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Archives: Reuters Articles

Foreign inflows into Asian bonds hit six-month high in November

Foreign inflows into Asian bonds hit six-month high in November

Foreign investors snapped up Asian bonds in November as they sought shelter from an equity market selloff driven by concerns over stretched tech valuations and uncertainty around the US Federal Reserve’s rate outlook.

They bought a net USD 10.86 billion of bonds in South Korea, Thailand, Malaysia, India, and Indonesia in November, marking their largest monthly net purchase since USD 15.29 billion of inflows in May, data from local regulatory authorities and bond market associations showed.

“Divergence between equity and debt assets emerged again in November, likely due to investors rotating to low-risk assets,” said Khoon Goh, the head of Asia research at ANZ.

South Korean bonds drew USD 11.08 billion, the largest monthly net inflow since at least 2016, on optimism over their inclusion in the FTSE World Government Bond Index starting in April 2026.

“We suspect that part of the strong inflows into South Korean bonds was diverted from the equity market,” ANZ’s Goh said.

Thai bonds recorded a third consecutive month of foreign inflows, totalling USD 319 million, while Malaysian bonds saw net foreign purchases of USD 316 million.

In contrast, foreign investors sold Indian and Indonesian bonds worth USD 447 million and USD 400 million, respectively.

The US Federal Reserve last week cut interest rates by 25 basis points to a 3.50%–3.75% range, reinforcing expectations that lower US borrowing costs would support regional assets.

Jonathan Davis, portfolio manager at PineBridge Investments, said that as equity valuations climb alongside lingering macro uncertainty, investors should remain focused on core fixed income and mindful of risk concentration in more indebted issuers.

“That is why we see a growing number of institutions looking toward the Asia-Pacific dollar bond market to maintain stability and diversify risks within their core fixed income portfolios.”

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Subhranshu Sahu)

 

US Treasury yields dip as investors await jobs, inflation data

US Treasury yields dip as investors await jobs, inflation data

NEW YORK – US Treasury yields dipped on Monday as investors waited for jobs and inflation data due this week, which will provide the last look at major economic releases for the year.

An increasingly divided Federal Reserve cut rates last week on concerns about a weakening labor market, even as many officials are concerned about sticky inflation.

A data void, as the federal government catches up from a 43-day shutdown, has added to uncertainty around the US economic outlook.

In the absence of government reports, investors have followed private jobs indicators. “And so there seems to be a little bit less consternation about the November jobs report in particular,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.

“Part of it may also be that the Federal Reserve will have another month’s worth of jobs data by the time they next need to make a decision, so this interim month’s jobs data is not hugely important,” he added.

The monthly jobs report for November and retail sales data for October are due on Tuesday, consumer price inflation data is due on Thursday and Personal Consumption Expenditures for October is due on Friday.

The two-year note yield, which typically moves in step with Fed rate expectations, fell 2.5 basis points to 3.506%. The yield on benchmark US 10-year notes fell 1.4 basis points to 4.182%.

The yield curve between two- and 10-year notes steepened by around a basis point to 67 basis points, the steepest since April 9.

Fed funds futures traders are pricing in only 22% odds that the Fed will cut rates at its January 27-28 meeting, with the next cut seen likely in April.

LeBas noted that those odds could change quickly depending on the data. “It’s still my base case that labor market weakness, despite divided opinions on the FOMC, will spur additional rate cuts in the early part of ’26,” he said.

New York Fed President John Williams said on Monday the Fed’s interest rate cut last week was the right move and leaves it in a good position to deal with an economy that’s on track to perform fairly well next year.

Boston Fed President Susan Collins said a changing inflation outlook tilted her toward supporting last week’s central bank interest rate cut.

Investors are also watching to see who US President Donald Trump will appoint to head the US central bank when Jerome Powell’s term ends in May.

Trump said on Friday he had narrowed his search for a new Fed chair to two people – former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett – and he should at least be consulted on decisions about interest rates.

However, Hassett’s candidacy has received some pushback from people close to Trump, CNBC reported on Monday.

Meanwhile, the US Supreme Court’s conservative justices have signaled reluctance to give Trump authority over the Federal Reserve in a major case set to be argued next month.

(Reporting by Karen Brettell. Editing by Mark Potter and Nick Zieminski)

 

Wall Street closes lower as investors position for busy week of data

Wall Street closes lower as investors position for busy week of data

Wall Street closed lower on Monday as investors braced for a slew of economic data later this week while assessing reports on Federal Reserve candidates and commentary from policymakers for clues on the interest rate outlook.

The nonfarm payroll figures for October and November are due later this week, along with reports on retail sales, business activity and inflation. October’s jobs data was delayed by the government shutdown earlier this quarter.

“Markets today are struggling with where to find the leadership, in terms of not wanting all the eggs in the AI basket and not having a lot of data yet,” said Carol Schleif, chief investment officer at BMO Family Office. “People will hold their breath a little bit before the jobs numbers this week and whether or not those are supportive of more rate cuts.”

The S&P 500 and the Nasdaq had logged their steepest daily declines in more than three weeks on Friday amid concerns about inflation and debt-fueled AI investments.

Traders also assessed a report that White House economic adviser Kevin Hassett’s candidacy for the Fed chair role received some pushback from people close to US President Donald Trump.

Speculation has been rife over a possible frontrunner as Jerome Powell’s term ends in May. Expectations for a dovish Fed chair have fueled bets for interest rate cuts next year.

Also on Monday, New York Fed President John Williams said the central bank’s interest rate cut last week leaves it in a good position, while Fed Governor Stephen Miran argued that current inflation does not reflect the true supply-demand dynamics.

The Dow Jones Industrial Average fell 41.49 points, or 0.09%, to 48,416.56, the S&P 500 lost 10.90 points, or 0.16%, to 6,816.51 and the Nasdaq Composite lost 137.76 points, or 0.59%, to 23,057.41.

Eight of the 11 S&P 500 major industry sectors rose, led by healthcare stocks, which popped 1.3%.

Information technology stocks slipped 1%, dragged down by ServiceNow, which fell 11.5% following a report that the cybersecurity company is in advanced talks to buy startup Armis.

In other company moves, Tesla rose 3.5% after CEO Elon Musk said the electric vehicle maker was testing its robotaxis without safety monitors in the front passenger seat.

IRobot plunged 72.7% after the Roomba vacuum-cleaner maker filed for bankruptcy protection.

Declining issues equaled advancers at a 1-to-1 ratio on the NYSE. There were 283 new highs and 93 new lows on the NYSE. On the Nasdaq, 1,715 stocks rose and 3,021 fell as declining issues outnumbered advancers by a 1.76-to-1 ratio.

The S&P 500 posted 30 new 52-week highs and six new lows while the Nasdaq Composite recorded 133 new highs and 198 new lows.

Volume on US exchanges was 17.13 billion shares, compared with the 17.10 billion average for the full session over the last 20 trading days.

(Reporting by Abigail Summerville in New York and Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Shilpi Majumdar and Matthew Lewis)

 

Asian stocks cautiously higher as tech sector rattled by Oracle

Asian stocks cautiously higher as tech sector rattled by Oracle

SINGAPORE – Asian stocks advanced in early trade on Friday following strength on Wall Street overnight, though a fresh decline in Oracle’s share price sent jitters through the tech sector.

Financial markets had to move fast to find their footing this week when the Federal Reserve cut interest rates but gave a less hawkish outlook than expected, and the return of AI bubble worries added to the stress for investors.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.7%, tracking mostly higher US markets on Thursday – the Dow and Russell 2000 indices hit new highs but the Nasdaq fell.

Tokyo’s Nikkei 225 outperformed the region in morning trade, climbing 1% as shares in Softbank Group 9984.T surged 6% after Bloomberg News reported it is considering acquiring the US data centre company Switch Inc.

S&P 500 e-mini futures were unchanged, and Nasdaq futures were down 0.2% as markets were on edge after Oracle shares plunged 13%, sparking a tech selloff, as the company’s massive spending and weak forecasts fanned doubts over how quickly the big bets on AI will pay off.

“Oracle announced disappointing earnings alongside further investment in data centres, triggering fresh concerns about AI-related spending, with investors questioning whether the high level of investment will ultimately deliver the required returns,” analysts from Westpac wrote in a research note.

Tech stocks received some support after Broadcom projected first-quarter revenue above Wall Street estimates on Thursday. But gains were tempered after the company said margins would fall due to a higher mix of AI revenue, dragging its shares down 5% in extended trading.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was last at a two-month low of 98.30, after the Fed’s less hawkish than expected outlook on rates.

Overnight, the dollar was further undermined after jobless claims data showed the number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week. The data are often volatile around this time of year, and the four-week average of claims suggested labor market conditions remained stable.

Fed funds futures are pricing an implied 75.6% probability that the US central bank will hold interest rates at its next meeting on 28 January, compared to a 73.9% chance a day earlier, according to the CME Group’s FedWatch tool.

Markets are pricing in at least two rate cuts for next year after Fed Chair Jerome Powell said at a post-policy press conference that he did not “think a rate hike is anyone’s base case.”

The yield on the US 10-year Treasury bond was last at 4.151%, up 1.2 basis points compared with late US levels.

Brent crude rose 0.5% to USD 61.59 as investors focused their attention on Russia-Ukraine peace talks, after having risen earlier on news that the US had seized an oil tanker off the coast of Venezuela.

On Thursday, the US issued new sanctions targeting Venezuela, imposing curbs on three nephews of President Nicolas Maduro’s wife, as well as six crude oil tankers and shipping companies linked to them.

Precious metals markets pulled back from fresh highs. Gold was flat at USD 4,281.91, while silver retreated from record highs, down 0.6% at USD 63.17.

Crypto markets remained under pressure, with bitcoin off 0.4% at USD 92,571.96 and ether down 0.6% at USD 3,231.69.

(Reporting by Gregor Stuart Hunter; Editing by Shri Navaratnam)

 

Gold edges down on profit-taking; silver at record high

Gold edges down on profit-taking; silver at record high

Gold edged lower on Friday after hitting a more than seven-week high in the previous session, as investors booked profits, while silver surged to yet another all-time peak on Thursday.

FUNDAMENTALS

* Spot gold dipped 0.2% to USD 4,277.64 per ounce, as of 0029 GMT.

* US gold futures for February delivery was down 0.1% at USD 4,307.80 per ounce.

* The US dollar plummeted to an eight-week low in the previous session, making greenback-priced gold more affordable for overseas buyers.

* The Fed delivered its third-consecutive 25-basis-point rate cut for the year in a deeply divided vote on Wednesday, but signaled that further cuts were unlikely as it waits for clearer signs on a softening job market and inflation that “remains somewhat elevated”.

* The number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week, but the surge likely does not suggest a material weakening in labor market conditions.

* A majority of US central bankers expect they will need to cut short-term interest rates next year, but in an unprecedented move for the Fed, six policymakers indicated they didn’t support even Wednesday’s quarter-point cut.

* Fed Chair Jerome Powell also declined to offer any guidance on whether another cut is likely in the near term.

* Non-yielding assets such as gold tend to perform well in low-interest-rate environments.

* Investors now await the monthly US non-farm payrolls report, set to be released on December 16, for fresh cues on the Fed’s policy path.

* India’s pension regulator on Wednesday issued revised investment rules for the country’s pension funds, permitting investments in gold and silver exchange-traded funds.

* Meanwhile, spot silver fell 0.5% to USD 63.31/oz after scaling a record peak of USD 64.31 on Thursday. Year-to-date, prices have surged 119%, supported by rising industrial demand, falling inventories, and the metal’s entry into the US critical minerals list.

* Elsewhere, platinum lost 0.2% to USD 1,691.45, while palladium fell 0.5% to USD 1,476.5.

DATA/EVENTS (GMT)
1400 GERMANY HICP FINAL YY 12 Nov
0745 FRANCE CPI (EU NORM) FINAL MM Nov
1445 FRANCE CPI (EU NORM) FINAL YY Nov
1445 FRANCE CPI YY NSA Nov
1445 FRANCE CPI MM NSA Nov
1500 UK GDP Est 3M/3M Oct
1500 UK GDP Estimate MM Oct
1500 UK GDP Estimate YY Oct
1500 UK Services MM Oct
1500 UK Services YY Oct
1500 UK Manufacturing Output MM Oct

(Reporting by Ishaan Arora; Editing by Rashmi Aich)

 

Gold rises as a divided Fed cuts rates; silver hits record high

Gold rises as a divided Fed cuts rates; silver hits record high

Gold prices rose on Thursday after the US Federal Reserve cut interest rates, even as policymakers remained split on the outlook for further easing next year, while silver notched another record high.

FUNDAMENTALS

* Spot gold rose 0.3% to USD 4,242.39 per ounce as of 0040 GMT.

* US gold futures for February delivery gained 1.1% to USD 4,271.30 per ounce.

* The Fed delivered a 25-basis-point rate cut in a divided vote, but signalled that borrowing costs are unlikely to drop further as it waits for clearer signs on a softening job market and inflation that “remains somewhat elevated”.

* A majority of US central bankers expect they will need to cut short-term interest rates next year, but in an unprecedented move for the Fed, six policymakers indicated they didn’t support even Wednesday’s quarter-point cut.

* Meanwhile, Fed Chair Jerome Powell said the central bank’s rate policy is well positioned to respond to whatever lies ahead for the US economy, while declining to offer any guidance on whether another cut is likely in the near term.

* Non-yielding assets such as gold tend to perform well in low-interest-rate environments.

* US job and inflation data for November will be released next week, followed by a detailed economic growth report for the third quarter.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.11% to 1,046.82 tonnes on Wednesday from 1,047.97 tons on Tuesday.

* Meanwhile, spot silver gained 0.9% to USD 62.31/oz after scaling a record peak of USD 62.67. Year-to-date, prices have surged 113%, supported by rising industrial demand, falling inventories and the metal’s entry into the US critical minerals list.

* Elsewhere, platinum rose 0.2% to USD 1,658.85, while palladium fell 0.3% to USD 1,471.75.

(Reporting by Ishaan Arora in Bengaluru; Editing by Sumana Nandy)

 

Wall Street indexes rally after Fed cuts interest rates

Wall Street indexes rally after Fed cuts interest rates

Wall Street ended higher on Wednesday, after the Federal Reserve cut interest rates by a quarter percentage point as expected and investors bet on further easing down the road, even as the central bank signaled that it will put further cuts on pause for now.

The central bank said that before its next policy change, it would look ahead for clearer signals about the direction of the job market and inflation that “remains somewhat elevated.”

But projections after the Fed’s two-day meeting showed median expectations for another quarter-point cut in 2026, in line with expectations at the September meeting. And policymakers raised estimates for 2026 GDP growth to 2.3% from 1.8% and maintained expectations for a 4.4% unemployment rate at the end of next year.

In his press conference, Fed Chair Jerome Powell declined to provide guidance on whether there will be another rate cut in the near future. However, investors garnered some hope for easing from his comments that the labor market has significant downside risks and that the central bank doesn’t want its policy to push down on job creation.

“The market may have found some solace in Powell’s downbeat labor market discussion – a bad news is good news situation, to support more cuts next year,” said Lindsey Bell, chief investment strategist at 248 Ventures in Charlotte, North Carolina, adding that US Treasury yields “lost some steam as Powell spoke, which helps support stock upside.”

The market had been muted ahead of the statement as investors, while widely expecting a cut, were concerned the Fed would take a more hawkish tone on the policy outlook. And even before Powell’s comments, some investors were eyeing more potential for rate cuts due to labor market concerns.

“The statement emphasized weakness in the labor market as the principal rationale for the 25 basis point cut, and this detail is what the market has picked up on, suggesting the Fed could continue easing policy, even though the expectations for easing in 2026 haven’t changed with one 25 basis point priced in,” said Michael Rosen, chief investment officer, Angeles Investments.

The S&P 500 closed up 46.17 points, or 0.67%, at 6,886.68, eyeing a return to its October 28 record closing high but ultimately falling short at the end of trading.

The Dow Jones Industrial Average rose 497.46 points, or 1.05%, to 48,057.75 while the Nasdaq Composite gained 77.67 points, or 0.33%, to 23,654.16.

The rate-sensitive small-cap Russell 2000 index outperformed large caps with a 1.3% gain for a record closing high.

Among the S&P 500’s 11 major industry sectors, all but two showed gains. Industrials made the biggest advance, ending up 1.8%. Its biggest boost was from energy equipment manufacturer GE Vernova, which surged 15.6% after forecasting higher revenue in 2026, signaling strong demand for its AI-related infrastructure.

On the other side of the spectrum, defensive utilities were the biggest laggard, falling just 0.1% while consumer staples was barely lower.

Advancing issues outnumbered decliners by a 2.86-to-1 ratio on the NYSE, where there were 496 new highs and 51 new lows. On the Nasdaq, 3,164 stocks rose and 1,642 fell as advancing issues outnumbered decliners by a 1.93-to-1 ratio.

The S&P 500 posted 45 new 52-week highs and seven new lows while the Nasdaq Composite recorded 185 new highs and 77 new lows.

On US exchanges, 16.91 billion shares changed hands compared with the 17.41 billion moving average for the last 20 sessions.

(Reporting by Sinéad Carew, Laura Matthews, Caroline Valetkevitch in New York, Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Tasim Zahid, Shinjini Ganguli and David Gregorio)

 

US yields drop after Fed rate cut, Powell signals hike unlikely

US yields drop after Fed rate cut, Powell signals hike unlikely

NEW YORK – US Treasury yields fell on Wednesday, after the Federal Reserve cut interest rates but signaled it will likely hold off on further reductions, in a move that was largely anticipated by market participants.

The Fed reduced rates by 25 basis points, and its new economic projections showed the median policymaker sees just one quarter-percentage-point cut in 2026, the same outlook as in September. The decision to cut by 25 basis points drew three dissents.

Yields were choppy following the announcement, paring declines as Fed Chair Jerome Powell spoke before reversing course and turning lower after he said the central bank’s next move was unlikely to be a rate hike, as it was not the base case in the new projections from the policymakers.

“The statement emphasized weakness in the labor market as the principal rationale for the 25 basis point cut, and this detail is what the market has picked up on, suggesting the Fed could continue easing policy, even though the expectations for easing in 2026 haven’t changed with one 25 basis point priced in,” said Michael Rosen, chief investment officer at Angeles Investments, Santa Monica, California.

Yields around the globe have been climbing in recent weeks, as many central banks have signaled they are either at or near the end of their own easing cycles, while the Bank of Japan is widely anticipated to hike rates at its policy meeting next week.

The yield on the benchmark US 10-year Treasury note fell 4.3 basis points to 4.143% after swinging between a session low of 4.137% and a three-month high of 4.209%. The 10-year yield was poised to snap a four-session streak of gains, its longest run of gains in five weeks.

Earlier in the session, US economic data showed the Employment Cost Index (ECI), the broadest measure of labor costs, rose 0.8% in the last quarter, versus expectations of economists polled by Reuters for a 0.9% advance, after gaining 0.9% in the second quarter.

The yield on the 30-year bond shed 2.1 basis points to 4.788%.

Several major brokerages had recently forecast a cut by the Fed for Wednesday’s meeting, and expectations for a 25 basis point reduction were nearly 90% heading into the meeting, according to CME’s FedWatch Tool.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 60.1 basis points, after rising to 60.7, its highest since September 3.

After solid auctions of 3-year and 10-year notes earlier this week, more supply will come to the market on Thursday in the form of USD 22 billion in 30-year bonds.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, slumped 7.3 basis points to 3.54% and was on track for its biggest one-day drop since October 16.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.326% after closing at 2.332% on Tuesday.

The 10-year TIPS breakeven rate was last at 2.268%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Additional reporting by Stephen Culp and Laura Matthews; Editing by Philippa Fletcher and Andrea Ricci )

 

Gold rises ahead of Fed rate cut decision, silver hits $60/oz milestone

Gold rises ahead of Fed rate cut decision, silver hits $60/oz milestone

Gold gained on Tuesday as traders remained optimistic ahead of the US Federal Reserve’s interest rate decision, while silver rose to hit an unprecedented USD 60 per ounce milestone amid supply constraints.

Spot gold rose 0.6% to USD 4,211.77 per ounce by 03:21 p.m. ET (2021 GMT). US gold futures for February delivery settled 0.4% higher at USD 4,236.2 per ounce.

Spot silver climbed 4.3% to USD 60.74 per ounce, hitting an all-time high.

“People are anticipating that there’s going to be strong industrial demand for silver for years to come, which is why it’s been bid up, the silver price,” said Fawad Razaqzada, market analyst at City Index and FOREX.com, adding that the buying momentum is strong at the moment.

Sectors including solar energy, electric vehicles and their infrastructure, and data centers and artificial intelligence will drive industrial demand higher through 2030, the Silver Institute industry association said in a research report.

Silver prices have also been supported by persistently low supplies and dwindling global inventories, expectations of the Fed easing interest rates, as well as its recent addition to the US critical minerals list.

“Metals are volatile by nature, but unless we fix the deficit, silver only has one way to go, and that is up,” said Maria Smirnova, senior portfolio manager and chief investment officer at Sprott Asset Management.

On the US policy front, the Fed’s two-day meeting ends with a decision on Wednesday. Traders now see an 87.4% chance of a 25-basis-point cut this week.

“The move in gold right now is attributed to the big spike in silver and the high expectations for another quarter-point cut,” said RJO Futures senior market strategist Bob Haberkorn.

Meanwhile, the US Labor Department’s JOLTS report showed job openings rose to 7.67 million in October, beating forecasts of 7.15 million, indicating a strong labor market.

Gold has shrugged off the jobs report, Haberkorn said, adding “we could see silver trade over USD 70 an ounce in the first half of 2026, and gold is on a path towards USD 5,000 an ounce.”

Platinum gained 2.8% to USD 1,688.39/oz, while palladium rose 2.6% to USD 1,503.74/oz.

(Reporting by Sarah Qureshi, Anjana Anil, Anushree Mukherjee, and Anmol Choubey in Bengaluru; Editing by Vijay Kishore, Leroy Leo, Maju Samuel and Krishna Chandra Eluri)

 

Mature markets push global debt to record near USD 346 trillion, says IIF

Mature markets push global debt to record near USD 346 trillion, says IIF

NEW YORK – Developed markets led a borrowing push that lifted global debt to near USD 346 trillion at the end of the third quarter, while a pending ruling on the legality of US tariffs could force even more US issuance, a banking trade group said.

The Institute of International Finance said total debt reached USD 345.7 trillion by the end of September, equivalent to about 310% of global GDP, a relatively steady ratio since mid-2022. A softer US greenback helped inflate the value of most local-currency liabilities when translated into dollar terms.

“Most of the overall rise came from mature markets, where debt accumulation has accelerated rapidly this year as key central banks ease policy,” said the report co-authored by Emre Tiftik, director of sustainability research at the IIF.

CHINA AND US DELIVER LARGEST INCREASES

Through September, debt increased by USD 26.4 trillion this year, some USD 675 billion per week. Last quarter, China and the United States again delivered the largest increases in government debt, followed by France, Italy and Brazil, according to the IIF.

Mature markets’ outstanding debt rose to a record USD 230.6 trillion, while emerging markets also hit a record above USD 115 trillion. Russia, Korea, Poland and Mexico posted some of the largest increases.

A newly highlighted risk comes from the pending US Supreme Court decision on the legality of tariffs imposed by the Trump administration earlier this year. The IIF warned that an adverse ruling could materially increase fiscal pressure on the US, likely pushing the Treasury to borrow even more.

Government borrowing remained the primary driver of the global increase.

“With budget deficits still elevated – and the impact of large fiscal stimulus packages set to kick off in 2026 in Japan, the US, Germany, and China – sovereigns are likely to continue adding to their debt burdens and interest expenses,” according to the IIF.

EM EUROBOND ISSUANCE REACHED RECORD HIGH

On the market side, emerging market sovereigns have leaned more heavily on international markets this year. EM eurobond issuance has reached a record high in 2025, aided by the weaker dollar and continued policy easing by major central banks.

EM sovereign issuance this year stood at USD 255.7 billion at the start of December, according to a JPMorgan tally, making 2025 the highest annual gross issuance, with EM investment grade taking USD 182.1 billion of the total. The Wall Street bank considers this year a “one-off”, however, and expects next year to show a dip in issuance.

Despite the large issuance, access remains sharply limited, especially for countries emerging from debt restructurings, the report noted.

Corporate debt is also rising. Non-financial corporate liabilities are now approaching USD 100 trillion, the report said, with borrowing accelerating in AI-linked and clean energy sectors. US AI-related bond issuance hit a record in 2025, and new debt has continued to flow, prompting some concerns in the US corporate bond market.

Global household debt rose to nearly USD 64 trillion, but its debt-to-GDP ratio fell to 57%, its lowest since 2015, as households slowed borrowing amid heightened uncertainty and persistent cost-of-living pressures.

Looking ahead, emerging markets face nearly USD 8 trillion in bond and loan redemptions in 2026, while mature markets are set to refinance over USD 16 trillion, raising the risk of funding strains if global conditions tighten, said the IIF.

(Reporting by Rodrigo Campos in New York; Editing by Alison Williams)

 

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