Ukraine alleges that the Kremlin is on the brink of mobilizing another 300,000 troops later this year in order to make up for significant battlefield losses.

“Russia has lost 267,000 personnel since the start of the year, including around 155,000 killed to date,” Ukrainian President Volodymyr Zelensky claimed in remarks released Sunday. “We are confident that following the elections, they will carry out a mobilization. We believe this will not take place in the major cities.”

Zelensky further asserted his belief that Putin would “deploy the 300,000 newly mobilized troops depending on the situation in the east of our country.”

Neither side has ever issued public war casualty figures, and so Zelensky’s claim of the massive number of Russia soldiers killed remains impossible to evaluate accurately.

But as for preparations for a new wave of mobilization on the Russian side, The Wall Street Journal says that this rings true. The publication has chronicled some anecdotal evidence, seeing signs of serious preparation.

“Last month Russian military officers flew from St. Petersburg to the country’s Kaliningrad exclave nestled between two NATO countries and the Baltic Sea,” WSJ reports. “There the officers oversaw readiness planning and procedures for a mobilization of the region’s residents, with details on how to house, feed and arm them, said Western intelligence officials.”

Speaking more of the Russian exclave, the report continues: “The planning exercise in Kaliningrad is just one of many being carried out nationwide, said the officials, in case the call is made.”

Officials cited in the report have said no concrete decisions have been made as of yet, and which is unlikely to happen until after parliamentary elections in late September.

WSJ sees it as a sign that while Russian forces have clearly been able to hold territory gained in the Donbass region, it has come at a huge and grim cost:

In recent months, Moscow has failed to recruit enough new soldiers to make up for those killed and injured on the battlefield, while Ukrainian drone advances have reduced the average Russian soldier’s lifespan on the front to a matter of minutes, days or weeks. Those problems in manpower may leave Putin with no choice other than to order a fresh wave of mobilization not seen in years, U.S. and European officials said.

It must be remembered that on a legal-technical level, for Russia the Ukraine conflict remains only at the level of ‘special military operation’. Some skeptics are calling the content of the WSJ piece largely propaganda. 

Still, the fresh rumors of an imminent large-scale mobilization are already prompting signs of a potential exodus from Russia, WSJ further describes.

Below: Purported recent scene at the the Russia-Abkhazia border checkpoint…

At the Russia–Abkhazia border checkpoint, Russians are trying to flee mobilization. They don’t want to be sent to the front as cannon fodder. pic.twitter.com/56eerLeISL

— распад и неуважение (@VictorKvert2008) August 22, 2026

Men of conscription age are reportedly seeking ways to leave the country, with neighboring Georgia and Armenia seeing real estate prices rise amid expectations that a new wave of Russian immigrants could arrive.

Moscow customs authorities reported that more than 20,000 people crossed the Georgian border in a single day last week – the highest figure on record. Notably though, Georgia’s Interior Ministry has rejected those figures.

Futures are lower with Tech underperforming as the market focuses on NVDA / MRVL earnings this week; while the AI theme is pressured globally and memory stocks slump driven by a slide in the Kospi. Futures got a boost just after 7am when CNBC reported that the Treasury could use the General Account ($935BN as of today) to fund bond buybacks. As of 8:00am ET, S&P futures are down 0.2%, rising from a session low hit this morning around -0.4%. Nasdaq futures are down 0.4% with Mag7 names mixed and Software up. In premarket trading, Memory/Semis are weaker, dragging down the Tech tape. Defensives are leading Cyclicals ex-Materials as Metals/Miners look to extend their bullish run. European stocks are lower, dragged down by tech whileSouth Korea’s Kospi was once again Asia’s top loser, sliding 3.1%. Shares of SK Hynix also lost more than 3%. Bond yields are lower, down 3-4bp as the curve shifts lower and USD is bid with the Dollar stronger versus G7. In commodities, oil and ags are pulling the group lower on reports of more than 15mm bbl leaving SoH over the weekend; gold / base are bid as silver sells off as part of AI weakness. Warsh’s speech Friday at 10am is the macro focus for the week but we also get updates on PCE, which has been de-risked with the CPI/PPI prints, income / spending, housing data, and some regional Fed activity indicators. US session has few scheduled events Monday; ahead this week are coupon auctions, July personal income and spending data including PCE price indexes, and Federal Reserve Chairman Kevin Warsh speech at Jackson Hole Symposium.

In premarket trading, Mag 7 stocks are mixed (Alphabet -0.3%, Amazon +0.3%, Apple +0.4%, Meta +0.2%, Microsoft unchanged, Nvidia -0.2%, Tesla -0.3)

• Watch US and Canadian metals, lumber, dairy, automotive and equipment maker stocks as Canada is set to apply counter-tariffs on $20 billion of US products on Sept. 8 after the US implemented a new 50% tax on imports of hundreds of Canadian items.
• Alibaba ADRs (BABA) fall 2% after raising $10.2 billion in Hong Kong’s biggest follow-on offering, underscoring its willingness to amass and spend vast sums to take the lead in global artificial intelligence.
• Applied Optoelectronics (AAOI) tumbles 12% after the company filed for a possible offering of shares.
• NVent Electric (NVT) slips 1% the maker of cabinets and racks for data centers agreed to buy Maverick Power for $1.75 billion.
• PDD Holdings ADRs (PDD) rise 2% after the owner of Temu reported second quarter earnings that beat the average analyst estimate.
• Regenxbio (RGNX) tumbles 25% after the drug developer said the FDA placed a clinical hold on its investigational gene therapy RGX-121 for Hunter Syndrome. The hold follows the discovery of either a small nodules or a cystic mass in spine MRIs of five trial participants.

In other corporate news,  Alibaba raised HK$80 billion ($10.2 billion) in Hong Kong’s biggest secondary share sale, underscoring its willingness to amass and spend vast sums to take the lead in global AI. Nvidia is discussing investing in Perplexity in an equity round valuing the AI startup at more than $30 billion, The Information reported. QXO, the building products conglomerate founded and led by billionaire Brad Jacobs, is hiring a onetime contender for the top job at Honeywell International.

Brent snapped a six-day run of gains, falling to around $93 a barrel as traders waited for details of Treasury Secretary Scott Bessent’s plan to economically isolate Iran. Treasury yields declined, with the longer end extending the move after CNBC reported Bessent could tap the near-$1 trillion Treasury General Account to fund bond buybacks. The greenback firmed, while the Canadian dollar was the worst-performing major currency after the country rejected a US tariff deal.

Traders are prepping for Fed Chair Kevin Warsh to speak at Jackson Hole on Friday, an event that takes on added significance after concerns over ballooning budget deficits and persistent inflation sent long-dated yields to multi-decade highs. The yield surge has already prompted an intervention by Bessent, who also pledged measures to shore up US finances. Meanwhile, Wednesday’s release of the Fed’s preferred inflation gauge will shape expectations for near-term interest-rate decisions after some officials recently reaffirmed concerns about stubborn price pressures. AI bellwether Nvidia Corp. is scheduled to report earnings the same day.

“This is set to be a pivotal week for asset markets, since there is still a chance the US Treasury selloff becomes a full-blown crisis,” wrote Kathleen Brooks, research director at XTB.

Bessent “is highly likely to underwhelm” given the scale of fiscal consolidation needed, said Emma Moriarty at CG Asset Management. Traders are unsure what to expect from Warsh given his reluctance to issue guidance and the view that Bessent’s intervention encroached on the Fed chief’s remit, she said.

Besides the Fed, we also have the most important AI company reporting earnings on Wednesday. For Nvidia, options markets are pricing in a 4.6% move following its results. The firm is not only a key pillar of the global buildout of artificial intelligence but is also increasingly orchestrating funding for AI projects. 

“Nvidia is now so powerful and cash-rich that it is almost like a central bank to the tech industry,” Brooks noted.

Elsewhere, as we reported on Sunday, clients of Goldman Sachs’ Prime Services desk net sold global equities in the week through Thursday for the first time in a month and at the fastest pace in two months, a -2.3 standard deviation move against the past year.

The relentless rise of the momentum factor had been a core tenant of factor investing, but a rapid unwind has pressured the strategy, Bloomberg warns. If this continues, value investing may come back into vogue, index rebalancing trades could become difficult and retail traders might need to slow down. In an astonishing change of fortunes, the tortoise pulls ahead of the hare, with the equal weighted S&P 500 Index outperforming momentum over the last year.

The absence of a spot-up/vol-up dynamic in chips may have two causes, according to Liquidnet Alpha cross-asset sales specialist Anthony Benichou. TMT hedge funds badly bruised in July are unlikely to redeploy leverage with the same aggression and momentum has broadened elsewhere, particularly into gold, gold miners and Bitcoin, which is “competing for marginal capital,” writes Benichou.

But while stock volatility takes a breather, bond traders are getting more than their share. Bessent’s bold intervention to stem a rise in yields last week has yet to pay off and could confuse the signal that markets send to the Fed. As noted earlier, investors are looking for Warsh to clarify his views on how the US central bank should react to stubborn inflation when he speaks on Friday at the annual gathering in Jackson Hole, Wyoming.

Credit spreads of hyperscalers also underscore growing costs for the AI buildout. JPMorgan strategists including Bram Kaplan note that on several AI-linked names, the left-tail of the implied volatility surface has “repriced lower even as CDS has moved wider.” That’s as prices of servers with Nvidia chips could be set for a 15% hike. Junk bond “tourists” are adding to the volatile mix as they wade into the financing splurge on data center projects.

In other assets, Pimco continues to view bonds as attractive and “would look to add if yields continue to rise, given the opportunity higher yields present for income, carry, and rolling down a steeper yield curve.”

Tech names have underperformed in Europe too where the Stoxx 600 is little changed with the macro outlook back in focus as traders looked to data for clues about the health of the region’s economy. Here are the biggest movers Monday:

• European steel firm SSAB and aluminum supplier Norsk Hydro traded higher after the US and Canada failed to agree on a tariff deal, which analysts say leaves the status-quo intact and is positive for the two companies
• Trainline gained as much as 2.8%, rising for a second session, as Shore Capital says the recent stock weakness due to the UK competition watchdog’s investigation is “overdone”
• Siegfried shares fell as much as 8.3%, erasing gains made after earnings on Friday, as analysts lowered their estimates
• BW Offshore fell as much as 16%, the most since March 2020, after the Norwegian offshore services firm cut its full-year guidance for Ebitda

Asian stocks fell at the start of what’s set to be the busiest week for earnings this reporting season, dragged down by losses in some tech heavyweights. The MSCI Asia Pacific Index dropped as much as 1.2%. Samsung’s shares tumbled nearly 9% as investors were underwhelmed by its plans to return as much as 110 trillion won ($80 billion) to shareholders this year. Alibaba’s stock plunged 8.5% after it raised HK$80 billion ($10.2 billion) in Hong Kong’s biggest secondary offering, selling shares at a discount. That spurred a broader selloff in Chinese tech stocks. About 370 of the MSCI Asia Pacific Index’s more than 1,200 constituents are due to report results this week, putting the durability of the AI rally and China’s consumption recovery in focus. Globally, Nvidia’s results and Federal Reserve Chair Kevin Warsh’s commentary at the annual gathering in Jackson Hole, Wyoming are the two major events this week. South Korea’s Kospi was once again the region’s top loser, sliding 3.1%. Shares of SK Hynix also lost more than 3%. Vietnam’s stock benchmark was the leading gainer after securing a bigger-than-expected weighting in FTSE Russell’s semi-annual index review.

In FX, the Bloomberg Dollar Spot Index rises 0.2%. The Canadian dollar is the weakest of the G-10 currencies, falling 0.6% against the greenback after Canada announced counter-tariffs on the US.

In rates, treasuries advance, pulling US 10-year borrowing costs down 2 bps to 4.71% with oil prices lower ahead of the expected release of a US economic isolation plan for Iran. Yields are lower by as much as 2bp with curve flatter; Friday’s selloff lifted 2-year yields by nearly 5bp to first close above 50-day average level in more than a week, where it remained near 4.24%. Treasury coupon auction cycle begins Tuesday with $69 billion 2-year note; $70 billion 5-year and $44 billion seven year follow over next two days. IG credit new-issue calendar is anticipated to be light through month-end. US session has few scheduled events Monday; ahead this week are coupon auctions, July personal income and spending data including PCE price indexes, and Federal Reserve Chairman Kevin Warsh speech at Jackson Hole Symposium.

In commodities, Brent crude futures fall 1.5% to around $93 a barrel and that has likely limited any downside in European equities. It’s helped bonds too with UK and German 10-year yields down 1 bp each. Gold headed for $4,650 an ounce. Bitcoin edged past $78,000.

US economic data calendar includes only July Chicago Fed National Activity Index at 8:30 a.m. New York time. Fed speaker slate is blank for Monday; ahead of Warsh’s address at Jackson Hole Symposium Friday, the only scheduled appearances are three by Richmond Fed’s Tom Barkin over Aug. 25-26

Market Snapshot

Top Overnight News

• Iran has granted permission for a number of Iraqi oil tankers to pass through the ‌Strait of Hormuz following repeated requests from Baghdad through various channels, Iran’s state news agency IRNA reported on Saturday. IRNA said obtaining special permission for Iraqi tankers was one of Baghdad’s main requests during Iranian ⁠parliament speaker Mohammad Baqer Qalibaf’s visit to Iraq. RTRS
• Saudi Arabia has held talks with London brokers about a state-backed scheme for war and political risk insurance that could provide cover for ships in the region, according to people familiar with discussions, as conflict threatens the kingdom’s trade. FT
• Scott Bessent’s set to announce details of the US effort to economically isolate Iran later today. Tehran threatened to halt all crude exports through the Strait of Hormuz and Persian Gulf if the US campaign continues. BBG
• Trade talks between the U.S. and Canada broke down on Friday, officials from both countries said, paving the way for the U.S. to impose 50% tariffs on about $20 billion worth of Canadian goods early on Saturday and risking escalation into an all-out trade war. WSJ
• US President Trump said in a pre-taped interview on 77 WABC that communities not taking data centres are making mistakes and that data centres provide tremendous amount of jobs and money. said:. Chinese President Xi comes to the White House, we’ll be using the East Room.
• Softbank plans to issue a record volume of retail bonds to partly fund its expanding artificial intelligence investments, as the company deepens its multibillion-dollar commitments to OpenAI and related infrastructure projects. WSJ
• Some of Nvidia’s biggest clients have been told AI server prices will rise more than 15%, people familiar said. The hikes will go into effect on systems shipped early next year. BBG
• Perplexity is in talks to raise money at a ~$30B valuation (up ~50% from its last finding round a year ago), and Nvidia could participate. The Information
• China’s $387 billion quant hedge-fund sector is rebounding from its steep July rout, with the most popular strategies outperforming benchmarks. BBG
• Demand for debasement hedges is increasingly finding its way into Bitcoin, with US ETFs for the digital currency recording $1.9 billion of net inflows last week, the strongest haul since October 2025.
• Mutual funds and hedge funds each carry equity market exposures that are elevated relative to the last few years but below recent peaks. Hedge fund returns, leverage, and crowding all surged in Q2, but July witnessed one of the sharpest deleveraging episodes of the past decade. GS Prime Services estimates now show hedge funds carrying net and gross leverage that rank below 12-month averages but remain elevated relative to the last few years. Similarly, mutual fund cash balances register 1.2% of assets, above the record low of 1.1% reached in December 2025 but otherwise one of the lowest levels on record. Goldman

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed, albeit with a mostly negative bias amid a US-Canada trade war and following quiet geopolitical headlines over the weekend, while participants await this week’s key events, including the US announcing the ‘toughest sanctions in history’ against Iran later, in what is described as economic D-Day, NVIDIA earnings due mid-week and the Jackson Hole Symposium on August 27th-29th. ASX 200 was higher amid strength in the mining, materials, resources and tech sectors, while participants digested another deluge of earnings releases from Australian companies. Nikkei 225 was choppy and traded on both sides of the 66,000 level amid strength in the heavy industries, while tech-related stocks lagged with Kioxia and SoftBank among the worst hit. KOSPI underperformed amid weakness in its tech giants, with Samsung Electronics and affiliates suffering heavy losses despite the recent announcement of its largest-ever shareholder return plan. Hang Seng and Shanghai Comp were pressured amid selling in tech, with Alibaba suffering heavily after it announced a USD 10bln Hong Kong share sale, while ‘Big Short’s’ Michael Burry said he sold his Alibaba shares to build a large position in JD.com (9618 HK) and suggested Alibaba was overvalued.

Top Asian News

• South Korean President Lee is said to be expected to meet Samsung Electronics (005930 KS) Chairman this week for possible talks on major semiconductor and AI investment projects, Yonhap sources say.
• SoftBank (9984 JT) plans a JPY 1tln retail bond sale, according to Bloomberg.
• Shein offers HK IPO shares at HKD 47.60-49.50/shr with total number of shares at 280mln Class B shares, while total number of shares under global offering is 252mln Class B shares. Hong Kong public offering period will begin at 09:00 am local time on August 24th and end at 12:00 noon on August 27th. Final offer price will be announced no later than 23:00 pm on August 31st.

European bourses (STOXX 600 +0.1%) kicked off the trading week on the backfoot. However, as the morning progressed sentiment has picked up off worst levels to currently trade with a slight positive bias. European sectors hold a slight positive bias. Basic Resources leads, buoyed by gains in underlying metals prices; Travel & Leisure benefits from lower energy prices and Media completes the top three. Autos reside at the top of the pile, joined closely by Healthcare and Tech. Key movers: Evolution (+1%) rejects Candle Lake’s SEK 695/shr offer, saying it does not reflect fair market value. Shell (-0.2%) fairs a touch better vs peers (BP/TotalEnergies -0.9%). Focus has been on an FT sources piece, which noted that Shell draws interest from bidders for its USD 8bln US chemicals assets. However, the piece highlighted that the USD 8bln valuation would be a “steep discount” to the amount that Shell had invested in its US chemicals facilities

Top European News

• French Economy Minister Lescure said it is not easy to cut taxes on large companies.

FX

• USD is firmer against all G10 peers to varying degrees, with moves vs CAD most pronounced after trade updates. DXY is at session highs just above 99.00 after breaking out of 98.90 resistance, the next level is the 200DMA @ 99.17.
• A lot of focus on USD “debasement” after alternative assets BTC and Gold outperformed last week, the market today is clawing back some of these losses with DXY edging higher and BTC off Friday’s highs, however gold is firmer, potentially signalling a haven bid with global equities mostly weaker. In terms of developments over the weekend, Bessent wrote a hawkish FT piece, while Iran returned the language noting “not a single drop of oil” would leave the Persian Gulf. On that note, we expect Bessent to explain the latest sanctions in a presser this evening. Oil is not convinced by these developments with Brent down ~1%. A busy week ahead sees PCE, GDP, and Nvidia earnings hit Wednesday; Jackson Hole and US supply data land Thursday. Friday brings the NFP Annual Revision Prelim and remarks from Fed Chair Warsh. While we do not have a specific time yet, Bessent could also announce “increased focus on fiscal consolidation”; which most desks have been sceptical on over the past week.
• CAD is the clear G10 underperformer after the unexpected breakdown of trade negotiations between the US and Canada, with the latter imposing dollar-for-dollar 50% tariffs on US goods. To remind, the updates we had on Friday said that their respective trade officials would meet in Washington to finalise the deal. USD/CAD looks to return to the 200DMA which it fell beneath on Wednesday, however a renewed trade war could lead to some USD weakness. MUFG reckons the CAD sell-off does not have legs, noting it targets just 5% of Canada’s exports.
• Action elsewhere is quiet, Antipodeans are lower amid the risk tone, AUD/NZD +0.1%, supported at 1.20, Scandis are also weaker with NOK suffering from the dull tone and weaker oil prices, while EUR/USD and GBP/USD are a touch weaker against the Buck around 1.1660 and 1.3630 respectively.
• PBoC injected CNY 340bln via 7-day reverse repos with the rate maintained at 1.40%.

Fixed Income

• A modestly firmer start to the week for fixed income. Today, the docket is dominated by US Treasury Secretary Bessent on Iran at 19:00BST, a speech followed by a Q&A which will likely feature questions on last week’s long-end intervention.
• As it stands, USTs are at the upper-end of 108-08+ to 108-15 parameters. Despite the action taken to essentially pullback long-end yields last Wednesday, USTs themselves are towards the lower-end of that week’s 108-07+ to 108-30 parameters. Given this, Bessent may give commentary to verbally support the action taken.
• Note, the week also features the BLS preliminary benchmark revision, where any downward revision could knock the Fed from its assessment around the labour market; at the July FOMC, Chair Warsh described it as “solid”, “steady” and “more or less at equilibrium”, commentary that underscored the near-term focus on inflation over jobs. An update is also due from Warsh at Jackson Hole on Friday. However, given his distaste for forward guidance, it remains to be seen whether he will materially update on the economy and/or monetary situation.
• From a yield perspective, the US 10yr is holding around 4.71%, in the upper half of last week’s 4.63-4.75% band. For the 30yr, the same picture, currently around 5.25% vs 5.17-5.34% from last week.
• EGBs also bid, but only modestly. Europe is partaking in the Coalition of the Willing meeting in Kyiv, though the French and German leaders are remote due to a Saudi Arabia meeting and domestic political matters, respectively. Currently, Bunds are firmer by around 10 ticks and holding just below the 124.00 handle, toward the mid-point of last week’s 123.60 to 124.44 parameters.
• Gilts in-fitting, UK specifics light as the focus is on Ukraine and, more pertinently, the above US events. Note, the UK is set to pledge missile support to Ukraine, the financial details of which could be pertinent to the benchmark. As above, Gilts are firmer by about 10 ticks in c. 30 tick parameters, within last week’s 85.81 to 86.73 band.
• Caterpillar (CAT) files to sell EUR denominated 2yr FRN and 3yr noted. 2yr FRN guidance seen +55-60bps to 3m Euribor. 3yr noted seen MS +65bps.
• Japan sold JPY 250bln in 10yr Climate Transition Bonds b/c 3.51 (Prev. 3.42). Price at the highest accepted yield 99.46 (prev. 99.17). Highest accepted yield 2.863% (Prev. 2.195%).

Commodities

• The weekend lacked any major updates. Focus is on US Treasury Secretary Bessent’s update later today at 14:00 EDT (19:00 BST). Market focus will be on the promised escalation of sanctions against Iran and further details regarding last week’s Treasury action at the long end. On Iran, focus will be on secondary sanctions, possible action against major Chinese entities and any retaliation through the Strait of Hormuz. Tehran has threatened to prevent oil exports from leaving the Persian Gulf if the pressure continues (Full preview available at 07:40 BST on the Newsquawk feed). Notable updates today include separate visits by the Omani foreign minister and Pakistani army chief to Tehran, with the latter reportedly speaking to US President Trump before his visit to Iran. Further, UKMTO reported an incident near Yanbu, Saudi Arabia, which prompted modest upticks in crude. As a reminder, the Yemeni Houthis recently expanded their “blockade-for-blockade” policy against Saudi Arabia to the northern Red Sea.
• WTI Oct and Brent Nov futures remain softer but off lows, with the former within USD 84.69-86.57/bbl (vs Friday’s 85.80-87.51/bbl range) and the latter towards the middle of a USD 90.30-92.06/bbl range (vs Friday’s 91.15-92.98/bbl range). Dutch TTF bucks the trend and trades firmer by ~1% intraday at the time of writing, buoyed by European storage replenishment ahead of winter, with the front-month contract trading on either side of EUR 66/MWh.
• Precious metals are mixed whilst DXY remains firmer following its recent selloff, and notwithstanding lower energy prices and yields today. Spot gold is higher in tandem with the Buck and bonds, which could potentially suggest some haven positioning ahead of this week’s risk events and the aforementioned Bessent announcement at 19:00 BST, with the yellow metal currently in a USD 4,594-4,660/oz range. Spot silver is flat/slow but found support this morning at its 100 DMA (USD 68.41/oz) but remains within Friday’s USD 67.91-70.02/oz range.
• Base metals are similarly mixed and relatively resilient to the firmer Buck, with the complex continuing to be underpinned by hopes of Chinese stimulus following a recent string of disappointing Chinese data, in turn triggering widespread market expectation that Beijing will have to deploy aggressive stimulus to meet its annual targets. 3M LME copper resides towards the upper end of a narrow USD 14,141.60- 14,279.78/t range.
• Sinopec (600028 CH) executive said it is very likely that China oil demand peaked last year.
• An unusual fire alert was detected near Iraq’s Kirkuk oil field (450k BPD) with an intense thermal anomaly recorded 21 km away at 07:18 UTC.
• Norway said it will proceed with development of its Barents Sea oil and gas reserves, regardless of the EU’s proposed Arctic drilling moratorium.
• Thailand’s Finance Ministry considers taxing gold transactions in which it will consider a tax on gold trade and gold imports, while it will discuss tax with the Gold Association this week. said:. – Gold tax is aimed at curbing illicit funds and there is no plan for a high gold tax.

Trade/Tariffs

• Trade discussions between the US and Canada collapsed on Friday partly due to a last-minute stand-off regarding cutting US tariffs on Canadian medium and heavy-duty vehicles, according to people familiar with the matter cited by Bloomberg. This means the 50% US tariffs on some Canadian goods have taken effect, while Canadian PM Carney vowed to retaliate by matching tariffs dollar for dollar on US goods from September 8th.
• Canadian PM Carney said Canada was in a trade war with the US and that President Trump “miscalculated” by escalating his tariff attack, according to FT.
• US Transportation Secretary Duffy said Canadian PM Carney is going to “come to the table” on trade because tariffs will be “devastating”, while he suggested Canada is foolish to think it could win a trade war with US President Trump.
• Canada sees a long trade war with the US that could last beyond the Midterms.

Central Banks

• Fed’s Kashkari (2026 voter, hawkish dissenter) said the Treasury market is functioning as it should and that the recent surge is unlikely to impact monetary policy deliberations.
• ECB’s Cipollone said that monetary policy needs to be well calibrated; inflation is far from adverse & severe scenarios. No signs pointing to a scenario of stagflation.
• SNB Sight Deposits w/e Aug 21st (CHF): Domestic 437.11bln (prev. 433.52bln), Total 462.66bln (prev. 458.75bln).

Geopolitics: Middle East

• US Treasury Secretary Bessent writes in FT that economic D-Day is coming for Iran, and countries that calculate appeasement of the regime to be a safer choice should reconsider. said:. “At dawn begins an economic D-Day — the single greatest financial offensive ever marshalled against an adversary.”. “Those who sever Iran’s remaining financial and commercial connectivity will reinvigorate their own. They will deepen their access to global capital, reinforce confidence in their markets and attain the standing they seek in the world economy.”. “The alternative for those who tether themselves to Tehran is the foreclosure of any path to lasting prosperity…And any nation that serves as a financial artery of a withering regime should expect to share in its isolation.”
• US President Trump said on Friday that Washington was observing what happens in the conflict with Iran, and he reiterated a warning against any country that provides a lifeline to Iran, while he said Iran would love to make a deal but isn’t ready to make the right deal in his opinion.
• UKMTO has received a report of an incident 63NM west of Yanbu, Saudi Arabia; tanker was struck by an unknown projectile.
• Pakistan’s Army Chef Munir spoke with US President Trump ahead of his visit to Tehran, according to Pakistani sources.
• The Pakistan Army Chief Field Marshal Syed Asim Munir left Islamabad for Tehran a few minutes ago to meet with high-ranking officials of Iran, ISNA reported citing sources.
• Iranian Foreign Ministry Spokesperson Baghaei criticised a looming US announcement of sanctions on Iran, which he said was an assertion of extraterritorial sovereignty over independent member states of the UN and that such secondary sanctions have no foundation in international law.
• Iranian Parliamentary Speaker Ghalibaf said they have received messages from neighbours about forming new security arrangements and economic cooperation, while he also stated that the US has put its allies at such risk through bullying and pure disregard of their interests for the sake of Israel that they briefly saw their entire existence on the line.
• Iran’s Foreign Ministry said the security of the Strait of Hormuz will be discussed during the Omani foreign minister’s visit, Al Arabiya reported. Adds, they would strike at any source of aggression.
• Iran’s Persian Gulf Strait Authority said vessels violating Iran’s rules for passage through the Strait of Hormuz could face fines, detention, or confiscation.
• Iran’s Foreign Ministry spokesperson said Oman’s Foreign Minister will visit Tehran on Tuesday as part of ongoing consultations regarding maritime security and freedom of navigation in the Strait of Hormuz.
• Iran’s Foreign Minister Araghchi noted in Etelaat newspaper regarding new perspective on the horizon of Iran-China strategic partnership, stating they have been friends in difficult times and have many capabilities to strengthen friendship and cooperation.
• Iran’s Persian Gulf Strait Authority issues new rules for ships transiting through the Strait of Hormuz and warns vessels that violate Iranian protocols could face restrictions on subsequent voyages, including fines, detention or seizure. Cargo owners are being told to check Iran’s non-compliant vessels list before chartering ships, while any vessel conducting ship-to-ship transfers or other transactions with a blacklisted vessel will itself be added to the list.
• Iranian Foreign Ministry spokesperson Baghaei said the Omani foreign minister’s visit to Tehran is not linked to the Pakistani army chief’s visit.
• Yemen’s armed forces launched several missiles toward Saudi Arabia, while a powerful explosion was heard at a headquarters of Saudi-linked militias in the southern Yemeni city of Aden, ISNA reported.
• Israel conducts an airstrike on the central Gaza Strip, according to Al Arabiya.
• Shipping data showed fewer than 20 commodity vessels transited the Strait of Hormuz over the weekend.

Geopolitics: Middle East

• US administration officials, including Witkoff and Kushner, are now no longer expected in Ukraine, Politico reported.
• Russia said its forces struck a tanker carrying fuel near Ukraine’s Odessa.
• UK PM Burnham arrived in Kyiv, Ukraine on Monday morning.
• South Korea said that North Korea is preparing further Russia troop deployments, although no sign of an imminent move.
• Russia repels a drone attack on an industrial zone of Nevinnomyssk in southern Stavropol region, according to the governor.

US Event Calendar

• 8:30 am: Jul Chicago Fed Nat Activity Index, est. -0.05, prior -0.02

DB’s Jim Reid concludes the overnight wrap

As we go to press this morning, the upward pressure on long-end bond yields from last week has shown initial signs of easing. Indeed, the 30yr Treasury yield is down -2.4bps overnight to 5.25%, whilst the 10yr yield is down by the same amount to 4.71%. That’s been supported by a pullback in oil prices, with Brent crude oil (-1.37%) finally reversing course after a run of 6 consecutive gains to trade at $93.10/bbl. But even as there’s been some relief on the rates and inflation side overnight, the negative momentum in equities has continued, with S&P 500 futures down another -0.10% after the index fell -1.43% last week. Meanwhile in Asia this morning, there’s also been a decent pullback across the board, including declines for the KOSPI (-3.15%), the Hang Seng (-2.09%), the CSI 300 (-1.26%), Shanghai Comp (-0.71%) and the Nikkei (-0.52%). 

That pullback in Treasury yields this morning follows last week’s surprise announcement that the US Treasury will increase its buyback operations for longer-dated Treasuries. That briefly eased the pressure on yields when it was announced, with the 30yr yield down -9.2bps on Wednesday to 5.19%, after reaching a post-2007 high of 5.31% last Monday. But even with that intervention, yields then crept back up into the weekend, with the 30yr yield closing at 5.27% on Friday, less than 4bps beneath its closing peak earlier in the week. Moreover, investor concern about wider financial repression led to clear effects in other asset classes, with the dollar index down -0.87% last week, whilst gold rose +5.18%. And this morning, gold is up another +0.72% to a 3-month high of $4,636/oz. 

One reason why yields moved higher into the weekend was the ongoing rise in oil prices last week, which added to fears about inflation. Indeed, if we look at the oil futures curve, it’s clear that markets are starting to price in a longer closure of the Strait of Hormuz again. For instance, the 12-month Brent future hit a 2-month high of $79.16/bbl on Friday, which isn’t far off its peak in the Iran conflict of $83.58/bbl back in May. So those expectations of higher oil prices put upward pressure on yields as well, and the weekend newsflow hasn’t shown any sign of progress towards a US-Iran deal either. 

The conflict is set to stay in the headlines this week, as US Treasury Secretary Bessent has said that he’ll be holding a press conference today to outline what he described as “the greatest coordinated economic isolation in the history of the world”. That follows President Trump’s post last week that “ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences.” Bessent also wrote an article in the FT overnight, in which he referred to an “economic D-Day”.

Elsewhere, tariffs were also back in the headlines over the weekend, after the trade talks between the US and Canada broke down. Canadian PM Mark Carney said they were “walking away from a bad deal”, and would now “match Washington’s new tariffs dollar for dollar”. So that means Canada will now face 50% tariffs on around $20bn worth of goods, and Carney said that their own retaliatory tariffs would take effect on September 8. Meanwhile on the US side, President Trump posted that “Canada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!” There’s already been a market reaction this morning to the breakdown of the talks, with the Canadian dollar weakening against every other G10 currency, including a -0.26% fall against the US Dollar. Otherwise, Bloomberg also reported overnight that Canada saw little chance of the talks resuming before the midterm elections. 

Looking forward, the week ahead has several other events, with a big one set to be Fed Chair Warsh’s speech at Jackson Hole on Friday. This is a speech that’s often used by Fed Chairs to make big announcements or send policy signals, and last year saw former Chair Powell acknowledge that policy might need adjusting, shortly before they cut rates again the following month. We’ll have to see what Warsh discusses this time, but he said at the July press conference that he hadn’t yet decided “whether it’s going to be a big-picture speech or whether it’s going to be a more traditional set up for all the action we’re going to have between September and December”.

Our US economists have a preview of the event (link here), and their view is that if Warsh goes for the “big-picture” speech, then his options include a discussion of the Fed’s taskforces he set up, or possibly a speech on AI’s impact on the economy and his thinking. Alternatively, if he goes for the “more traditional” speech, they think Warsh could do a “cleanup” of the July press conference, and he may wish to counter one market narrative that Fed policy actions could be delayed until the task forces have completed their work. Otherwise, he might also discuss how officials are viewing inflation dynamics, or how the FOMC views the monetary policy implications of evolving financial conditions and recent volatility in long-term interest rates. But whatever he decides, market pricing is still very much in the balance for the next meeting in 3 weeks’ time, with futures currently pricing in a 39% chance of a hike. So investors are keeping an eye out for anything that could shift this in either direction.

Elsewhere this week, earnings season is winding down, but we do have a few releases left including Nvidia on Wednesday. In the last few years, Nvidia’s earnings have often been a big macro event in their own right, with reactions on a par with US jobs reports and CPI prints. But in the most recent quarters, the positive earnings surprises haven’t been as big as we saw in 2023-24, and after each of the last 4 earnings reports, Nvidia’s share price actually fell the next day. Speaking of Nvidia, Bloomberg also reported over the weekend that some of their biggest customers had been told about price hikes for servers containing its AI chips. So that adds to the signs that AI is having inflationary consequences, and isn’t a straightforward positive supply shock. 

Otherwise, the data calendar is fairly light next week, with a few inflation reports likely to be the main focus. That includes the US PCE reading for July on Wednesday, which is the Fed’s target measure, for which our US economists expect core PCE at a monthly 0.18%. Then in Europe, we’ll start to get some of the flash CPI prints for August, including from France and Spain on Friday, ahead of the Euro Area-wide number next week. 

Recapping last week now, it was generally a rough week for markets, as the lack of any US-Iran talks meant that oil prices kept moving higher, leading to fresh concerns about inflation. So that meant Brent crude rose +6.63% last week to $94.39/bbl. And in turn, the US 1yr inflation swap rose +34.5bps to 2.24%, its biggest weekly jump since March, whilst the 1yr Euro inflation swap rose +25bps to 2.71%. 
That backdrop kept up the pressure on sovereign bonds, with the 10yr Treasury yield up +4.2bps to 4.73%, whilst the 10yr bund yield was up +5.4bps to 3.26%. Admittedly, there was a bit of a rally after the Treasury buyback announcement, but that began to unwind into the weekend. Moreover, there was a bit more of a risk-on tone on Friday after the flash PMIs for August were generally better than expected. For instance, the Eurozone composite PMI moved up to a 9-month high of 52.1 (vs. 51.7 expected), whilst the US composite PMI moved up to a 4-year high of 56.0 (vs. 54.0 expected). 

That backdrop helped equities to recover into the weekend, but it wasn’t enough to outweigh the losses from earlier in the week. So ultimately, the S&P 500 (-1.43%), the STOXX 600 (-0.56%) and the Nikkei (-3.93%) were all down on the week. And that weakness in risk assets was also clear in US credit, where IG (+1bp) and HY (+3bps) spreads both widened last week. However, the performance in Euro credit was more subdued, with both IG and HY spreads unchanged over the week. 

Authored by Jacki Thrapp via The Epoch Times,

The Department of the Interior will cut the amount of water it allocates through the Colorado River to Arizona, Nevada, and California in 2027 and 2028.

The cuts were signed off by Secretary of the Interior Doug Burgum on Aug. 21 as part of the department’s 2027-2028 Operating Guidelines for the Colorado River, which provides water to over 40 million people, generates hydropower for seven states, and is a vital resource for 30 tribes and two Mexican states.

The Colorado River Basin is experiencing historically low runoff and reservoir levels amid a 26-year drought, which worsened recently after the winter of 2025-2026 resulted in the lowest observed snowpack on record.

The cuts were not a surprise to Arizona, Nevada, and California, as they pitched a temporary, two-year agreement to the Assistant Secretary of Water and Science in May in an effort to address the “deteriorating hydrologic conditions in the Colorado River system.”

The Lower Basin states will see water deliveries reduced by a total of 1.25 million acre-feet annually in both 2027 and 2028, with Arizona taking a reduction of 760,000 acre-feet, California 440,000 acre-feet, and Nevada 50,000 acre-feet, according to the Interior Department press release.

The plan will see the Lower Basin states face a 21 percent reduction in water from the river in 2027 and 2028, with deeper cuts later.

But a trio of states warned that if water cuts double after 2028, it would devastate their economies.

“The combined contents of Lake Powell and Lake Mead have not been this low since before Lake Powell began filling following the closure of the gates at Glen Canyon Dam in 1963, with both Lake Powell and Lake Mead hitting record lows the last few weeks,” the press release said.

The department suggested the plan will continue allowing reliable operations and water deliveries while “preserving the flexibility necessary to respond to Basin states’ voluntary actions, consensus recommendations and the continued prolonged drought,” the release said.

“Forty million people, millions of acres of farmland and ranchland, industries that power the American West, and some of our nation’s fastest growing metropolitan areas depend on the Colorado River,” Burgum said.

“These decisions provide a water management strategy for Basin stakeholders to respond to the prolonged drought by incorporating flexible tools and voluntary actions while leaving room for consensus agreements,” said Andrea Travnicek, the Assistant Secretary of Water and Science.

“The Department and Reclamation will continue to work with all Basin stakeholders to identify areas to maximize efforts throughout the Basin to modernize infrastructure, develop conservation programs, and identify innovative approaches to deliver water under changing conditions.”

Arizona Gov. Katie Hobbs, who is running for reelection this November, applauded California and Nevada for “stepping up to the plate” on Aug. 21 to implement a water allocation plan but urged that more needed to be done from other states that receive water from the Colorado River.

A new study has concluded that 152 Polymarket wallets may have profited from access to secret information about military action, with other wallets copying the insiders’ bets. The patterns raise red flags about foreign adversaries’ potential exploitation of insiders’ profit-seeking to anticipate American strikes.  

Released on Thursday by the Anti-Corruption Data Collective (ACDC), the 29-page report focuses on a particular species in the diverse prediction market ecosystem — an “Orca,” which ACDC describes as a wallet that makes targeted, long-shot bets in a manner differs from the behavior of high-volume, high-frequency, multi-market “Whales.” Analysts also studied the corresponding behavior of “Bots,” which are wallets that seem at least partially automated. 

To locate Orcas in the sea of data, ACDC looked at wallets that “place bets in a small number of markets and on very few topics, and have a high success rate (> 75%) for longshot bets (defined as more than $2500 wagered at 35 cents or less).” The researchers found that, where military event markets were concerned, Orcas would bet first, with Whales and Bots following in their wakes. They noted that Orcas snared the biggest percentage returns, but Whales and Bots — putting down more money — would rake in the biggest actual profits. 

A cohort of 152 Orcas betting on military actions won $8 million and posted a sparkling 97.2% win rate on events where the market had the likelihood at 35% or less when the Orcas stepped up to wager.  The report highlighted several Orca attributes that suggest they’re insiders: 

• “More than half of Orcas made their first longshot bet within two days of creating an account on Polymarket, a possible sign they joined specifically to trade on privileged information. 
• Orcas wager more per longshot bet, despite the risks and low probabilities, and longshots dominate their total activity. 
• Orcas betting on military markets are less crypto-native and prefer cashing out into fiat currency.”

The report includes a case study on an Orca that wagered on action against Iran. “0x88e6” placed its first longshot bet on the very day of America’s June airstrike on Iran’s Fordow nuclear complex. It made multiple bets that day, with the last one squeezed in just an hour before the bombs dropped. With some of the bets priced as low as 5 cents, 0x88e6 won more than $20,000 for the strike. It went on to win more than $13,000 on Fordow having been deemed successfully “destroyed.” 

ACDC’s analysts observed Whales and Bots swooping in with heftier capital to mimic Orca bets: 

When an Orca bet on U.S. military action in Iran hours before the June ​2025 strikes…a Bot and a ​Whale made copycat wagers of $200,000 and $100,000, respectively. ⁠Similar Orca bets before February U.S.-Israeli air strikes on Tehran also appeared to spark a flurry of first-time long-shot bets by Bots and Whales wagering on the same outcome, the research found. — Reuters

“Most people vastly underestimate how observable unusual betting activity actually is on Polymarket. It’s all right ​there on the internet, and we can see clear signs that big traders and bots are copying potential insider trades,” ACDC co-founder ​David Szakonyi told Reuters. “It would be ⁠naive to think foreign-intelligence agencies aren’t monitoring these markets.” 

“We spotted nine Polymarket accounts, all connected, who made, collectively,$2.4 million betting almost exclusively on U.S. military operations,” says Nicolas Vaiman, co-founder of the small data analytics firm Bubblemaps.

“And now here’s the crazy part: 98% win rate.”… pic.twitter.com/XXietAHjvv

— 60 Minutes (@60Minutes) June 28, 2026

In April, US Army Special Forces Master Sergeant Gannon Ken Van Dyke was arrested for allegedly making more than $400,000 by placing Polymarket bets on the timing of a US military operation to capture Venezuelan President Nicolas Maduro. Van Dyke was involved in the planning and execution of that very operation. The federal government charged him with unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction. In February, the Israeli government arrested and indicted an IDF military reservist and a civilian with classified clearances who placed Polymarket bets regarding military operations, with one of the bets covering the timing of Israel’s first strike on Iran in June 2025.

While warning about national security and “political integrity” risks, ACDC lauded Polymarket’s public blockchain architecture: “The same data transparency that allows Whales and Bots to legally capitalize on the information advantage of others allows researchers and journalists to uncover potential insider trading.” At the same time ACDC noted the difficulty of identifying the insiders, and argued for “outright bans on the types of markets most vulnerable” to their exploitation. The group is also pushing for identification verification for all users, and delaying payouts for high-risk bets while the transaction is scrutinized. 

Authored by Natalia Katona via OilPrice.com,

• Rhine freight from ARA to Karlsruhe has surged from €45/t to €215/t as Kaub remains below the 77-cm threshold needed for normal commercial traffic.
• The squeeze is disrupting 3.1 million t/y of ethylene capacity and product movements from the 320,000-b/d Miro refinery.
• Europe is avoiding a deeper crisis only because crackers are running at around 70% and fuel demand is weak.

The Rhine has slightly risen from its mid-August record low (when Kaub’s water level gauge – at the river’s decisive chokepoint – was below 10 cm), but the relief is mostly optical. Barges still cannot carry normal loads through it, leaving the industrial corridor from Rotterdam and Antwerp to southern Germany, eastern France and Switzerland short of transport capacity. The immediate result is expensive freight, constrained chemical production and uneven fuel supply. However, the more troubling conclusion is that Europe is avoiding a deeper disruption only because its factories and consumers are already demanding less. This way, the Rhine’s low-water crisis is a stress test for an industrial system built around cheap, high-volume river transport, and a reminder that pipelines, railways and roads cannot quickly reproduce what the Rhine does.

Kaub, on the Middle Rhine, determines how much cargo can move between the Amsterdam-Rotterdam-Antwerp (ARA) hub and industrial centres farther south. When its navigable water depth fell below 10 centimetres in mid-August, the waterway was roughly 1.2 metres deep (in comparison, just a year ago water depth was around 2.3 meters). The level has since recovered to about 45 centimetres, but that remains below the 77-centimetre benchmark – far from a return to normal commercial traffic. At the lowest levels, only specialised low-draft barges can cross Kaub, and while the Lower Rhine may remain open, the route to the Upper Rhine is effectively shut for most vessels, fragmenting what normally functions as one market.

The chemical industry feels that fracture first. Several of Germany’s largest steam crackers are located along the Rhine corridor and are affected by restrictions at Kaub. The BASF, INEOS, LyondellBasell and Shell sites in this area have around 3.1 million t/y of combined ethylene capacity. BASF’s Ludwigshafen complex is particularly exposed because it lies south of Kaub and moves about 40% of all incoming and outgoing goods by river.

Naphtha supply is not much of a problem – most of Germany’s naphtha moves by pipeline, offering protection against a river bottleneck. But pipelines do not redistribute the broad range of finished products made by a cracker, and if those materials cannot leave, storage fills, and operators must curb runs. With low water levels continuing to limit the normal movement on the river, barges are forced to carry smaller loads, while specialised chemical vessels are limited. Related: U.S. Billionaires Are Piling Into Argentina’s Vaca Muerta Shale

The effects can spread quickly into smaller downstream markets. LyondellBasell’s force majeure at its 170,000 t/y Wesseling butadiene unit followed restricted feedstock flows to its crackers and a resulting decline in crude C4 production. Crude C4 is produced during the steam cracking of naphtha alongside ethylene and is then processed to extract butadiene. A relatively small reduction in cracker output can therefore cause a much larger squeeze in the smaller butadiene market – and other co-products that are difficult to reroute, such as pyrolysis gasoline, face similar pressure.

This restricted inland movements of chemical products contributed to naphtha inventories in ARA reaching 598,000 tonnes in mid-August (75% more than a month earlier). However, the problem is not only in the movement restrictions: weaker cracker operations have overall reduced naphtha consumption by the crackers even before the Rhine’s levels became an issue – the crackers have been running at 70% due to weak demand on their production across the wider European market.

The same effect is emerging in refining. Most inland German refineries receive crude through pipelines, so the Rhine does not automatically force crude runs lower. Their exposure lies in intermediate feedstocks, blending components and, above all, moving gasoline, diesel and heating oil to customers.

Karlsruhe illustrates the issue. Road trucks have been shuttling to and from the Miro refinery (320,000 b/d capacity) to collect fuel, but the site also normally ships products by barge both toward ARA and upstream to Switzerland. With movements restricted in both directions, Karlsruhe must hold surplus refined products in its storage facilities, while markets farther away pay shortage premiums.

The Rhine’s freight rates reflect this physical imbalance. The assessed ARA-Karlsruhe barge rate rose five-fold to €215/t currently from about €45/t at the end of June, while ARA-Basel reached €275/t in mid-August. At extreme low water, even those assessments become partly theoretical because few normal cargoes can pass.

Road and rail offer relief, but not replacement. Chemicals require appropriate tankers and transportation conditions, while the volumes involved overwhelm available vehicles and infrastructure. One fully loaded barge carrying 2,400 tonnes of diesel is equivalent to 90 trucks. Germany’s temporary relaxation of Sunday and public-holiday restrictions for heavy vehicles may improve flexibility, but it cannot manufacture tank cars, specialist trailers, drivers or road capacity.

Yet the constraints extend even beyond crackers and refineries. Covestro declared force majeure on polyether polyols made at Dormagen, while Salzgitter shifted coal from Rotterdam to rail for its HKM steelmaking division. Such workarounds keep selected flows moving, but they also compete for the same scarce trains and trucks needed elsewhere. The disruption is therefore cumulative: every industry solving its own bottleneck makes the alternatives tighter for the next.

Nor is this only a German problem. Eastern France has experienced localised gasoline shortages as barges serving Strasbourg carried a fraction of their normal loads. Switzerland faces higher import costs and the possibility of drawing on strategic stocks. Rotterdam and Antwerp remain supplied by sea, yet congestion and slower terminal turnover spread costs across the wider northwest European market. This way, low water does not create a single European shortage but rather creates a dispersed issue of trapped supply and local shortages.

For now, weak demand is preventing isolated local shortages and oversupplies from becoming a broader crisis. European crackers were operating at only about 70% in July, after years of pressure from expensive energy, weak construction and automotive demand, and cheaper imports from Asian competitors. Fuel consumption in inland Germany has also been decreasing. However, if chemical plants and fuel markets were operating near normal levels, the shortage of river capacity would be much harder to absorb. A recovery in manufacturing, higher diesel demand or winter stockpiling could therefore intensify the disruption even if water levels improve modestly.

The Rhine may have risen slightly, but Europe’s industrial margin of safety has not. This summer’s lesson is that weak demand can cushion a logistics failure, but it cannot solve one. When (or if) the economy rebounds and supply chains are once again required to handle normal volumes, the problem will extend far beyond the river itself.

And besides, this summer should not be mistaken for a worst-case scenario. A super El Niño could bring a warmer winter, less Alpine snow and a weaker meltwater buffer. If another hot, dry summer follows, Rhine levels in July and August 2027 could fall even lower than this year’s records.

Europe is entering an 18-month election cycle that could accelerate the continent’s shift toward populism, with high-profile elections scheduled this year in Germany and Sweden, followed by France, Italy, Spain, Switzerland, and Poland in 2027.

The much-needed political realignment reflects mounting public backlash against progressives in Brussels after years of uncontrolled mass migration from the Third World, deteriorating social cohesion, elevated violent crime, and nation-killing domestic policies that have accelerated deindustrialization.

At the same time, European manufacturers face intensifying pressure from China (the demise of VW Group), which is exploiting its cost advantages and state-supported industrial capacity to flood the struggling continent with cheap electric vehicles.

Andrzej Szczepaniak, a senior European economist and executive director at Nomura International in London, describes this combination of pressures as “the seeds of political change,” warning that “politics in Europe is lurching towards more populism.”

Szczepaniak says right-wing parties are positioned to make significant gains across Germany, France, Spain, Switzerland, and the UK over the next 18 months.

“Five years ago, financial markets would not have seemed so at ease with such a prospect. But then again, these populist right-wing political parties were previously not so fiscally prudent as they are perceived to be today. Indeed, Italy’s Giorgia Meloni is the standard-bearer for financial markets of how a populist right-wing political party can govern: fiscally prudent enough to show investors that the party can govern responsibly while focusing heavily on social issues, including immigration and culture wars, to keep grassroots supporters happy,” the analyst said.

He pointed out, “Now, if anything, financial markets are much more concerned about populist left-wing parties being elected due to their desire to increase spending, often paid for through higher borrowing or higher taxes, which are likely to shut the engine off of already stuttering economies.”

Focusing on Germany, Szczepaniak said the most immediate political shift will occur there, where Alternative for Germany has overtaken Chancellor Friedrich Merz’s CDU/CSU in national polling. The AfD is polling at about 42% ahead of the Sept. 6 election in Saxony-Anhalt, potentially putting it within reach of becoming the first AfD government at the state level.

Dismal results for the governing coalition in Germany’s three September state elections could threaten Merz’s political survival. Szczepaniak sees a replacement of the chancellor as more likely than a snap national election because both the CDU/CSU and SPD risk losing additional seats to the AfD.

AfD is the only hope for Germany https://t.co/6ONn1LOipE

— Elon Musk (@elonmusk) August 19, 2026

Germany’s economic turmoil is contributing to that revolt against the left wing. Despite the government’s so-called fiscal bazooka, consumer confidence remains weak. Voters are seeking an economic turnaround under new common-sense leadership.

The market is increasingly expecting Marine Le Pen of France to follow Meloni’s playbook by maintaining fiscal restraint while focusing on tackling the mass migration invasion and cultural issues. Left-wing Jean-Luc Mélenchon, by contrast, has proposed higher spending and the cancellation of portions of France’s debt, policies that Szczepaniak warns could cause French bond spreads to widen sharply. 

Whoever succeeds France’s Emmanuel Macron will inherit a giant mess. France’s debt-to-GDP ratio is set to explode to 120% next year, while political fragmentation is likely to prevent the structural reforms needed to revive growth or reduce the primary deficit. Szczepaniak remains bearish on France relative to Germany, Italy, and Spain.

The broader message is that right-wing populism is on the rise across Europe, and markets are welcoming such potential changes after years of failed left-wing control. Beyond the EU, left-wing regimes have been rejected across South America as right-wing governments take hold. 

Related:

• Forget Reminding Young People About ‘Boat People’: South America’s Rejection Of Socialism Is Happening In Real Time

The world is rejecting left-wing regimes because these governments are unserious, unproductive, and, in fact, proving only to be nation-killing.

Professional subscribers can read the full note here at our new Marketdesk.ai portal.

Authored by Haley Zaremba via OilPrice.com,

• U.S. utility-scale battery storage has reached 52 GW after three years of 70 percent average annual growth, with 8.3 GW of that added in the first six months of 2026 alone.
• Clean energy capital spending hit $74 billion in the first half and is on pace for a record $180 billion this year, even after the rollback of federal incentives.
• Grid operators have another 54 GW queued through 2028, while China holds roughly half of global capacity and the EU moves to triple its own by 2030.

Donald Trump is accidentally overseeing a massive buildout of the country’s renewable energy capacity and infrastructure. Not only are investments in renewable technologies soaring to new highs, the national energy grid is rapidly transforming to accommodate an increasingly solar- and wind-powered energy mix.

Despite massive rollbacks of Biden- and Obama-era clean energy incentives and financial supports, investment in clean energy tech keeps soaring to new heights, buoyed by market forces far outside of the federal government’s control. Clean energy capital expenditures already reached $74 billion in the first half of 2026, and they’re on track to reach a record $180 billion by the end of the year, according to fintech firm Crux’s State of Clean Energy Finance: 2026 Mid-Year Market Intelligence Report.

“The market is proving resilient,” Crux CEO and co-founder Alfred Johnson was recently quoted by Politico’s E&E News. “We’re seeing a significant amount of investment subsequent to the tax law changes of last year.”

The insatiable energy demand coming from data center hyperscalers and the artificial intelligence boom has spurred a tidal wave of investment into all kinds of energy projects, and especially renewables due to their noted advantages when it comes to energy security and affordability. These advantages have been underscored in recent months by extreme volatility in fossil fuel markets thanks to the war in Iran and resultant supply chain vulnerabilities. “Renewables and storage continue to be the fastest way to get new electrons on the grid until additional gas-fired generation can be built,” NextEra Energy CEO John Ketchum was recently quoted by Reuters.

As a result, we are currently “living in what arguably is one of the best periods to invest in renewables in the US over the last 20 years” according to Miguel Stilwell d’Andrade, chief executive officer of Portuguese electric utilities company EDP. Accordingly, EDP is directing approximately USD $5.3 billion – more than half of its capital expenditures – toward United States renewables projects over the next three years.

All of that renewable energy buildout is being accompanied by a massive and unprecedented uptick in battery storage buildout, resulting in a rapid transformation of the nation’s energy grid. Over the past three years, utility-scale battery storage capacity increased at a blistering rate of 70 percent per year on average to reach 52 gigawatts (GW) today. Nearly 16 percent of that – 8.3 GW – was added in the first half of this year alone.

“This expansion depends mostly on co-locating batteries with solar photovoltaic (PV) plants to capitalize on wholesale price arbitrage across major energy markets,” Interesting Engineering reported earlier this week. Connecting battery packs directly to solar farms allows the farms’ operators to store excess clean energy at peak production hours until the evening hours, when production wanes, demand rises, and rates reach a premium. “This lucrative business model has sparked a massive construction boom across solar-heavy states, turning temporary energy storage into a primary driver of modern grid infrastructure,” Interesting Engineering goes on to report.

As stunning as this year’s figures are, the battery storage revolution is just getting started. Grid operators already have plans to add another 54 GW of battery capacity by the end of 2028. That means that the nation’s energy storage capacity will double again by 2030, compared to current levels.

And the United States is not alone – the energy storage renaissance is proving to be a global trend. China is leading buildout by a wide margin, controlling more than half of global capacity. But other major global leaders are hurrying to get a foothold into the rapidly expanding market. Just this month, the European Union formalized a plan to triple the bloc’s energy storage capacity by 2030. European Leaders are banking on energy storage – alongside renewable energy expansion – to steady the continent’s energy markets and protect member states from the next energy crisis.

Authored by Jason Ditz via Antiwar.com,

A week after ordering the Israeli Defense Forces (IDF) to prepare for a “long-term stay” in occupied southern Lebanon, Defense Minister Israel Katz has now also ordered them to escalate the rate at which they’re destroying what is being framed as “Hezbollah infrastructure” across the south.

The issue with this is the same as it’s been throughout the war, that Israel’s definition of Hezbollah infrastructure generally boils down to civilian infrastructure at large, with a particular emphasis on the municipalities where Shi’ite Muslims live, but by no means restricting the attacks just to them.

Officials aimed to frame the tiny Shi’ite villages that the IDF already occupies as “Hezbollah fortresses,” and presented the ongoing demolition of those villages as “engineering activity.” Much of that engineering involves explosions, whether it’s heavy artillery fire on the villages or increasingly the deployment of incendiary white phosphorus munitions to set fires in the villages and the surrounding area.

Katz has made clear that a number of the villages in the southernmost parts of Lebanon will simply have to “disappear,” and with tens of thousands of homes destroyed in recent months, there are a number of villages which it can be said simply no longer exist.

But Israel has allowed a handful of non-Shi’ite villages to remain in that area, but living under the occupation leaves those villages in a very tenuous situation. Local leaders in Kfar Chouba reported that the IDF warned them that if anyone in the village was armed, the entire village population would be expelled and the buildings destroyed. So far, that hasn’t happened.

But obeying the occupiers doesn’t mean the villagers can live as they would in peacetime. The village’s economy is based heavily around farming and olive orchards, but the Israeli troops regularly restrict villagers’ access to those lands. There’s no formal rule given to the villagers as to where they’re allowed or not allowed at any given time, and even the southernmost parts of the village are “no go” areas, with IDF troops reportedly setting up operations within buildings in that part of the village.

Further north, Israel continues to heavily attack the Ali Taher Ridge, though in the past few days they haven’t made any serious attempts to advance on the ground into the area. Israel reportedly sees the ridge as strategically valuable, as it overlooks much of the northern part of Nabatieh District, the northernmost part of Lebanon that Israel intends to occupy, at least at this point.

Authored by Trita Parsi via Antiwar.com, reprinted with permission from Trita Parsi’s Substack.

The Trump administration believes it has turned the tables on Iran. Washington assesses that the rerouting of maritime traffic through the Omani corridor, combined with a global shift away from Persian Gulf oil, has reduced the effectiveness of Tehran’s closure of the Strait of Hormuz. At the same time, the U.S. blockade has sharply constrained Iran’s ability to sell its oil. The result, in Washington’s view, is a status quo that imposes greater costs on Iran than on the United States.

That calculation changes the strategic equation. Rather than being forced to accommodate Iranian demands, President Donald Trump now believes he can afford to wait Tehran out. For the first time since the war began, the White House has concluded, time is working in America’s favor.

Assuming that assessment is correct, the more important question is what Trump intends to do with this newfound leverage. If Washington interprets Iran’s vulnerability as an opportunity to extract capitulation rather than to negotiate a durable settlement, the result is more likely to be another round of war than an end to the conflict. Tehran has already demonstrated that when confronted with a choice between surrender and escalation, it will choose the latter. Giving Iran the same choice again is therefore unlikely to produce a different outcome.

The only way to turn this unexpected shift in the balance of leverage into a political victory is through diplomacy. If Washington’s assessment is correct, it now has an opportunity to use its leverage to secure a compromise that addresses its core interests while giving Tehran sufficient reason to accept an agreement. If, instead, the administration pursues maximalist demands, it risks converting a moment of leverage into another cycle of war.

Historically, however, Washington has tended to make precisely this mistake. Whenever U.S. policymakers have concluded that time and leverage are on their side, they have often treated Iranian weakness not as an opening for compromise, but as an opportunity to seek capitulation. The danger is that Trump will repeat that pattern. He will mistake leverage for victory and turn a potentially favorable negotiating position into the continuation of the tragedy that is US-Iran relations.

Trump failed militarily, but thinks he can win economically

America has run out of military options. The clearest indication is that the Trump administration has stopped striking Iranian targets even as Tehran continues to attack ships transiting the Strait. On Monday, an Iranian attack killed a sailor aboard a vessel using the southern corridor. Yet Washington did not respond militarily – even though the second round of the war began precisely because the administration had declared that it could not accept Iran firing on ships.

According to Reuters, U.S. forces have used virtually all of their global stockpile of ATACMS and Precision Strike Missiles (PrSM) during the five-month Iran conflict. Moreover, roughly 65% of Patriot interceptors, 38% of THAAD interceptors, and almost half of the Navy’s Tomahawk cruise missiles have been expended.

The depletion of these stocks appears to have forced Trump to abandon its pursuit of a military knockout and instead shift the burden of economic pressure onto Tehran. That strategy, in turn, appears to be producing results faster – and to a greater degree – than the administration anticipated.

In the American description of events, this success is mainly due to three factors: New, much larger ships are being used that carry primarily crude oil. These VLCCs (Very Large Crude Carrier) can carry up to 2 million barrels of oil. In comparison, other oil tankers can transport between 350,000 and 1 million barrels.

Before the outbreak of the war, approximately 21 million barrels of petroleum and crude oil passed through the Strait of Hormuz on a daily basis. These were carried by 65 to 80 tankers. Roughly the same amount of oil transition through the strait can now be achieved by only ten VLCCs a day. And given that the vast majority of ships transitioning through the Strait in the Southern Corridor have their transponders off, this traffic has not been noted by outlets tracking the traffic.

Secondly, demand for Persian Gulf oil has significantly dropped as numerous economies have started to transition to other sources of supply. Brazil, for instance, has increased its exports and started to serve markets that previously relied on Persian Gulf oil. Most importantly, Beijing appears to have deliberately reduced its oil consumption to prevent prices from remaining above $100 a barrel and thereby aggravating the risk of a global recession.

Third, the war has created economic incentives strong enough to attract ships and crews willing to assume substantially greater risks. The growing volume of traffic through the Southern Corridor, despite the obvious dangers, is evidence that these incentives are surprisingly powerful.

Unlike its earlier illusions about the blockade as a guaranteed knockout blow against the Iranian theocracy, Washington no longer expects economic pressure to produce a quick surrender. Instead, the administration appears to be betting on a slower process of economic strangulation that will eventually force Tehran to capitulate. Faith in a knockout blow has given way to the more fragile hope of prolonged strangulation.

Tehran isn’t worried – for now

Iran’s calculation is effectively the opposite of Washington’s. Tehran doubts the United States can sustain the flow of VLCC traffic through the Strait and believes Trump will have little choice but to return to the Islamabad MOU within the next two to three weeks. Trump may have made progress on oil exports, but LNG and many petrochemical products, including fertilizers, remain unable to leave the Persian Gulf.

Tehran also appears to believe that it retains the ability to halt the VLCC traffic, but is deliberately refraining from doing so for now. The calculation is to avoid escalation while waiting to see whether the United States’ depleted military options ultimately compel Trump to return to the MOU.

In short, Tehran does not appear overly concerned – for now. But that could change. If Trump refuses to return to the MOU, or succeeds in turning the balance of economic pain against Iran, Tehran will face a far harsher reality. Just as Washington underestimated Iran’s resilience, Tehran may have underestimated the both resilience of the global economy and Trump – the former’s ability to shift away from oil and the latter’s craftiness in finding non-military ways to effectively reopen parts of the Strait.

Between surrender or escalation, Iran will almost certainly choose escalation. Even if Trump has gained the economic upper hand, Tehran still believes it holds a military advantage. Its options range from more aggressive attacks on VLCCs to strikes on Emirati pipelines that bypass the Strait, and potentially to renewed escalation in the Red Sea.

Indeed, it was precisely Trump’s erroneous assumption that Iran would choose surrender over war that helped drive the United States toward escalation in the first place. Washington’s recurring search for Iran’s breaking point has repeatedly produced escalation rather than capitulation. There is little reason to expect the pattern to be different this time.

The US-Iran tragedy

Herein lies the tragedy of the lethal dance between Washington and Tehran. America’s winner-take-all approach makes agreement unacceptable when Iran has the momentum. When the momentum shifts to Washington, the United States comes to believe that nothing short of Tehran’s full capitulation is palpable.

Because Iran fears surrender more than war, the cycle oscillates between economic pressure and military escalation, interrupted only by brief and often fragile periods of diplomacy. Put simply, the structure of the situation favors war.

This is particularly visible today as neither side is investing in any real diplomacy with the other. Tehran’s “diplomacy” is to simply wait for Trump to return to the MOU, while Trump has barred U.S. officials from engaging with Iran and committed himself instead to economic warfare.

When you don’t negotiate when you’re weak, because you are weak, and you don’t negotiate when you are strong, because you are strong, then war becomes the baseline.

Trita Parsi is the Executive VP of the Quincy Institute for Responsible Statecraft and an award-winning author. Washingtonian Magazine has named him one of the 25 most influential voices on foreign policy. Noam Chomsky calls him “one of the most distinguished scholars on Iran”