KEOI Daily Briefing · Oct 8
KEOI Daily Briefing · Oct 8
> Note: The Economist could not be read this edition — its homepage presented a Cloudflare human-verification challenge, which we do not attempt to bypass. Today's edition: 8 WSJ stories + 4 Japan stories.
Today's highlights
- Fed minutes point to one more hike this year but no urgency for October; a $39B 10-year Treasury auction cleared at 5.300%, a 26-year high, on robust end-investor demand.
- AI's capital race finds new funding plumbing: Broadcom is arranging $50B+ for OpenAI's custom chips, with Oracle and SpaceX lining up similar deals — while rising rates compress tech valuations.
- Ripple breaks into Wall Street via leveraged-ETF swap financing; Houthi attacks on Saudi airports escalate; Brent holds above $100.
- Japan: Takaichi defends the food consumption-tax cut as "the best option" as Diet questioning begins; the government weighs a small second supplementary budget; BOJ's Sato ties rate decisions to consumption and income; the yen slides to a two-week low near 158.5.
1. Fed Minutes Signal Further Rate Increase This Year, but No Urgency for October Hike
Most Fed officials expect one more rate increase by year-end following September's first hike in three years, but the minutes showed no urgent case for moving at the October 27–28 meeting. A cooler September jobs report — wage growth of 3%, the slowest in over five years — supports a pause this month.
Original: read here
2. Treasury Yields Ease as Auction Draws Robust Demand
A $39 billion auction of 10-year notes cleared at 5.300%, the highest in 26 years, with primary dealers taking an unusually small share — a sign of strong end-investor demand. The 10-year touched 5.361% intraday, its highest since April 2002, before settling at 5.276%.
Original: read here
3. Oracle, Broadcom and SpaceX Seek Blockbuster Debt Deals to Pay for AI Chips
Broadcom is arranging more than $50B in financing for OpenAI's custom AI chips, with Apollo and Blackstone involved; Oracle is in talks with Apollo and Goldman Sachs, and SpaceX discussed a ~$40B Nvidia chip financing. After cloud giants issued hundreds of billions in bonds, buyers are turning to off-balance-sheet vehicles to fund tens of billions per deal.
Original: read here
4. Rising Rates Are Eroding the Value of Even the Most High-Flying Tech Stocks
The S&P 500's forward earnings multiple has compressed from 22.2x to 19.3x as the 10-year yield hit a 24-year high. Since mid-August, 18 of 25 industry groups have fallen; Microsoft, Nvidia, Apple and Meta added roughly 300 index points in Q3 while the other 496 companies subtracted about 150.
Original: read here
5. Ripple, Crypto's Payments Giant, Breaks Into Wall Street
Ripple Prime — built on its $1.25B Hidden Road acquisition — now provides swap financing to leveraged ETFs, a lucrative business long dominated by banks. With 593 leveraged ETFs managing $256B+, nonbank players are gaining share as banks face stricter risk rules, though extreme one-day moves could expose swap counterparties to losses.
Original: read here
6. Houthis Escalate Attacks on Saudi Airports, Killing 3 and Wounding Dozens
Strikes on Riyadh's King Khalid airport and Abha airport killed three people and wounded dozens. The Houthis warned international airlines to avoid Saudi airspace and are threatening energy facilities and shipping through the Bab al-Mandeb strait. Brent settled at $100.20; the EIA raised its Q4 forecast to $105.
Original: read here
7. Japan: Tax-Cut Debate Opens in the Diet; BOJ Divided; Yen at Two-Week Low
Prime Minister Takaichi told the Lower House that cutting the food consumption tax to 1% for two years from April 2027, paired with income-linked benefits, is "the best option" against rising prices. The government is separately weighing a small second supplementary budget focused on disaster relief. BOJ board member Ayano Sato said rate decisions will hinge on consumption and income data, leaving an October 29–30 hike an open question. The yen fell to a two-week low near 158.5 per dollar after Governor Ueda's remarks were read as dovish.
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