(Bloomberg) — Indicators in global bond markets are signaling their greatest risk aversion in more than a year, as a selloff in AI stocks and growing geopolitical tensions sent investors seeking safe-haven assets.
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Spreads on dollar bonds of top-rated Asian companies widened to their highest levels since last July on Friday, moving in lockstep with credit markets as a whole. The move reflects a rise in corporate bond yield premiums globally, which rose to their highest level since May 2025, reaching as much as 129 basis points, according to a Bloomberg index.
Growing concerns about the rapid pace of debt-fueled AI spending are causing market turmoil amid fears the technology won’t turn a profit soon enough. The abrupt unwinding of AI bets has sparked debate among some high-profile investors, with Citadel’s Ken Griffin warning of a bubble while Blackstone Inc. Chairman Jon Gray said there was no reason to worry because demand is “almost parabolic.”
Asian credit markets reported weakness at Friday’s open, with regional credit default swaps widening about 1.5 basis points to 78 and Chinese tech spreads 3 to 5 basis points wider, traders said. Spreads for investment grade securities in China were reported up to 5 basis points wider, while credit spreads for investment grade securities in India and Korea widened up to 3 basis points.
At the same time, U.S. Treasuries, considered a safer investment vehicle, had their best day in more than two years, rising across the board. There was also a wave of buying in Treasury futures as traders rushed to unwind their bearish bets and cover their short positions.
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