Episode summary
Is Inflation About to Derail the Rally? With Andreas Steno | Macro Mondays: October 19, 2026
Summary
Andreas Steno argues that the recent move in markets is being driven by a mix of inflation anxiety, credit stress, and heavy positioning rather than by a clean deterioration in the economic backdrop. He points to France as a warning sign in Europe, saying widening sovereign and credit spreads reflect both political turmoil and the return of market discipline in a hiking cycle. In the U.S., he thinks the selloff in AI-linked names is more fundamental than earlier pullbacks because funding costs and credit spreads now matter for the data-center buildout.
He says the hot CPI and PPI prints last week did not push bond yields higher because positioning was already extremely crowded, with investors short bonds, long energy, and long the Mag 7 against their suppliers. That kind of setup can reverse quickly if the next data points soften. Andreas also says his inflation view has been too soft recently, but he still sees a peak in core inflation momentum around October or November, with a more favorable comparison base in headline inflation into early 2027.
On AI, he pushes back against the idea that hyperscalers will sharply cut capex just because funding conditions are tighter. He argues the revenue side is still improving, since compute prices have risen materially this year. He closes by highlighting the U.S. move to exclude DeepSeek from civilian government systems as an early sign that Chinese AI competition may face more direct restrictions.
Key takeaways
- Andreas Steno says France is trading like a distressed credit, but he still thinks it could become a buy after the political and market dust settles.
- He argues the latest AI selloff is more fundamental than earlier ones because higher rates and wider credit spreads now hit the financing side of the buildout.
- He says market positioning was extremely crowded in bonds, energy and AI, which helps explain why bond yields fell even after a hot PPI report.
- Andreas expects core inflation momentum to peak around October or November, which he says would help ease funding stress.
- He says compute prices have risen about 35% since New Year, so the revenue side of AI infrastructure is still improving even as costs rise.
- He views the DeepSeek ban from civilian government systems as an early sign that Chinese AI competition could face broader restrictions.
Notable quotes
“France is trading like a distressed credit more or less”
“we had an extreme fear in the fear and greed index”
“I think we're approaching some sort of at least momentum peak in core inflation”
“the price of renting an hour of GPU capacity”
How the episode opens
Hey guys, welcome back to Macro Mondays. I'm Dino and it will be me solo for the next 20 to 30 minutes as my partner in crime had a I think it's called a parent teacher conference today. It's it's probably the first one for him.
So, um, anyway, uh, we'll have a great show today and I'll provide you with a bit of a sneak peek into my State of the Union speech that will be live for Real Vision members tomorrow. Uh, before we continue, uh, last week we basically had our twoe festival of learning. Uh, all the sessions are on real vision for free.
That's all you have to do is to sign up via the link that hopefully shows up on the screen below. Uh and tomorrow for Real Vision members, my uh my colleague Mikl will be hosting Rory Johnson at 900 p.m. Eastern to discuss what's happening in oil markets uh also within geopolitics uh and everything related to uh the energy prices ahead of the midterms.
And at 3 p.m. as already mentioned, I will be hosting the monthly state of the union speech for pro members. Um today I'll provide you with a little bit of a sneak peek into that.
Before we get to the sneak peek from the State of the Union speech, let's have the laugh of the week. I found this tweet from the European Commission earlier today uh after I have tweeted quite a few times about what was going on in um in France in particularly over the weekend where we had a pretty decent escalation of things down there. And this is a a real tweet from I think it was May earlier this year where the European Commission basically ridiculed everyone that dared to tweet that France was quote unquote on fire.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation signals
- cpi and ppi
- european bond stress
- ai credit stress
- energy and input costs
Companies and tickers mentioned
- Steno Research
- DeepSeek
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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