Syz the moment

But as volatility in Japan rises and the Bank of Japan gradually moves away from ultra-low interest rates, investors are increasingly looking for alternatives. One currency is emerging as a natural candidate: the Swiss franc. The logic is straightforward. Swiss interest rates remain close to zero, making the franc one of the cheapest major currencies in the world to borrow. At the same time, the Swiss National Bank remains attentive to excessive currency appreciation, reducing—at least in investors’ eyes—the risk of a sharp and uncontrolled strengthening of the franc. Positioning data suggests traders are taking notice. Hedge funds have pushed net short positions in the Swiss franc close to a two-month high, while speculative short positions in the yen have declined for a second consecutive week. The performance differential is already becoming visible. Over the past month, a carry trade funded in Swiss francs and invested in the Mexican peso would have generated a return of roughly 4%, compared with around 1.3% for the same trade funded in Japanese yen. The yen is unlikely to lose its status as the world’s dominant funding currency anytime soon. But the backdrop has changed. Expectations of higher Japanese interest rates, combined with the persistent risk of currency intervention, have made yen-funded carry trades less predictable. By contrast, Switzerland combines extremely low borrowing costs with relatively low interest-rate volatility. That is putting the franc firmly back on traders’ radar. There is, of course, a striking irony in all of this: one of the world’s ultimate safe-haven currencies is increasingly being borrowed to finance risk-taking elsewhere. The Swiss franc may still be a refuge when markets panic—but in calmer times, it is increasingly becoming the fuel behind the carry trade. Source: Bloomberg

Bloomberg reported today that Broadcom is preparing another gargantuan SPV deal, and is in talks with a group of lenders to raise more than $60 billion in debt for an AI chip financing deal that will benefit Anthropic PBC and other companies. The financing, which is still being ironed out, may also include a roughly $30 billion junior debt tranche, said some of the people, who asked not to be identified because the information is private. Under the proposed plan, Broadcom would guarantee a portion of the senior-secured tranche, which could range from about $60 billion to $70 billion. The numbers under discussion would potentially bring the total to as much as $100 billion, which would make it the largest SPV deal ever funded. The agreement would add to a rush of deals aimed at financing artificial intelligence infrastructure. AI companies like Anthropic are taking a bigger role in the build-out, aiming to ensure they have enough computing capacity. Broadcom, meanwhile, is looking to sell more chips and other data center equipment, challenging Nvidia in this lucrative market. Broadcom’s debt is interesting because its recent competition for Google’s TPU business has been accompanied by a spike in CDS. And, as Bloomberg notes, the monster debt deal will do little to alleviate that pressure and will likely feed down to the CDS of other chip / hyperscaler credit. Source: zerohedge

More money printing. More debt. Higher prices. Source: Charlie Bilello

Billionaire investor Sir Christopher Hohn’s TCI has quietly built a major exposure to loans backed by some of Italy’s most prestigious hotels. 🏨 $392M — Hotel Danieli, Venice 🌊 $132M — Caesar Augustus, Capri 🏔️ $74M — Six Senses, Lake Como 🏙️ $38M — Mandarin Oriental, Milan The thesis is simple: scarcity + pricing power. Italy’s revenue per available hotel room surged 53% between 2019 and 2025, the strongest increase in Europe, driven largely by luxury properties. Historic palazzi, prime waterfront locations and strict planning rules mean supply cannot easily respond to booming demand from wealthy international travellers. For Hohn—an investor obsessed with businesses able to raise prices faster than inflation—ultra-luxury Italian hotels increasingly look like real-estate monopolies in disguise. And TCI is financing them. Source: FT

Source: zerohedge

The US Treasury announced it will at least double buybacks of long-dated Treasuries, from $2bn to $4bn per operation. Markets reacted immediately: 📉 30Y Treasury yield: 5.34% → 5.18% 🥇 Gold: +3.1% 🥈 Silver: +4.1% ₿ Bitcoin: +7.8% Ξ Ethereum: +10% 💵 Dollar: -0.7% Why does it matter? The US already spends roughly $1.4 trillion annually on interest, while trillions of low-cost debt must be refinanced at much higher rates. And this isn't just an American problem: long-term government yields are surging globally. The biggest wildcard may be Japan. As Japanese yields rise, domestic investors have less incentive to finance US and European governments. 👉 The bond market is increasingly becoming the key macro risk—and falling yields remain rocket fuel for gold and crypto. Source: Bull Theory

The companies announced it Wednesday, bringing them one step closer to filing for approval of the treatment option. Merck shares climbed more than 12% on Wednesday, while Moderna’s stock soared about 177%. The size of those moves reflect the companies’ relative size entering Wednesday: Merck’s market cap was around $333 billion, while Moderna’s sat near $25 billion. Meanwhile, short sellers betting against Moderna $MRNA are sitting on $5.5 billion paper loss in a single day after the stock jumped 177%. Their total losses on the trade this year now stand at $7.7 billion. Source: Bull Theory CNBC

Here’s the mechanism: 1️⃣ The Treasury issues more short-term T-bills. 2️⃣ The Fed buys bills, injecting liquidity into the system. 3️⃣ The Treasury uses its cash and buyback program to retire longer-dated Treasuries. The result? 👉 More demand at the long end. 👉 Less duration risk in the market. 👉 Potential downward pressure on long-term yields. Technically, this isn't traditional QE because the Fed isn't directly buying 10Y or 30Y Treasuries. But economically, the distinction could become increasingly blurred. With US interest costs exploding and long-term yields above 5%, policymakers have a powerful incentive to prevent the long end from spiraling higher. Call it buybacks. Call it liquidity management. Call it maturity transformation. But if the objective increasingly becomes controlling long-term borrowing costs… We may eventually get Yield Curve Control—just with a different name tag Source: Lukas Ekwueme @ekwufinance Hoisington Investment Management