AGP Executive Report

AI & Public Finance: A survey of economists and AI experts suggests AI could lift US GDP growth by a median ~0.5 percentage point per year through 2031, with higher productivity potentially boosting tax receipts and easing deficits if spending doesn’t outrun gains. Rates & Bonds: Fed officials’ hawkish stance is keeping pressure on long-end yields; US 10-year Treasuries hit a post-crisis high near 5.12% as markets weigh Iran-war risks and inflation pain, while Citi pushed its first cut to June 2027 after stronger payrolls. Morocco Macro: Bank Al-Maghrib forecasts growth slowing to 4.4% in 2026 (from 4.9%), then 2.9% in 2027 as the agricultural rebound fades, with the current account deficit widening. Energy Markets: Russia raised its 2026 crude export outlook to 244.7 million tons as refinery damage and sanctions reduce domestic processing capacity. Aviation & Defense Forecasts: Multiple aerospace supply-chain outlooks point to continued demand (lighting, electrical systems, casting), while GPS-denied navigation and quantum navigation are framed as fast-growing defense opportunities. Corporate Moves: Starbucks plans to close ~250 underperforming North American stores; Airtel Money filed for an LSE IPO with IFC backing. Commodities: US durum prices firmed as harvest tightness narrows the discount versus hard red spring wheat. Tech/Robotics: California’s DMV greenlit heavy-duty autonomous truck testing, supporting broader logistics adoption.

Rates & Oil Shock: Bond yields jumped again, dragging global risk sentiment as oil rebounded after Iran-linked Strait of Hormuz tensions, pushing Japan yields to a 30-year high and weighing on Asia equities. US-China Trade Watch: Investors also tracked expectations for a Trump–Xi summit and upcoming central bank signals, keeping markets jittery. Dairy Earnings & Demand: Fonterra reported a 142% profit jump on strong foodservice/ingredients performance after selling Mainland/Anchor to Lactalis, while protein markets face margin pressure from higher inputs and rising capacity. AI Spend Momentum: Gartner forecasts AI spending rising 49.5% in 2026 to $2.7T, with no major diversion from other IT budgets. Healthcare Market Growth: New forecasts highlight fast expansion in room pressure touchscreen monitors, pelvic intelligence, and PII discovery copilot tools, reflecting tighter compliance and care needs. Local Economy/Infrastructure: North Bay’s airport industrial land expansion and road servicing plans point to continued capital spending focus. Sector Forecasts: Road tanker equipment, road marking materials/removal, and cold-chain RKN containers all show strong growth trajectories into 2030.

Aviation Fuel Shock: Ryanair CEO Michael O’Leary said the airline won’t add a fuel surcharge next summer, but warned fares may need to rise 10–20% if jet fuel stays elevated, as hedges expire and weaker carriers face consolidation pressure. Middle East Energy & Markets: Oil eased after US-Iran talks via mediators, lifting European equities and helping India’s Sensex/Nifty rebound as multiple agencies raised India’s FY27 growth outlook to around 7%. EU-China Trade Pressure: The ECB flagged rising overlap between Chinese exports and European industrial output, especially in machinery and transport equipment, increasing competitive strain on manufacturers. Stablecoins Meet AI: BlackRock research pointed to AI agents boosting stablecoin use; Circle’s Arc/USDC could benefit even as crypto stocks dip. Healthcare Device Demand: New forecasts keep stacking up for disposable and digital health tools—single-use ureteroscopes/trocars, smart hospital lighting, and sterile bioprocess filtration—signaling continued capex and infection-control spend. Energy Transition Complexity: A report notes Europe’s grid is getting harder to run as solar, wind, batteries, EVs, and heat pumps multiply behind meters, forcing millions of near-real-time decisions. Regional Power Deal: Korea’s first US investment project—an Encinal, Texas gas plant—targets AI data-center power via long-term PPAs, with returns projected over 20 years. Weather Risk: Massachusetts coastal towns like Scituate are bracing for a potential early-fall nor’easter with wind and flooding concerns.

Gold Outlook: Strategists expect gold to trade in a $4,000–$4,500 range over the next few months as a strong US dollar and elevated bond yields offset geopolitical support. Fed Watch: Chicago Fed chief Austan Goolsbee said the central bank can’t ignore persistent supply shocks, warning the return to target may be “the hard way.” Oil Risk Premium: JPMorgan says it can’t model oil’s endgame as Iran conflict scrambles assumptions, even as Brent sits near $100 and diesel hits records—an AI-driven power demand backdrop adds another layer of uncertainty. AI & Chips: Samsung and SK hynix are ramping high-bandwidth memory output to meet AI data-center demand, while Gartner flags a “trust hurdle” for industrial AI agents as autonomy creeps toward real-world operations. Asia Growth: The ADB lifted South-east Asia growth forecasts, citing AI-related electronics demand despite energy and El Niño pressures. Corporate/Markets: RBC initiated Tabcorp with an outperform call; Flutter faces margin pressure from US tax and bonus competition; Volkswagen warned its profit outlook is collapsing under China and tariffs. Healthcare/Investing: Innate Pharma closed its Sobi deal with a $75m upfront payment to fund trials; retail pharmacy and retinal device markets continue to expand in forecast reports.

China-ASEAN Auto Push: Chinese automakers have pledged about $17.7bn in cumulative investment across 10 ASEAN nations since 2021, roughly matching a year of ASEAN vehicle export revenue—yet execution is getting harder as the region moves from deal-making to “standing firm” implementation. US Retirement Income: The 2027 Social Security COLA is tipped to be the biggest in three years at ~3.5%, but Medicare Part B keeps taking a large slice of the raise. AI in Sports: AI in sports is forecast to climb from $1.03bn (2024) to $2.61bn by 2030, driven by real-time decision tools, injury prevention, and smarter fan experiences. UK Fiscal Pressure: UK borrowing overshot forecasts and debt interest costs are weighing on the Budget backdrop, while gilt yields show only limited relief. Australia Rates Watch: Big banks now expect the RBA to lift rates again, with a September hike to 4.60% on the table. Energy & Power: Fervo won ~$20m in US DOE awards to expand enhanced geothermal in Idaho and Nevada, while Finland’s Endra started a 35MWp solar-plus-5MW/10MWh battery project for 2028. Market Microstructure: Taboola launched Realize ID to reduce open-web identity fragmentation and boost conversion efficiency.

RBA Rate Bets Intensify in Australia: CBA and ANZ have pulled forward their calls, now expecting a 25 bps RBA hike to 4.6% on Sept 29, pushing mortgage costs to the highest since 2011 and raising the odds of follow-up moves. Oil Shock to Keep India Tightening: India could face 75–100 bps cumulative rate hikes if crude stays elevated, with FY27 inflation risks and bond yields likely stuck around 7.0–7.2%. US-China Trade Talks: Trump and Xi meet again in Washington with analysts expecting modest progress and more focus on optics and incremental steps than big breakthroughs. Diesel Squeeze Spreads Globally: UBS warns the diesel shortage could worsen as Russia may extend export curbs and US policy risk rises; diesel prices are already near record levels, feeding inflation and logistics stress. AI Spending Skews to Infrastructure: Gartner forecasts $2.67T in global AI spend in 2026, with about 56% going to infrastructure—servers, chips, networking—far outpacing model budgets. Energy Bills Debate in the UK: A new report argues households could pay less if default tariffs became time-varying, reflecting when power is cheaper to generate. Singapore Market Watch: The Straits Times index is near 5,700 as easing oil supports the rate outlook and sentiment.

AI Spending Surge: Gartner projects global AI spend will jump 49.5% to $2.7T in 2026, with enterprises leaning on embedded “agentic” features to boost efficiency and decision-making. Semiconductor & Data Center Demand: Separate forecasts point to data center accelerator growth to $372.68B by 2030 and intensifying pressure on advanced chip packaging and inspection capacity. China AI Adoption: Gartner says half of global enterprises will use Chinese large language and multimodal models by 2027, driven by cost and easier deployment. Energy & Rates Backdrop: Oil’s slide is lifting risk appetite, but diesel tightness tied to Iran/Ukraine is expected to persist into next year, keeping fuel costs a macro risk. Metals Watch: UBS raised near-term palladium forecasts on a tighter supply outlook, even as EV transition clouds the long run. Market Movers: HP warns PC shipments will fall mid-single digits in 2027 vs 2026, while European equities rallied ~1% as lower oil eased inflation worries. Shipping/Finance: Diana Shipping booked a new time charter at $18,000/day, and Osisko Gold plans $500M senior secured notes to refinance and fund its Cariboo project.

Central Banks & Rates: The Fed lifted rates for the first time in three years and signaled another hike, while the BOJ raised rates in a split vote—keeping bond yields and the yen in focus. Gold & Commodities: Gold steadied as traders weighed inflation risk against the Fed path; oil remains a key swing factor as Middle East supply disruptions keep pressure on refined fuel markets. Energy Costs & Policy: Australia rejected a fuel-excise “shield,” arguing it’s unfunded, as petrol and diesel prices stay elevated. AI & Markets: A US-China summit is set for Sept. 24 with Big Tech leaders, with AI cooperation and a tariff truce on the agenda. Tech & Investment Flows: Data centers are pulling capital ahead of homebuilding in the US, reinforcing the AI infrastructure buildout theme. Healthcare Deals & Demand: Telix and ITM moved to deepen radiopharmaceutical supply; Japan approved Viatris’s WAKIX for narcolepsy/excess daytime sleepiness. Regional Growth Signals: NZ’s economy beat expectations with 0.2% June-quarter growth, while ASEAN markets show a widening split—Singapore and Thailand leading, others lagging. Business & Consumer: Dunedin’s car rental demand is rising with South Island tourism, and Kenya’s tea supply worries are pushing UK prices higher.

Housing & Rates: Britain’s OBR is reportedly weighing a downgrade to Labour’s growth outlook tied to the 1.5m housebuilding plan, raising the risk of higher borrowing costs and renewed pressure on an already tight housing supply. Oil & Inflation: Morgan Stanley warns oil upside risks are rising as multiple disruptions hit supply and refining, with buffers weakening; meanwhile UK drivers are told to fill early as petrol/diesel could spike on Iran-linked tensions. Fed & Markets: After the Fed’s rate hike, gold and silver rebounded as investors reassessed yields and growth risks, while commentary highlights how markets may be underpricing the next phase of tightening. Semiconductors & AI Supply: Samsung is lifting HBM4 yields toward ~80% and accelerating volume, while Korea Eximbank research projects the global chip market topping $1.6T in 2026 on AI-driven memory demand. Auto & Corporate Stress: Volkswagen faces further profit hits and layoffs risk as it cuts outlook amid China weakness and tariffs. Crypto & Policy: A renewed $1,000 XRP call followed Washington meetings tied to US crypto policy, underscoring how regulation chatter is moving token narratives. Global Growth Watch: Chile’s economy edges toward recession, with the central bank cutting its 2026 growth forecast, while South Korea FX experts broadly favor a “Goldilocks” won range in the low 1,300s.

Central Banking Watch: Australia’s Reserve Bank is signaling a hawkish path to crush inflation, with economists now watching jobs data ahead of the Sept 28-29 decision. China Rates: China kept benchmark lending rates unchanged for the 16th month, underscoring limited room for new easing as credit demand stays weak. India Growth Upgrade: Moody’s lifted India’s real GDP growth forecast to 7% for 2026-27, pointing to stronger domestic demand and investment resilience. Oil & Macro Risk: Oil stayed elevated as Asian demand and speculators supported prices, while commentary argues China’s energy buffer has helped prevent a worse spike tied to the Iran conflict. FX/Policy Spillovers: Standard Chartered expects the dollar to regain ground near term as the Fed stays tighter and U.S. yields remain elevated. Rates & Housing: Markets are debating whether mortgage rates can fall toward 6% or risk climbing toward 8% if spreads widen and yields stay firm. Banking Liquidity: India’s FCNR(B) maturity wall looms from 2027-2031, raising the stakes for bank liquidity management. Corporate Stress Test: Volkswagen warned of a €10bn profit hit as China and restructuring costs bite. Crypto Momentum: Bitcoin pushed above $80k and Ethereum hit its highest level since January, while Coinbase’s CEO trimmed his BTC target range for 2030. AI in the Real Economy: Intel said it can supply only about half the CPU demand tied to AI inference, highlighting supply constraints as a near-term market driver. Energy Transition Costs: UK heat-pump economics look more favorable as gas prices jump faster than electricity, while fixed energy deals in the UK are shrinking ahead of winter. Housing Downturn Signal (AU): Australia’s housing listings surge is flagging higher-risk corridors for deeper price falls.

Auto Demand & Inventories: China’s “Golden September” is here but with caution: CPCA sees September passenger-car retail sales at ~1.69M (+9.7% m/m) yet -24.6% y/y, while end-Aug inventory fell to 3.14M units, supporting only 56 days—tight enough to matter, but not a green light for a big surge. Energy & Inflation Pressure: U.S. diesel hit a record ~$6.45/gal as Iran-war disruptions tighten refined-product supply, raising costs for trucking and food; JPMorgan also says it can’t model oil’s endgame anymore. Geopolitics to Commodities: Copper’s physical premium in China is rising toward a four-year high, while global mine output is trending toward its first annual decline since 2017—supportive for prices if supply keeps slipping. Credit & Growth Signals: Moody’s sharply lifted India’s FY27 GDP growth forecast to 7% but flagged oil/El Niño inflation risks; S&P upgraded Cyprus to A, citing fiscal surpluses and debt reduction. Tech & Capital Costs: Goldman warns AI infrastructure spending plus higher government borrowing is pushing up the global cost of capital. Crypto Momentum: Bitcoin market cap overtook Tesla’s valuation ranking as BTC trades near $81k; Ethereum also broke above $2.63k on rising whale activity. Weather Risk to Food: El Niño and extremes threaten Asia sugarcane output, raising volatility risk ahead of major festivals.

Fed & Rates: The Fed lifted rates 25 bps to 3.75–4% and signaled higher-for-longer, with another hike still possible and only gradual cuts after; markets are watching bond yields near 5% and the knock-on effect for borrowing and stocks. Oil & Geopolitics: Iran-war uncertainty is making oil hard to forecast, while Saudi pipeline damage after drone strikes has disrupted exports and kept Brent volatile around the low-$100s. Wall Street: U.S. indexes finished mixed as yields rose and oil swung, with the S&P 500 slightly up but the week still choppy. Commodities (Ag): Soybeans and corn remain driven by tight stocks and harvest/inputs pressure; traders also weigh USDA updates and export demand. Corporate Finance: Netflix accelerated buybacks, adding a record $4.7B in Q2 with $27.1B remaining, while Volkswagen warned of a €10B earnings hit from China pressure, Porsche issues, and EV transition costs. Healthcare Markets: Remote patient monitoring is forecast to hit $62.2B by 2031 (12.5% CAGR), and Teva touted real-world continuity and cost savings for UZEDY. UK Housing: The Resolution Foundation urged £6B in Budget support to tackle unaffordable rents. Global Growth Watch: Moody’s raised India’s FY27 growth forecast to 7% but flagged energy-price and inflation risks. Tech/AI Capital: Nvidia’s AI spend outlook remains a key market narrative as investors track compute and memory bottlenecks. Crypto: Bitcoin reclaimed $80K as macro pressure eased and regulatory expectations improved.

Fed-rate sensitivity check: T-Mobile’s $85B debt load looks scary on paper, but most notes are fixed-rate, so the Fed’s Sept. 17 hike to a 4.00% upper bound won’t hit cash flows the way a simple “$212M” math shortcut suggests. Sovereign growth outlook: Moody’s lifted India’s FY27 real GDP growth forecast to 7% (from 6%) on resilience, while flagging energy and food-price risks from West Asia conflict and El Niño. Oil and inflation pressure: Oil was around $104.33/bbl (Brent) with gas prices still tied to refining and logistics; diesel in Texas hit a record ~$6.40 as distillate inventories sit below the 5-year average. Trade momentum in Asia: Malaysia’s August trade growth accelerated to 43.4% y/y, with exports up 45.5%, supporting a possible 2026 export growth beat. UK renewables economics: CfD AR8 could add up to 19GW of renewables and cut bills by ~£5 via net savings of ~£11B, though assumptions matter. AI and markets: Huawei warned Chinese AI may need to accelerate while balancing safety; meanwhile, Goldman said fears of an “earnings bubble” are overblown as profit growth slows rather than collapses. Food supply risks: El Niño-linked heat could threaten tropical crops, raising UK prices for coffee and other staples. Corporate moves: Toro Corp. bought two MR tanker vessels for $83.4M total; Beneficient plans to launch AltLens for private-market risk analytics.

Nvidia & AI Chips: Jensen Huang said Nvidia will double chip sales next year, targeting a 70% revenue jump to about $673B by Jan 2028, as AI demand stays the core driver. Central Banks & Rates: Japan’s core inflation eased to 1.7% in August, keeping pressure on the Bank of Japan to hike toward 1.25%, while the Bank of England held at 3.75% but warned inflation could top 4% if the Iran-linked energy shock drags on. US Labor & Markets: US jobless claims fell to 196,000 (holiday-distorted), reinforcing a steady labor backdrop after the Fed’s first hike in three years; stocks rebounded as oil eased and yields slipped. Energy & Shipping: US natgas futures eased as LNG flows fell, while airlines (American, United, Southwest) scaled back schedules due to fuel-cost shocks. Crypto & Policy: Bitcoin held near $76K after the Fed’s move; XRP slid after the CLARITY Act failed on a procedural vote. EV & Mobility Forecasts: New market outlooks point to fast growth in EV powertrains, battery reuse, and electric two-wheelers, alongside hospital electric track-vehicle systems. Solar Deal: Anza Power bought 205MWac construction-ready solar plants in New Zealand from Helios Energy, signaling continued clean-energy buildout.

Global Rates Shock: The Fed lifted its benchmark to 3.75%-4% for the first hike since 2023, with officials now penciling in 4.1% for end-2026 and pointing to tariffs, energy shocks and AI spending—pushing Treasury yields higher and keeping CFOs focused on higher funding costs. UK Policy & Borrowing: The Bank of England voted to slow bond sales (QT) to £46bn/year and warned the unwind is meant to limit pressure on government borrowing costs. Market Positioning: A portfolio manager is leaning toward an AI-and-value “barbell” as investors debate whether this is a sentiment pullback or a deeper slowdown. Freight & Trade Risk: WiseTech launched an Ocean Freight Risk Outlook, flagging elevated booking acceptance and reliability risk on Asia–North America and Asia–Europe lanes. UAE Credit Outlook: UAE banks expect lending conditions to improve in Q3, with business loan demand and credit appetite set to recover. Food Supply Shock: Europe faces a potato shortage after heatwaves, threatening smaller and pricier fries. Company Moves: Snap shares rose on new SPECS partnerships with Salesforce, Nvidia and AWS; Rubico declared a 0.50-share stock dividend; Performance Shipping completed delivery of its M/T P. Aliki sale. AI Hardware Demand: Forecasts keep pointing to strong growth in AI memory and advanced semiconductor packaging.

Fed Shock to Markets: The U.S. Federal Reserve raised rates 25 bps to 3.75%–4.00% in its first hike since 2023, with Chair Kevin Warsh warning inflation is “too high” and signaling at least one more hike this year; Trump blasted the move, but markets still sold as the dollar jumped and stocks slid. Airlines & Fuel Costs: American and United warned they may cut capacity further if fuel stays elevated, with fuel adding about $1B to American’s Q4 costs and United flagging December flight changes into 2027. AI Power Crunch: Google, Nvidia and Emerald AI launched an AI Energy Management Alliance to turn data centers into grid “grid assets,” aiming to manage load flexibility as electricity supply strains. AI Copyright Fight: OpenAI/Microsoft’s copyright case widened as more publishers joined, raising the stakes for training-data economics. Consumer Demand Watch: U.S. retail sales rebounded 1.2% in August, but category splits show pressure where mortgage and borrowing costs bite. Housing & Rates: Lennar’s profit more than halved as mortgage rates near 7% cooled demand, while homebuilder sentiment hit lows. Tech Supply Chain: SK Hynix is in early talks with Intel about making memory chips in the U.S., a potential boost for Intel’s long-delayed manufacturing plans.