🌍 **PIMCO: AI Bond Binge Is Splitting U.S. Dollar and Euro Credit Markets**

PIMCO's credit team finds that heavy hyperscaler bond issuance to fund AI capex is creating a widening performance gap between USD and EUR investment-grade credit.
• Hyperscalers now account for **~5%** of the USD IG index vs just **1.2%** of the EUR IG index, after $120B of USD net supply this year alone (vs €22B in Europe).
• Issuer-matched Amazon and Alphabet bonds show EUR paper outperforming USD paper — a sign of _"demand fatigue"_ in the dollar market.
• Spread dispersion in USD IG has hit levels not seen since the April 2025 tariff shock, even as headline spreads sit near multi-year tights.
Bloomberg consensus sees hyperscaler capex topping **$1 trillion/year** from 2027, meaning this technical divergence is likely to persist.

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