adjustment as underlying inflation approached 2%. Members linked upside price risks to oil, the earlier yen depreciation and AI-related demand, while two preferred to keep the policy rate at 1.0%.

Why it matters: Japan is leaving its ultra-loose regime as imported costs and domestic price-setting increasingly reinforce each other.

4. Euro-Area Inflation Rises to 4.0% in October

The flash estimate put annual HICP inflation at 4.0%, up from 3.8% in September. Energy inflation accelerated to 20.8%, while services inflation reached 3.3% and inflation excluding energy, food, alcohol and tobacco held at 2.5%.

Why it matters: The gap between headline and underlying inflation confirms that energy is the main shock, but persistent services inflation still limits ECB flexibility.

Growth Trade and Fiscal Policy

5. US Payrolls Rise by 165,000 in October

Nonfarm payroll employment increased by 165,000 and the unemployment rate changed little at 4.1%. Professional and business services, health care, and transportation and warehousing led the gains, while revisions added a combined 84,000 jobs to August and September.

Why it matters: A resilient labor market gives the Fed room to focus on inflation and reduces the urgency of easing financial conditions.

6. US Manufacturing Expansion Strengthens in October

The manufacturing PMI rose to 55.5, its tenth consecutive expansionary reading, and production reached 59.0, the highest since November 2021. Prices remained elevated at 75.2, while respondents frequently cited pricing volatility, longer lead times, tariffs and the Middle East conflict.

Why it matters: Strong factory demand is colliding with supply and cost pressure, a combination that supports output but complicates disinflation.

7. US Services Activity Expands but Price Pressure Remains High

The services PMI registered 54.5, signaling continued expansion, and the employment index returned to growth at 51.4. The prices index remained high at 73.0, indicating that service-sector cost pressure is still broad even as activity stays firm.

Why it matters: Resilient services and persistent input inflation reinforce the case for restrictive US monetary policy.

8. Euro-Area Retail Trade Falls 0.7% in September

Seasonally adjusted retail volumes declined 0.7% from August in the euro area and 0.6% in the EU, although euro-area sales remained 0.4% above a year earlier. Non-food sales fell 1.2% on the month, and Germany recorded a 2.0% decline.

Why it matters: Weak retail demand shows the household cost of the energy shock and helps explain why euro-area growth remains less robust than US growth.

Markets and Financial Conditions

9. US Technology Selloff Leaves Major Indexes Lower for the Week

Associated Press | United States | Equity markets | Published November 6 2026 | Reporting and analysis

The S&P 500 fell 2.7% over the week, the Nasdaq 3.4%, the Dow 0.9% and the Russell 2000 2.1%. The losses were concentrated in technology and AI-linked shares as investors reassessed valuations and the policy constraints on data-center expansion.

Why it matters: The correction is testing whether AI exposure remains a source of broad market leadership or becomes a concentrated financial vulnerability.

10. Dollar and Treasury Yields Jump after Strong US Payrolls

Reuters via Euronext | Global | Foreign exchange and bonds | Published November 6 2026 | Reporting and analysis

The dollar index rose 0.77% on Friday to 102.26, while the euro fell to about $1.114. The US 10-year yield moved to roughly 4.85% and the 2-year to 4.52% as markets raised the probability of a December Fed increase to around 80%.

Why it matters: Strong labor data are transmitting quickly into global funding costs through the dollar and the Treasury market.

11. Global AI Selloff Spreads to South Korea and Japan

Associated Press | Global | Equity markets and technology | Published November 5 2026 | Reporting and analysis

The S&P 500 fell 4.4% and the Nasdaq 5.5% in a sharp post-election reversal, while South Korea’s Kospi dropped 5.3% and Japan’s Nikkei 225 lost 1.8%. Data-center restrictions and questions about the pace of AI investment intensified pressure on globally connected technology shares.

Why it matters: The common shock across US platforms and Asian semiconductor markets shows how deeply AI has become embedded in cross-border financial conditions.

12. Election Results Reprice AI Infrastructure and Energy Risks

Associated Press | United States and global | Markets and policy | Published November 4 2026 | Reporting and analysis

Markets reacted to US midterm results that strengthened political resistance to some data-center projects and altered expectations for energy and fiscal policy. Brent crude fell 8.7% to $94.62 and the US 10-year yield eased to about 4.88%, while AI-linked shares experienced large sector-specific moves.

Why it matters: Political constraints on power, permitting and infrastructure are now affecting both technology valuations and the macro outlook.

Technology Innovation and the Future of Work

13. Big Tech’s AI Buildout Relies More Heavily on Debt

Axios | United States and global | AI financing | Published November 3 2026 | Reporting and analysis

Alphabet, Microsoft, Meta and Oracle are preparing further bond issuance even as lenders demand higher compensation. The report argues that the AI buildout is increasingly financed with borrowed money, tying data-center expansion more directly to credit spreads and long-term rates.

Why it matters: AI investment is becoming a financial-conditions story, not only a technology and productivity story.

14. Gartner Warns That AI-Driven Layoffs May Be Reversed

IT Pro reporting on Gartner research | Global | Future of work | Published November 2 2026 | Reporting and analysis

Gartner expects roughly 30% of employees dismissed and replaced by AI to be rehired by 2029, often at higher cost, because firms misjudge the work that still requires human capability. Only 19% of surveyed firms reported practices that help leaders assess how work is changing and align talent strategy accordingly.

Why it matters: The evidence favors redesigning tasks and organizations over treating AI as a simple substitute for headcount.

15. More Firms Report Revenue Gains from AI but Job Redesign Lags

TechRadar reporting on Deloitte research | Global | AI adoption and productivity | Published November 6 2026 | Reporting and analysis

Twenty-eight percent of surveyed firms reported current revenue growth from AI, up from 20% earlier in 2026, while 86% planned to raise investment. Yet only 15% had redesigned jobs extensively and just 1% completely, suggesting that organizational change is lagging capital spending.

Why it matters: AI returns are becoming measurable, but the productivity payoff still depends on complementary changes in work design, governance and cost control.

16. US Voters Impose New Constraints on Data-Center Expansion

Axios | United States | AI infrastructure and politics | Published November 4 2026 | Reporting and analysis

Voters approved numerous data-center moratoriums and elected candidates favoring a slower infrastructure buildout, including in Texas, the center of the US boom. The results turn local power costs, water use, permitting and community consent into major constraints on a planned multi-trillion-dollar investment cycle.

Why it matters: The binding limit on AI expansion may increasingly be political and infrastructural rather than technological.

Geopolitics Energy and Structural Change

17. OPEC Plus Holds December Production at September Levels

Seven OPEC+ countries decided to maintain their September required production levels for December and reiterated their commitment to full conformity with existing agreements. The group will review conditions again on November 29.

Why it matters: Supply restraint keeps oil and refined-product prices exposed to geopolitical shocks and preserves an important source of global inflation risk.

18. Korea Records a $61.46 Billion Current-Account Surplus

The Bank of Korea reported a September current-account surplus of $61.46 billion, reflecting the strength of the export cycle and the semiconductor boom. The magnitude of the surplus underscores how AI-related demand is reshaping Asian trade balances and foreign-exchange flows.

Why it matters: Korea’s external position shows that the AI investment cycle is redistributing income toward semiconductor exporters and widening global imbalances.

19. Euro-Area Producer Prices Rise 2.5% in September

Industrial producer prices increased 2.5% from August in the euro area and 2.6% in the EU, following gains of 2.0% in both regions in August. The acceleration indicates that higher energy and input costs are moving through business supply chains before reaching final consumer prices.

Why it matters: Rising pipeline costs increase the risk that today’s energy shock becomes broader and more persistent inflation.

20. Japan Launches an Emergency Cybersecurity Package

Associated Press | Japan | Cybersecurity and resilience | Published November 6 2026 | Reporting and analysis

Japan announced a 10 billion yen package after attacks on companies and public agencies, including cyber rescue teams and a specialist unit that will use AI to detect vulnerabilities. The program combines public-private information sharing, active cyber defense and cooperation with foreign technology partners.

Why it matters: Digital resilience is becoming a form of economic infrastructure as AI expands both productive capacity and the sophistication of cyber threats.

Eagle Letter: AI and stock markets, monetary policy decisions, and much more…

This Week in One Sentence

Technology earnings, rather than the week’s crowded macroeconomic and political calendar, set market direction as investors questioned the financing and returns of the AI buildout while traditional havens sent a less consistent signal.

The Context

What moved markets: Technology earnings exposed a higher hurdle for AI investment. Intel fell 28.6% on Friday, Nvidia lost 4.2%, and the Nasdaq dropped 2.9%. Investors distinguished between companies that can fund capital spending through operating cash flow and those whose investment plans increasingly depend on debt, equity issuance or optimistic assumptions about future utilization.

What did not: The selloff did not produce a uniform flight to safety. The US 10-year Treasury yield fell only five basis points on Friday to about 4.93%, while gold futures dropped 3.7% to roughly $3,883 and Bitcoin fell below $77,000. The week therefore looked more like a repricing of technology and AI-financing risk than a broad macro panic.

The Bottom Line on Economic Data

United States: Real GDP accelerated from 2.2% in the second quarter to a 3.4% annualized rate in the third. Real final sales to private domestic purchasers rose 4.9%, supported by investment. September nominal consumer spending increased 0.5%, but real spending was unchanged, suggesting less momentum at the start of the fourth quarter.

Policy implications: The Fed held its target range at 3.75-4.00% by a 10-2 vote, but September PCE inflation rose to 3.6% year on year and core PCE to 3.1%. The Employment Cost Index increased 0.8% in the third quarter and 3.4% over twelve months. The mix justifies the pause while keeping a December increase plausible if employment and wage data remain firm.

Europe and Asia: Euro-area GDP grew 0.4% in the third quarter and 1.3% from a year earlier. The ECB kept its deposit rate at 2.50%, while the BOJ held at 1.25% but raised its inflation forecast. China’s official manufacturing PMI fell from 50.1 to 49.3. In markets, the technology shock spread to Asia, with South Korea’s Kospi down 3.5% and Japan’s Nikkei 225 down 2.1% on Friday.

Cross Asset Signals and Market Debate

The Treasury move admits two readings. The roughly 36-basis-point decline in the 10-year yield during October points to meaningful demand for duration, but the still-high 4.93% level suggests that inflation, energy and bond supply continue to constrain the rally. Credit markets also show dispersion rather than systemic stress: bonds tied to highly leveraged AI infrastructure have repriced sharply, while broader high-yield conditions remain more stable. Falling gold and Bitcoin reinforce the view that investors were reducing crowded or liquid positions rather than buying every conventional haven.

Market Snapshot

Equities: On Friday the S&P 500 fell 1.8%, the Nasdaq 2.9% and the Dow 1.1%. For the week, the S&P lost 0.6%, the Nasdaq 2.0% and the Dow 0.9%, while the Russell 2000 gained 1.3%.

Rates and FX: The US 10-year yield ended Friday near 4.93%, down from 4.98% on Thursday and about 36 basis points lower during October. The yen strengthened to 157.89 per dollar after the BOJ decision.

Commodities: December Brent settled at $117.64 and WTI at $104.12; Brent gained 13.6% and WTI 15.2% during October. Gold futures fell 3.7% on Friday to about $3,883 an ounce.

Other risk indicators: Bitcoin fell below $77,000, while the VIX ended Friday near 19.4. Recent repricing in AI-infrastructure bonds shows that financing risk is becoming more issuer-specific.

The Week Ahead

The US midterm elections on Tuesday will test expectations for tariffs, energy policy, regulation and data-center permitting. ISM manufacturing arrives Monday, job openings Tuesday and ISM services Wednesday. The Bank of England meets Thursday, while Friday’s US payroll, unemployment and wage data will be the main test of the Fed outlook. Apple earnings and OPEC+ policy add technology and energy risks.

Forecast benchmarks: Current calendars put the October ISM manufacturing index near 54.7 and services near 54.8. Payroll estimates are less settled: Barclays expects 50,000 new jobs and a 4.1% unemployment rate, while other published estimates are closer to 65,000-75,000. The dispersion itself argues against treating one point estimate as a firm consensus.

A stabilization in technology shares, contained credit spreads and softer but positive payroll growth would support the view that this is a valuation and financing adjustment. A broader rise in corporate spreads, renewed energy disruption, stronger wages or another sharp deterioration in AI-related cash flow would instead signal tighter financial conditions and increase pressure on both equities and central banks.

Monetary Policy and Inflation

1. Federal Reserve Holds Rates at 3.75-4.00%

Federal Reserve | United States | Monetary policy | Published October 28 2026 | Primary source

The FOMC maintained its target range by a 10-2 vote and said economic activity was expanding at a strong pace. Lisa Cook and Beth Hammack dissented in favor of a 25-basis-point increase, while the statement emphasized that inflation remains elevated.

Why it matters: The vote shows that the October pause left the tightening debate open rather than marking the end of the cycle.

2. ECB Keeps Its Three Policy Rates Unchanged

European Central Bank | Euro area | Monetary policy | Published October 29 2026 | Primary source

The ECB held the deposit rate at 2.50%, the refinancing rate at 2.65% and the marginal lending rate at 2.90%. It warned that the longer energy shock raises inflation risks, lowers growth and tightens financing conditions.

Why it matters: The ECB must now balance imported energy inflation against a growth outlook weakened by the same shock.

3. Bank of Japan Holds at 1.25% and Signals Further Increases

Reuters via MarketScreener | Japan | Monetary policy | Published October 30 2026 | Reporting and analysis

The BOJ held its short-term policy target at 1.25% by an 8-1 vote and raised its inflation forecast. Hajime Takata dissented in favor of 1.50%, while the bank retained the option of further increases.

Why it matters: Japan is moving further away from its former ultra-loose regime even as policymakers remain cautious about growth and currency effects.

4. Christine Lagarde Will Leave the ECB Presidency in February 2027

European Central Bank | Euro area | Central-bank governance | Published October 29 2026 | Primary source

Christine Lagarde informed the Governing Council that she will step down on February 7, 2027, eight months before the scheduled end of her term. Her successor will be appointed by the European Council under the treaty process.

Why it matters: The leadership transition adds an institutional variable to monetary policy at a time of energy-driven inflation and uneven sovereign risks.

Growth Trade and Fiscal Policy

5. US GDP Accelerates to a 3.4% Annualized Rate

Real GDP accelerated from 2.2% in the second quarter to 3.4% in the third. Investment, consumer spending and government spending increased, and real final sales to private domestic purchasers rose 4.9%.

Why it matters: The report shows that AI-related investment and domestic demand are still strong enough to complicate the Fed’s inflation trade-off.

6. September PCE Inflation Rises to 3.6%

The PCE price index rose 0.5% in September and 3.6% from a year earlier, while core PCE increased 0.3% over the month and 3.1% over the year. Nominal consumer spending rose 0.5%, but real spending was unchanged.

Why it matters: Inflation is moving away from target even as real consumption loses momentum, leaving the Fed with an increasingly uncomfortable policy mix.

7. US Employment Costs Rise 0.8% in the Third Quarter

The Employment Cost Index rose 0.8% in the third quarter and 3.4% over twelve months. Wages and salaries increased 3.1% year on year, while benefits rose 3.9%; inflation-adjusted private wages fell 0.6%.

Why it matters: Moderating nominal wage pressure reduces the risk of a wage-price spiral, but declining real pay may restrain household demand.

8. Euro-Area GDP Grows 0.4% in the Third Quarter

Seasonally adjusted GDP increased 0.4% in the euro area and 0.5% in the EU from the previous quarter. The year-on-year increases were 1.3% and 1.5%, although the flash estimates remain subject to revision.

Why it matters: Moderate growth gives the ECB some room to focus on inflation, but the deceleration from the second quarter shows limited resilience to the energy shock.

Markets and Financial Conditions

9. US Stocks End the Week Lower as Technology Shares Fall

Associated Press | United States | Equity markets | Published October 30 2026 | Reporting and analysis

The S&P 500 fell 1.8% on Friday and 0.6% over the week. The Nasdaq lost 2.9% on Friday and 2.0% over the week, while the Dow declined 0.9% for the week and the Russell 2000 gained 1.3%.

Why it matters: The divergence between technology-heavy indexes and small caps suggests a reassessment of AI valuations rather than an indiscriminate liquidation of risk.

10. Treasury Yields Fall as Investors Seek Safety

Reuters via Stockopedia | United States | Government bonds | Published October 30 2026 | Reporting and analysis

The US 10-year Treasury yield fell about six basis points to 4.925% as investors moved out of technology shares and into government bonds. It declined roughly 36 basis points during October after reaching 5.365% earlier in the month.

Why it matters: The rally in Treasuries shows that equity-specific fears can temporarily outweigh strong growth, high inflation and expensive oil.

11. Yen Strengthens after the Bank of Japan Meeting

Reuters via MarketScreener | Japan and global FX | Foreign exchange | Published October 30 2026 | Reporting and analysis

The yen strengthened to 157.89 per dollar after the BOJ held rates and upgraded its inflation outlook. Falling US Treasury yields also weighed on the dollar as the technology selloff drove demand for safer assets.

Why it matters: The move connects expectations for Japanese normalization with the global repricing of yields and technology risk.

12. Oil Finishes October with Double-Digit Gains

Reuters reporting via EnergyNow | Global | Energy markets | Published October 30 2026 | Reporting and analysis

December Brent settled at $117.64 and WTI at $104.12 after renewed attacks on commercial shipping and energy infrastructure. Brent gained 13.6% during October and WTI 15.2%, while the transition to the January Brent contract lowered the quoted front-month level.

Why it matters: Persistent geopolitical risk keeps energy at the center of global inflation, household purchasing power and central-bank policy.

Technology Innovation and the Future of Work

13. Microsoft and Alphabet Receive Different Verdicts on AI Spending

Axios | United States | Big Tech earnings | Published October 29 2026 | Reporting and analysis

Microsoft exceeded sales and earnings expectations and generated $18.63 billion of quarterly free cash flow despite a year-on-year decline. Alphabet missed revenue and earnings expectations and reported negative free cash flow of $9.1 billion.

Why it matters: Investors are rewarding AI capital spending only when revenue and cash generation make the financing burden credible.

14. Amazon Reports Strong Cloud Growth and Negative Free Cash Flow

AWS revenue grew 39% to $46.0 billion and Amazon’s operating margin reached 13.9%. Bedrock spending by Fortune 500 companies rose nearly sevenfold, but trailing twelve-month free cash flow fell to an outflow of $42.4 billion as AI-related investment increased.

Why it matters: Amazon demonstrates that strong AI demand and rising operating profit can coexist with an increasingly capital-intensive financing model.

15. Hyperscalers Have Raised $326 Billion This Year

Axios | United States and global | AI financing | Published October 29 2026 | Reporting and analysis

Alphabet, Amazon, Meta, Microsoft and Oracle have raised $326 billion through equity and debt in 2026, more than three times the previous year’s record. Meta indicated that it could issue nearly $100 billion more in equity through early 2027.

Why it matters: AI is no longer financed only from operating cash flow; it is reshaping bond supply, equity issuance and financial conditions.

16. Some AI-Linked Layoffs Are Being Reversed

Associated Press | United States | Future of work | Published October 29 2026 | Reporting and analysis

Some employers are rehiring workers after discovering that automation did not capture undocumented workflows, judgment, team cohesion and emotional intelligence. Experts argue that firms often underestimate the invisible work required to perform tasks reliably.

Why it matters: The emerging reversals suggest that AI changes task design and skill requirements more consistently than it eliminates whole occupations.

Geopolitics Energy and Structural Change

17. China’s Manufacturing PMI Falls Back to 49.3

China’s official manufacturing PMI fell from 50.1 in September to 49.3 in October. New export orders declined to 48.7 and production to 49.8, returning the sector to contraction after one month of expansion.

Why it matters: Weak export orders underline the limits of a manufacturing-led growth model when external demand and trade relations become less dependable.

18. The AI Selloff Spreads to Korea and Japan

Associated Press | Global | Technology and cross-border markets | Published October 30 2026 | Reporting and analysis

US technology shares suffered their worst session since June, while South Korea’s Kospi fell 3.5% and Japan’s Nikkei 225 lost 2.1%. Nearly as many S&P 500 shares rose as fell, showing that the pressure was concentrated in technology and AI-linked names.

Why it matters: The global spillover reveals how AI investment has become a common factor linking US platforms, Asian semiconductors and international financial conditions.

19. US Governor Races Could Shape Data-Center Investment

Ten governor races could influence rules for 67.4 gigawatts of planned data-center capacity representing an estimated $2.5 trillion of investment. Texas, which accounts for a quarter of planned capacity, is the central contest because candidates differ sharply over permitting and restrictions.

Why it matters: AI capital spending is becoming dependent on state politics, power systems and permitting rather than technology and finance alone.

20. Elections Central Banks and Jobs Lead the Week Ahead

The US midterm elections, the RBA and Bank of England decisions, ISM surveys and Friday’s payroll report dominate the calendar. Apple earnings, euro-area inflation and OPEC+ policy provide additional tests of technology demand, prices and energy supply.

Why it matters: The coming week will show whether the recent risk-off move remains an AI valuation correction or broadens through policy, labor and energy channels.

Eagle Letter: Central banks, Canada-EU ties, and much more…

Central banks delivered a clear message this week. Inflation concerns dominate. The Federal Reserve raised its target range by 25 basis points to 3.75-4.00%, which was its first increase since 2023. The decision was (somewhat surprisingly) unanimous, perhaps to provide a strong message to the public. The median projection for the policy rate at the end of 2026 rose to 4.1%, which implies another increase in 2026.

The Bank of Japan also raised its policy rate by 25 basis points to 1.25%, the highest level in 31 years. The 7-2 vote and Governor Kazuo Ueda’s cautious guidance seemed to have disappointed investors. They were expecting a faster path, and the yen weakened. The Bank of England held at 3.75%, but three of nine policymakers voted for an immediate increase and the minutes warned that persistent energy pressure could require tighter policy.

1. Federal Reserve – The FOMC Raises Rates to 3.75-4.00%

Federal Reserve | Monetary policy decision | September 16, 2026

The FOMC unanimously raised the target range by 25 basis points, its first increase since 2023. The statement described economic activity as solid, domestic spending as resilient and inflation as elevated. The brief language placed unusual emphasis on the commitment to price stability and avoided detailed forward guidance.

2. Federal Reserve – Projections Point to Another 2026 Increase

Federal Reserve | Summary of Economic Projections | September 16, 2026

The median policy-rate projection rose to 4.1% for the end of 2026 and remained at 4.1% for 2027. Officials projected PCE inflation of 3.7%, core PCE inflation of 3.4% and unemployment of 4.1% this year. The combination implies that most policymakers expect another increase before year-end and little scope for easing in 2027.

3. Associated Press – Why the Fed Is Raising Rates Now

Associated Press | US monetary-policy analysis | September 17, 2026

The Fed’s shift reflects renewed energy inflation, firm economic growth and a labor market that has not weakened materially. The move may restrain inflation expectations and therefore long-term borrowing costs, even though the policy rate itself increased. The main uncertainty is how the Fed responds if AI investment slows while oil remains expensive.

4. Associated Press – US Retail Sales Rise 1.2%

Associated Press | US consumer spending | September 16, 2026

Retail sales rebounded 1.2% in August after a revised 0.5% decline in July and exceeded the 0.7% consensus forecast. Sales excluding gasoline stations rose 1.1%. Strong spending supports near-term growth but also reduces the case for the Fed to treat the energy shock as the only source of inflation pressure.

5. Federal Reserve – Industrial Production Stalls in August

Federal Reserve | Industrial production | September 18, 2026

Total industrial production was unchanged in August, manufacturing output fell 0.3% and capacity utilization remained at 76.3%. Utilities output rose 1.8%, while mining increased only 0.1%. The contrast with retail sales shows that household demand is stronger than factory momentum.

6. Reuters – US Manufacturing Output Ends a Seven-Month Advance

Reuters | US manufacturing | September 18, 2026

Manufacturing production fell 0.3% in August against expectations of a 0.3% increase. Output was still 0.9% higher than a year earlier and remains supported by AI-related investment. The report suggests that the expansion is increasingly concentrated rather than uniformly strong across industry.

7. Office for National Statistics – UK Inflation Rises to 3.1%

Office for National Statistics | UK consumer prices | September 16, 2026

CPI inflation increased to 3.1% in August from 2.9% in July, and monthly prices rose 0.5%. Transport, especially motor fuel, made the largest upward contribution. Core CPIH inflation remained at 2.9% and services inflation at 3.6%, showing that the latest acceleration was led mainly by goods and energy.

8. Associated Press – The Bank of England Holds but Signals a Possible Increase

Associated Press | UK monetary policy | September 17, 2026

The Bank of England held its policy rate at 3.75% by a 6-3 vote, with three members preferring an immediate increase to 4.00%. Policymakers warned that a prolonged energy shock could make another increase necessary. The split shows that the debate has moved from whether to tighten toward the timing of the next step.

9. Reuters – The Bank of England Expects Inflation above 4%

Reuters | UK inflation and monetary policy | September 17, 2026

The Bank of England expects inflation to exceed 4% early next year if the energy shock persists. Governor Andrew Bailey and several deputies explicitly raised the possibility of higher rates. Weak wage growth argues for patience, but the institution is increasingly concerned that imported inflation could influence expectations and domestic price setting.

10. Reuters – The Bank of Japan Raises Rates to a 31-Year High

Reuters | Japanese monetary policy | September 18, 2026

The BOJ raised its policy rate from 1.00% to 1.25% by a 7-2 vote. The rate is the highest since 1995, but two dissenters favored no change. The decision reflects concern that oil prices and a weak currency could push inflation above target, while the dissent underscores political and economic limits on rapid normalization.

11. Reuters – Ueda Signals Further Tightening but Keeps the Pace Flexible

Reuters | Bank of Japan communication | September 18, 2026

Governor Kazuo Ueda said the BOJ remained prepared to raise borrowing costs but would consider financial conditions and upside price risks when deciding the pace. The cautious message fell short of the market’s hawkish expectations. Communication has become important because the rate increase itself had already been fully priced.

12. Reuters – The Yen Slumps despite the BOJ Increase

Reuters | Foreign exchange | September 18, 2026

The dollar rose more than 1.2% to 158.07 yen after the decision and was on course for its strongest weekly gain against the yen in two years. Two dissents and cautious guidance caused investors to reduce expectations for subsequent BOJ moves. The reaction shows that relative rate paths matter more than a fully anticipated decision.

13. Reuters – Global Markets End a Turbulent Central-Bank Week

Reuters | Global financial markets | September 18, 2026

Global equities edged higher on Friday as late US gains offset losses in Europe. The S&P 500 and Nasdaq rose, while the Dow and European shares fell. With oil above $100 and major central banks tightening, investors remain willing to own technology stocks but are less comfortable with rate-sensitive and domestically oriented sectors.

14. Reuters – Wall Street Finishes Mixed as the 10-Year Yield Reaches 5%

Reuters | US equities and bonds | September 18, 2026

A semiconductor rally helped US equities avoid a broad decline, but the 10-year Treasury yield returned above 5%. The week divided into pre-Fed anxiety and a post-decision reassessment of how far rates may rise. Technology retained support, while materials, utilities and real estate remained vulnerable to high discount rates.

15. Associated Press – Weekly US Index Performance Shows Narrow Resilience

Associated Press | US market performance | September 18, 2026

The S&P 500 slipped 0.1% over the week and the Dow lost 1.7%, while the Nasdaq gained 0.7%. On Friday, the S&P 500 rose 0.2%, the Nasdaq 0.4% and the Dow fell 0.2%. The divergence confirms that technology strength is masking weaker breadth in the broader market.

16. Reuters – European Shares Fall as Autos and Telecoms Retreat

Reuters | European equities | September 18, 2026

The STOXX 600 fell 1.1% on Friday and 0.6% over the week. Volkswagen dropped 5.6% after cutting its outlook, while automobiles and telecommunications led the decline. Europe’s market reaction combines company-specific earnings pressure with concern that higher energy costs and interest rates will weaken household demand.

17. Reuters – Saudi Aramco Halts October Deliveries to Some European Refiners

Reuters | European oil supply | September 18, 2026

At least two European customers were reportedly told they would receive no Saudi crude under term contracts in October after the East-West Pipeline attack. Brent nevertheless ended the week near $103, below its earlier peak. The divergence between benchmark prices and contractual availability leaves Europe exposed to refinery and freight pressures.

18. Reuters – China’s Industrial Strength Masks Weak Domestic Demand

Reuters | Chinese economic activity | September 15, 2026

Industrial output grew 5.2% from a year earlier in August, but retail sales rose only 0.4%, fixed-asset investment fell 7.2% in the first eight months and property investment dropped 19.9%. Advanced manufacturing and exports continue to offset weak household demand, leaving the recovery dependent on external technology spending.

19. Associated Press – Canada Seeks Deeper European Ties

Associated Press | Trade and structural change | September 18, 2026

Prime Minister Mark Carney presented closer European integration as part of Canada’s response to rising US borrowing costs and new tariffs. The initiative illustrates how trade conflict is changing economic alliances and investment planning. Diversification may reduce dependence on the United States but requires costly adjustments in regulation, logistics and market access.

20. Kiplinger – Next Week Brings PMIs and Heavy Fed Communication

Kiplinger | Economic calendar | September 18, 2026

The next week is light on major releases but includes at least ten appearances by Fed officials. Flash PMIs arrive Wednesday, new-home sales Thursday and durable-goods orders plus final consumer sentiment Friday. Markets will use the speeches to assess how broadly officials support another increase before year-end.

Eagle Letter: U.S. monetary policy, oil prices, AI uncertainty, and much more…

Oil and long-term interest rates again dominated markets and macroeconomic developments on Tuesday. Brent rose about 2.5% to around $108.5 a barrel. The US 10-year Treasury yield briefly reached 5.04%, its highest level since 2007, before trading near 5.00%. The increase reflects the combination of higher oil prices, expectations of tighter monetary policy, high budget deficits and concern about the US fiscal outlook. Equities remained under pressure, although the selling was more selective than on Monday.

1. Associated Press – The Fed Faces a Credibility Test

Associated Press | US monetary policy | September 15, 2026

The Federal Reserve is widely expected to raise its policy rate by 25 basis points on Wednesday, its first increase in three years. Markets see the decision as a test of Chair Kevin Warsh’s emphasis on price stability because inflation remains above target and oil prices have risen again. The projections will show whether officials view the move as a single adjustment or the start of a new cycle.

2. Reuters – Global Yields Reach New Highs before the Fed

Reuters | Global markets and interest rates | September 15, 2026

The US 10-year yield reached its highest level since 2007, while German Bund yields rose to a 17-year high. Investors are pricing higher policy rates, heavy government borrowing and a lasting energy premium at the same time. The bond market is tightening financial conditions independently of any decision the Fed makes on Wednesday.

3. Associated Press – Oil and Bonds Keep Wall Street under Pressure

Associated Press | US financial markets | September 15, 2026

The S&P 500 was down 0.4%, the Dow 0.8% and the Nasdaq 0.8% in the early afternoon as the 10-year Treasury yield touched 5.04%. Higher yields raise borrowing costs and reduce the relative appeal of expensive equities. Tuesday’s market shows how an energy shock can reach stocks through both inflation expectations and discount rates.

4. Reuters – Big Tech Diverges after Monday’s AI Selloff

Reuters | US equities and technology | September 15, 2026

Nvidia recovered modestly, but Alphabet, Amazon and Microsoft fell more than 1% around midday. Investors appear to distinguish between chipmakers that sold off sharply on Monday and platform companies whose valuations still depend on sustained AI investment. Energy was the only major S&P 500 sector to gain.

5. Reuters – The Dollar Holds Firm as Rate Expectations Rise

Reuters | Foreign exchange | September 15, 2026

The dollar index traded near 99.6, the euro remained around $1.154 and the yen weakened to about 154.8 per dollar. More than 92% probability of a Fed increase was priced into futures. When the Fed, ECB and BOJ all lean toward tightening, currencies depend increasingly on the expected sequence of subsequent moves.

6. Reuters – Morgan Stanley Forecasts Two Fed Increases in 2026

Reuters | Monetary-policy forecasts | September 15, 2026

Morgan Stanley now expects the Fed to raise rates in September and December and forecasts another ECB increase in December. The shift reflects sticky inflation, second-round energy effects and demand supported by AI investment. Such forecast revisions can reinforce the rise in long-term yields even before central banks act.

7. New York Fed Survey – Manufacturing Growth Slows Sharply

Federal Reserve Bank of New York data | Manufacturing | September 15, 2026

The Empire State Manufacturing Index fell to 7.6 in September from 20.6, compared with a consensus forecast of 14.8. A positive reading still signals expansion, but the size of the decline complicates a uniformly hawkish interpretation of the US economy. It also increases the importance of Wednesday’s retail-sales and industrial-production reports.

8. Reuters – China’s Technology Factories Outrun Household Demand

Reuters | Chinese economic activity | September 15, 2026

Industrial production increased 5.2% from a year earlier in August, above expectations, while retail sales grew only 0.4%. Fixed-asset investment fell 7.2% in the first eight months and property investment dropped 19.9%. The divergence shows an economy supported by high-tech manufacturing and exports but restrained by housing and weak consumption.

9. Reuters – Britain’s Labour Market Remains Soft

Reuters | UK employment and wages | September 15, 2026

The unemployment rate held at 4.9%, regular pay growth remained at 3.5% and vacancies fell to 702,000. Private-sector regular earnings rose only 2.9%, the weakest pace since 2020. The figures reduce the risk of a wage-price spiral and support expectations that the Bank of England will hold rates on Thursday.

10. ZEW – German Expectations Remain Positive but Fragile

ZEW | German economic sentiment | September 15, 2026

The ZEW expectations index edged up to 34.7, while the assessment of current conditions improved by 14 points to minus 47.1. Fiscal measures and exports support hopes of recovery, but high energy prices and security risks remain substantial constraints. The survey points to improvement from a still weak starting point.

11. Reuters – German Wholesale Inflation Accelerates to 6.8%

Reuters | German prices | September 15, 2026

Wholesale prices rose 6.8% from a year earlier in August, the fastest pace in more than three years. Petroleum-product prices increased 36.1% and chemical products 13.6%. The data provide a concrete transmission channel from the Middle East conflict to European consumer inflation and strengthen the case for ECB vigilance.

12. Reuters – European Shares Reach a Three-Month Low

Reuters | European equities | September 15, 2026

The STOXX 600 fell to its lowest level since June as banks and financial-services companies led the decline. UBS, UniCredit and other lenders weakened after concerns about investment-banking revenue and higher bond yields. Energy costs and tighter policy are now weighing on both earnings expectations and valuation multiples.

13. Reuters – Asian Markets Wait for the Fed and BOJ

Reuters | Asian financial markets | September 15, 2026

Asia-Pacific equities outside Japan edged lower while the Nikkei gained 0.2%. Oil above $105 and the prospect of rate increases in both the United States and Japan restrained risk appetite. The yen weakened despite the expected BOJ move, suggesting that investors want stronger guidance on the pace of normalization.

14. Reuters – The Yen Rally Faces a Bank of Japan Test

Reuters | Japan and foreign exchange | September 15, 2026

The yen has risen about 5% since the start of September, but analysts see a risk of disappointment if the BOJ raises rates without accelerating its future path. Markets expect a 25-basis-point increase to 1.25% on Friday. Japanese investors also shifted 1.3 trillion yen into foreign equities in August, showing that cross-border capital flows remain important.

15. Yonhap – Korean Stocks Fall for a Fourth Session

Yonhap News Agency | Korean equities and currency | September 15, 2026

The KOSPI declined 0.85% to 6,627.26 as foreign and institutional investors sold a combined 2.48 trillion won. Samsung Electronics lost 0.2%, SK Hynix 0.4% and the won weakened to 1,359.4 per dollar. Korea remains particularly sensitive to higher oil, global yields and uncertainty about AI capital spending.

16. Reuters – Saudi Arabia Cancels Some European Oil Cargoes

Reuters | Physical oil supply | September 15, 2026

Saudi Arabia reduced late-September shipments to European buyers after damage to the East-West Pipeline interrupted Red Sea loadings. Poland’s Orlen and other refiners sought replacement supplies, and some cargo prices rose above $120. The cancellations turn a geopolitical risk premium into an observable physical shortage.

17. Reuters – Some Physical Oil Cargoes Trade above $130

Reuters | Oil pricing and market structure | September 15, 2026

Prices for selected physical cargoes in Europe exceeded $130 a barrel, approaching April’s records, even as Brent futures traded near $108. The gap reflects urgent demand for particular grades and delivery locations. Physical-market stress can reach refiners and consumers faster than benchmark futures imply.

18. Associated Press – Saudi Arabia Seeks Egyptian Support

Associated Press | Middle East and Red Sea security | September 15, 2026

Saudi Crown Prince Mohammed bin Salman met Egypt’s president as Houthi attacks threatened shipping and energy infrastructure on both sides of the Red Sea. The East-West Pipeline may remain largely closed for weeks. Egypt has an economic interest in restoring traffic because lower Red Sea flows reduce Suez Canal and pipeline revenues.

19. Reuters – Japanese Land Prices Rise for a Fifth Year

Reuters | Japanese property market | September 15, 2026

Average land prices increased 1.5% in the year to July, matching the strongest rate since the early 1990s. Prices in Tokyo, Osaka and Nagoya rose 4.4%, while tourism supported gains in regional destinations. The data strengthen the case that Japan can tolerate gradual monetary normalization, although regional differences remain wide.

20. Reuters – Canadian Home Sales Fall as Mortgage Rates Rise

Reuters | Canadian housing | September 15, 2026

Home sales fell 0.7% in August and 6.9% from a year earlier, while the national price index was down 3% year on year. Higher bond yields have already raised fixed mortgage rates, and markets see a meaningful chance of a Bank of Canada increase in October. Housing shows how global rate repricing can restrain domestic demand before central banks move.

Eagle Letter: Oil prices, AI risks, bond yields, and much more…

Oil, bond yields, and a reassessment of the AI outlook dominated Monday’s markets. Brent crude rose about 3% after new attacks on Saudi energy and shipping infrastructure. Damage to the East-West Pipeline (Saudi Arabia has used to bypass disruption in the Strait of Hormuz) could take three to five weeks to repair. The renewed supply risk briefly pushed the US 10-year Treasury yield through 5% for the first time since 2023.

Calls from leaders at Anthropic, OpenAI and other frontier laboratories to slow the advance of the most capable models raised questions about the pace of investment, product releases and future cash flows. US technology shares fell, while gains in less AI-sensitive sectors limited the decline in the broader market.

1. Eurostat – Euro-Area Growth Is Revised Higher

Eurostat | GDP, demand components and employment | September 7, 2026

Euro-area GDP increased 0.6% in the second quarter and EU GDP 0.7%, while employment rose only 0.1% in both areas. Net exports contributed 0.9 percentage points to euro-area growth and inventories subtracted 0.5 points. The mix shows a resilient economy, but one still unusually dependent on external demand rather than broad domestic investment.

2. Eurostat – Productivity Improves, but Not Everywhere

Eurostat | Labour productivity | September 7, 2026

EU labour productivity rose 0.9% per person and 0.8% per hour from a year earlier in the second quarter. Slovenia and Denmark recorded strong gains, while Italy and several eastern economies declined. The dispersion matters because Europe needs productivity growth to finance higher defense, energy and ageing-related expenditure without relying only on debt or taxation.

3. Destatis – German Industry Contracts Again

German Federal Statistical Office | Industrial production | September 7, 2026

German industrial production fell 1.1% in July and was 1.6% below its year-earlier level. Automotive output dropped 9.2%, partly because of a multi-week shutdown, and production in energy-intensive branches declined 1.7%. Energy output rose 4.7%, but the broader figures show how difficult Germany’s manufacturing adjustment remains despite fiscal support and stronger euro-area demand.

4. Associated Press – China’s Export Surplus Keeps Expanding

Associated Press | China trade | September 8, 2026

China’s exports increased 25% from a year earlier in August and imports 28.2%, widening the monthly trade surplus to $119.1 billion. Auto exports rose 43% and semiconductor exports 129.8%. Strong technology and manufacturing shipments support growth, but they also deepen global imbalances and increase the probability of additional trade restrictions in the United States and Europe.

5. Japan Cabinet Office – GDP Is Revised Up before the BOJ Meeting

Japan Cabinet Office | Second-quarter national accounts | September 8, 2026

Japan revised second-quarter growth to 0.4% from the previous quarter, or 1.4% annualized, from an initial 1.1%. Capital expenditure fell 0.9%, less than first estimated, while private consumption was flat and net exports added 0.5 percentage points. The revision reduces near-term recession concerns but leaves the expansion heavily exposed to trade and exchange-rate conditions.

6. INSEE – French Manufacturing Weakness Broadens

INSEE | Industrial production | September 9, 2026

French manufacturing output fell 0.8% in July after a 1.0% decline in June, and total industrial production decreased 0.4%. Transport equipment dropped 2.8%, while electrical, electronic and computer equipment fell 0.8%. Higher energy production prevented a larger aggregate decline, but the sector detail points to weak capital-goods momentum and continued pressure on industrial competitiveness.

7. INEGI – Mexican Inflation Remains Comparatively Contained

INEGI | Consumer and producer prices | September 9, 2026

Mexico’s annual consumer inflation stood at 3.26% in August, while the producer price index increased 2.99% from a year earlier. These rates are moderate compared with the renewed energy-driven price pressure in the United States and Europe. Mexico nevertheless remains exposed through fuel, exchange-rate and tariff channels, so monetary policy must balance imported risks against softer domestic demand.

8. National Bureau of Statistics of China – Factory Inflation Accelerates

National Bureau of Statistics of China | Producer prices | September 10, 2026

China’s industrial producer prices rose 3.8% year on year and 0.4% month on month in August. Mining prices increased 17.8% and fuel and power purchasing costs 9.8%, while consumer-goods producer prices still fell 0.5%. The split shows a supply-side energy and raw-material shock moving through heavy industry before it is fully reflected in final consumer prices.

9. National Bureau of Statistics of China – Consumer Inflation Picks Up

National Bureau of Statistics of China | Consumer prices | September 10, 2026

China’s CPI rose 0.8% from a year earlier and 0.4% in August alone. Food prices were still 1.4% lower than a year ago, whereas non-food prices increased 1.2%. The return of modest inflation reduces deflation concerns, but subdued food prices and weak household demand distinguish China’s cycle from the energy-led inflation problem confronting many import-dependent economies.

10. U.S. Bureau of Labor Statistics – Producer Prices Signal Pipeline Pressure

U.S. Bureau of Labor Statistics | Producer prices | September 10, 2026

US final-demand producer prices increased 0.4% in August and 5.4% over twelve months. Goods prices rose 1.1%, led by a 4.2% energy increase, while diesel jumped 24.1%. Services advanced only 0.1%, but transportation and warehousing rose 2.3%. The report shows why businesses may face renewed margin pressure even if core consumer inflation remains better behaved.

11. U.S. Department of Labor – Layoffs Remain Low

U.S. Department of Labor | Unemployment insurance claims | September 10, 2026

Initial unemployment claims edged down to 206,000 in the week ended September 5, and the four-week average also stood at 206,000. Continuing claims were 1.774 million. The labor market is no longer as dynamic as it was earlier in the expansion, but the absence of broad layoffs gives the Federal Reserve more room to respond to inflation without immediately threatening employment.

12. European Central Bank – A Second Energy-Driven Rate Increase

European Central Bank | Monetary policy decision | September 10, 2026

The ECB raised its three policy rates by 25 basis points, taking the deposit rate to 2.50%. Staff projections put headline inflation at 3.0% in 2026, 2.5% in 2027 and 2.1% in 2028, while growth is seen at 0.9%, 1.4% and 1.5%. The move prioritizes anchoring expectations despite clear downside risks to activity.

13. Istat – Italian Industry Rebounds, but the Trend Is Flat

Istat | Industrial production | September 10, 2026

Italian industrial production increased 0.7% in July after two monthly declines, but was unchanged from a year earlier and slipped 0.1% over the latest three months. The rebound contrasts with contraction in Germany and France, yet it does not establish a strong trend. Italy’s near-term resilience still depends on consumption, investment execution and manageable sovereign borrowing costs.

14. Statistics Canada – Foreign Assets and Bond Dependence Both Rise

Statistics Canada | International investment position | September 10, 2026

Canada’s net foreign asset position jumped by a record C$619.2 billion to C$1.946 trillion in the second quarter, mainly because of market-price gains. At the same time, foreign investors held 44.6% of federal government bonds, up from 27.0% in early 2021. Strong external assets coexist with a growing reliance on global investors to finance public debt.

15. Bank of Japan – Domestic Producer Prices Stay High

Bank of Japan | Corporate goods prices | September 11, 2026

Japan’s producer price index fell 0.2% in August but remained 7.6% above a year earlier. Import prices declined 3.0% in yen terms during the month yet were still 24.8% higher year on year. The figures capture the central policy dilemma: a firmer yen can provide temporary relief, but imported inflation and accumulated cost pressure still support further normalization.

16. UK Office for National Statistics – Services Lift July Growth

Office for National Statistics | Monthly GDP | September 11, 2026

UK GDP increased 0.4% in July and in the three months to July. Services grew 0.4% in the month and 0.6% over three months, while production and construction both fell over the three-month period. The economy is proving more resilient than expected, but growth remains service-led and vulnerable to the renewed squeeze on real incomes from energy prices.

17. Japan Cabinet Office – Corporate Expectations Face an Energy Test

Japan Cabinet Office and Ministry of Finance | Business Outlook Survey | September 11, 2026

Japan’s quarterly Business Outlook Survey covered more than 11,000 enterprises and provides a timely view of conditions, sales, profits and investment before the September Bank of Japan meeting. Its importance is structural: companies must decide whether wage gains, automation and AI-related investment can offset weak household demand, higher import costs and a less accommodative interest-rate environment.

18. Eurostat – Employment Rises as Labour-Market Slack Stabilizes

Eurostat | EU labour force survey | September 11, 2026

The EU employment rate for people aged 20-64 increased to 76.4% in the second quarter from 76.3%, while labour-market slack remained at 11.0% of the extended labor force. Employment resilience supports consumption, but the persistence of unmet demand for work shows that aggregate labor shortages coexist with regional and skills mismatches during Europe’s industrial and digital transition.

19. U.S. Bureau of Labor Statistics – Energy Lifts Headline Inflation

U.S. Bureau of Labor Statistics | Consumer prices and real earnings | September 11, 2026

US consumer prices rose 0.4% in August and 3.4% over the year. Gasoline increased 3.9% and energy 2.1% in the month; core prices rose 0.3% but slowed to 2.4% year on year. Real hourly earnings fell 0.1% in August and 0.3% over twelve months, showing how the energy shock is already eroding purchasing power.

20. Associated Press – Equities Rebound, but the Week Ends Lower

Associated Press | US and global financial markets | September 11, 2026

The S&P 500 rose 0.9% on Friday but lost 0.8% for the week; the Dow fell 1.6%, the Nasdaq 0.7% and the Russell 2000 2.4% over five sessions. The 10-year Treasury yield approached 5% and Brent remained near $104 after a volatile surge. Markets are repricing a regime of resilient growth, renewed inflation and tighter policy.

Eagle Letter: Oil prices, ECB meeting, and much more…

Oil, inflation and interest-rate expectations were crucial for global markets. Brent crude moved above $100 a barrel. The weekly rise of more than 8% implies a renewed supply shock.

United States: Consumer prices rose 0.4% in August and 3.4% from a year earlier. Gasoline increased 3.9% in the month and energy 2.1%. Core inflation was 0.3% month on month and eased to 2.4% year on year. Producer prices also rose 0.4% in August and 5.4% over twelve months. Diesel jumped 24.1%. Real average hourly earnings fell 0.1% in the month and 0.3% over the year, while initial jobless claims remained low at 206,000.

The ECB raised all three policy rates by 25 basis points, taking the deposit rate to 2.50%, and projected headline inflation of 3.0% in 2026 and 2.5% in 2027. China reported 25% export growth, 28.2% import growth and a $119.1 billion trade surplus in August; consumer inflation rose to 0.8%, while producer inflation accelerated to 3.8%. The figures underline China’s export strength but also the growing international pressure created by its external surplus.

Japan revised second-quarter GDP growth up to an annualized 1.4%, although private consumption was flat and capital expenditure still declined. UK GDP increased 0.4% in July, supported by services. Germany and France reported weaker July industrial production, whereas Italian output rose 0.7%. The regional pattern remains uneven even before the full effect of higher energy costs reaches activity.

1. Eurostat – Euro-Area Growth Is Revised Higher

Eurostat | GDP, demand components and employment | September 7, 2026

2. Eurostat – Productivity Improves, but Not Everywhere

Eurostat | Labour productivity | September 7, 2026

3. Destatis – German Industry Contracts Again

German Federal Statistical Office | Industrial production | September 7, 2026

4. Associated Press – China’s Export Surplus Keeps Expanding

Associated Press | China trade | September 8, 2026

5. Japan Cabinet Office – GDP Is Revised Up before the BOJ Meeting

Japan Cabinet Office | Second-quarter national accounts | September 8, 2026

6. INSEE – French Manufacturing Weakness Broadens

INSEE | Industrial production | September 9, 2026

7. INEGI – Mexican Inflation Remains Comparatively Contained

INEGI | Consumer and producer prices | September 9, 2026

8. National Bureau of Statistics of China – Factory Inflation Accelerates

National Bureau of Statistics of China | Producer prices | September 10, 2026

9. National Bureau of Statistics of China – Consumer Inflation Picks Up

National Bureau of Statistics of China | Consumer prices | September 10, 2026

10. U.S. Bureau of Labor Statistics – Producer Prices Signal Pipeline Pressure

U.S. Bureau of Labor Statistics | Producer prices | September 10, 2026

11. U.S. Department of Labor – Layoffs Remain Low

U.S. Department of Labor | Unemployment insurance claims | September 10, 2026

12. European Central Bank – A Second Energy-Driven Rate Increase

European Central Bank | Monetary policy decision | September 10, 2026

13. Istat – Italian Industry Rebounds, but the Trend Is Flat

Istat | Industrial production | September 10, 2026

14. Statistics Canada – Foreign Assets and Bond Dependence Both Rise

Statistics Canada | International investment position | September 10, 2026

15. Bank of Japan – Domestic Producer Prices Stay High

Bank of Japan | Corporate goods prices | September 11, 2026

16. UK Office for National Statistics – Services Lift July Growth

Office for National Statistics | Monthly GDP | September 11, 2026

17. Japan Cabinet Office – Corporate Expectations Face an Energy Test

Japan Cabinet Office and Ministry of Finance | Business Outlook Survey | September 11, 2026

18. Eurostat – Employment Rises as Labour-Market Slack Stabilizes

Eurostat | EU labour force survey | September 11, 2026

19. U.S. Bureau of Labor Statistics – Energy Lifts Headline Inflation

U.S. Bureau of Labor Statistics | Consumer prices and real earnings | September 11, 2026

20. Associated Press – Equities Rebound, but the Week Ends Lower

Associated Press | US and global financial markets | September 11, 2026

Eagle Letter August 2026 No.5

Persistent inflation, high oil prices and concern about public debt pushed long-term yields higher.

The US 10-year Treasury yield finished at 4.73%, up from 4.69% on Thursday, while the 30-year yield moved above 5% to its highest level since 2007. Brent crude closed at $92.67. Expensive energy, large sovereign financing needs and borrowing linked to the AI investment boom are all adding pressure at the long end of the yield curve.

Minutes from the Federal Reserve’s July meeting reinforced the message that policy is more likely to remain restrictive than to provide quick relief.

What caught our eye:

1. National Bureau of Statistics of China – Industry Outpaces Household Demand

National Bureau of Statistics of China | Production, consumption and investment | August 17, 2026

China’s industrial value added increased 4.5% year on year in July and high-tech manufacturing grew 13.8% in the first seven months, while retail sales rose only 0.6% in July. The contrast shows that industrial upgrading and export capacity remain much stronger than household demand. Rebalancing will require income support, a more durable property stabilization and less reliance on manufacturing investment.

2. Eurostat – EU Bankruptcies Rise as Business Formation Slows

Eurostat | Business registrations and bankruptcies | August 17, 2026

EU business registrations fell 0.5% in the second quarter, while bankruptcies increased 5.7%. Registrations in information and communication rose 8.8%, but industry recorded a 3.6% decline. The sector split points to continued structural churn: digital activities attract new firms, whereas energy-intensive industry and other established sectors face financing costs, weak demand and the burden of economic transformation.

3. Statistics Canada – Energy Pushes Inflation Back to 3.0%

Statistics Canada | Consumer prices | August 17, 2026

Canadian CPI inflation accelerated to 3.0% in July from 2.8% in June. Gasoline prices were 25.7% higher than a year earlier, while inflation excluding gasoline remained at 2.2% and grocery prices rose 3.1%. The gap illustrates how a global energy shock can delay monetary normalization even when domestic inflation is comparatively contained and household budgets are already under pressure.

4. Bank of Japan – AI, Oil and the Yen Complicate the Rate Path

Bank of Japan | Outlook highlights | August 17, 2026

The Bank of Japan expects fiscal-year 2026 growth of 0.6% and core inflation of 2.5%. AI-related demand and government measures support activity, but crude oil and yen depreciation raise prices and weaken the terms of trade. The Bank still signals further rate increases if its outlook is realized, making Japan a notable exception to expectations of easier policy elsewhere.

5. U.S. Bureau of Labor Statistics – Import Prices Fall but Remain Elevated

U.S. Bureau of Labor Statistics | Import and export prices | August 18, 2026

U.S. import prices fell 0.4% in July as cheaper fuel outweighed higher nonfuel prices, and export prices declined 1.3%. Yet import prices were still 5.9% above a year earlier and export prices 8.2% higher. Monthly relief therefore coexists with a substantial annual cost shock, complicating the interpretation of tariffs, exchange rates and supply-chain normalization.

6. U.S. Census Bureau – Housing Starts Drop 12.4%

U.S. Census Bureau | New residential construction | August 18, 2026

Housing starts fell 12.4% in July to an annualized 1.239 million and single-family starts declined 9.9%. Permits rose 5.0%, offering a tentative signal of future stabilization. High mortgage rates, construction costs and affordability constraints are still restricting supply, reinforcing a structural housing shortage even as near-term building activity weakens.

7. Federal Reserve – Industrial Production Edges Higher

Federal Reserve | Industrial production and capacity utilization | August 18, 2026

U.S. industrial production rose 0.2% in July and manufacturing output also increased 0.2; excluding motor vehicles, factory production gained 0.4%. Capacity utilization remained at 76.3%, 3.1 percentage points below its long-run average. The figures suggest moderate aggregate momentum alongside large sector differences between AI-related capital spending, traditional manufacturing and autos.

8. Federal Reserve – July Minutes Keep Another Rate Increase in Play

Federal Reserve | FOMC minutes | August 19, 2026

The FOMC voted 9-3 to hold the target range at 3.50-3.75%, but many officials judged that higher rates could be required if inflation did not decline. Participants saw underlying price pressure beyond tariffs and energy, even as most expected eventual disinflation. The minutes shifted attention from the timing of easing toward the risk that restrictive policy may need to last longer.

9. Eurostat – Euro-Area Inflation Rises to 2.9%

Eurostat | Harmonised consumer prices | August 19, 2026

Euro-area inflation increased to 2.9% in July from 2.8% in June, with services contributing 1.55 percentage points and energy 0.94 points. National rates ranged from 0.3% in Sweden to 8.2% in Romania. This dispersion makes a single monetary stance increasingly difficult: common energy exposure is interacting with very different domestic price and demand conditions.

Eagle Letter August 2026 No.4

The week ended with a tension that markets have not resolved: US inflation moderated, but consumer spending and confidence weakened while oil remained expensive. That combination reduced the immediate case for a Federal Reserve rate increase, yet it also revived concern that growth could slow before inflation has fully returned to target.

Equities absorbed the news remarkably well. The S&P 500 slipped 0.2% on Friday from Thursday’s record but still gained 0.4% for the week, its third consecutive weekly advance. The Nasdaq added 0.1% and the Russell 2000 rose 1.1%, while the Dow lost 0.6%. Investors still appear willing to interpret softer data as supportive for policy, provided that earnings remain resilient.

Energy complicates that interpretation. Brent rose 1.7% on Friday to $88.52 as uncertainty continued over tanker access to the Persian Gulf. Reports that two UAE-operated tankers had been attacked in the Strait of Hormuz reinforced the risk that another disruption could quickly reverse the recent improvement in headline inflation.

United States: Advance retail and food-services sales fell 0.6% in July to $763.6 billion after rising 0.2% in June, although they remained 5.0% above their year-earlier level. Sales excluding autos and gasoline declined 0.2%, while the control group used in GDP calculations fell 0.4%. Online sales dropped 2.2% after an earlier Amazon Prime Day, whereas restaurant sales rose 0.5%. The details suggest genuine softness, but event timing and earlier tax-refund spending argue against treating one month as a consumer recession.

The next US data sequence will test whether July’s retail decline was isolated. Monday brings the Empire State manufacturing survey. Tuesday features import and export prices, housing starts, industrial production and pending home sales. Thursday’s jobless claims and Philadelphia Fed survey will add evidence on labor demand and manufacturing.

U.S. Bureau of Labor Statistics – Productivity Rises but Labor’s Share Reaches a Record Low

U.S. Bureau of Labor Statistics | Productivity and costs | August 6, 2026

Nonfarm business productivity increased at a 1.4% annualized rate in the second quarter and was 2.2% higher than a year earlier. Unit labor costs rose only 1.3%, but real hourly compensation fell 3.1% and labor’s share of output declined to 52.9%, the lowest in a series beginning in 1947. The figures separate rising efficiency from the distribution of its gains.

Our IMEN Updates & Highlights 2026 #27

Stablecoins, public debt and interest rates, geoeconomics, and much more…

Axios – AI Architects Say an Intelligence Inflection Point Is Approaching

Axios | Artificial intelligence and institutions | August 6, 2026

Leading AI developers increasingly describe a transition in which models help accelerate their own improvement. The claims remain uncertain, but corporate reorganizations and rapidly rising infrastructure budgets show that firms are acting as if capabilities will continue to advance quickly. The structural question is no longer only what AI can automate, but whether governance, energy systems and labor institutions can adapt at the same speed.

IMEN report on the BLS employment report

The U.S. Bureau of Labor Statistics (BLS) released the employment situation report for July. Instead of rising moderately as expected, employment fell by 23,000.

National Bureau of Statistics of China – Consumer Inflation Slows Sharply

National Bureau of Statistics of China | Consumer and producer prices | August 9, 2026

China’s consumer inflation slowed to 0.5% year on year in July, below expectations and down from 1.0% in June. Food prices declined while non-food inflation also eased, reinforcing evidence that domestic demand remains much weaker than the export sector. The contrast with high inflation in many advanced economies gives Beijing policy room, but monetary easing alone may not repair household confidence or property balance sheets.

Iraq and Turkey Agree on a New Oil Export Route

Iraq and Turkey signed a one-year agreement to raise crude exports through the Kirkuk-Ceyhan pipeline to at least 750,000 barrels per day. The corridor offers an alternative to southern terminals dependent on passage through the Strait of Hormuz, although it cannot replace Iraq’s prewar export capacity. Geopolitical disruption is redirecting infrastructure toward redundancy and overland routes.

World Economic Forum – Building Skills Is Not Enough for Young People

World Economic Forum | Jobs and the future of work | July 27, 2026

Training alone does not create durable employment when young people lack finance, mentorship, customers and functioning institutions. The article proposes five connected elements – skills, appropriate finance, mentoring, market access and enabling economic conditions – as an integrated pathway. Its structural message is especially relevant for women and workers in fragile economies, where isolated programs often stop before firms can scale.

In the euro area, the economy expanded by 0.4 percent in the second quarter of 2026 (and by 0.5 percent in the EU as a whole)

Among the large euro area member states, all recorded fairly solid gains: Germany, France and Italy each at 0.2 percent, and Spain a strong 0.7 percent.

U.S. Economy Grows at a Sluggish 1.5% in the Second Quarter

U.S. growth and inflation | July 30, 2026

Real GDP expanded at a 1.5% annualized rate in the second quarter, down from 2.1%, as imports weighed on the headline. The domestic picture was firmer: consumer spending rose at a 3.2% pace, underlying private demand grew 3.9% and non-residential investment advanced 8.4%, supported by AI spending. June PCE inflation slowed to 3.7% year on year and core PCE to 3.3%, still well above the Federal Reserve’s target.

IMEN Letter: Central banks, geopolitics, AI uncertainty, and much more…

“In the past week, we saw three major central bank decisions, four large companies reporting, the first estimate of US second-quarter growth, and a coordinated currency intervention.”

Bank of England Holds Bank Rate at 3.75%

United Kingdom monetary policy | July 30, 2026

The Monetary Policy Committee voted 6–3 to keep Bank Rate at 3.75%, the fifth hold of 2026. A larger-than-expected decline in inflation created room to assess the renewed Iran-related energy shock, but the split vote showed that policymakers remain divided over the balance between weak demand and renewed price pressure. The decision reinforces the global shift from synchronized easing toward more conditional, shock-sensitive policy.

Federal Reserve — FOMC Keeps the Federal Funds Target Range Unchanged

Federal Reserve | FOMC statement | July 29, 2026

The FOMC maintained the federal funds target range at 3.50–3.75% by a 9–3 vote. Beth Hammack, Neel Kashkari and Lorie Logan preferred a 25-basis-point increase, while the statement described activity as solid and inflation as elevated relative to the 2% goal, partly because of energy supply shocks. The split vote makes inflation credibility, long-term yields and data dependence central to the next meeting.

Reuters — South Korea Stock Rout Breaks Records as SK Hynix Earnings Disappoint

Reuters | Asian equity markets | July 29, 2026

Iraq and Turkey Agree on a New Oil Export Route

Associated Press | Energy infrastructure and trade routes

Iraq and Turkey signed a one-year agreement to raise crude exports through the Kirkuk-Ceyhan pipeline to at least 750,000 barrels per day. The corridor offers an alternative to southern terminals dependent on passage through the Strait of Hormuz, although it cannot replace Iraq’s prewar export capacity. The deal shows how geopolitical disruption is redirecting infrastructure investment toward redundancy and overland routes.

World Economic Forum — Climate Resilience Can Help Cities and Businesses Grow

World Economic Forum | Urban resilience analysis | July 28, 2026

Climate resilience is becoming a location factor for capital, supply chains and skilled workers. Research covering 1,500 cities finds that protective infrastructure, water systems, cooling, liveability and public-private finance can improve business attractiveness; 45% of surveyed CEOs are considering supply-chain reconfiguration. Adaptation spending increasingly functions as competitiveness policy.

Branko Milanovic on What Comes After Globalization

Bloomberg Odd Lots (Joe Weisenthal, Tracy Alloway) | Podcast, ~61 min | 27 July 2026

Milanovic supplies the missing label for the current era. Globalisation has visibly fallen out of favour, but naming what replaces it has proved harder; his term is “national market liberalism” — market mechanisms retained, but organised around national rather than global objectives. The conversation draws on his new book on the United States, China and the remaking of the world economic order, and pairs directly with the two VoxEU columns above (items 13 and 14) on what institutional form a fragmented order might take.

IEA — Affordable Electricity Is Essential for the EU’s Electrification Goals

International Energy Agency | Commentary | July 23, 2026

The IEA finds that coordinated action on low-cost generation, grids, flexibility, nuclear lifetime extensions and energy taxation could materially lower EU electricity prices by 2030. Without such measures, consumer prices could be more than 40% higher than today in its counterfactual. The structural point is that electrification depends as much on system design and tax incentives as on adding renewable capacity.

VoxEU — Resilience Is a Network Property: Europe’s Integration Test for 2050

CEPR / VoxEU | Policy column | July 23, 2026

The column argues that resilience depends on the depth, diversity and quality of economic connections rather than the number of links severed in pursuit of self-sufficiency. For Europe, the implication is deeper capital markets, diversified supply chains and differentiated integration with strategic neighbors. Derisking should mean rewiring concentrated exposure, not retreating into costly autarky.

Eagle Letter August 2026 No.3

U.S. Bureau of Labor Statistics – Productivity Rises but Labor’s Share Reaches a Record Low

U.S. Bureau of Labor Statistics | Productivity and costs | August 6, 2026

Axios – AI Architects Say an Intelligence Inflection Point Is Approaching

Axios | Artificial intelligence and institutions | August 6, 2026

IMEN report on the BLS employment report

The U.S. Bureau of Labor Statistics (BLS) released the employment situation report for July. Instead of rising moderately as expected, employment fell by 23,000.

National Bureau of Statistics of China – Consumer Inflation Slows Sharply

National Bureau of Statistics of China | Consumer and producer prices | August 9, 2026

Iraq and Turkey Agree on a New Oil Export Route

World Economic Forum – Building Skills Is Not Enough for Young People

World Economic Forum | Jobs and the future of work | July 27, 2026

In the euro area, the economy expanded by 0.4 percent in the second quarter of 2026 (and by 0.5 percent in the EU as a whole)

Among the large euro area member states, all recorded fairly solid gains: Germany, France and Italy each at 0.2 percent, and Spain a strong 0.7 percent.

U.S. Economy Grows at a Sluggish 1.5% in the Second Quarter

U.S. growth and inflation | July 30, 2026

IMEN Letter: Central banks, geopolitics, AI uncertainty, and much more…

“In the past week, we saw three major central bank decisions, four large companies reporting, the first estimate of US second-quarter growth, and a coordinated currency intervention.”

Bank of England Holds Bank Rate at 3.75%

United Kingdom monetary policy | July 30, 2026

Federal Reserve — FOMC Keeps the Federal Funds Target Range Unchanged

Federal Reserve | FOMC statement | July 29, 2026

Reuters — South Korea Stock Rout Breaks Records as SK Hynix Earnings Disappoint

Reuters | Asian equity markets | July 29, 2026

Iraq and Turkey Agree on a New Oil Export Route

Associated Press | Energy infrastructure and trade routes

Iraq and Turkey signed a one-year agreement to raise crude exports through the Kirkuk-Ceyhan pipeline to at least 750,000 barrels per day. The corridor offers an alternative to southern terminals dependent on passage through the Strait of Hormuz, although it cannot replace Iraq’s prewar export capacity. The deal shows how geopolitical disruption is redirecting infrastructure investment toward redundancy and overland routes.

World Economic Forum — Climate Resilience Can Help Cities and Businesses Grow

World Economic Forum | Urban resilience analysis | July 28, 2026

Branko Milanovic on What Comes After Globalization

Bloomberg Odd Lots (Joe Weisenthal, Tracy Alloway) | Podcast, ~61 min | 27 July 2026

IEA — Affordable Electricity Is Essential for the EU’s Electrification Goals

International Energy Agency | Commentary | July 23, 2026

VoxEU — Resilience Is a Network Property: Europe’s Integration Test for 2050

CEPR / VoxEU | Policy column | July 23, 2026

Eagle Letter August 2026 No.2

IMEN report on the BLS employment report

The U.S. Bureau of Labor Statistics (BLS) released the employment situation report for July. Instead of rising moderately as expected, employment fell by 23,000.

Iraq and Turkey Agree on a New Oil Export Route

World Economic Forum – Building Skills Is Not Enough for Young People

World Economic Forum | Jobs and the future of work | July 27, 2026

In the euro area, the economy expanded by 0.4 percent in the second quarter of 2026 (and by 0.5 percent in the EU as a whole)

Among the large euro area member states, all recorded fairly solid gains: Germany, France and Italy each at 0.2 percent, and Spain a strong 0.7 percent.

U.S. Economy Grows at a Sluggish 1.5% in the Second Quarter

U.S. growth and inflation | July 30, 2026

IMEN Letter: Central banks, geopolitics, AI uncertainty, and much more…

“In the past week, we saw three major central bank decisions, four large companies reporting, the first estimate of US second-quarter growth, and a coordinated currency intervention.”

Bank of England Holds Bank Rate at 3.75%

United Kingdom monetary policy | July 30, 2026

Federal Reserve — FOMC Keeps the Federal Funds Target Range Unchanged

Federal Reserve | FOMC statement | July 29, 2026

Reuters — South Korea Stock Rout Breaks Records as SK Hynix Earnings Disappoint

Reuters | Asian equity markets | July 29, 2026

Iraq and Turkey Agree on a New Oil Export Route

Associated Press | Energy infrastructure and trade routes

Iraq and Turkey signed a one-year agreement to raise crude exports through the Kirkuk-Ceyhan pipeline to at least 750,000 barrels per day. The corridor offers an alternative to southern terminals dependent on passage through the Strait of Hormuz, although it cannot replace Iraq’s prewar export capacity. The deal shows how geopolitical disruption is redirecting infrastructure investment toward redundancy and overland routes.

World Economic Forum — Climate Resilience Can Help Cities and Businesses Grow

World Economic Forum | Urban resilience analysis | July 28, 2026

Branko Milanovic on What Comes After Globalization

Bloomberg Odd Lots (Joe Weisenthal, Tracy Alloway) | Podcast, ~61 min | 27 July 2026

IEA — Affordable Electricity Is Essential for the EU’s Electrification Goals

International Energy Agency | Commentary | July 23, 2026

VoxEU — Resilience Is a Network Property: Europe’s Integration Test for 2050

CEPR / VoxEU | Policy column | July 23, 2026