Questions have emerged over the sustainability of the semiconductor boom underpinning South Korea’s economy. Memory shortages and surging prices have sent exports and corporate profits soaring, but it remains unclear whether earnings can continue to rise at the same pace. Growing use of long-term supply contracts with price caps has also prompted forecasts that memory price increases will be limited. Combined with the possibility of slowing artificial intelligence (AI) investment and China’s technological advances, these concerns have dampened optimism about a prolonged boom.

As the war in Iran drags on and inflation fears mount, the U.S. 10-year Treasury yield has broken through 5%, followed by the 30-year mortgage rate crossing the 7% threshold. Buyers struggling to afford interest payments are postponing home purchases, leaving listings to pile up and prompting both homeowners and builders to cut prices to attract buyers. Sluggish transactions are leading to price reductions, but war-driven inflation concerns and the U.S. debt burden are pushing interest rates higher, maintaining pressure on the housing market. In particular, concerns are growing that if peace talks fail to achieve a breakthrough and uncertainty over crude oil supplies persists, high interest rates could suppress buying demand and intensify downward pressure on home prices.

The US Treasury Department announced that it had imposed a substantial fine on Bank of America (BofA). As scrutiny of money laundering in the US financial sector intensifies, financial institutions that fail to adequately detect and report suspicious transactions are facing a succession of penalties. Similar regulatory trends are increasingly evident in other major countries. In China in particular, authorities are steadily stepping up enforcement and monitoring to prevent capital outflows through underground banks, virtual assets and fraudulent trade transactions.

Concerns about slowing growth are mounting as China's economy struggles under a property slump and heavy debt burdens. The prolonged property downturn is increasing banks' exposure to bad loans and suppressing household consumption, obstructing a recovery in domestic demand. The government, which must fill the gap in private-sector spending, also faces shrinking fiscal room as its debt grows, leaving it in a dilemma: the more it stimulates the economy, the greater its public debt burden becomes. Market observers warn that China could fall into a prolonged slump like Japan, which spent years adjusting its debt after its property bubble burst.

The global energy supply chain crisis is dragging on. Rapidly declining crude oil and petroleum product inventories worldwide have weakened the market’s ability to absorb further supply shocks. Middle Eastern oil producers are accelerating efforts to expand supply, but persistent shipping disruptions around the Strait of Hormuz and the Red Sea have limited the recovery in actual exports. The resulting rise in energy prices is spreading across production and transportation costs, increasing inflationary pressures in major Western economies, including the United States and Europe.

UBS, Switzerland’s largest bank, is considering moving its headquarters abroad to reduce the cost burden of tighter capital requirements. After authorities demanded that UBS, enlarged by its rescue takeover of Credit Suisse, hold more capital, the bank began exploring relocation options, including acquiring a U.S. bank. UBS has been a central pillar of Switzerland’s wealth management industry, providing trading and lending services to local family offices and asset managers. If a headquarters relocation is followed by the departure of key personnel and business functions, Switzerland’s wealth management sector and related industries, including legal and tax services, will inevitably suffer. With Hong Kong and Singapore rapidly attracting wealthy clients’ money, concerns are also growing that a UBS departure could undermine Switzerland’s standing as an international financial hub.

Competition among artificial intelligence (AI) companies to secure chips is driving massive borrowing, allowing credit risk to accumulate in financial markets. Anthropic is seeking funding by offering annual returns above 10%, while CoreWeave, xAI and others have raised huge sums against chips and future revenue. Loan trading and asset securitization are also broadening the pool of investors betting on the success of AI businesses. But if expected earnings fail to materialize and the value of chips pledged as collateral also falls, companies’ repayment difficulties could readily spill over into financial-sector losses. In other words, the vicious cycle seen during the global financial crisis could recur: bad loans cause financial-sector losses, triggering a credit crunch that further weakens companies’ ability to repay.

Japan’s SoftBank Group is considering acquiring Allied Universal, the largest private security company in the United States. As automation using artificial intelligence (AI) and robots gains momentum across U.S. industry, the move is seen as an effort to broaden the commercialization of AI technology by connecting its existing semiconductor, data center and robotics assets with frontline security services. Market observers say that if the acquisition goes through and a system for automating security work is established, it could provide an opportunity to increase corporate value across SoftBank’s AI value chain.

China and Japan, two major players in the U.S. Treasury market, have been cutting their holdings. China is diversifying the investment of its foreign exchange reserves, while Japan may have sold Treasuries to secure the dollars needed to defend the yen. Losses from falling Treasury prices and concerns about increased supply as U.S. finances deteriorate are also dampening sentiment toward long-term bonds. As concerns grow over expanding Treasury supply, hedge funds are playing a larger role in the market. With major holder countries reducing their positions, private capital seeking interest income and trading gains is accounting for a growing share of the Treasury market.

France’s fiscal troubles are rattling its government bond market. As protests against austerity plans spread, government bond yields have approached 5%, and the yield gap with Germany has widened to levels seen during the European debt crisis. The government has moved to curb pension and healthcare spending to reduce the deficit, but fierce opposition and a growing interest burden are hampering fiscal consolidation. Warnings are even emerging within France that failure to contain its fiscal troubles could force it to seek assistance from international institutions and implement reforms under external supervision.

Anthropic has placed a massive bet on the long-term growth of the artificial intelligence (AI) market by securing vast computing resources in advance. Buoyed by surging revenue, it has accumulated long-term purchase commitments, but many contracts require payment even if usage declines, leaving it exposed to mounting financial burdens if growth falters. Suppliers are also lending customers the money to fund purchases, creating a risk that failed investments could send shock waves through business partners and creditors. With equipment obsolescence shortening the time available to recoup investments and China's DeepSeek intensifying its low-cost offensive, uncertainty is growing over whether the company can generate enough revenue to support its enormous spending.

Chinese households are struggling with falling incomes and job insecurity, weakening their ability to repay debt and sustain spending. Credit card delinquencies are rising even among middle-aged employees whose repayment capacity banks had trusted, revealing increasingly strained household finances. With the property slump also eroding asset values, households have cut spending, while businesses serving the domestic market are hesitant to expand investment amid sluggish sales. The Chinese government is trying to fill the gap left by the property downturn by fostering advanced industries, but increased production has not translated sufficiently into job and income growth, leaving the consumption recovery without momentum. As industrial support expands production capacity while household purchasing power stagnates, concerns about a prolonged downturn are mounting.

U.S. blockchain company Ripple has received final approval from the Office of the Comptroller of the Currency (OCC) to establish a national trust bank. As stablecoins are increasingly brought under mainstream financial regulation centered on the GENIUS Act, Ripple has secured a foundation for expanding its reserve management and digital asset custody businesses under federal supervision. U.S. financial authorities are now encouraging not only private companies but also community banks to enter the market, while major U.S. banks are accelerating joint stablecoin issuance and expanding deposit tokens and blockchain payment services.

With the U.S. Federal Reserve (Fed) holding its policy rate steady at the October Federal Open Market Committee (FOMC) meeting, market forecasts for the December rate path are divided. Caution has spread amid concerns that monetary policy cannot directly control supply shocks caused by a prolonged Middle East war. The Fed’s policy path is expected to depend heavily on the course of the Middle East war, whether shipping through the Strait of Hormuz returns to normal, and how quickly global oil prices stabilize.