Long-term rates moved higher over the past week as markets weighed inflation risks and the scale of capital required for the AI capacity buildout. The 30-year Treasury auction cleared at its highest yield since 2001, while the 30-year yield reached 5.3% and the 10-year reached 4.7%.
Oil added to the pressure. Brent crude rose $3 over the week to $91 as rhetoric around the Iran war increased the perceived risk of escalation. At the same time, large AI financing announcements showed how rapidly the sector’s demand for debt capacity is growing.
Despite higher government bond yields, credit demand remains strong. Investment-grade and high-yield spreads are both close to their lowest levels this century, with higher yields continuing to attract capital into fixed income.
| Indicator | Level | Context |
|---|---|---|
| Brent crude | $91 | Up $3 on the week |
| UST 10-year | 4.7% | Around 25-year highs |
| UST 30-year | 5.3% | Around 25-year highs |
| IG corporate OAS | 80bps | Around 25-year lows |
| US HY OAS | 267bps | Around 25-year lows |
Four talking points
The long end moved higher
Inflation concerns and expected long-term borrowing for AI capacity contributed to 30-year yields of 5.3% and 10-year yields of 4.7%.
Borrowers are seeking more capacity
NVIDIA announced a $500 billion vendor-financing platform, while a $105 billion NVIDIA guarantee for a new OpenAI data centre was announced on 17 August. Alphabet is reportedly preparing its first Australian-dollar bond.
Iran rhetoric lifted Brent
Brent crude reached $91. Further escalation could materially increase prices and inflation pressure, although the newsletter’s view is that the effect might prove temporary after the 3 November US elections.
Spreads remain close to historic lows
Investment-grade and high-yield spreads remain close to their lowest levels this century. High underlying rates are helping to sustain broad demand for fixed income.
Primary markets: the weekly scan
Primary markets were very active, especially for August. Public investment-grade issuance included $5.5 billion from Martin Marietta Materials, $4.75 billion from AMD and $3.75 billion from Verizon. Activity was also visible across private credit, syndicated loans and structured markets.
Large public deals lead August supply
Martin Marietta, AMD and Verizon led investment-grade issuance, with two sizeable high-yield transactions and further emerging-market activity.
Jane Street raises $14.6 billion
The refinancing was joined by Apollo’s New York Yankees financing and a new $1 billion Partners Group mandate.
Poste Italiane secures an acquisition bridge
An 18-month, €2.85 billion bridge from 17 banks led the week’s disclosed syndicated-loan activity.
Arby’s completes an $830 million WBS
One Boston Wharf CMBS and a new Fortress European CLO added to activity, while CLO resets continued.
Stressed and distressed: airBaltic bonds fell to around 23 cents following the announcement of a restructuring plan that includes a debt-for-equity swap.
What to watch this week
Rates-market sentiment
Rates remain volatile as traders try to determine the likely path of future changes.
Strait of Hormuz and oil
News around the conflict could become one of the biggest swing factors for rates over the coming months.
Quote of the week
“The all items index rose 3.4 percent for the 12 months ending July after rising 3.5 percent for the 12 months ending June.”US Bureau of Labor Statistics · July 2026 CPI report
Short read
Read DCM Insider’s analysis of the $500 billion NVIDIA vendor-financing platform with Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs and KKR.
