Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>DC company share prices are rolling over, foreshadowing increasing pressure on their hyperscaler customers.  Since the July swoon in semiconductor stocks, the DC sector has underperformed both hyperscalers and semiconductors.</li>
<li>DC players face strong headwinds on multiple fronts, including high leverage/circular financing, supply chain delays, public opposition, and questions about aggressive forecasts of future compute demand.</li>
<li>Leverage is the most prominent risk in the DC sector, with questions looming about completion dates and customers' ability to meet their contracted offtake agreements.</li>
</ul>


DC company share prices are rolling over, foreshadowing increasing pressure on their hyperscaler customers.  Since the July swoon in semiconductor stocks, the DC sector has underperformed both hyperscalers and semiconductors.
DC players face strong headwinds on multiple fronts, including high leverage/circular financing, supply chain delays, public opposition, and questions about aggressive forecasts of future compute demand.
Leverage is the most prominent risk in the DC sector, with questions looming about completion dates and customers' ability to meet their contracted offtake agreements.


DATA CENTER SECTOR: From the Tip of the Spear to Canary in the Coal Mine

Director, Sentiment Matters

Lars Kreckel

Director

The mood of the market, mapped and decoded

Sentiment Matters

Investor sentiment is the overall mood of investors - how bullish or bearish they are on a market or asset.

Sentiment is part of every investor’s investment process. Whether for macro investors, stock pickers, or thematic investors, it matters whether a position is consensus or contrarian.

<ul>
<li>
Buy Side Sentiment Tracker: we aggregate asset-allocation views from 54 top asset managers across 73 assets, based on 1,400+ individual views.</li>
<li>
Bullish, but not extreme: Risk appetite is high and rising, yet equity downgrades and resilient sovereign demand show the Buy Side is far from universally risk-on.</li>
<li>
Max Contrarian: Infrastructure, Industrial Metals and Gold are most popular; Swiss Franc, Cash and Consumer Staples are least popular.</li>
</ul>



Buy Side Sentiment Tracker: we aggregate asset-allocation views from 54 top asset managers across 73 assets, based on 1,400+ individual views.

Bullish, but not extreme: Risk appetite is high and rising, yet equity downgrades and resilient sovereign demand show the Buy Side is far from universally risk-on.

Max Contrarian: Infrastructure, Industrial Metals and Gold are most popular; Swiss Franc, Cash and Consumer Staples are least popular.


Sentiment Matters: Buy Side Sentiment Tracker - October 2026

<ul>
<li>
Treasuries Sentiment has turned sharply bearish, but not extreme. The SMA sits around the 30th percentile, still above its historical buy threshold.</li>
<li>
The underlying picture is mixed. Momentum and some speculative positioning are very bearish, while buy-side sentiment, options, analyst expectations and flows remain closer to neutral.</li>
<li>
This is not broad capitulation. Price action has been persistently poor rather than disorderly, leaving room for sentiment to deteriorate further before a stronger contrarian signal emerges.</li>
</ul>



Treasuries Sentiment has turned sharply bearish, but not extreme. The SMA sits around the 30th percentile, still above its historical buy threshold.

The underlying picture is mixed. Momentum and some speculative positioning are very bearish, while buy-side sentiment, options, analyst expectations and flows remain closer to neutral.

This is not broad capitulation. Price action has been persistently poor rather than disorderly, leaving room for sentiment to deteriorate further before a stronger contrarian signal emerges.


Sentiment Matters: US Treasuries Bearish, But Not Capitulation

Chief Economist, Heteronomics

Phil Rush

Chief Economist

Heteronomics

Heteronomics represents a different kind of economics. We believe analysis should delve into the details of what is really going on, rather than using overly simplistic assumptions to quick-sell stories. Independence from myopic institutional pressures allows us to focus on the realities underlying your asset allocation decisions, without the conflicts of the old market structures. Heteronomics targets the themes driving UK asset prices, offering the benefits of depth, independence and ultimately price.

UK-centric macro research

Macroeconomics

<ul>
<li>Higher EA inflation keeps the ECB on course for December, while disappointing US labour market data reduce the pressure to respond again more urgently than that.</li>
<li>Stronger UK GDP and faster credit growth stretch their inconsistency with the BoE’s dovish belief that policy is tight. It should begrudgingly make a first hike in November.</li>
<li>Next week is quiet for economic events. We’ll be watching for the Fed and ECB minutes, the Indian rate decision, and publishing our monthly from the road to Pakistan.</li>
</ul>


Higher EA inflation keeps the ECB on course for December, while disappointing US labour market data reduce the pressure to respond again more urgently than that.
Stronger UK GDP and faster credit growth stretch their inconsistency with the BoE’s dovish belief that policy is tight. It should begrudgingly make a first hike in November.
Next week is quiet for economic events. We’ll be watching for the Fed and ECB minutes, the Indian rate decision, and publishing our monthly from the road to Pakistan.


AI Generated Content, Heteronomics

Heteronomics AI

AI Generated Content

<ul>
<li>BanRep unexpectedly raised its policy rate by 25bp to 12.25%. A three-way split signals an active debate over the need and forcefulness of further tightening.</li>
<li>Broadening inflation and elevated expectations keep the bias hawkish, with El Niño, fiscal policy and external rates posing additional upside risks.</li>
<li>A dovish pivot to rate cuts would require clear disinflation towards 3%. Softer demand, credible fiscal restraint and delayed peso pass-through could yet create room in 2027.</li>
</ul>


BanRep unexpectedly raised its policy rate by 25bp to 12.25%. A three-way split signals an active debate over the need and forcefulness of further tightening.
Broadening inflation and elevated expectations keep the bias hawkish, with El Niño, fiscal policy and external rates posing additional upside risks.
A dovish pivot to rate cuts would require clear disinflation towards 3%. Softer demand, credible fiscal restraint and delayed peso pass-through could yet create room in 2027.
