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On October 17th, according to the Financial Times, Anthropic is offering Blackstone Group a yield exceeding 10% to raise funds to support its latest chip deal. This $60 billion debt financing program, dubbed "Project North Star," will help Anthropic procure approximately 1.5 gigawatts of custom semiconductors, or TPUs, developed by Google. It is expected to be the largest chip financing deal to date and a key test of investor demand for AI-related debt. Sources familiar with the matter revealed that Blackstones funds will invest $9 billion to purchase debt backed by Anthropics chip lease payments over the next five years, representing half of its approximately $18 billion in subprime loans. Blackstone has received a coupon rate offer of 10%, and the total yield will be even higher after accounting for new debt issuance discounts and other fees. According to the Intercontinental Exchanges Bank of America BB-rated U.S. High Yield Bond Index, borrowers with similar credit profiles typically pay around 7% yields when financing in the public bond market.According to the Financial Times, Anthropic offered Blackstone Group a double-digit yield in its latest chip financing deal.In an executive order, U.S. President Trump stated that he would waive certain sanctions, restrictions, and tariffs applicable under the Graham Act on sanctions against Russia and Iran, effective immediately.On October 17th, Russian President Vladimir Putin stated on the 16th that, in response to attacks by Ukrainian authorities on Russian industrial enterprises and fuel and energy complexes, the Russian armed forces continue to strike Ukrainian military-industrial complexes and related facilities. Putin stated that the Russian military is accelerating its offensive across the entire front, and the "safe zone" along the border with Ukraine has significantly expanded in recent months. One of the main tasks on the ground remains the "liberation" of Donetsk. The Russian militarys control of Dobropilya was a landmark event in the special military operation, opening up a passage to Donetsk.On October 17th, German Chancellor Merz stated in Brussels, Belgium, on the 16th that the EU should exercise fiscal restraint in negotiating the next long-term budget, opposing a significant increase in its size and emphasizing that limited funds must be prioritized for defense and competitiveness. Following the conclusion of the two-day EU summit, Merz explicitly opposed the proposal to increase the next budget by approximately 50% at a press conference. He said that drastically increasing the EU budget is "fiscally unfeasible," and the final budget figure must be significantly reduced based on the European Commissions proposal. Merz posted on social media on the 15th that Europes funds are limited and clear priorities must be set. "We must invest funds in key areas that will determine Europes future—defense and competitiveness."

Gold Price Prediction: XAU/USD rises on Powell's dovish speech

Daniel Rogers

Dec 01, 2022 14:59

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The price of gold is increasing as a result of Jerome Powell's dovish speech on Wednesday, which weakened the US Dollar. At the time of writing, the Gold price is up approximately 0.6% and has risen from a low of $1,744.95 to a daily high of $1,765.

 

Earlier in the day, the price of gold reduced gains as US bond yields rose in anticipation of a highly anticipated speech by Federal Reserve Chair Jerome Powell. Powell stated, however, that policy will likely need to stay tight for some time and that it makes sense to slow the rate of interest rate hikes. The time to reduce the pace of rate hikes could arrive as early as the December meeting, according to him.

 

As a result, the gold price is on course for its best month since May 2021, thanks to the dollar's decline. Last observed, the US dollar index, DXY, was down 0.5% to 106.29, while the yield on the US 10-year note was down to 3.694%, not far from the November 28th low of 3.62%. The greenback is poised for its largest monthly loss since September 2010 as investors anticipate the Federal Reserve to reach its target interest rate in the first quarter of 2019. After four consecutive 75 bps rate hikes, the markets are now pricing in a 75% possibility of a lower 50 bps boost in December.

 

Moreover, evidence revealed that the labor market began to cool. In October, the number of job opportunities in the United States decreased to 10.3 million. The number of hiring and total separations remained relatively stable at 6 million and 5.7 million, respectively. "Job vacancies have decreased from their peak of just under 12 million in March, but with 1.7 job postings per unemployed person in the United States, the gap between labor demand and supply remains considerable," ANZ Bank analysts explained.

 

TD Securities analysts contend that a bull trap is being set in precious metals markets. "Over the past few days, systematic trend followers have substantially covered their gold shorts, while the strong price action has likely continued to draw additional long interest from discretionary money managers seeking a recession hedge amid peak central bank hawkishness."

 

"However," stated the analysts, "narrative is chasing prices, and we see many events on the docket that could spark a renewed leg lower as CTAs run out of dry powder on the bid. Alongside inflation and employment data, Chair Powell's speech is a prime possibility for a catalyst.