Daily Briefing | 2026-09-30: Rising Interest Rates and Accelerated AI Capital Spending

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Today's main theme

The common theme over the past 24 hours has been that high inflation and high capital spending are simultaneously squeezing policy and corporate balance sheets. The Reserve Bank of Australia raised cash rates to a 15-year high, indicating that energy shocks and weak productivity are forcing major central banks to extend their tightening cycles. In an effort to reduce fuel costs, the United States has once again provided companies with up to 40 million barrels of strategic oil reserves, but this has also pushed the inventory closer to the legal threshold that restricts conventional releases. On the other hand, Anthropic disclosed a ten-year AI infrastructure commitment of at least $518 billion in its IPO materials, about 80% of which is difficult to cancel, turning the computing power competition from a technology narrative into a long-term cash flow and credit risk. China's State Council has called for increased counter-cyclical adjustments, accelerated implementation of bond funds and major projects, and the study of new measures to stabilize the real estate market and promote employment and income growth. Russia's expanded takeover of European corporate assets serves as a reminder to the market that interest rates, energy, technology investment, and geopolitical frictions are forming the same set of pricing constraints through the cost of capital and supply chains.

Five key news items

1. The Reserve Bank of Australia raised interest rates for the fourth time this year, bringing the cash rate to 4.60%.

On September 29, the Reserve Bank of Australia unanimously decided to raise interest rates by 25 basis points, raising the cash rate to 4.60%, the highest level in 15 years. Since 2026, the cumulative interest rate hikes have reached 100 basis points. Core inflation remains at 3.6%, significantly above the target range of 2% to 3%. The central bank believes that high energy costs and weak domestic productivity are making some upside risks to inflation a reality and has indicated that it is prepared to continue tightening if necessary. The market has priced in the possibility of at least one more rate hike. This decision illustrates that even if other regions attempt to buffer energy shocks with strategic inventories or fiscal measures, commodity prices may still be introduced into service inflation through transportation, electricity, and wage negotiations. For Australia, mortgages, corporate financing, and consumption will continue to be under pressure, while the Australian dollar may receive support from interest rate differentials. Going forward, we need to observe quarterly inflation, employment, and wage data, as well as whether household debt repayment pressures will cool down consumption faster than the central bank expects. If energy prices remain high, the risk of a coexistence of slowing growth and sticky inflation will further increase. Banks' net interest margins may benefit, but mortgage defaults, commercial real estate valuations, and SME cash flows will become important points to observe in terms of financial stability.Source: Reuters

2. China's State Council has called for increased counter-cyclical adjustments, with measures to stabilize the housing market and relending awaiting implementation.

The State Council executive meeting of China proposed that, in response to the new situation in economic operation, efforts should be intensified to adjust macroeconomic policies against the cycle and strive to achieve the annual economic and social development goals. The official growth target for 2026 is 4.5% to 5%, with GDP growing by 4.7% year-on-year in the first half of the year. The meeting called for accelerating the issuance and use of various bonds and the commencement of major projects during the 15th Five-Year Plan period, with a focus on promoting the "six networks": water network, new power network, computing power network, next-generation communication network, urban underground pipeline network, and logistics network. At the same time, we will optimize fiscal expenditures, adjust monetary policy tools in a timely manner, increase the amount of relending for technological innovation, technological transformation, and supporting agriculture and small businesses, and study policies to stabilize the real estate market and promote employment and income growth. Policy signals have shifted further from general support to funding and project implementation, but the scale of incremental investment, tool interest rates, and detailed rules for the real estate market have not yet been announced. Its market significance lies in its potential to improve demand expectations for infrastructure, equipment upgrades, and the real estate chain. Going forward, it depends on the progress of the investment and use of special bonds, the amount and cost of relending, and whether housing restrictions and mortgage policies in major cities will be further adjusted. If fiscal and credit tools can be implemented simultaneously, the transmission of policies to investment and consumer confidence in the fourth quarter will be more direct. If the focus remains on existing projects, the multiplier effect may be weak.Source: China Government Website

3. Anthropic discloses $518 billion in computing power commitments, approximately 80% of which are unlikely to be cancelled.

Anthropic’s confidential IPO prospectus shows that the company plans to invest at least $518 billion over the next decade in six partners to build AI infrastructure, one of the largest related commitments to date, of which about 80% is non-cancellable or must be paid even if it is not actually used. Specifically, this includes paying at least $111.1 billion to Google, $110 billion to Amazon, $31.4 billion to Microsoft, and assuming approximately $161.2 billion in lease obligations related to Broadcom equipment; In addition, most xAI Nvidia computing power arrangements worth up to $84.5 billion can be canceled 90 days in advance. Anthropic believes that the demand for advanced models will ultimately be primarily limited by computing power supply, and is therefore shifting from pure cloud services to dedicated data centers and direct chip leasing. However, these suppliers are also model competitors, forming cost, channel, and competitive dependencies. For the industry, long-term contracts will support demand for chips, power, data centers, and cloud services, but lock in the risks of underutilization and financing costs in advance. Going forward, attention should be paid to IPO valuations, cash flow coverage, computing power prices, and how regulators examine cross-investment and market concentration. Since approximately a quarter of revenue comes from two customers, the maturity mismatch between customer concentration and long-term procurement rigidity will also become a key focus for public market investors in measuring risk.Source: Reuters

4. The United States provides another 40 million barrels of strategic oil reserves to companies, with inventories approaching release limits.

The U.S. government has announced a loan of up to 40 million barrels to energy companies for the Strategic Petroleum Reserve, the last planned U.S. share of the 400 million barrel reserve arrangement jointly released by about 30 International Energy Agency member countries following the Iran war. The United States pledged in March to provide a total of 172 million barrels; The same batch of 40 million barrels was launched in June, but the company was ultimately only willing to borrow about 500,000 barrels. The current U.S. strategic oil reserves are below 284 million barrels, the lowest since 1982; Gasoline averaged about $4.45 a gallon, up nearly 50% from before the war broke out in late February, while diesel rose about 70% to about $6.50. U.S. law stipulates that once inventories fall below 252.4 million barrels, the president cannot arrange for regular small-scale releases, but exceptions can still be made in major emergencies. This time, the company will use a loan instead of a sale, requiring it to return the crude oil and pay a premium of up to 24% in kind by the end of 2028 at the latest. The application deadline is October 6. In the short term, it can increase supply and suppress oil prices, but the effect depends on refinery demand and companies' willingness to borrow. A decline in inventory buffers will also increase the tail risk of future energy shocks. If this round of subscriptions remains close to the low levels of June, the policy price signal will be significantly stronger than the actual supply increase, and the market focus will return to strait navigation and oil refining capacity.Source: Reuters

5. Russia expands its takeover of European corporate assets, affecting 135 foreign-affiliated companies.

This month, Russia placed the assets of Nestlé, Metro, and Auchan under temporary state management, calling it an "asymmetrical measure" in response to European sanctions and aid to Ukraine. The Kremlin said the decision could be reversed, but there is currently no reason to resume dialogue; Russian sources also suggested that remaining European companies, such as Italy's UniCredit Bank and Austria's Leiferissen Bank, may become the next targets. According to data compiled by TASS, 135 foreign-affiliated companies have been placed under temporary management since the war, the vast majority of which are from the European Union. The number of member companies of the European Business Association in Russia has decreased from 400 a year ago to 330. Last week, the European Union extended sanctions against more than 3,000 individuals and entities and froze approximately 210 billion euros in Russian sovereign assets. Asset takeovers have increased the expropriation risks and exit costs of cross-border investments, and the retail, food, and banking sectors also face uncertainty regarding management rights and profit repatriation. It remains to be seen whether the list will be expanded to include large European banks, whether the EU will take reciprocal measures, and whether the post-war trade negotiations between the US and Russia will lead to differentiated treatment for European and American companies.Source: Reuters

Market Correlation and Today's Observation

Today's asset pricing can be observed along two chains. The first point is "energy-inflation-interest rate-exchange rate": the United States releases strategic oil reserves to reduce fuel costs, but inventories are close to the institutional threshold, which means that the policy buffer is not unlimited; If oil prices cannot continue to fall, the Reserve Bank of Australia's continued interest rate hikes may be repeated in more economies. High interest rates typically support the US dollar and high-yield currencies, raise long-term bond yields, and compress the valuation space for gold and overvalued technology stocks. Whether the Australian dollar can strengthen also depends on whether the interest rate differential can offset the slowdown in Chinese demand and local consumption.

The second point is "policy investment - computing power demand - corporate financing". China's accelerated bond funding and six-network projects can provide incremental demand for infrastructure, equipment upgrades, and the computing power industry, and may also stabilize the RMB and risk appetite. However, the market needs to see a clear scale and speed of execution before it will shift from policy expectations to upward profit revisions. Anthropic's long-term, non-cancellable contracts have strengthened the prosperity of data centers, power, chips, and cloud services, but have concentrated the pressure to meet future demand on a few AI companies. If global yields continue to rise, commitments in the $518 billion range will face higher financing costs, and technology valuations may show a divergence between strong industry orders and high equity discount rates. Russia's expanded takeover of foreign assets will further increase the risk premium in Europe. Today, we should focus on tracking the reaction of oil prices to reserve releases, the Australian dollar and US Treasury yields, the Chinese real estate and infrastructure sectors, as well as the valuation differences between AI infrastructure beneficiaries and high-cash-burning model companies.

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Cover image:Eric Stoynov / Unsplash