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(Bloomberg) -- Metrics across global bond markets are signaling their biggest risk-off sentiment in more than a year, as a selloff in AI stocks and growing geopolitical tensions caused investors to seek out safe-haven assets.
On Friday, spreads on dollar bonds of higher-rated Asian companies widened to their highest levels since last July, moving in tandem with credit markets more broadly. The move mirrors a jump in corporate bond yield premiums globally, which surged to their widest since May 2025, reaching up to 129 basis points, a Bloomberg index shows.
Mounting concerns over the rapid pace of debt-fueled spending on AI is causing turmoil in markets amid fears that the technology won’t deliver profits soon enough. The sharp unwinding of AI bets has prompted debate among some prominent investors, with Citadel’s Ken Griffin warning of a bubble while Blackstone Inc. President Jon Gray said there’s no cause for concern as demand is “almost parabolic.”
Asian credit markets signaled weakness at Friday’s open, with regional credit-default swaps widening about 1.5 basis points to 78 and China technology spreads 3 to 5 basis points wider, according to traders. China investment-grade spreads were indicated as much as 5 basis points wider, while India investment-grade and Korean credit spreads widened as much as 3 basis points.
At the same time, US Treasuries, viewed as a safer investment vehicle, rallied for their best day in more than two years, rising on all levels. There was also a wave of buying in Treasury futures, as traders rushed to unwind bearish bets and cover short positions.
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