Dumping Bonds, Dancing Robots

Tom Westbrook’s forecast for the European and international markets. China’s humanoid robotics company Unitree jumped out of the blocks on Wednesday, trading six times above its offer price, as long bond yields steadied near multi-decade highs.

Traders are arguing over the true cause of the summer’s protracted bond selloff: improved economic expectations or growing concern over persistent inflation and the burden of excessive government expenditure.

Later on Wednesday, the Federal Reserve releases its minutes from last month’s meeting, and the United States adds to its almost $40 trillion debt pile with a $16 billion 20-year note sale.

Both are under scrutiny as investors want greater compensation for lending to the U.S. government and doubt the Fed’s capacity to control long-term inflation.

It stands in sharp contrast to China. Investor enthusiasm for hyperscaler debt did not appear to be abating as 10-year sovereign futures hit a record high on Tuesday. Alphabet’s bond issuance was the most recent deal to generate significant interest.

In the meantime, Unitree’s offering is 8,000 times oversubscribed by retail investors, indicating a robust demand for technological exposures. At the World Robot Conference in Beijing, over 300 companies are scheduled to compete to demonstrate that robots are more than simply spectacular displays of power and agility; they are also enterprises that can generate profits in the real world.

In Europe and Britain, final inflation rates are expected to increase from 2.6% to 2.9%. In the U.S., Target, TJX, and Lowe’s earnings will be closely watched after last week’s weak retail sales figures.