Data from JPMorgan Chase reveals that foreign investors purchased US corporate bonds in January at the fastest monthly pace in nearly three years, as stable yields and lower hedging costs enhanced the appeal of US credit. Strategists Nathaniel Rosenbaum and Silvi Mantri noted in a report that while buying slowed during the final week of January, with average overnight net inflows of $240 million—a 59% decline from the previous week—the month's average nightly net purchases still reached $332 million, marking the highest level since February 2023. Wall Street has been closely monitoring whether a weaker US dollar would trigger a larger-scale exodus from American assets; however, foreign inflows into US corporate bonds have remained robust thus far, indicating that dollar weakness has not yet prompted a broader capital shift. Rosenbaum stated in a telephone interview, "Despite concerns that a depreciating dollar signals foreign investors selling dollar-denominated securities, what we're currently observing in the credit market appears to be the opposite, with very strong buying activity emerging from Asia at the beginning of the year." Influenced by geopolitical fluctuations and market speculation about intervention to support the yen, the US dollar index fell 1.3% in January, recording its worst monthly performance since last summer. Rosenbaum indicated that, nonetheless, the interest rate differential between the US and countries like Japan has kept hedging costs low for foreign buyers, thereby helping stimulate demand for US bonds. Some strategists predict that corporate bond issuance in February could reach a record high, as Wall Street races to fund artificial intelligence projects. Rosenbaum's team projected in a separate report that investment-grade bond issuance in the technology, media, and telecommunications sector could reach an unprecedented $400 billion by 2026. Meanwhile, global publicly offered syndicated bond volume hit the $1 trillion milestone in record time, as borrowers capitalized on soaring demand to lock in relatively lower costs. Data shows that Oracle completed the largest corporate bond issuance of the year on Monday, raising $25 billion, which pushed global financing volume past the $250 billion threshold faster than in the previous two years. For comparison, the $250 billion mark was reached on February 7 in 2024 and February 11 last year. Data indicates that government bonds accounted for over 40% of this year's total bond issuance volume. Financial companies followed closely, constituting nearly 35% of the total issuance, including Goldman Sachs' record $16 billion transaction. Oracle's offering comes amid projections that AI data center construction will require funding exceeding $3 trillion. As companies emerge from the so-called earnings quiet period following quarterly results announcements, corporations—especially technology firms—are expected to begin claiming a larger share of supply. AT&T and IBM completed large bond transactions late last week, and this trend is anticipated to continue. JPMorgan strategists noted that February and March have been among the highest issuance months for the technology, media, and telecommunications sector over the past four years. Despite global bond issuance hitting a record high in 2025 and investor demand driving borrowing spreads to multi-decade lows, a sense of complacency persists in the market. Some fund managers are scaling back their purchases of corporate bonds. The beginning of 2026 is poised to break multiple records, including a January that saw euro-denominated bonds and US high-grade corporate bond issuance reach historic highs. January 7 set a new record for single-day issuance volume in Europe, following what were the two most active consecutive trading days ever for US investment-grade bonds. Bonds are not the only active segment of the credit market. European leveraged loan issuance hit an all-time high last week, while US leveraged loan issuance in January ranked as the seventh highest in history, although the latter has begun to show signs of strain.
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