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The Copper Chart Causing Alarm

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The Copper Chart Causing Alarm

Copper futures in London continue to move higher, once again approaching record highs, as US buyers purchase record volumes from the seaborne market, with imports reaching 200,000 tons in July. A phased US tariff would keep that buying in motion for longer, further tightening the ex-US market and limiting any near-term price correction in London trading.

Rafael Barcellos, head of Latin American Metals & Mining and Pulp & Paper Equity Research at Bradesco BBI, wrote in a note last week that global mine supply is deteriorating. He warned that severe weather in Chile has forced Antofagasta and Lundin to cut their production guidance, further tightening an already stressed physical market.

Barcellos explained:

Copper prices extended their July rally into August, running above US$14,000/t throughout the month and reaching ~US$14,450/t as of August 30. Momentum has been driven by near-term physical tightness, as refined copper continues to flow into the US ahead of a potential import tariff.

While market consensus frames the policy as a binary outcome for copper — a tariff being supportive for prices and a no-tariff decision being negative — we would argue instead that both outcomes are ultimately bearish, and that it is the uncertainty around the tariffs that is intensifying the current upward momentum. Should tariffs not be implemented, the massive inventories accumulated in the US would be redirected elsewhere, increasing global supply availability. However, should the US instead move ahead, US buyers would likely reduce near-term procurement given the elevated stocks already built ahead of the decision, ultimately reducing regional demand and easing tightness elsewhere. That said, a phased tariff (e.g. an incremental rate over the coming years) — which we do see as the most likely scenario — should help keep US buyers in the seaborne market for longer, smoothing rather than removing the demand adjustment and limiting the near-term downside to prices.

On the supply side, the concentrate market remains tight, further exacerbated by extreme weather in Chile, which led Antofagasta and Lundin Mining to lower their 2026 production guidance ranges to 625-655kt (from 650-700kt) and 300-325kt (from 310-335kt), respectively, reflecting disruptions at Los Pelambres and Caserones. On the refined side, amid persistent concentrate tightness, Chinese smelters have increasingly turned to secondary feedstock, with copper scrap imports rising +15% YoY in July (+9% YTD)

Barcellos’ view of the copper market was echoed in a Bloomberg report on Friday, which cited International Copper Study Group data showing that global mine production fell 1.1% during the first half of 2026, with output at industry giants Codelco and Freeport-McMoRan declining by double digits.

Separately, Morgan Stanley, which began the year forecasting supply growth, now expects mine production to finish roughly unchanged or slightly lower, potentially marking the first annual decline since 2017.

Producers representing roughly two-thirds of global supply recorded a 3.5% decline during the first half and a 4.1% drop in the second quarter, according to Jefferies data cited by SP Angel. Chile, the world’s largest copper-producing country, suffered its weakest second quarter in nearly two decades and now expects annual output to fall 2.6%.

Related:

Copper has now advanced for 10 consecutive weeks on the London Metal Exchange.

To sum up, all of this only suggests a structurally bullish period for copper. Demand from electric vehicles, power-grid expansion and artificial-intelligence data centers is accelerating just as physical-market tightness constrains supply and pushes London prices higher.

Tyler Durden
Mon, 09/07/2026 – 11:35

GOP Bets On Trumpapalooza To Defy Midterm History

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GOP Bets On Trumpapalooza To Defy Midterm History

Authored by Carolina Lumetta via RealClearPolitics,

Texas-based Republican strategist Rebecca Trahan is excited to see the first-ever GOP midterm convention come to Dallas next week. More specifically, she hopes it will bring yet more national attention and dollars to the Senate campaign for state Attorney General Ken Paxton.

“I think [the convention] can be very motivating. I hope that the event does encourage and get people to get out and vote,” Trahan told RealClearPolitics. “I hope that it drives a lot of money to the Paxton campaign because they really need it, and I know that Texas really needs Ken Paxton as the next senator considering our options.”

Trahan says Paxton’s Democratic opponent James Talarico is a more formidable challenger than many Republicans realize. She said the convention is a welcome burst of energy onto the scene but would be better if it were more accessible. The two-day event will not be aired in full on national television networks, and it competes with the beginning of the school year and the start of football season on the two nights of speeches.

“I really applaud the RNC for doing everything that they can to help Texas candidates, and especially to help Ken Paxton, because we need it,” Trahan said.

But she’s not attending the convention either.

“For me, if I’m going to a fundraiser, I prefer that it be a little bit more private,” Trahan said. “I love conventions, but there is so much work to be done just this weekend alone, and block walking and phone banking. So I chose to stay back and do that.”

The Republican National Committee promised a “Trumpapalooza” as the president takes the stage on both convention nights. Several Republican candidates have hemmed and hawed on whether they’ll attend the rally-like event, and the RNC has opened attendance to the public, hoping to gin up both base and prospective voter support.

“We are trying to reach those low- and mid-propensity voters that came out for President Trump in 2024, and we’re trying to communicate to the American people the contrast that they have on the ballot this cycle,” RNC spokeswoman Natalie Baldassarre told RCP.

Vice President JD Vance previewed the party’s message during a White House press briefing Thursday. For the past year, the Trump administration has highlighted the One Big Beautiful Bill, rebranded as the Working Families Tax Cuts. In recent weeks, they’ve argued that Democrats who opposed the legislation would essentially be raising taxes if they win and would try to reverse Trump’s actions over the past two years.

“My elevator pitch is actually very simple,” Vance told reporters. “Do you want to live in a country that has safety and security and prosperity? If the answer is yes, and I think most Americans do, then vote for congressional Republicans over congressional Democrats on every single issue. The Democrats have taken the side of fraudsters, of criminals, and of far-left interest groups over the side of the American people.”

But the strategy of hosting a midterm convention in Texas in September could be a double-edged sword.

“I don’t know how much I want to be part of this,” one Republican House member told RCP. “It’s just going to be a highly orchestrated Trump thing where they’ll trot out some members.”

Many Republican candidates, particularly those in tight races, have either declined to attend the convention due to scheduling issues or have not revealed their plans, according to reporting from Politico and CNN. During a midterm year, even one or two days spent away from the campaign trail is considered wasted time. To that effect, House Speaker Mike Johnson already canceled the final weeks of the House session this month so that members may remain in their districts.

The low level of enthusiasm does not appear to be worrying the White House. Vance said the point of the convention is to bring the full force of the Trump administration to help the GOP, which does not necessarily require candidates to be on the stage.

“That doesn’t concern me,” Vance said during the briefing. “We can make the argument as much as possible that if you elect congressional Democrats, you’re going to see higher prices, worse energy, higher taxes, and more fraud. The president and I can go and make that argument on national TV. We don’t need a congressman in a tight race to be there in all cases.”

Conventions in midterm years are often glorified revelries with little concrete purpose, especially when the identity of the party’s eventual presidential nominee is unknown. Trump first publicly floated the idea of a midterm convention last year. Then, the RNC voted during its January annual meeting to change the charter rules to allow for such an event. Trump confirmed the date and location in another Truth Social post in June.

While the GOP has never done something like this before, Democrats were once quite practiced at it. The party would often host a mid-cycle convention until the mid-1980s, when then-Democratic National Committee chairman Paul Kirk shuttered the tradition. He complained that would-be presidential candidates used the stage to attract attention for themselves rather than all the races down-ballot that needed support. The entire event he summed up as “places for mischief.”

This year, the DNC again teased that it might return the practice, but in its own annual meeting, members shot down the idea. DNC Executive Director Roger Lau said in a statement that the party had “baited” the GOP into throwing money down the drain for a midterm convention, giving the DNC an advantage in spending. But that strategy might not have panned out. The RNC reported a record $130.3 million in cash on hand by the end of July. The DNC reported roughly $16 million at the same time, along with nearly $18 million in debt.

Most congressional Republicans are paying roughly $25,000 each to attend the convention, though each state party manages its own ticket packages. Other affiliated organizations, such as the National Republican Congressional Committee, are offering additional perks like breakfast with House leadership and special access for up to $100,000, according to an NRCC flyer first reported by Politico. The RNC also designated tickets for state parties, which then determined how to distribute them. Instead of delegates, the seats will be filled with members of the public, according to the RNC.

RNC Chair Joe Gruters told Newsmax this week that the convention will be a landing place for the party’s messaging. He appeared optimistic that of the 35 competitive House races this cycle, Republicans can defy conventional wisdom and defend the congressional majority.

“We think we can defy history and we have the right candidates,” Gruters said. “We have the messaging, we have the resources to put behind that messaging, and so, we’re well on our way.”

The messaging will focus on key portions of the president’s agenda, including last year’s tax cuts, border enforcement, energy policy, trade, and more. But it will have to dodge some pitfalls, such as the ongoing war with Iran, high inflation and gas prices, a controversial deal to subsidize Venezuelan beef, concerns about data centers, and the president’s sinking approval ratings. Vice President JD Vance will keynote the first night, and the president will close out Thursday night with his own address.

Tyler Durden
Mon, 09/07/2026 – 10:25

Huawei Crashes Apple’s Big Launch Week With $3,000 Trifold Smartphone

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Huawei Crashes Apple’s Big Launch Week With $3,000 Trifold Smartphone

Two days before Apple’s big launch event on Wednesday, when the company is expected to debut its long-awaited foldable iPhone, Huawei Technologies and Xiaomi are unveiling their premium foldable smartphones.

Huawei on Monday unveiled its Mate XT 2, a trifold smartphone that unfolds into a 10.2-inch tablet. The starting price is $2,980, representing a 10% increase over its predecessor.

Huawei Executive Director Richard Yu attributed part of that increase to the big memory squeeze that has sent prices skyrocketing. Despite its premium price, the entry-level device comes with 16GB of memory and 256GB of storage. 

Xiaomi is set to launch a rival foldable phone later today, while Apple’s foldable iPhone, expected to debut on Wednesday, could be called the iPhone Ultra and cost upwards of $2,500.

Yu told reporters earlier that the “real challenge right now is pricing, because memory costs have risen sharply. We adopted a lot of new technology, and the cost pressure has been enormous.”

The launches of premium foldable phones from the three major brands this week come amid mounting headwinds across the global handset market. Counterpoint forecasts a 14% drop in global smartphone shipments this year. Chinese manufacturers are particularly exposed because of their reliance on budget handsets.

Counterpoint analyst Ivan Lam said Apple has the “world’s biggest premium device installed base,” adding, “Its foldable will sell well and rapidly grab market share.” He also noted that the new handset could spur broader consumer demand, giving rivals a lift.

Smart Analytics Global forecasts that Apple could capture 41% of worldwide foldable sales next year. Its entry will undoubtedly intensify competition across the foldable space.

However, Nikkei Asia reported last week that production of foldable iPhones remains limited ahead of this week’s launch.

“Apple has very high quality requirements and added an extra trial run in August ahead of actual production. However, production is ramping up slowly, with output currently at only a few hundred units a day in late August. That initial volume could be challenging to meet market demand,” one supply chain manager told the Japanese news outlet.

With U.S. gasoline prices averaging above $4 a gallon nationally and squeezing household budgets, the iPhone Ultra’s high price tag could pose a major test of consumers’ willingness to spend on premium upgrades. For Apple, under new leadership with John Ternus at the helm, the key question is whether the foldable design offers enough value to persuade consumers to upgrade. Then again, there are always buy-now, pay-later options.

Tyler Durden
Mon, 09/07/2026 – 10:00

Futures Drop As Iran Hostilities Send Brent To 6 Week High Above $97

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Futures Drop As Iran Hostilities Send Brent To 6 Week High Above $97

US stock futures slipped in cautious, low volume trading as the latest Middle East escalation pushed oil prices higher, lifting bond yields in Europe and Asia. As of 9:00am ET, S&P futures were down 0.2% with Nasdaq futures modestly in the red despite solid performance for tech stocks earlier in the session, which helped the Kospi surge more than 4.6% – its second biggest jump since the Situational Awareness takeover by Citadel – and Nikkei jumped almost 2% as OpenAI’s GPT-6 Astra debut reinvigorates the Asian semiconductor rally. Taiex climbs about 1.5% and ChiNext soars 2.6% (as discussed overnight, China may be the next Gamma Squeeze target). Hang Seng underperformed peers with a 1% loss as Chinese tech stocks retreat in Hong Kong. Brent crude rose above $97 a barrel following the largest exchange of tanker attacks yet between Iran and the US. Traders also assessed reports of hits on Saudi Arabian oil infrastructure and a potential accord between Iran and Oman to manage shipping through the Strait of Hormuz. In FX, the yen strengthened to its highest level since February, surpassing the peak reached after July’s intervention. The dollar fell 0.2%. Cash trading in Treasuries and US equities was closed for Labor Day. US markets are closed for Labor Day. 

In corporate news, an Amazon.com Inc. cargo plane overran a runway at Miami International Airport and burst into flames on Sunday, killing at least five people and temporarily shutting down the airport’s runways.

  • Jaguar Land Rover Automotive Plc will slash some 4,000 jobs as Britain’s largest carmaker grapples with US tariffs, the fallout of a crippling cyberattack and intense competition.
  • Novo Nordisk A/S stopped two more trials for its experimental heart disease medicine, in a further blow to the drug’s prospects.
  • Abu Dhabi National Oil Co. is in talks with the biggest refining companies in Thailand and Africa to invest in their businesses.
  • Uber Technologies Inc. has hired banks to hold calls with investors this week for a debut euro bond sale.
  • Novartis AG suffered a second trial disappointment within a week after the Swiss pharma group’s potential blockbuster heart drug failed in a final-stage study.

US cash trading and individual stock futures are shut today for the Labor day weekend. For anyone catching up after a break, Friday’s US jobs report did the early work on this week’s story. Payrolls rose 162,000, blowing past estimates, and pushed the market-implied odds of a Federal Reserve rate hike on Sept. 16 to a little above 60% from around 50% before the print.

That leaves Friday’s CPI (and to an extent Thursday’s PPI) as the real swing factor for a Fed that’s held steady for five straight meetings. The European Central Bank adds its own test Thursday, with markets pricing a near-certain quarter-point hike to a 2.50% deposit rate. Between the two central banks and Friday’s CPI, this is the week Europe has to trade around.

“Markets will be adjusting their positioning heading into the Fed’s blackout period. The risk is the Fed turning hawkish and that will be reflected in equities,” said Geoff Yu, a senior macro strategist at BNY. “Bond markets will remain nervy and we remain focused on fixed-income volatility.”

While economic data will likely be the biggest catalyst for markets this week, earnings will also help shape the outlook for key equity sectors. Results from Oracle Corp. and Adobe Inc. on Thursday will give investors a fresh read on AI infrastructure demand and the threat the technology poses to software makers. For now, the earnings backdrop remains supportive. Investors should buy any dips in equities given a robust earnings outlook, said JPM strategists. Even moderate central bank tightening would be unlikely to derail the positive backdrop for stocks unless inflation expectations change materially, said the team led by Mislav Matejka. “As corporate profits remain on an uptrend, any bout of weakness in equity prices would leave them cheaper,” the strategists wrote. “We believe one should continue using the dips to add.”

The Stoxx 600 struggled for direction, with economically sensitive sectors among the biggest decliners as inflation concerns drove bond yields higher. Novartis AG shares fell 2.6% after a heart drug failed in a final-stage study. Energy stocks outperformed, while the real estate and insurance sectors were among the biggest laggards. Here are the biggest movers Monday:

  • Nordex shares rose as much as 12%, the most in over four months, after being upgraded to buy at BofA Global Research
  • SigmaRoc rose as much as 13%, the most since March 2021, after the lime and minerals group released its interim results and announced the acquisition of Lithuanian dolomite business AB Dolomitas
  • Lottomatica shares gained as much as 8.2%, hitting the highest since June, after the Italian gaming company quantified the boost to online earnings it expects from the proposed acquisition of Spanish rival Cirsa Enterprises
  • Infineon shares rose as much as 3.9% as MP Capital Markets upgraded the stock to buy from hold
  • Burkhalter shares rose as much as 6.7%, the most since March 2022, after the Swiss building technology services company reported results
  • Novartis shares fell as much as 3.9% after the Swiss pharma group’s potential blockbuster heart drug, pelacarsen, failed in a final-stage study
  • Schindler dropped as much as 3.6% after Goldman Sachs gave the elevator and escalator specialist its only sell rating, downgrading from neutral, citing lower growth and earnings progression compared to the wider sector
  • Tomra shares fell as much as 10%, while Norwegian-listed peer Envipco also slumps, after France abandoned plans to impose a mandatory deposit return system for plastic bottles, introducing doubts over a potential growth catalyst for the stocks
  • Hollywood Bowl shares dropped as much as 6%, the most since May 2025, after analysts at Deutsche Bank cut their price target and warned the summer drought created “less-than-ideal conditions” for the provider of indoor family entertainment

German establishment politics, and specifically Merkel’s pro-immigration legacy, suffered a crushing blow over the weekend, after the conservative Alternative for Germany scored its best-ever result in a state election on Sunday, delivering a powerful blow to liberal Chancellor Friedrich Merz. The AfD secured 44% of the vote in Saxony-Anhalt. In the UK, the government signaled it won’t provide financial support to limit job losses expected to be announced at Jaguar Land Rover this week.

South Korea’s memory heavyweights were standouts in Asia as the release of OpenAI’s GPT-6 model continued to fuel renewed enthusiasm for AI. Driving the tech rally is OpenAI’s plan to release a new model, GPT-6, pitched as a milestone toward artificial general intelligence. That pushed the Philadelphia Semiconductor Index up 3.4% on Wall Street Friday and has SK Hynix and Samsung leading the advance in Asia Monday. The enthusiasm isn’t universal though. Hong Kong’s Hang Seng and its tech gauge both slipped into the red despite the Nikkei and Kospi seeing solid gains.

The dollar initially ticked higher, but then retreated following another surge in the yen which pushed the USDJPY as low as 154, down almost 200 pips overnight. The Korean won extended winning streak to around two-year high. T-note futures are about 1/32 softer near 107-14 with cash Treasuries closed for Labor Day. Bund futures are ~15 ticks lower after German far-right party AfD wins state election. Aussie curve bear flattens with 3-year yield ~3 bps higher. WTI crude futures climb 1% to near $92.40; gold sheds almost $30 to below $4,400-handle.

The notable overnight mover was again the yen, which strengthened to its highest level since February, surpassing the peak reached after coordinated intervention by Japan and the US. The Japanese currency suddenly extended gains, up as much as 1.4% to 154.06 against the dollar in London trading. There was no clear driver for the move, with some traders pointing to the US holiday helping to exaggerate the moves while others mentioned the break of the key 155 per dollar level as a reason.  The yen’s break below 155 is significant given the level previously acted as a floor following past intervention episodes,” said Masahiko Loo, senior fixed income strategist at State Street Investment Management.

Large stop-loss orders below the 155-per-dollar level were triggered and options dealers were forced to sell dollars, adding to the yen’s gains, according to a trader familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly.

China, separately, said it’s injecting 300 billion yuan ($45 billion) into its largest banks and insurers, its biggest recapitalization in almost two decades, with only a modest share reaction so far. 

In commodities, oil advances, with Brent futures are trading at a 6 week high, above $97 a barrel, after US attacks on Iranian tankers and Tehran’s threat of a new restricted zone outside the Strait of Hormuz. Over the weekend, Iran said it hit three US-linked ships in retaliation for American attacks on Iranian tankers. The US military earlier said it struck three Iranian crude tankers, in response to the IRGC targeting two US Navy warships with ballistic missiles. European natural gas prices surge. Meanwhile, Ukraine is resigned to Russia’s war dragging on through another tough winter.

In rates, japan likely sold a portion of its holdings of foreign securities, including US Treasuries, to finance its record currency intervention over the past month. Treasury futures edge down. There’s no trading of cash Treasuries worldwide on Monday because of a US public holiday.

Market Snapshot

Top Overnight News

  • Saudi Aramco’s oil facilities in the Saudi Arabian city of Jizan have been attacked only a month after a separate strike temporarily knocked out some production at its refinery.: FT
  • Iran says US energy companies’ facilities are ‘exposed’: RTRS
  • UAE says its energy exports will not be ‘held hostage’ by Iran war: RTRS
  • Several Qatari liquefied natural gas tankers are heading back toward the Persian Gulf, a sign the supplier may be positioning vessels for a resumption of exports through the Strait of Hormuz: BBG
  • The Alternative for Germany scored its best-ever result in a state election on Sunday amid growing public discontent with the political establishment, delivering a powerful blow to Chancellor Friedrich Merz: BBG
  • AI could pose ‘existential’ risk to humanity, UN rights chief warns: RTRS
  • From dance floor to war: China readies humanoid robots for combat: RTRS
  • Japan likely sold a portion of its holdings of foreign securities, including US Treasuries, to finance its record currency intervention over the past month, despite concern in Washington over the impact of Treasury sales on long-term yields: BBG
  • The South Korean won advanced to its strongest level in nearly two years Monday, helped by a rally in semiconductor stocks and continued foreign inflows into the country’s benchmark equity index: BBG
  • Nepal rescuers focus on 900 hydropower workers, 121 could be trapped in tunnels, officials say: RTRS
  • German industrial production declined the most in almost a year, marking an unexpected setback to the recovery of Europe’s biggest economy: RTRS
  • Fed’s Hammack (2026 voter) said on Friday that Fed policy is not restrictive and inflation is too high, while she stated local contact views indicate now is the time for a Fed hike to control inflation.
  • Huawei launches new foldable smartphone; Xiaomi and Apple set to follow: RTRS
  • Warning signs abound for Republicans as midterm campaign begins final sprint: RTRS
  • President Trump said on Friday that they are taking action to help cattle ranchers and signed an order that allows ranchers to process their own beef, while small, medium, and large ranchers can sell to consumers, and he also stated that meatpackers have been charging unsustainable prices.
  • There were multiple casualties after an Amazon (AMZN) cargo plane overran the runway and struck vehicles whilst landing at Miami International Airport, while the Miami-Dade County Sheriff announced that at least five people have been confirmed dead.

Iran Headlines

  • US launched strikes against three Iranian crude oil tankers on Saturday, which destroyed one, in retaliation for the IRGC targeting US Navy warships with ballistic missiles.
  • Iran’s navy said it targeted three oil tankers that were travelling through unauthorised routes in the Strait of Hormuz and three additional US vessels in other areas.
  • US President Trump said on Friday that they do intermittent strikes in Iran and that the Iran issue is a military conflict, while he added that they may hit Pickaxe Mountain very soon. Trump warned that if anything goes badly with Iran, they may hit them hard and have essentially taken over Iran. He also claimed there have been no shootings for days and there are no mines in the Strait.
  • US Energy Secretary Wright said a nuclear deal with Iran may not be achievable in the near term and military action may be needed to address threats from Iran, according to ABC News.
  • Iran’s top security official Rezaei said Iran and Oman will sign agreed Strait of Hormuz passage maps in the coming days and that Iran will commit to keeping the Strait of Hormuz open when the US neither threatens Iran nor attacks it. Rezaei also stated that they will announce in the coming days and weeks a restricted zone outside the Strait of Hormuz that starts from the US Navy’s blockade line and extends through the strait into the Persian Gulf, and any ship identified entering this zone with the intention of passing through the strait will be added to the sanctions list. Furthermore, he said that Iran tested an Iranian anti-ship missile above a US warship for the first time and claimed the missile created ‘hell’ for the Americans ‘and they fled’.
  • Iranian Parliamentary Speaker Ghalibaf warned that Iran’s response to any attack against its interests and security would be faster, heavier and more painful.
  • Iran’s Foreign Ministry said the US-led war is disrupting global oil trade and costs, while it added that US aggression is causing instability in the Strait of Hormuz.
  • Israeli military announced that it struck southern Lebanon after Hezbollah launched drones towards Israeli soldiers in the security zone. Israel’s army also issued an evacuation warning to residents of a building in Deir Zahrani, southern Lebanon.
  • Israeli Finance Minister Smotrich said PM Netanyahu ordered the evacuation of certain settlement outposts in the West Bank. It was separately reported that Israel conducted an airstrike on eastern Gaza City with four missiles.
  • Joint statement by UAE, Saudi Arabia, Qatar, Jordan, Indonesia, Pakistan, Turkey and Egypt Foreign Ministers strongly condemned statements made by Israel’s National Security Minister Ben-Gvir and Defence Minister Katz regarding the displacement of Palestinians.
  • Yemeni armed forces said they thwarted an attempt by Houthis to infiltrate the Dabab front, while they announced that warplanes struck Houthi positions in Balhaf and south of Hodeidah.

A more detailed look at global markets courtesy of newsquawk

APAC stocks traded mixed as the region reflected on the recent strong US jobs data and subsequent Fed rate hike bets, as well as the US and Iran tit-for-tat attacks on vessels in the Strait of Hormuz. ASX 200 was little changed as resilience in the energy, resources, materials and mining sectors is offset by underperformance in tech, utilities and telecoms, but with downside in the index cushioned by support at around the 9,000 level. Nikkei 225 gapped above the 66,000 level with tech-related stocks heavily represented in the list of biggest gainers in the index. KOSPI outperformed amid firm gains in the semiconductor giants, including SK Hynix, which is said to be sharply increasing the production share of its sixth-generation 10nm-class 1c DRAM. Hang Seng and Shanghai Comp lagged with the Hong Kong benchmark pressured amid underperformance in the likes of Baidu and Xiaomi, while the big banks also declined after reports that ICBC and AgBank plan large A-share placements to raise CNY 100bln and CNY 160bln, respectively, as part of a Beijing-led CNY 360bln capital injection in financials.

Top Asian News

  • US President Trump said on Friday that he will be hosting a state dinner for Chinese President Xi when he comes and that China has very little involvement with Iran.
  • China’s Finance Ministry announced it will lead a capital injection of CNY 360bln in state banks and insurers, with ICBC (601398 CH) planning to raise CNY 100bln to bolster its capital, and Agricultural Bank of China (601288 CH) to raise CNY 160bln through a private placement of A shares, while the insurers include China Life Insurance (601628 CH), China Taiping Insurance (966 HK) and People’s Insurance Company of China (601319 CH).
  • China unveiled a plan to strengthen rural investment and will boost rural revitalisation investments to boost agricultural productivity, while it will enhance bond and credit support for qualified agricultural initiatives.

European stocks were subdued and oil crept higher after tit-for-tat tanker strikes between the US and Iran. Novartis AG shares fell 2.6% after a heart drug failed in a final-stage study. The Stoxx Europe 600 Index was little changed by 1:10 p.m. in London. Energy stocks outperformed, while the real estate and insurance sectors were among the biggest laggards. 

Top European News

  • UK Chancellor Healey said Britain’s economic growth must extend beyond the largest cities as he prepares to outline his economic agenda in a major speech on Monday. He is reportedly to set to announce a GBP 150mln fund for northern firms, aiming to boost growth.
  • UK recruiters saw hiring pick up for the first time in four years in August, according to the FT citing a survey by KPMG and the Recruitment and Employment Confederation.
  • Hundreds of masked anti-immigration protesters blocked roads leading to Britain’s busiest ferry port in Dover on Saturday.
  • German Chancellor Merz warned about further losses of industrial jobs and said that they are losing industrial jobs on a large scale, although he welcomed the latest agreement on Volkswagen’s supervisory board.
  • Germany’s far-right AfD is set to win the election in the eastern German state of Saxony-Anhalt with 44.5% of the vote.
  • German police discovered 12 explosive devices near overhead powerlines in two districts in east Germany, which is the latest spate of incidents targeting Germany’s electricity infrastructure.
  • Greek PM Mitsotakis unveiled a package of economic measures including tax breaks and wage increases for pensioners and employees, with the measures costing EUR 3.5bln by 2030.
  • Fitch raised Portugal’s sovereign rating from A to A+; Outlook Stable.

Tariffs/trade

  • US President Trump said Canada’s dollar imbalance with the US is unacceptable.
  • US President Trump said on Friday that they have the right to put tariffs on nations like Switzerland and have the right not to trade with financial elite countries, while he also stated that he gets along very well with Mexico’s President.
  • Japanese Trade Minister Akazawa said progress was made on the USD 550bln investment initiative that was set up as part of a trade deal with the US.

FX

  • DXY struggled for direction after ultimately fading the knee-jerk uplift from the stronger-than-expected NFP report on Friday, with price action not helped amid the holiday closures in North America on Monday and with the Fed currently on a blackout period, while market participants will have to wait till much later in the week for US CPI data.
  • EUR/USD traded little changed just above the 1.1600 level, with the single currency unfazed by news that the German far-right AfD is set for a big election win in the eastern state of Saxony-Anhalt, but will fall short of achieving a majority. Separately, German Chancellor Merz warned about further losses of industrial jobs.
  • GBP/USD marginally softened although held on to the 1.3500 status, with participants looking ahead to comments from UK Chancellor Healey, who will outline his economic agenda in a speech today.
  • USD/JPY was range-bound on both sides of the 156.00 level in the absence of fresh catalysts from the US or Japan to begin the week, with both their central banks scheduled for key meetings next week.
  • Antipodeans conformed to the uneventful trade across the FX space amid the ultimately mixed risk appetite and with no tier-1 data to spur price action.
  • PBoC set USD/CNY mid-point at 6.7795 vs Exp. 6.7086 (prev. 6.7787)

Fixed Income

  • 10yr UST futures lacked direction after whipsawing in the aftermath of last Friday’s blockbuster jobs report, while price action is contained with US cash markets closed on Monday for Labor Day.
  • Bund futures trickled lower and returned to beneath the 123.00 level amid mild gains in oil prices and with German Industrial Production data due later, while there was little impact from news that Germany’s far-right was set for a major victory after elections in the eastern state of Saxony-Anhalt.
  • 10yr JGB futures were subdued in the absence of any major fresh drivers or tier-1 data from Japan.

Commodities

  • Crude futures mildly gained after the US and Iran conducted tit-for-tat attacks on vessels in the Strait of Hormuz during the weekend, but with upside capped as it was also reported that Iran’s top security official Rezaei said Tehran will declare a restricted zone near the Strait of Hormuz and announce a new shipping route agreed on with Oman in the coming days and weeks.
  • Major OPEC+ countries stuck with the plan to keep oil output quotas unchanged for October.
  • Iraq raised oil export capacity to over 3mln bpd, according to state media.
  • US Energy Secretary Wright said the Trump administration is focused on boosting crude and fuel supplies rather than curbing US exports, as a way to reduce prices. Wright also said that US Navy escorts that are assisting tankers across the Strait of Hormuz are vital in sustaining crude flows and suggested they will continue to do so until Iran backs down.
  • Russia’s Vostok Oil project loaded its first crude for shipment via the Northern Sea route.
  • Iran is to increase gasoline prices for heavy consumers using more than 110 litres per month, effective on Tuesday.
  • Spot gold retested the USD 4,400/oz level to the downside following last week’s stronger-than-expected US jobs data, which supports the case for the Fed to hike rates this month.
  • Copper futures ultimately declined with early indecision on the recent key market themes including US data, Fed rate expectations and ongoing geopolitical tensions.

Geopolitics: Ukraine

  • Ukrainian President Zelensky sees no quick end to the war with Russia following a meeting with US envoys Witkoff and Kushner, and is seeking a package from allies that would cover defence reinforcements, as well as energy, including US LNG.
  • Russian President Putin ordered troops not to fire on Kyiv for three days during US envoys Witkoff and Kushner’s visit to Ukraine’s capital, according to Kremlin spokesman Peskov. However, it was reported that Russia and Ukraine exchanged a wave of strikes prior to the US envoys’ visit to Kyiv.
  • Russian Kremlin aide said talks between Russia and the US were highly useful and lasted for over three hours, but gave no indication of a breakthrough.
  • White House official said US and Russian officials discussed substantive plans for the next steps in talks aimed at ending Russia’s war in Ukraine, which will be announced in the coming weeks.
  • France’s far-right National Rally chief Bardella wants Ukraine to pay for Europe’s help and said France’s unconditional support for Ukraine should be replaced by a more transactional relationship.

Geopolitics: Other

  • North Korean leader Kim said North Korea’s navy nuclear armament will put nuclear combat systems to practical use and will restrain the enemy’s invading fleet, while he added that their new warship can carry out annihilating retaliatory strikes on the enemy at any time.

DB’s Jim Reid concludes the overnight wrap

Morning all. Tough times in our house this weekend with 8 nine-year-old boys sleeping over for our twin’s birthday party. They were very noisy. However, we were kept awake not by them but by an illegal rave in a field a few hundred yards away. I say we but my hearing isn’t the best so I didn’t hear it. My wife has the hearing of an owl and couldn’t sleep through it and felt that I should be woken up to be made aware of the noise I couldn’t hear. So I could do with the weekend to start again. Thankfully it’s US Labor Day so it should be relatively quiet.  

I was asked to do an op-ed for the FT today on the recent yield sell-off in bond market. As I said in the piece, the moves over the summer are just another leg to the normalisation trade that has been going on post Covid. In the unlikely event that you’d been on a desert island since just before the GFC and came back ashore today, I’m sure you’d look at current yields as pretty normal given all the spot info and history of bond markets you had at your disposal. I also don’t think the recent concerns are fiscal related, even if the higher yields go the more worries we will have further down the line for several countries. Finally while the pressures that have been there for higher yields are likely to continue, we have to accept that bonds are being bonds again. That is the coupon is helping maintain returns even in the face of yield rises. For example, its been nearly 4 years since the UK mini-budget crisis and 10yr Gilt yields are +65bps than the peak, while index returns are up around 12%. Clearly not spectacular but its getting harder to get outright negative returns in government bonds over the medium-term. So while the news flow will likely to continue to be negative, at least bonds are being bonds again. See my op-ed at the FT here for more. 

The main headline this morning is Germany’s political landscape shifting further to the right after the AfD secured around 44% of the vote in the Saxony-Anhalt state election yesterday, its strongest result in any German election to date and more than double its support from 2021. Chancellor Friedrich Merz’s CDU slumped to roughly 17%, its weakest showing in the state, as voters expressed growing frustration over economic stagnation, energy costs and migration policy. While the AfD fell just short of an outright parliamentary majority, the result nonetheless marks a major symbolic breakthrough for a party that remains shunned by mainstream rivals under Germany’s long-standing political “firewall”. The outcome will intensify pressure on the federal government and is likely to reinforce concerns about political fragmentation. More broadly, it underlines how anti-establishment and populist parties continue to gain traction across parts of Europe despite robust labour markets and relatively subdued inflation.  

The main focus in the Iran conflict over the weekend was a tit-for-tat escalation targeting commercial shipping in and around the Gulf. According to Reuters and other major news agencies, several tanker incidents and maritime attacks heightened concerns about the security of energy supplies moving through the Strait of Hormuz, with both sides accusing each other of responsibility. Brent is up +1.05% this morning to $97.29/bbl so we remain a distance from a resolution.

Elsewhere in overnight markets, tech is lifting most boats with the KOSPI (+4.18%) leading gains, followed by the Nikkei (+1.87%). Chinese equities are mixed, with the CSI 300 (+0.19%) edging higher, while the Hang Seng (-0.97%) and Shanghai Composite (-0.34%) are underperforming and bucking the broader regional trend. S&P 500 futures (-0.11%) are trading slightly lower but activity will be light today due to the Labor Day holiday. The Yen is fairly flat after another hectic week of intervention stories.

Looking forward now and the coming week offers a busy mix of central bank decisions, inflation data and growth indicators across the major economies. The main global focus will undoubtedly be on the US inflation reports (including CPI on Friday) and the ECB policy meeting (Thursday) with the former likely to heavily influence the FOMC next week. Elsewhere, investors will look to China’s trade (tomorrow) and inflation data (Wednesday), UK monthly GDP (Friday), and industrial production releases in Germany (today) and France (Wednesday). Corporate earnings are relatively light but Oracle (Thursday), Adobe and Inditex are among the notable releases.
As noted above, the biggest event is likely to be the US August CPI report (Friday), arriving just days before the September 16 FOMC meeting. The release follows a stronger-than-expected August employment report last Friday that reinforced the view that the labour market remains resilient. Nonfarm payrolls rose by 162k, with a further 55k of upward revisions to the previous two months. Private-sector hiring remained firm (127k) and job gains continued to broaden beyond healthcare, while measures of labour demand improved further.

Although the unemployment rate edged up to 4.14%, the broader U-6 measure fell to 7.7% and participation increased to 61.6%, suggesting the labour market remains on a relatively stable footing. Overall, the report corrected some of the softer signals seen in July and supports the view that employment growth remains at or slightly above breakeven levels.

Attention now turns to inflation. Our US economists expect headline CPI (Friday) to rise by +0.38% month-on-month in August, up from +0.07% previously, while core CPI is expected to print at +0.21% month-on-month, broadly unchanged from July’s +0.22%. Higher gasoline prices are likely to support the headline reading, while core inflation should continue to benefit from gradually moderating shelter costs. If realised, the forecasts would leave headline CPI broadly unchanged at 3.38% on a year-on-year basis while core inflation edges 10 bps lower to 2.38%.

Ahead of that, the PPI (Thursday) will provide another important input into the inflation outlook. Our US economists expect PPI to imply a +0.21% month-on-month increase in core PCE, down from +0.25% in July, leaving the annual rate broadly stable. The remainder of the US calendar is relatively quiet, with markets closed today for the Labor Day holiday. However, the preliminary University of Michigan consumer sentiment survey (Friday) will also attract attention. Our US economists expect sentiment to improve to 52.5 from 51.7 in August, while the survey’s inflation expectations measures will be closely watched.

In Europe, the ECB policy decision (Thursday) will be the key event. Our European economists expect a 25bp rate increase, taking the deposit rate to 2.50%, and investors will focus on any guidance regarding the likelihood of further tightening. Our economists now expect an additional hike in December with the reasons explained in their preview note here. They have also upgraded their 2026 and 2027 economic forecasts by 0.3pp and 0.1pp to 0.8% and 1.2% respectively. See their note on it here.  Economic data will also be closely monitored, including German industrial production (today) and trade data (tomorrow), French industrial production (Wednesday), and UK monthly GDP (Friday). Inflation releases from Sweden (today) and Norway and Denmark (Thursday) will provide additional insight into regional price pressures.

In Asia, China will dominate the calendar. Our economists expect the August trade balance (tomorrow) to show stronger activity, with exports and imports forecast to grow a significant 27% and 29% year-on-year respectively. Inflation data (Wednesday) are expected to show CPI accelerating to 0.8% year-on-year from 0.5%, while PPI inflation moderates to 3.2% from 3.5%. In Japan, key releases include labour cash earnings and the Economy Watchers survey (tomorrow), followed by PPI data (Friday).  A reminder that the BoJ has an important meeting on Friday week, less than 36 hours after the FOMC conclusion.

Beyond the economic calendar, the US Treasury’s expanded long-end buyback programme begins on Wednesday, increasing support operations in longer-dated maturities. In politics, the US Republican Party will hold its first midterm national convention in Dallas on Wednesday and Thursday, while Canada’s counter-tariffs on US imports come into force tomorrow. Corporate earnings highlights include Inditex (Wednesday) and Adobe and Oracle (Thursday). Oracle will be the key given all the focus on AI capex.  

Recapping last week now and risk assets struggled to gain much traction, as a fresh rise in energy prices raised fears about more persistent inflation. That came amidst no signs of progress on reopening the Strait of Hormuz, with Brent crude oil up +7.80% last week (+0.80% Friday) to $96.28/bbl, their highest in six weeks. Moreover, the relentless rise in European natural gas futures continued, with a 4th consecutive weekly gain (+7.42%) last week (+0.20% Friday) to €72.00/MWh. So for Europe in particular, investors were pricing in a growing probability of a more inflationary shock.   

That backdrop helped push yields up to multi-year highs around the world. For instance in Germany, the 10yr bund yield was up +6.1bps last week (-0.4bps Friday) to 3.34%, and it even reached a post-2011 high of 3.37% on Wednesday. Meanwhile in the US, the 10yr yield was up +6.3bps last week (+1.4bps Friday) to 4.78%, and on Tuesday it closed at 4.80%, its highest since October 2023.   
The yield moves got further momentum on Friday from a very strong US jobs report, which showed payrolls up by +162k in August (vs. +55k expected). In addition, there were +55k of upward revisions to the previous two months, and the unemployment rate held steady at 4.1%. So that raised investors’ confidence that the Fed would likely hike rates at their September meeting, with futures pricing in a 62% chance of a hike by the close on Friday.   

With inflationary pressures mounting and yields rising further, that generally put pressure on risk assets around the world. That was particularly clear in Europe, where the STOXX 600 fell -0.81% last week (+0.12% Friday), whilst the DAX fell -1.97% (+0.17% Friday). Elsewhere, Japan’s Nikkei also fell -2.09% (+1.26% Friday), while the MSCI EM index rose +0.24% (+1.35% Friday). In the US, equities saw a relative outperformance, but even there, the S&P 500 was still barely up last week with a +0.09% gain (-0.38% Friday). That slight risk-off tone was seen in credit as well, as US IG (+2bps) and HY (+7bps) spreads both widened, as did Euro IG (+2bps) and HY (+8bps) spreads.

Tyler Durden
Mon, 09/07/2026 – 09:22

Central Banks Bought 23 Tonnes Of Gold In July

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Central Banks Bought 23 Tonnes Of Gold In July

Authored by Naveen Athrappully via The Epoch Times,

Central banks worldwide purchased a net 23 tonnes of gold in July, in line with the overall yearly trend, according to the World Gold Council (WGC).

Gold bars weighing 1000 grams each are displayed at the Austrian Gold and Silver Refinery (Oegussa) in Vienna, Austria, on Feb. 3, 2026. Georg Hochmuth/APA/AFP via Getty Images

The largest buyer last month was China, which bought 20 tonnes, according to a Sept. 3 WGC report.

“Notably, activity from the People’s Bank of China (PBoC) has picked up pace in recent months, with double-digit monthly purchases of gold since May 2026,” the report said. Poland purchased eight tonnes and was the second-largest buyer.

Russia was the top net seller, with six tonnes sold. This was followed by Turkey, Uzbekistan, and Jordan, all of which sold a tonne each.

Year-to-date, global central banks reported purchasing 130 tonnes of gold, down from roughly 160 tonnes during the same period in 2025. Poland has added 90 tonnes this year, with China buying 60 tonnes. Turkey has sold 85 tonnes, while Russia’s sales total 50 tonnes.

Central banks account for roughly 20 percent of all historically mined gold, according to the WGC. Bullion serves as a vital bank reserve asset, valued for its liquidity, safety, and potential returns. In times of uncertainty, gold demand tends to rise.

According to a June 16 WGC report, a survey of central banks found that 89 percent of respondents forecast global central bank gold reserves to rise over the year.

As for funding, half of the respondents said they would procure the gold locally by using domestic currencies. Thirty-eight percent said they would sell other reserve assets to purchase gold.

“The majority of respondents (74 percent) see moderate or significantly lower US dollar holdings within global reserves over the next five years,” the report said.

“Respondents also believe that the share of other currencies, such as the euro and renminbi, will remain unchanged over the same period, while gold holdings will increase.”

Goldman Sachs predicts central bank buying will support the rise in gold prices, according to an Aug. 28 report. Such purchases are being driven by a need to diversify their reserves.

In 2022, the G7 nations froze Russia’s assets held in Europe due to Moscow’s invasion of Ukraine. Since then, the central banks have been buying gold at an increased rate, according to Goldman Sachs.

Spot gold ended Friday at around $4,430 per oz., up from about $4,329 at the beginning of the year. Gold hit a peak of roughly $5,595 in late January.

Unable to Withdraw Gold

The Sept. 3 WGC report cites a conflict between Venezuela and the Bank of England over gold reserves.

The Venezuelan government has roughly $4 billion worth of gold stored with the bank and has sought to withdraw it. However, because the United Kingdom has refused to recognize Venezuela’s socialist government, the country has been unable to secure its gold reserves.

According to the June 16 WGC report, central banks are continuing to diversify the locations of their gold reserves. While the Bank of England remained the top choice, domestic storage was a close second, followed by the Bank for International Settlements in third place.

This week, the Netherlands’ central bank announced plans to shift roughly 86 tonnes of gold from the United States and Canada to London, citing geopolitical risk.

Ewa Manthey, commodities strategist at ING Bank, highlighted the risk faced by certain nations that store gold abroad, citing Venezuela’s inability to retrieve its gold from the Bank of England, according to a Sept. 4 opinion on the company’s website.

“This case is exceptional – but it shows that the host country’s courts and political recognition decisions can affect access to reserves,” Manthey said.

“Gold held at the Bank of England remains the property of the foreign central bank, but it is physically located in the UK and is therefore subject to UK jurisdiction.”

Tyler Durden
Mon, 09/07/2026 – 09:15

USS Abraham Lincoln Returning Home After Being “Sunk” Three Times By Iran

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USS Abraham Lincoln Returning Home After Being “Sunk” Three Times By Iran

In yet another example of Iranian social media claims not matching up with reality, the nuclear powered Nimitz-class aircraft carrier USS Abraham Lincoln is returning home after a 286 day deployment and 5 days of rest at port in Thailand.  The ship was untouched by any signs of combat, despite the IRGC claiming on at least three separate occasions that they had sunk the mighty vessel with drones and missile strikes. 

Iranian aligned accounts even spread AI videos and video game clips of a ship sinking, arguing that the clips showed the Abraham Lincoln.  Left wing commentators celebrated the news, only to scrub their posts after it was revealed that the information was fake.

Despite resounding evidence to the contrary, many conspiracy advocates asserted that the Lincoln had been hit and the US government was “covering it up.”  This also turned out to be nonsense after the carrier arrived at Laem Chabang Port in Thailand for rest and cleaning.  

The narrative then shifted, with people claiming that the Lincoln “looked damaged” and disheveled, which proved they were right about Iran hitting the vessel.  In reality, the carrier had normal rust and residue caused by months at sea. 

The posts exposed an embarrassing lack of basic knowledge when it comes to natural wear from sea water on naval ships facing long deployments.  

The ship was cleaned at port with no signs of damage from attack.  It has now left Thailand on a return trip to the US and the Naval Air Station North Island in Coronado (San Diego).  

The carrier and all its sailors are accounted for.  The return of the USS Abraham Lincoln highlights an incessant disinformation campaign by Iran and Iran supporters, flooding social media with false claims in an effort to win the war in the theater of public opinion.  On the ground, the vast majority of supposed IRGC successes have proven to be fake. 

The Iran War and the war in Ukraine have become case studies for a new era of digital warfare.  Substantial efforts are being made to “play the algorithms” and manipulate consensus.  Iran, perhaps more than any government so far, has relied heavily on digital guerrilla tactics as a way to demoralize US operations.  They have, of course, received extensive help from sources in the west. 

Whether or not one agrees with the reasons behind the war, it is clear that propaganda alone is not going to lead to victory.  Tangible realities matter and Iran is being hit with those tangibles in the form of an inflation crisis, import/export crisis and fuel shortage crisis and foreign ships passing more freely through the Strait of Hormuz.   

The lesson here is simple:  Online discourse is rarely a reflection of the truth.  All one has to do is wait a few months for the fog of war to clear and the majority of false claims will melt away.     

Tyler Durden
Mon, 09/07/2026 – 08:50

AfD’s Historic Win Shocks German Political Establishment: Here’s What Happens Next

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AfD’s Historic Win Shocks German Political Establishment: Here’s What Happens Next

The pro-Germany, anti-globalist, anti-mass migration right-wing populist party known as Alternative für Deutschland delivered its strongest election result ever in Saxony-Anhalt on Sunday, dealing a sharp blow to Germany’s political establishment. 

On Sunday, AfD secured 43.8% of the vote in Sunday’s regional election, exceeding polling estimates. Chancellor Friedrich Merz’s Christian Democrats lost about 19 percentage points, while turnout surged to 77.8% from 60.3% in 2021.

According to Marion Mühlberger, a senior economist at Deutsche Bank, AfD’s weekend win leaves the party holding 39 seats in the 83-member legislature, three short of an absolute majority. The CDU, Social Democrats, Greens and Left also have a combined 39 seats. 

Mühlberger said there are two possible outcomes of what comes next: an AfD minority government tolerated by BSW, or a political stalemate that leads to a snap election, which would only give AfD a new opportunity to secure outright control.

 Mühlbergere explained:

At the time of writing, the two most likely options are i) an AfD minority government (supported by the BSW) or ii) a stalemate resulting in snap elections, with the AfD hoping to reach an absolute majority rather than attempting a minority government. AfD leadership for now appears undecided on their preference: while national co-leader Chrupalla last night indicated a willingness to try a minority government, AfD’s lead candidate in Saxony-Anhalt, Ulrich Siegmund, already suggested a snap election as his preferred option, saying that “the AfD is not prepared to make far- reaching compromise to form a coalition.”

We believe that even an AfD (minority) government supported by the BSW would have materially detrimental ramifications for the economic prospects of Saxony-Anhalt over the coming years. Direct investment in the state would likely decline amid significant policy uncertainty, and skilled worker shortages would likely become even more pronounced. However, Saxony-Anhalt contributes less than 2% of German GDP, and any structural damage done to the regional economy is unlikely to spill over to the rest of the German economy. While an AfD state government might test some of Germany’s federal institutions, it will have no leverage over national economic or fiscal policy, not even via the constitutional court.

Over the course of today, we will see leaders of the coalition parties in Berlin officially react to their parties’ weak electoral performance. Chancellor Merz is expected to give a press statement today at 13.30 CET. There will likely be considerable political noise over the couple of weeks ahead of the state elections on 20 September in Berlin and Mecklenburg-Vorpommern. There may be some criticism of party leadership and reform proposals. However, once these final state elections of the year are over, we believe that an AfD government in Saxony-Anhalt is likely to provide an additional impetus for the federal government coalition to double down on reforms

Mühlbergere said the five seats held by the populist BSW will be decisive: 

Thus, the populist BSW, with its 5 seats, has a key role to play in the upcoming coalition negotiations as potential kingmakers. While the AfD missed their 45+% / absolute majority election target, they missed it so narrowly that it seems difficult for them to not aim for governing Saxony-Anhalt

The BSW is the potential kingmaker

As no single party reached an absolute majority needed to govern alone, coalition negotiations for entering a formal coalition or receiving ad hoc support for a minority government will kick off today. 

The BSW has theoretically three options once the new parliament has convened and the next state premier is to be elected. First, they could elect the AfD lead candidate as state premier (without entering a formal coalition), second they could elect the CDU lead candidate or third they could abstain in the first two ballots for state premier. 

Judging from statements of BSW co-leaders (at the federal level) Wagenknecht and Ali yesterday night,1 we deem the first option the most likely.

What comes next? There are two options:

Option 1 – BSW abstains in third round facilitating an AfD minority government 

This morning, BSW leader Wagenknecht called for a “political reset” in Saxony- Anhalt, especially when it comes to energy policy, sanctions against Russia (which however are set at the EU level), education, and public broadcasting. Thus, there is a certain overlap of political priorities with the AfD. However, the BSW does not want to enter a formal coalition with the AfD. 

With the AfD rejecting the BSW’s proposal for an independent state premier, an AfD minority government tolerated by the BSW seems to be a possible outcome. This means that the BSW would not enter a formal coalition with the AfD, but elect the AfD lead candidate as state premier in an informal cooperation.

Option 2 – The route to snap elections 

The newly elected parliament must convene for the first time by 6 October at the latest. But the regional constitution does not set a deadline for electing a state premier. Until a new government is elected, Sven Schulze will remain in office leading the caretaker government. 

As government formation could turn out to be complex, snap elections may be a possible way out. The AfD’s lead candidate Siegmund already suggested this as a potential option, saying that the AfD is not prepared to make far-reaching compromise to form a coalition.

There are three routes to snap elections:

  1. If the newly elected parliament does not elect a state premier with an absolute majority after two ballots, it can decide with an absolute majority to dissolve itself before a third ballot. 
  2. Six months after the election, the new parliament can decide with a two- thirds majority to dissolve itself. 
  3. A newly elected state premier could call a vote of confidence. This could be a viable option for an AfD minority government, confident of winning an absolute majority in snap elections.

It is highly uncertain that snap elections would generate clear majorities. What could help the AfD is the narrative that the other parties want to keep them out of power, and that they now need a clear mandate. Moreover, smaller parties would again be at risk of not making the 5% hurdle, which would help the AfD. On the other hand, the strong AfD performance could again mobilise the centrist forces to avoid the AfD winning an absolute majority.

Mühlberger’s assessment was that an AfD majority in Saxony-Anhalt could weaken investment and aggravate skilled-worker shortages. She cited policy uncertainty, the party’s anti-mass migration agenda, and potential conflict with the civil service.

For Merz, the most consequential challenge is containing AfD’s momentum in the upcoming elections in Berlin and Mecklenburg-Vorpommern on Sept. 20.

Polymarket’s “Mecklenburg-Vorpommern Parliamentary Election Winner” market puts AfD’s odds of winning at 82%.

AfD’s odds of winning the Berlin election are much lower, at around 18%.

While Deutsche Bank was considerably less favorable toward AfD, Nomura analyst Andrzej Szczepaniak’s recent report said that markets are less concerned about right-wing populism and more concerned about “populist left-wing parties being elected due to their desire to increase spending.”

Tyler Durden
Mon, 09/07/2026 – 07:45

Oh Look, Yet Another Church Up In Flames…

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Oh Look, Yet Another Church Up In Flames…

Authored by Steve Watson via Modernity News,

Another week, another historic church reduced to smoke, rubble. The former Saint Agnes Church on Martha Avenue in Toledo, Ohio went up early Saturday morning. The 116-year-old landmark’s steeple came down. The roof burned out. Nearby homes were evacuated. Once again the cause is listed as currently unknown.

Toledo Fire & Rescue was called around 6:30 a.m. Saturday after reports of heavy black smoke pouring from the roof of the vacant church in the Five Points neighborhood. Crews arrived to find the building already heavily engulfed.

Officials warned of collapse risk and alerted people in surrounding homes. The steeple later fell. By Saturday afternoon excavators were tearing the ruined structure down.

Saint Agnes opened in 1910. It was among 29 parishes closed or merged by the Roman Catholic Diocese of Toledo in 2005. The parochial school shut the same year. The diocese no longer owns the property. A charter school now occupies the old school building next door and reported only minor smoke, water, and a cracked window.

One neighbor told local television: “About 6:45 we heard fire trucks and I peeked out my window and it literally looked like the whole street was on fire.”

Investigators in Toledo have not named a suspect, a motive, or even a cause. Vacant churches do burn by accident. They also burn because someone wants them gone. The public is asked, week after week, to accept “unknown” as the last word while the buildings keep falling.

In the U.S. hostility against churches has jumped to hundreds of incidents a year – vandalism, arson or fires of uncertain origin, gun incidents, bomb threats.

Churches are not supposed to be disposable scenery. They are the markers of the civilisation that built the towns around them. When those markers keep mysteriously burning to the ground what does that say about our civilisation?

This is now happening every week all over the world.

Historic London Church BURNS To The Ground Amid SILENCE From Government

ANOTHER Historic UK Church TORCHED; Cause “Unknown”

Another Day Another Church BURNED To The Ground

Another TWO Historic Churches Explode Into Flames…

Historic Buffalo Church TORCHED TWICE In Four Days Following Sale To ISLAMIC Group

NYC Historic Church TORCHED in Confirmed Arson — City REJECTS Save Plan As Demolition Ordered

NYC Church BURNS; Cause “Unknown”

Yet Another HISTORIC CHURCH TORCHED In Canada

Yet MORE Churches Torched; Sustained Attack On Christianity Gathers Pace

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden
Mon, 09/07/2026 – 07:20

Labor Day Gas Prices Have Never Been Higher

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Labor Day Gas Prices Have Never Been Higher

American travelers are facing record-high gasoline prices this Labor Day weekend as conflict in the Middle East and disruptions to global fuel supplies keep prices elevated.

The national average for a gallon of regular gasoline stood at about $4.15 on Sept. 5, according to the American Automobile Association (AAA). That is nearly $1 higher than a year ago.

This year’s Labor Day is now the first in history with a national average above $4 per gallon. The previous Labor Day record was $3.82 per gallon, set on Sept. 3, 2012.

Gas prices are displayed at a gas station in the New York City borough of Brooklyn on Sept. 4, 2026. Spencer Platt/Getty Images

As Bill Pan reports for The Epoch Times, GasBuddy analyst Patrick De Haan said he expects the national average to be about $4.03 on Labor Day, well above the previous record.

“Gasoline, while not at all-time records, is at its highest level ever recorded this late in the calendar year,” De Haan said.

Prices vary widely across the country.

AAA said California has the nation’s highest average on Sept. 5 at $5.83 per gallon, followed by Washington at $5.50 and Hawaii at $5.40. Oregon, Alaska, and Nevada are all near or above $4.90.

At the other end, Indiana has the lowest average at $3.43, followed by Texas at $3.67. Oklahoma and Mississippi are just above $3.70.

Air Travel Also Costs More

Drivers are not the only travelers facing elevated costs.

AAA booking data show that domestic round-trip airfare for Labor Day is averaging about $750, up by 2 percent from last year.

Travelers flying to the most popular domestic destinations face a much larger increase. Those fares are nearly 20 percent higher than a year ago, averaging close to $800 for a round trip.

However, international travelers are seeing some relief. Average international airfare is down by 4 percent from a year ago, according to AAA.

Oil, Fuel Supplies Under Pressure

Gasoline demand typically begins to decline near the end of summer as vacations end and schools reopen, putting downward pressure on prices. However, this year, high crude oil costs have outweighed the seasonal drop in demand.

Oil prices moved back above $90 per barrel this week, after renewed exchange of fire between the United States and Iran raised concerns about supplies moving through the Middle East.

The wartime disruptions in the Strait of Hormuz, one of the world’s most important oil shipping routes, have been a major source of uncertainty.

Oil traffic through the waterway has improved from earlier disruptions. U.S. Energy Secretary Chris Wright said 17 million barrels of crude passed through the strait on Aug. 31, the highest daily volume since shipments were disrupted by the war.

But continued fighting and threats to commercial shipping have kept energy markets on edge.

Another source of pressure has come from Russia, where Ukrainian drones target oil refineries deep inside Russian territory. Those strikes have tightened supplies of refined products such as gasoline and diesel.

“While some oil shipments are apparently getting through the Strait of Hormuz, the dominant force propping up both gasoline and diesel prices is increasingly the growing loss of Russian refinery capacity,” De Haan said.

“Until that refining supply picture improves, both gasoline and diesel prices face continued upward pressure.”

Measures to Boost Supply

For the week that ended on Aug. 28, American refineries were running at 98 percent of capacity, according to the Energy Information Administration. That was the highest utilization rate since August 2018.

The federal government has also taken steps to make it easier to move fuel around the country.

President Donald Trump extended a waiver of the Jones Act for another 90 days, through Nov. 15. The waiver allows some foreign-flagged vessels to carry fuel and other covered cargo between U.S. ports when qualified American ships are unavailable.

The Environmental Protection Agency has also relaxed seasonal fuel rules. An emergency waiver effectively ended summer-blend gasoline requirements early, beginning on Sept. 1, allowing more gasoline to enter the market.

Gasoline supplies remain tight. U.S. gasoline inventories fell by 1.2 million barrels last week to 205.7 million barrels. That was about 6 percent below the five-year seasonal average.

Tyler Durden
Mon, 09/07/2026 – 06:45

Cambodia, US Begin Planning For Resumption Of Military Exercises In 2027, Says Cambodian Army

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Cambodia, US Begin Planning For Resumption Of Military Exercises In 2027, Says Cambodian Army

Authored by Victoria Friedman via The Epoch Times,

The Cambodian army announced it would resume joint military exercises with the United States early next year, in a bid to foster stronger relations nearly a decade since the last bilateral drills were held.

U.S. Under Secretary of War for Policy Elbridge Colby speaks as part of a meeting of NATO Ministers of Defense Summit at the NATO headquarters in Brussels on Feb. 12, 2026. John Thys/AFP via Getty Images

The Royal Cambodian Army (RCA) said in a statement on Facebook that it and other officials met with representatives from the U.S. Army Pacific and the Idaho National Guard between Aug. 31 and Sept. 4 to begin planning for Exercise Angkor Sentinel 2027.

The Sept. 4 statement said the meeting was “marking an important step toward the resumption of the bilateral exercise.”

Cambodian officials said both sides had discussed training activities, including a command post exercise, explosives disposal, and medical and engineering exchanges.

“Exercise Angkor Sentinel 2027 is scheduled to take place in February 2027, with the aim of strengthening interoperability and disaster-response capabilities, reflecting renewed momentum in Cambodia-U.S. military cooperation and a shared commitment to strengthening defense cooperation,” the statement said.

The announcement follows several meetings between U.S. and Cambodian officials in an effort to improve relations, after Phnom Penh suspended joint exercises with the U.S. military in 2017.

Cambodia said it canceled the 2017 exercises because its armed forces were needed for local elections and an anti-drug campaign. Some observers, however, saw the move as a sign that then-Prime Minister Hun Sen was distancing Cambodia from the United States, according to a 2018 report by the Congressional Research Service.

Last month, Under Secretary of War for Policy Elbridge Colby met with Cambodia’s prime minister, Hun Manet, as well as the country’s Minister of National Defense Tea Seiha.

Mutually-Beneficial Military Cooperation

Colby said in a series of Aug. 15 X posts that the United States was “building a stronger, practical defense relationship in a spirit of partnership, mutual respect, and pragmatism.”

The U.S. official said he and Seiha discussed Washington’s and Phnom Penh’s shared interest in expanding military cooperation in a way that is pragmatic and mutually beneficial.

“We are ready to work with countries like Cambodia where they are, through a realistic approach that focuses on where our interests overlap,” Colby said. “We want a Southeast Asia of independent, strong, and economically prospering nations.”

At the time, Manet said he was satisfied with the “positive momentum” in U.S.-Cambodian relations, as well as with the progress in preparing for Exercise Angkor Sentinel.

The Cambodian prime minister said that “the joint exercises and training not only build military capability but also serve as a vital bridge to foster close friendship between the armed forces of both countries.”

Washington has previously been concerned over China’s military presence at a Cambodian naval base on the Gulf of Thailand. China has assisted in upgrading the base, and the United States has voiced its suspicions that Beijing was granted special but secret privileges there. Cambodian officials have repeatedly rejected that claim.

US Seeks ‘Partners Not Protectorates’

Colby said on Aug. 10 that the United States was not disengaging from its Asian partners but wanted those partners to be more proactive in their own defense.

“America is definitely not disengaging from Asia,” Colby said in a speech in Manila, the Philippines. “We are not leaving; in fact, we are digging in, to ensure a favorable balance of power where it matters most.”

The Pentagon official made the remarks while on a broader tour of Asia, that included the Philippines, Thailand, Cambodia, and Indonesia.

Colby, the third-ranking official in the Department of War, said that when the United States asks for allies “to step up, to invest more in their own defense, and to take responsibility for their own sovereign security, we are not signaling abandonment.”

“We are looking for partners, not protectorates,” he said.

“When our partners are strong, deterrence is strong.”

The Associated Press and Reuters contributed to this report.

Tyler Durden
Mon, 09/07/2026 – 06:10

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