MORNING BID EUROPE-Market picks CoreWeave as AI rout deepens

A look at the day ahead in European and global ​markets from Tom Westbrook The bruising AI selloff extended ​after the bell, hard into Asia ‌and even ​lent a bid to beaten-down bond markets.

South Korea's chip-heavy KOSPI has slid more than 15% this week, though it's really data centres ‌in the eye of the storm. Markets that last year were buyers, seeing pick-and-shovel exposure to the AI boom, are now worried they could buckle under debts before the payoff arrives from leased computer power.

CoreWeave, a loss-making ‌data-centre operator which owes nearly $50 billion according to LSEG data, was at the heart of the ‌wipeout with shares down 15% on Wednesday and another 6% after market, vapourising a fifth of its value. Yields on its debts due in 2032 shot over 15%, sending a tremor through credit markets.

In a memo, the CEO Mike Intrator said ⁠markets ​can sometimes "misunderstand and act ⁠irrationally." The spectre of trouble in high-yield debt, especially data centres where some of their funding (and fragility) comes from chip vendors, drove ⁠investors into Treasuries and sovereign bonds around the world for the first time in a while.

After spiking briefly ​when US CPI ran hotter than expected, ten-year US government bonds rallied and extended gains through Asia. ⁠The long bond dropped nearly 8 basis points, a big move for the timezone, and Fed funds futures surged as short-sellers ⁠raced ​out of the way. Beneath the shifting sentiment, the revenues flowing chipmakers' way remain enormous and growing. TSMC, the world's largest manufacturer of AI chips, likely reports a sixth straight quarter of record ⁠earnings later on Thursday.

ASML, the world's largest maker of tools used to make AI chips, said on ⁠Wednesday customers were already ⁠looking to place orders for 2029 and 2030, easing concerns that the AI investment boom was losing momentum. Key developments that could influence markets on Thursday:

- Economics: ‌US retail ‌sales, PPI, British monthly GDP - IMF meetings in ​Bangkok

(Editing by Saad Sayeed)