Global Credit Bullets | Monday, 19 October 2026

Algebris argues that investors should remain cautious on risk and credit spreads while favouring duration in fixed income.

• At the IMF/World Bank meetings in Bangkok during the week before 19 October 2026, the team held more than 60 meetings and found consensus constructive on growth but not overly negative on inflation.
• Carry trades and technology equities remained the most popular long positions, although enthusiasm for artificial intelligence was fading; global duration faced broad pessimism because of AI capital expenditure and fiscal challenges.
• France had become a consensus short, while concerns about the eurozone were increasing ahead of the 2027 elections.
• September US core CPI rose 0.3% month on month, 10 basis points above expectations, while core PPI rose 0.7%, 40 basis points above expectations.
• Algebris estimated that the data would add around 12 basis points to monthly core PCE, implying a 0.32% month-on-month reading; shelter inflation also accelerated, but the team judged the figures insufficient to trigger a Fed hike in October, which was priced at around 15%.

Takeaway: Algebris prefers duration to spreads despite the inflation upside surprise, while maintaining a cautious bias toward risk assets and credit because of fiscal, political and AI-investment uncertainties.