US Inflation Comes in Hot, Tech Stocks Slide

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October 15, 2026

Credit Ratings
Macro News

In a volatile session on Wednesday, US Treasury yields initially jumped higher by over 10bp across the curve, immediately following the much-awaited inflation report. However, they have since pulled back the entire move and are currently lower by 6-10bp. US Headline CPI YoY for September came in at 3.7%, higher than expectations of 3.6%. Similarly, the Core CPI YoY print came in at 2.6%, again higher than expectations of 2.5%. Regarding the inflation data, Chicago Fed President Austan Goolsbee said that he found the report to be “discouraging”, adding that it is still too soon to know whether interest rates are high enough at this point to deliver on the Fed’s inflation goal. Markets are currently pricing in a 25bp Fed rate in December.

Looking at equity markets, the S&P and Nasdaq fell by 1.1% and 1.9% respectively, their worst session since July as tech and semiconductor stocks led the sell-off. US IG CDS spreads widened by 1.8bp and HY CDS spreads widened by 9.9bp. European equities ended higher. European IG CDS spreads tightened by 0.4bp, and Crossover spreads were 0.5bp tighter. Asian equity markets have opened in the red this morning. Asia ex-Japan CDS spreads tightened by 0.3bp.

New Bond Issues

China Cinda $ 3.5Y FRN at SOFR+140bp area

Morgan Stanley Bank NA raised $3bn via a two-trancher. It raised $2.5bn via a 4NC3 bond at a yield of 5.659%, 25bp inside initial guidance of T+100bp area. It also raised $500mn via a 4NC3 FRN at SOFR+93bp vs. SOFR equivalent area. The senior bank notes are rated Aa3/A+/AA. Proceeds will be used for general corporate purposes.

Banco BPM raised €400mn via a PerpNC6 AT1 bond at a yield of 6.75%, ~43.75bp inside 7.125-7.25% area. The junior subordinated note is rated BB- (Fitch). If not called by 21 October 2032, the coupon will reset to the 5Y Mid-Swap plus 338.3bp. A trigger event would occur if, at any time, the CET1 ratio on either a consolidated basis or an individual basis falls below 5.125%. Proceeds will be used for general and regulatory capital purposes.

Rating Changes

Term of the Day: Bonar Bonds

Bonar bonds are Argentinian sovereign bonds denominated in US dollars but issued under local law. These are typically used to manage debt maturities and gain market trust. Argentina issued Bonar bonds in late 2025 and 2026 (bonds due in 2029 and 2028) under the Milei administration aim to manage reserves, pay creditors, and secure long-term financing. Bonds bonds help cover dollar-denominated maturities, reducing the need to use central bank reserves.

Talking Heads

On the Fed Potentially Hiking Rates Half a Point in December – Jason Schenker, president of Prestige Economics
“When we get to December, if the kibosh hasn’t yet been put on inflation in a more meaningful way after September’s hike, they may choose to go 50 instead of 25 to take a bigger bite at the apple… If they see 25 basis points did nothing, then I think that they might roll out the 50”
On IMF Warning about China’s Stimulus Lacking Ambition
Krishna Srinivasan, Director of the Asia and Pacific Department
The currency’s weakness “reflects the symptom” of underlying domestic imbalances that need to be fixed… “They need to be a lot more ambitious to address the imbalances”
On ECB May Not Having to Do as Much If Markets Tighten – Primoz Dolenc, ECB GC member
“If there is a tightening on the financial market, then maybe we don’t have to do as much as we would otherwise… We have different monetary policy measures in our toolkit, even TPI”

Top Gainers and Losers- 15-Oct-26*