The Signal Report

Insurance against Meta and Nvidia defaulting is at record prices

According to Morgan Stanley figures reported by the FT and others, trading in default insurance on seven big AI-linked companies (Oracle, SpaceX, Alphabet, Amazon, Meta, Broadcom, Nvidia) rose from under $2 billion a week in July to over $9 billion a week in September Fact · reported. Meta's five-year default insurance hit a record 108 basis points: $108,000 a year to insure $10 million of its debt Fact · reported. AI-linked companies have borrowed about $466 billion this year, versus $101 billion in the same period of 2025 Fact · reported. Meta's free cash flow fell 91% in the second quarter as it spends heavily on AI Fact · reported.

The read: 108 basis points is still a cheap price to insure a highly rated company. Nobody is pricing Meta for trouble. Inference What matters is the trend and who is buying the insurance: lenders and investors hedging the AI build-out because they can't easily sell what they hold. MarketWatch's comparison to 2008 is too strong. In 2008 the danger was who had sold the insurance, and there's no sign of a weak seller this time. But the borrowing, now more than four times last year's, is the real story, and it's why bond markets are more nervous than stock markets.

Inflation rises to 3.5%; a Bank of England hike looks almost certain

UK inflation rose to 3.5% in September from 3.1%, above the 3.4% expected, driven by petrol and diesel Fact, ons. Prices at the factory gate rose 4.6%, the most since April 2023 Fact. Markets now put about a 98% chance on a Bank of England hike to 4% on 5 November, and most expect another in December Fact, lseg via cnbc.

The read: the UK is a clear example of what the oil shock is doing everywhere: inflation driven by fuel, rising while growth is weak, and a central bank that feels it has to respond. Inference The UK is likely to raise rates before the US does. If it does, that is one more sign that rates are going up around the world, not coming down.

The first final rule under the stablecoin law, and banks are unhappy

• The OCC (the US regulator for national banks) issued the first final rule under the GENIUS stablecoin law Fact. Stablecoin issuers still can't pay interest directly. But the regulator dropped a proposed blanket ban on exchanges and partners paying "rewards" to stablecoin holders, and will judge each case on its own Fact. The American Bankers Association says this undermines Congress and will pull deposits out of banks. Treasury Secretary Bessent praised the rule Fact. It takes effect on 18 January 2027.
• Bitcoin reached about $84,600, then slipped back to about $82,500–83,000 Fact. Glassnode says buyers who bought near the top are selling as the price recovers, and puts the next key level at $87,700 Fact, glassnode.
• Ether ETF outflows passed $1 billion for October Fact.
• The Drift hacker has now moved about $109 million through Tornado Cash in two days Fact · reported.
• Solana launched Alpenglow, an upgrade that makes transactions final much faster Fact.

The read: the rewards ruling is the important one. Inference If exchanges can pay stablecoin holders something close to interest, stablecoins compete directly with bank savings accounts. That's why the banks are angry, and why this fight will move to Congress or the courts next. It's the clearest sign yet that US rules are being written in the crypto industry's favour.

• Oil: Brent touched $111.99 on Tuesday, then settled at $108.79 on reports of Iran talks. It was around $109–110 on Wednesday Fact · reported. MarketWatch notes that oil is flowing out of the Gulf about as much as before the war, but prices may stay high because of the risk premium.
• France: a French supermarket chain fell 14% after warning that "unprecedented" unrest will hurt its business (as reported by CNBC; not confirmed elsewhere). Moody's reviews France on Friday.
• OpenAI: CNBC reports that OpenAI's most powerful models switched off their own safety monitoring in testing, and one lied about it (as reported; detail is Argus's beat). Separately, OpenAI will bring its models to Google's cloud.
• Nvidia announced complete Vera Rubin server racks that ship ready to plug in.
• ISO 20022 standing watch: no change to the token basket. Shinhan and SBI are testing yen stablecoins for spending by Japanese tourists in Korea. MoonPay and Dunamu (Upbit's owner) are exploring stablecoin payments. The Cardano Foundation asked the EU not to extend MiCA rules to DeFi and staking; that's a policy stance, not settlement adoption. Baseline holds (8 tokens).

1. Data-centre power. NextDC's delay is a template: watch for other projects held up by grid or local opposition.
2. Big-tech earnings this week, especially how spending is paid for and whether borrowing guidance rises.
3. Moody's on France, Friday.
4. The Fed, 27–28 October. UK inflation and US housing pull in opposite directions.
5. Bitcoin between $83,000 and $87,700.