Written Commentary
The Ghost in the Machine: Q3 2026 Macro Outlook
September 28, 2026
Increasing Persian Gulf shipping attacks a reality check for AI exuberance; digesting Japan Wages; monthly Tankan, German Industrial Production, IMF warnings; awaiting US FOMC minutes, NY Fed Inflation expectations and further rash of central bank speakers.
- Narrow focuses on increased flow of crude and AI Investment capital overlooks practical systemic realities.
EVENTS PREVIEW
While the conflicts in the Middle East and Black Sea, and upward pressure on official interest rates and bond yields continue (regardless of yesterday’s modest but short-lived drop), US equity indices continue to make new highs. The latter effectively assumes that the Q3 earnings season, which officially starts next week, will deliver evidence of further incremental ROI gains from AI investment, as well as strong revenue growth and a robust outlook when the Anthropic IPO filings due sometime during this month are published.
AI Investment and Infrastructure Constraints
One consideration in the AI Investment boom that continues to be underdiscussed is that, as much as capital is being deployed at light speed, the temporal and physical realities have considerable mismatches. For example, it may take 12-18 months to build a data centre, but the power grid capacity and infrastructure to supply it (if not already available) may take up to 6 years to construct, leaving aside any permitting considerations.
Energy Markets and Shipping Risks
In a similar vein in the energy sector, increased flow of crude barrels from the Persian Gulf region does not resolve other potential problems, such as skyrocketing transport and insurance costs, routes remaining navigable (with Iran currently increasing attacks on tankers), and refineries having the suitable capacity to process the crude.
Given the CEOs of Saudi Aramco and Vitol have in recent days both opined that inventories of crude and products are ‘scarily low’ and ‘exhausted’ in Europe, and that any renewed disruption could see crude hit $200/bbl, the situation is very much a case of ‘hope for the best, but prepare for the worst’, and implies elevated volatility in rates and energy prices, which equity indices may struggle to ignore over the longer run.
Today’s Economic Calendar
Today’s regular schedule has Japan’s Labour Cash Earnings & monthly Tankan and less dovish comments from BoJ’s Sato, German Industrial Production (better than expected due to a surge in construction output), and the expected 25 bps rate hike to 5.50% from India’s RBI to digest (though its outlook somewhat more hawkish than expected), ahead of the US NY Fed Inflation Expectations survey and the minutes from September’s FOMC meeting, along with a further smattering of central bank speakers.
The FOMC and tomorrow’s ECB minutes will be scrutinized for the debates around rate trajectories, even though it is clear that most central banks are agnostic on where rates might end up, and the recent and forthcoming run of speeches are and will be rather more informative, as per the speeches from Fed’s Jefferson and Williams last week, and indeed ECB’s Rehn this week, in all cases leaning against aggressive or reactive policy signalling.
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