American Century Investments: AI-related credit boom is the primary driver behind the surge in government bond yields.

EIA in its latest Short‑Term Energy Outlook said Middle East oil supply will remain constrained into Q4 2026, though September production shut‑ins fell to the lowest level since the conflict as increased escorting through the Strait of Hormuz, rerouting and ship‑to‑ship transfers support an overall rebound in Middle East output and exports. US diesel remains tight: East Coast distillate stocks in September were 32% below the five‑year average and are expected to be about 20% below the five‑year average this winter, only gradually approaching the average in H2 next year. EIA projects the 2027 Henry Hub spot average at $3.16/MMBtu, down 9% YoY. US households heating with natural gas and propane are forecast to see lower winter heating spending, while heating‑oil households’ spending is expected to rise about 21%. The outlook incorporates the US Sept 29 announcement to swap 40 mln barrels from the Strategic Petroleum Reserve but excludes possible additional releases announced by the G7 on Oct 2.

REUTERS TANKAN showed confidence among Japan’s large manufacturers rose to 22 in October from 21 in September, the highest since December 2021, driven by strong semiconductor demand. A precision-machinery manager said semiconductor-related orders have run about 1.5x normal over the past four months; another machinery firm reported strong orders and shipments to the chip sector. The non-manufacturing index fell to 23 from 29, the weakest since November 2024, as rising costs and inflation erode household purchasing power. Some manufacturers warned AI-related demand could slow.