Authored by Jonathan Turley via Jonathan Turley,

“This is my place of business.”

Those words from Jim Sheehan, owner of the Wydaho Roasters coffee shop in Driggs, Idaho, have sparked the latest controversy over the right of businesses to refuse service on the basis of religious or political views.

Sheehan has drawn national attention after throwing out a group of pro-life teenagers, calling them the equivalent of a Ku Klux Klan meeting in his shop. Sheehan clearly caters to those who want their lattes with an added shot of rage.

However, this and a number of other cases have exposed the hypocrisy of many regarding the service businesses must provide customers with opposing views. From cakes to coffee, shops remain ground zero for an age of rage.

Years ago, politicians and pundits rallied around the effort to force Jack Phillips, a cakeshop owner, to create cakes celebrating same-sex marriages. Phillips objected that it violated his religious beliefs. The case went all the way to the Supreme Court in what many of us hoped would be a final resolution of this conflict.

I had long criticized the framing of the case (and other similar cases) under the religious clauses rather than treating it as a simple matter of free speech. In the end, the Supreme Court punted in a frustrating 2018 decision.

In 2023, however, the Supreme Court delivered a major victory for free speech in 303 Creative v. Elenis. It ruled that Lorie Smith, a Christian website designer, could refuse to provide services for a same-sex marriage. Justice Neil Gorsuch wrote that “the framers designed the Free Speech Clause of the First Amendment to protect the ‘freedom to think as you will and to speak as you think.’ … They did so because they saw the freedom of speech ‘both as an end and as a means.'”

But notably, in cases like Masterpiece Cakeshop, Phillips insisted that he would always sell cakes to any couple, including same-sex couples. He only refused to make cakes specifically celebrating same-sex marriages, due to his religious views.

The case of Wydaho is different. Sheehan refused the same general accommodation offered to all customers because he opposes pro-life causes. In the confrontation, Sheehan declared that “in my world” pro-lifers are no different from the Ku Klux Klan.

“This is my place of business,” he declared. “I did a lot of work to get people on the ballot so women would have the right to choose in the state of Idaho, and this is something I do not support, nor does my wife, and it’s our business. So we have that choice.”

In my view, they do have that choice. Yet it must also be acknowledged what Sheehan is doing is far more extreme than what Phillips did in Masterpiece Cakeshop. He is not being asked to create a coffee concoction opposing abortion, like a Cafe Au Life specialty drink. He acknowledges that other groups might use the shop – he just does not want these teenagers to use it to support pro-life causes.

The same controversy arose the same week across the country in Virginia. In Alexandria, Fatana Karimi, owner of the Karimi Salon, threw out a woman after she revealed that she was Israeli. Jessica Walton posted an account of the encounter, and a video was later posted on social media.

In the video, the person identified as Karimi says that she declared on Instagram that she would not serve those who support Israel. (She also adds that she got Walton to sign a release for the video.)

The Virginia Human Rights Act states that businesses cannot engage in “unlawful discrimination in employment because of race, color, religion, ethnic or national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, sexual orientation, gender identity, disability, or military status.” Karimi will likely argue she refused service not due to Walton’s religion or national origin, but due to her support for Israel – a political position.

The case is reminiscent of the abusive treatment afforded to Harvard Law Professor Alan Dershowitz at Martha’s Vineyard by a pierogi stand. He was also refused service over his political views.

The line between national origin and religious discrimination versus political discrimination can be tenuous and unclear. However, in the video, the owner states that it is her national identity that is causing the action: “Get out of my shop. I can’t provide service to an Israeli. It’s against my political beliefs. You need to leave immediately.”

Back in Idaho, Sheehan’s bizarre analogy to the KKK outraged many, to the point that he later apologized for it. However, it is fascinating that liberals are now celebrating the right to exclude others for political or religious reasons, even when they are not asked to engage in any expressive act or make any creative product that contravenes their beliefs.

If that is now the case, many owe individuals such as Phillips an apology for years of costly lawsuits, even after the Supreme Court gave him his first nominal victory.

Sheehan could be prosecuted if he were refusing general service or accommodations to the teenagers due to their race or religion. But he is refusing service on the basis of his own political views. Wydaho Roasters does not appear to want business from people who are pro-life, of whom there might be quite a few in Idaho. Karimi appears not to want either Israeli or possibly Jewish customers. It is a curious business plan to exclude such a large segment of the market, but some owners are sure to put their political views before their profits.

However, those on the left cannot have it both ways. They cannot reject the free speech rights of some owners to decline service while celebrating others’ refusal to do the same thing. None of this is likely to make society any more civil. No one wants a black eye to go with the red-eye espresso.

Of course, recognizing the free speech rights of an unhinged coffee shop owner does not require patronizing his establishment. Sheehan clearly does not want to serve pro-life citizens, and I expect the feeling is mutual.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.” He is a member of the USA Today Board of Contributors.

By Michael Every of Rabobank

US Treasury Secretary Bessent took out a tactical nuke in saying he could use $1trn from the Treasury General Account to fund Special Military Operation Twist bond buybacks vs. the $2bn per round increase we saw last week. That looks a lot like the ‘Whatever It Takes’ mentioned yesterday: his former mentor Stan Druckenmiller is not a fan, apparently.

He also launched ‘Operation Economic Outcast’ to isolate and squeeze Iran further on top of US sanctions and a blockade against its oil. Those helping Iran will face secondary sanctions escalating to their removal from the US dollar system, as nuclear a weapon as financial warfare can wield. However, when asked why he didn’t impose them immediately, Bessent replied, “Why would I want to blow up the global financial system?” He will first try to persuade key parties to walk away from Iran: yet some have real nuclear weapons and others control rare earths and global supply chains. The stakes here are therefore sky high, unless this is a bluff.

Tehran said it would retaliate to sanctions by land, sea, air, or cyber-attacks; trolled it might kill Barron Trump, as Israeli PM Netanyahu claimed it had threatened one his sons too; continued to threaten ships transiting Hormuz; the Houthis struck a Saudi tanker in the Red Sea, which neither Egypt nor Turkey responded to; the Saudis held talks about a state-backed war insurance plan for shipping like the US one that didn’t work; China sent PLA jets to drill alongside Egypt’s; China reported it has boosted coal’s economic value by 700% after turning it to liquids, underlining it’s much more energy secure than before; a US defence start-up is making thousands of drone interceptors in the UAE for $5,000, cheaper than Iranian attack drones; and Greece warned Turkey against violating its “sovereign rights” and vowed to respond from a “position of strength.”

In Ukraine, EU leaders, and no US representative, offered help to Kyiv as it faces another €23n defense funding hole, albeit managing to hit Russia’s Afipsky oil refinery as well as another e-commerce giant. Russia threatened to hit UK factories making defence parts for Ukraine.

Trump may impose a 7.5% ‘overcapacity’ tariff on China ahead of the Xi state visit, clearly a negotiating card. He will also raise the tariff on Canadian autos and trucks from 25% to 50% from 1 January in response to PM Carney’s ‘elbows up’. Ottawa now faces the choice of matching those tariffs, retreating, or doing what those who oppose tariffs as self-harm never do: slash their levies and enjoy cheap imports replacing local production. Alberta Premier Smith, where a vote on a secession referendum looms in October, had to stress it’s “not viable” to cut off energy exports to the US; and with warnings US-Canada trade war could affect their defence relationship, Carney said he will begin negotiations with the EU about deepening trade and defence relations.

That makes political but not geostrategic sense. Canada isn’t in Europe so can’t join the EU, but if it were to enter a customs union it would surrender sovereignty: and would Europe buy Canadian cars, trucks, planes, agri products, or its fossil fuels given plans to decarbonise? They’d like its critical minerals, but can buy them now. Canada would be sending its goods to a bloc far away over seas neither it nor the EU have the navies to protect, as both are defense under-spenders relative to their huge needs. Both rely on the US for defense and, increasingly, for AI. Yet both assume a benign US stance if they push ahead without it, strategically, even while saying they are doing so because they don’t see the US as benign. That logical inconsistency implies either the strategy is hollow, or will need filling with a greater shift to economic statecraft replete with risks.

Equally, some may picture a ‘blue’ bloc from Canada to Armenia as Yerevan said it will hold a referendum on EU membership soon, shifting the bloc further east and Russia-EU tensions higher. UK PM Burnham also made more mandate-free noises about rejoining in the future. 

Yet Politico underlines the German AfD — cosy with the Kremlin and wishing to leave the euro and Schengen — will win the 6 September state election in Saxony-Anhalt. The plan to deal with that ranges from ignoring to defunding Saxony to banning the AfD: are those a basis for long-term political stability? In early 2027, France then has a presidential election that could pit nationalist Le Pen vs. leftist Melenchon: both want to tear norms up, the latter to tear French debt up too. What’s the correct interest rate or FTA for these kinds of structural problems?

The new Rhine Group think tank led by Draghi states that for the EU, “The stakes are existential.” It underlines, “Europe is in a harder place than when the future of European competitiveness report was released… If stagnation continues, the continent will progressively lose the ability to fund the core obligations of a modern state: defence, public healthcare, pensions, education, climate investments, and safety nets for those who lose their jobs… Decline is not inevitable, but it is the direction we are heading unless we take urgent action.” The warning that “slow agony” lay ahead without radical, rapid EU change failed to produce anything much: will this report do the trick?

Meanwhile, showing how the world now works, the US(!) is opening up Venezuela’s telecom sector while excluding Chinese firms, as Fortune magazine floats the idea of the country adopting the US dollar.

In the US, the Supreme Court issued a ruling with potentially huge consequences. It has allowed, for now, a Trump executive order to proceed which strictly monitors mail-in voting and requires tighter control of who is listed as a voter and the envelopes used to do, at a time when the president has quietly asserted control over the postal service, according to the New York Times. Those making market, or geostrategic, gambles on midterm outcomes assuming that the magical mystery tour of mail-in votes will be cast in the same way they have may be in for a surprise – or so Republicans seem to feel. 

The Trump admin also proposed a staggering $103,000 fee for H-1B visas, effectively shutting off that avenue for all but the highest-earning immigrants, and is preparing to revoke the visas of up to 200K foreigners in largest mass action ever. That looks like a midterm-focused policy.

In short, there is a lot of economic outcasting going on right now. It’s just not clear who is going to be in and who is going to be out, and with whom, when the dust settles – and we can expect serious dustups in that process.

None of that mattered to the RBA’s majorly monomaniacal meeting minutes, which showed that it left rates on hold on the view that inflation was easing and so was the tight labour market. All of the above backdrop was cast out of that forecast, as is the case with other central banks. To be fair, how does one include it? To be just as fair, how can one exclude it? Maybe Warsh will have something to say on not saying anything about that on Friday.  

President Donald Trump drew fresh attention to a long-running controversy on Sunday when he reposted a Just the News article on Truth Social headlined “ICE refuses to disclose records on Ilhan Omar fraud probe, cites ongoing ‘enforcement proceedings.'” His decision to amplify the report, without comment, renewed scrutiny of allegations that have dogged Rep. Ilhan Omar (D-Minn.) for years – though ICE’s response stops short of confirming she is personally the target of any active proceeding.

The Trump administration has said for months it possesses evidence that Omar committed immigration fraud. What has remained unclear is whether that evidence translates into an indictment, a denaturalization proceeding, or nothing at all.

Just the News filed a Freedom of Information Act request in January 2026 for records related to Omar’s marriage to Ahmed Nur Said Elmi, a man whose identity, evidence suggests, is that of her brother. ICE’s response cited a specific legal exemption rather than denying or providing a timeline. “ICE has determined that the information you requested is being withheld in full pursuant to Title 5 U.S.C. § 552(b)(7)(A),” the agency wrote. “Disclosure of any responsive records at this time could reasonably be expected to interfere with enforcement proceedings.”

Department of Justice guidance requires a two-step showing before an agency can invoke it. “First, there must be a ‘reasonable likelihood’ of a pending or contemplated law enforcement proceeding,” the guidance states. “Second, release of the information must be reasonably expected to cause some articulable harm to that proceeding.” ICE cleared both hurdles by its own estimation; whether that estimation holds up matters more now that the president has amplified it himself.

While no court has established as fact that Ahmed Nur Said Elmi is Omar’s brother, the most detailed public claim comes from the government of Somaliland. This territory, which split from Somalia in 1991, claimed back in March that Omar’s original last name was Elmi before it was changed, and that this evidence “was available, but the Obama Justice Department refused to investigate.”

The allegations that Omar married her brother first surfaced during Omar’s 2016 campaign for a seat in the Minnesota House, alongside a separate claim that she remained legally married to her first husband when she married Elmi.

Omar was born in Somalia and lived in a refugee camp in Kenya before coming to the United States in 1995. She applied for a marriage license with Ahmed Hirsi in 2002 but never married him civilly, only through a Muslim ceremony. The two separated in 2008. Omar married Elmi the following year, then split from him in 2011 through another Muslim divorce. She resumed her relationship with Hirsi in 2012, a year before she won her seat in the Minnesota House. Omar did not file for a formal divorce from Elmi until 2017, and she married Hirsi civilly in 2018, sixteen years after they first applied for that license.

Omar’s campaign denied both allegations against her. “Allegations that she married her brother and is legally married to two people are categorically ridiculous and false,” said then-campaign spokesman Ben Goldfarb.

Following its unexpected rebound in May (from three months of declines), US home prices in America’s 20 largest cities were expected to rise again (+0.1% MOM) in June (according to the latest data from S&P Cotality Case-Shiller).

Instead prices actually accelerated more, up a sizable 0.24% MoM, pulling home prices up 2.1% YoY – the fastest acceleration in a year…

“Seasonal factors continue to support monthly price growth,” said Rebecca Kaufman, Associate Director of Commodities at S&P Dow Jones Indices.

“Because June typically falls near the peak of the homebuying season, price appreciation often moderates and market activity cools in the months ahead.”

For the fourth consecutive month, Chicago led all metros with a 6.9% annual increase in June, followed by New York (4.8%) and Cleveland (4.1%).

Meanwhile, Seattle recorded the largest annual decline at 2.0%, followed by Las Vegas (-1.9%) and Denver (-1.2%).

“This geographic divide reflects a years-long trend, with housing markets in the Northeast and Midwest regaining strength while many Western and Sunbelt markets soften,” says Kaufman.

Prices remain oddly coupled with Fed Reserves, implying stability, rather than acceleration, from here…

“The housing market remains under pressure, with 30-year mortgage rates holding near 6.5% in June,” Kaufman concluded.

“As financing costs are kept high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in prior years.”

There continue to be clear signals that the White House is moving away from the potential for renewed military action and instead settling in for a long economic siege campaign targeting Iran, on a permanent basis.

The avoidance of more bombs away and with all the risks and uncertainty of a military ‘solution’ has seen oil prices drop. Energy prices are weakening also amid positive signals from Pakistan’s army chief Field Marshal Asim Munir, who just left Tehran after carrying a fresh US-drafted framework. Crude oil prices (WTI) dropped 3% to just below $82.50 a barrel on Tuesday, extending the 2.4% decline recorded in the previous session.

Al-Arabiya is reporting that he presented an offer to lift sanctions under the MOU, so long as Iran reopened the Strait of Hormuz and halts all hostile actions against Gulf states.

Munir had spoken to Trump by phone before travelling to Tehran, which underscores the high-level nature of the reported offer. Other top Pakistani officials accompanied him:

Pakistan and Iran made “significant progress” in talks that focused on the US-Israeli war on Iran and a path to peace, Pakistan’s interior minister said on Tuesday, at the end of a visit to Tehran.

Pakistan’s Interior Minister Mohsin Naqvi subsequently stated on X, “The Iranian President candidly shared his government’s perspective and we had a very constructive exchange on the issues involved.”

While it’s unclear what Tehran’s response will be, the last days have not seen new Iranian attacks on shipping in the Hormuz Strait. 

Still, Tehran is proclaiming that Washington’s shift is a result of military defeat. On Tuesday Al Jazeera is citing IRGC spokesman Sardar Mohebi, who says the Trump administration’s intensified economic campaign against Iran is proof that the US has failed on the battlefield.

He calls the move toward Operation Economic Outcast a “tacit admission” of America’s military defeat in the region. As evidence for this the Iranians are pointing to US media admissions that pretty much all of the Pentagon’s Gulf outposts have suffered damage or serious destruction, and US forces have pulled back. Even bases in Jordan have been hammered in what some analysts have called a successful campaign of ‘debasification’.

But in another sign that Washington is moving away from a war-footing and instead opting for a long economic campaign, it is said to be readying the return of diplomats to the region. Another result of the fierce Iranian retaliation amid Operation Epic Fury had been the closure of US embassies and consulates across the region – which in some cases may have even been targeted.

“The State Department is preparing to send U.S. diplomats back to embassies in the Middle East that were evacuated before and during the war with Iran, suggesting that the Trump administration does not anticipate a return to all-out hostilities,” the NY Times reports Tuesday.

“The return of foreign service officers and the scaling back of emergency measures taken at U.S. missions in the Middle East could begin this week, according to an internal State Department document obtained by The Times,” the publication continues.

In Bessent’s secondary sanctions rollout presser on Monday, he slipped up the below off-the-cuff moment when he called on a random journalist, who asked an excellent question:

Reporter: You described this as an economic D-Day, but D-Day wasn’t a threat of an invasion and the US didn’t give a timeline to Germany. So why not impose the sanctions today?

Bessent: Why would I want to blow up the global financial system? pic.twitter.com/WRt4onNuIM

— Acyn (@Acyn) August 24, 2026

Of course, nothing is yet certain and the situation remains very fluid, with the Iranians having previously demonstrated willingness to assert new leverage through attacks. According to details in the NY Times:

The restaffing is set to proceed even though talks between the United States and Iran have floundered, leaving the Trump administration to threaten new economic sanctions.

Embassies slated to restore higher levels of staffing include those in Israel, Lebanon, Saudi Arabia, Qatar, Jordan, Oman, Iraq and Kuwait, the document says.

The State Department issued a statement saying it “continuously reviews the security posture at our diplomatic missions around the world. Based on our latest assessment, we are adjusting our staffing posture at certain posts in the Middle East to ensure we can continue advancing U.S. foreign policy objectives while protecting the safety and security of our personnel.”

But at this moment, embassies across the Gulf as well as Jordan remain shuttered, with most diplomatic personnel having been removed to other State Department posts.

In order to “win” a trade war, a country must first have something that other countries want or need.  This basic rule defines every other aspect of the conflict, from tariffs to monetary isolation.  When it comes to the US there has long been a misconception that Americans “feed off global labor” and that the dollar’s world reserve status is the country’s only point of leverage. 

This is not really the whole story. 

Reserve status is helpful, but another thing the US has that most countries do not is (greater) free market access, which generates economic momentum.  In other words, even in blue states like California, the US does business more freely and has less socialist regulation than the vast majority of the world and this is why foreign exporters see America as a golden market for their goods.

It’s a bit ironic, but, there are many countries that could, over time, match or surpass the US as a coveted consumer market; “winning” a trade war by becoming more independent and successful.  However, none of them will do it because this would mean giving more freedom to their citizens to purchase what they like and operate businesses without constant bureaucratic constraints.

This is why socialism and communism will always lose in an economic war with a country that has free markets.  They cannot compete because they restrict their own population’s ability to compete.  Without a healthy consumer market the only thing these nations can do is produce and export to more free economies willing to buy. 

“We need to fight these tariffs dollar to dollar” -Doug Ford

“As Donald trump is trying to inflict pain on every Canadian, that we inflict pain right back” -Also Doug Ford@fordnation a question which you seem to have not contemplated:

What happens when you fight “dollar to… pic.twitter.com/5gD4O8HjiW

— Viva Frei (@thevivafrei) August 24, 2026

Tariffs might be viewed as an anathema to this free market flow.  They are, after all, a tax on corporations importing foreign goods.  This assumes that corporate sourcing can’t adapt.  This has proven false as Trump’s tariffs have not led to the inflationary spike that many critics predicted.  Tariffs have only added around 0.5% to the CPI and companies are gradually shifting to domestic suppliers.    

America is unique because for decades the country has been treated as an “open air market” by foreigners, and America has obliged them.  Tariffs against US made goods are common; US tariffs against foreign goods? No so much.

It’s quite revealing that the very moment the Trump Administration took action to enforce even moderate protections on US trade, every other government jumped directly to accusing Trump of “attacking them” and “declaring war”.  The double standard is obvious:  Everyone else can use tariffs, the US can’t. 

Canada, for example, has used tariffs on goods from almost every other country in the world for many years, including some US goods.  No one accuses Canada of “waging war” on the world, because no one is clamoring to get access to Canada’s consumer markets.  America, on the other hand, is supposed to play the role of the cash cow. 

To do otherwise is an egregious crime against the world order.

The US has many financial problems and pitfalls, yes, but this doesn’t change the fact that most of the planet relies on the US as a place to sell their stuff.  In fact, America makes up over 30% of total global consumer markets.  China and all of the EU combined cannot match that kind of allure for exporters.  They can’t even afford to buy their own goods and trinkets at a level that would sustain them.  Like it or not, without US consumers the global economy falters.     

The escalating rhetoric from Canada is a perfect example of a socialist nation wrongly believing they have leverage in a fight against a larger opponent.  Canadian officials assert that they have trade weapons that can harm the US, but is this really true?  Let’s take a look at come of the threats made by Canadian leaders.

Canada Can Shut Off Electricity Exports To The US?

In his blustering speeches on the fight with the US, Canadian Prime Minister Mark Carney argued that Canada supplies over 85% of US electricity imports (largely to the Eastern Seaboard).  Other officials such as Ontario Premier Doug Ford and Quebec Premier Christine Fréchette have openly called for these power supplies to be cut off in order to “punish” the US for tariffs.  

Doug Ford threatens to cut off electricity to the United States.

Elbows up, motherfuckers! pic.twitter.com/Q044kXX6cR

— Mark Slapinski (@mark_slapinski) August 25, 2026

What they don’t mention is that Canada’s electricity makes up less than 1% of all US power.  In other words, this is empty posturing.  They are relying on the stupidity and lack of research of average social media posters to repeat such fallacies in the hopes of frightening American voters.

The tactic is similar to what the Iranians have been doing – Playing on social media hype while omitting the dire realities of their ground game. 

Canada Can Shut Off Oil Exports To The US?

The US is the world’s largest oil producer and is a net exporter.  Strictly speaking, the US does not need any Canadian oil in order to function.  On the other hand, the Great White North does supply around 60% of all foreign oil going to the US.  Wouldn’t the loss of this oil cause some kind of damage to the American economy?

PM Mark Carney says Canada fuels U.S. growth, supplying 99% of its natural gas imports, 85% of electricity imports, and 60% of crude oil imports.

“I don’t think they want us to stop sending any of that energy.”

Follow: @dimosnews pic.twitter.com/p9mHLImtep

— Dimos News (@dimosnews) August 23, 2026

Possibly, but Canadians calling for this measure might not understand how their own oil infrastructure works.  Around 70% of Canada’s oil supply travels out of Alberta using pipelines that cross into US territory (the Enbridge Pipelines).  These pipelines go through the US east to Ontario. 

This goes for natural gas as well, which Canada also transports using pipelines that travel through the US. Shutting down energy flows to the US would mean shutting down energy flows to the largest population centers in Canada.  Not very smart.

The Loss Of Canadian Goods Would Be Detrimental To The US? 

Besides oil, what does the US actually buy from Canada?  Well, a lot of cars and car parts, machinery, engines, metals and lumber.  Most of these goods used to be produced in the US until outsourcing to foreign countries killed US manufacturing, mining and logging.  Meaning, the US took a massive jobs hit by opening up its markets to countries like Canada.  Canada wasn’t necessarily doing the US a favor.

Canada’s advantage over all other countries except perhaps Mexico is that they are the most convenient source for these goods; that does not mean they are not the only source.  They are replaceable.  Scaling to adapt to the loss of Canadian auto parts, for example, would be frustrating due to extensive integration, but it can be done within 1-2 years. 

In the meantime, what do Canadian leaders think is going to happen to all the manufacturers in their country who are suddenly cut off from American markets?  They’re going to leave, and they will likely move their operations to the US to avoid the 50% tariffs. 

At bottom, Mark Carney’s decision to walk away from the US trade deal which reduced tariffs to a reasonable level is going to prove disastrous because Canada has nothing that the US needs, and the US has something Canada needs very much (the largest consumer market in the world right next door). 

The economic advantages Canada has enjoyed simply through proximity to the US cannot be denied.  It seems foolish for Carney to scrap a deal with limited tariffs in favor of a 50% sledgehammer.  It appears as if he believes Canada is entitled to limitless US access, as if Canada is another American state. 

But let’s say that the socialists get everything they think they want, including the eventual downfall of the US economy.  Let’s say they find some way, some Achilles Heal, that brings the US down.  Canada and most of the world would only suffer further with the loss of 30% of global consumption.  It would not be the grand victory they imagine.  Instead of simply accepting moderate tariffs, they would rather blow themselves up.                          

Global stocks rose as chipmakers rebounded, with falling bond yields adding support to risek sentiment after Brent crude slid below $90 a barrel, down more than 3% after a New York times reports that “evacuated foreign service officers could begin heading back to their posts as early as this week… suggesting Washington does not anticipate a renewal of full-scale conflict with Iran.” Oil is also lower on positive signals from Pakistan’s army chief, and Al-Arabiya reporting that he carried an offer to lift sanctions under the MOU. As of 8:00am ET, S&P 500 futures climbed 0.4%, while those for the Nasdaq 100 advanced 0.9% and leading the charge in a reversal of yesterday’s cash performance. In premarket trading, semis lead with Memory, Mag7, Software, and Low/Unprofitable Tech all higher too. This is occurring with bond yields down 1-2bp. Nvidia was poised to break its longest losing streak since 2022. Semis are up 2% and Memory +3.5%, reversing all of yesterday’s drop. NVDA is also leading Mag7 higher with 5 / 7 higher ex-AAPL, MSFT. The AI theme is boosting other sectors as Cyclicals ex-Energy lead Defensives. Monday saw the second-lowest tape volume of the year despite the update from Bessent and renewed noise around debasement trades. Gold snapped a four-day run of gains, while the dollar held steady. The yield on 10-year Treasuries declined four basis points. In a WSJ Op-ed, Stan Druckenmiller gives his view on the likelihood that Bessent – his former junior trader at Soros – is making with intervention. In commodities all 3 complexes are lower with Base Metals the bright spot; gold is outperforming broader Precious on the move lower. Today’s macro data focus is on Housing Data, regional Fed activity indicators, weekly ADP, and Consumer Confidence.

In premarket trading, Mag 7 names are mostly higher: Nvidia climbs 0.9%, with the chipmaker set to snap its seven-session losing streak as Wall Street awaits the company’s quarterly update due Wednesday. Meta Platforms +0.9%, Tesla +0.5%, Amazon +0.4%, Alphabet +0.4%, Apple -0.1%, Microsoft -0.2%.

• Alibaba ADRs (BABA) rise 0.5% after the South China Morning Post reported that the company’s founder Jack Ma bought more than $76.5 million worth of the company’s Hong Kong-listed shares, citing people familiar with the matter.
• Artificial intelligence-linked stocks are rising and on track to end days of share price declines. Micron (MU) climbs 2%, Seagate (STX) gains +2%.
• Dick’s Sporting Goods (DKS) falls 12% after lowering its full-year outlook amid weakness at its recently acquired Foot Locker unit, overshadowing sales gains during the World Cup.
• Dynatrace (DT) climbs 3% after Morgan Stanley upgraded the infrastructure software company to overweight, citing faster growth prospects.
• Kura Oncology (KURA) rises 9% after CEO Troy Wilson reported buying $1.24 million of shares in the company.
• Navitas Semiconductor (NVTS) gains 5% after the company announced a deal to acquire Claros Inc.

In other corporate news, investment bankers and would-be buyers have been eyeing potential assets that might be for sale with Paramount Skydance’s legal fight to buy Warner Bros. Discovery dragging on. In other assets, private equity managers using structured equity deals to placate investors frustrated by a lack of cash returns. Bitcoin climbed above $80,000 for the first time since mid-May, back in favor amid dollar debasement chatter.

Brent oil fell to the lowest level in a week after the New York Times reported the US is preparing to send diplomats back to embassies in the Middle East, suggesting Washington doesn’t anticipate a renewal of a full-scale conflict with Iran (expect this latest burst of geopolitical optimism to be reversed shortly). 

Technology shares remained in the spotlight, with chip stocks firming in the run-up to earnings from Nvidia, which has for years been a bellwether for the artificial-intelligence trade. More recently, it has also become involved in orchestrating funding for projects across the technology’s ecosystem.

“Nvidia needs to give investors a reason to raise forward numbers,” said Amanda Lyons at Energy Group Capital. “The fundamental debate has shifted from whether AI demand exists to whether the extraordinary infrastructure buildout can continue generating sufficient economic returns.”  

Traders are also looking out for the US Treasury’s next moves, with long-dated yields still trading near multi-decade highs. A slate of economic data and a key speech by Federal Reserve Chair Kevin Warsh at the end of the week will further shape the direction of bonds and expectations for interest rates. Warsh’s first major speech as Fed chief will be a trial of his pared-back communications style. His challenge is to address criticism that he hasn’t been forthcoming about his views on the economy without compromising his resolve not to spoon-feed traders clues about future policy moves.

Investors are awaiting key events “that could define the direction of markets heading into September,” said Laura Cooper, global investment strategist at Nuveen. “From clarity on the Fed’s reaction function and the potential need for a September hike to whether AI earnings can revive tech enthusiasm, there is plenty for investors to digest.”

Tied to the sudden burst of dollar debasement, bitcoin briefly surged past $80,000 before paring its advance. The cryptocurrency is benefiting from a return of optimism to the sector after Treasury Secretary Scott Bessent’s intervention in the bond market last week fueled demand for dollar alternatives.

Stanley Druckenmiller, the billionaire investor who mentored Bessent in his early career as a hedge fund trader, suggested his former pupil was making a mistake by wading into the bond market. “Governments defending prices against fundamentals always lose,” Druckenmiller wrote in a Wall Street Journal opinion column.

In politics,  the US is set to impose a 7.5% tariff on Chinese goods over allegations of excess manufacturing capacity before a planned summit between Xi Jinping and Donald Trump. Meanwhile, Bessent’s Iran threat hinges on the willingness of the US to escalate tensions with China, which buys around 90% of Iran’s oil. 

The consumer confidence reading is in focus later in the session, following alarming signs from bellwether Walmart last week and with retail gas prices elevated — unleaded remains above $4/gallon, while diesel is approaching recent highs. Consumers likely lost some confidence in August amid renewed concerns about the labor market and inflation, while elevated long-term yields will weigh on confidence for the foreseeable future, notes Bloomberg Economics.

Zoom Communications and Intuit kick off a busy week for software earnings tonight, with the broader sector the best-performing group in the S&P 500 Index over the past month. In contrast, Nvidia heads into numbers on Wednesday with the stock currently on the longest losing streak since Sept. 2022.

The mood music in Europe is also upbeat with the Stoxx 600 up 0.5% alongside a 3.1% pullback in Brent crude.

In FX, the greenback has failed to hold onto an initial gain with the Bloomberg Dollar Spot Index now slightly lower with pound the marginal G10 outperformer.

In rates, softer crude has dragged global borrowing costs lower with US yields down 1-3bp, inside last week’s ranges; 10-year near 4.66% is 3bp lower on the day with UK and German counterparts similarly richer. 

Treasuries hold modest gains, trading just off session highs as US trading gets under way, as oil benchmarks extend retreat from last week’s monthly highs.  Treasury auction cycle begins with 2-year notes, following a raft of second-tier US economic data. Key events later this week include July personal income and spending data including PCE price indexes and Federal Reserve Chairman Kevin Warsh’s speech at the Jackson Hole Symposium. $69 billion 2-year note auction at 1 p.m. New York time has WI yield near 4.23%; last month’s 2-year sale drew 4.315%, the highest result since December 2024; $70 billion 5-year and $44 billion 7-year note auctions follow over next two days. IG credit new-issue calendar is anticipated to be light through month-end; Sumitomo Mitsui Trust was Monday’s only issuer with a $2.25 billion three-part offering

In commodities, energy prices are weaker in the wake of the US ramping up economic pressure on Iran, positive signals from Pakistan’s army chief, and Al-Arabiya reporting that he carried an offer to lift sanctions under the MOU. WTI crude oil futures are down about 3% amid assessment of latest US measures against Iran. Spot gold printed a fresh multi-month peak before fading upside, now lower by 0.4%. Bitcoin is up 1.3% but back below the $80k mark. 

US economic data calendar includes ADP weekly employment change (8:15 a.m.), August Philadelphia Fed non-manufacturing activity (8:30 a.m.), June FHFA house price index and S&P Cotality home price index (9 a.m.), August Richmond Fed manufacturing index and Conference Board consumer confidence and July new home sales (10 a.m.). Fed speaker slate includes only Richmond Fed’s Tom Barkin repeating Aug. 13 comments at 8 a.m. and 4 p.m.; Barkin, the only Fed speaker with scheduled appearances ahead of Warsh’s address at the Jackson Hole Symposium Friday, also is set to make unscripted comments in a panel discussion Wednesday

Market Snapshot

Top Overnight News

• Treasury Secretary Scott Bessent’s threat to unleash an economic assault against Iran risks setting the US on a collision course with China, its main trading partner: BBG
• Iran vows to resist widened US sanctions, says Washington seeks talks: RTRS
• U.S. Squeezes Iran but Avoids Targeting Its Biggest Lifeline: China: WSJ
• Stanley Druckenmiller, the billionaire investor who mentored US Treasury Secretary Scott Bessent in his early career as a hedge fund trader, suggested his former pupil is making a mistake by wading into the bond market: WSJ
• Oil extended Monday’s drop as a US plan to ramp up economic pressure on Iran so far spared the country’s trading partners from harsher measures for now: BBG
• The debasement narrative is back, and has propelled Bitcoin to a three-month high. The crypto rally isn’t just about a weaker dollar and fiscal concerns, however, and the key level that could prove that is $83,000: BBG
• Trump’s approval holds at record low as US support for Iran war falls: RTRS
• The AI-debt deluge is getting so extreme in most major global credit markets that a global borrower is turning to far-flung New Zealand to try to escape it, in its first overseas issuance there in almost a decade: BBG
• New installations emerge on islet as China accelerates South China Sea build-up: RTRS
• Global stocks rose as chipmakers rebounded, while Bitcoin briefly topped $80,000 and oil extended declines.
• US Supreme Court sides with President Trump for now regarding his mail-in ballots curbs. US Supreme Court lifted a judicial decision that blocked in 23 states and Washington DC, President Trump’s order restricting mail-in ballots.
• US is preparing to rescind up to 200,000 business and tourism visas in largest mass visa revocation ever, reported AP citing officials.
• Oura and Dunkin’ Get Ready to Join IPO Bonanza: WSJ
• Lutnick’s Intervention in Canada Talks Draws Praise, Blame: BBG
• Trump administration moves to impose more than $100,000 fee for H-1B worker visas: RTRS
• Goldman Sachs revises its timeline for the next Bank of Japan interest-rate hike to September from January 2027, according to a note by economists including Tomohiro Ota and Yuriko Tanaka.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed following the subdued lead from Wall Street, where most major indices declined amid tech weakness and headwinds from Economic D-Day sanctions on Iran and the US-Canada trade war. ASX 200 traded higher amid strength in the domestic tech, healthcare and financial sectors, while participants digested a plethora of earnings and somewhat balanced RBA August Meeting Minutes. Nikkei 225 saw two-way price action and gradually clawed back initial losses to move into the green, with recent reports noting that Japan is considering exempting gains from non-core business sales from corporate tax if companies reinvest the proceeds in acquisitions. KOSPI underperformed amid recent tech headwinds and with SK Hynix shares also pressured after union members narrowly rejected the tentative wage agreement through a 50.1% vote against. Hang Seng and Shanghai Comp were subdued amid earnings releases and cautiousness as US sanctions on Iran and warnings against countries with economic ties to Iran, increase risks of stoking US-China frictions, while the US is also mulling 7.5% overcapacity tariffs on China.

Top Asian News

• Japanese PM Takaichi said Govt. plans to continue keeping the gasoline price at around JPY 170/Litre.
• Japanese Ministry of Finance requests a FY27 budget of JPY 38.6 tln, 15.1% increase compared to the initial budget for FY26, Kyodo reported; “the increase is due to rising interest rates”.
• Japan PM Takaichi has reportedly requested the LDP to “actively promote” measures against rising inflation, in a recent meeting, Nikkei reported.
• Japanese Finance Minister Katayama said can’t comment on budget requests for fiscal 2027, adds will focus on key policies in FY27 budget to drive economic growth and will balance fiscal sustainability and economic growth and will communicate with market. said:. Have received various opinions on scheme for JGBs for retail investors.

European bourses (STOXX 600 +0.4%) are broadly firmer this morning, digesting the positive mood music following the recent Pakistan-Iran talks in Tehran. In brief, Pakistani officials suggested that “we had a constructive exchange of views on the issues raised”, noting “big progress”. Most recently, mild risk-on action was seen after sources suggested that the Pakistani Army Chief conveyed a message from the US to Iran. The Americans reportedly offered to halt the naval blockade, in exchange for opening the Strait. Nonetheless, the gains are modest at this stage, as talks are only at preliminary stages and amidst the heightened uncertainty. European sectors hold a positive bias. Industrials takes the top spot, joined closely by Energy and then Utilities. The leader today has been buoyed by strength in Melrose (+8%) after it announced that the GKN probe has ended without criminal charges, and as it sets out a reopening timeline for the Garden Grove plant. To the downside, Autos parks itself at the foot of the pile, followed closely by Consumer Products & Services. Key Stories: NatWest (-0.2%, FT reports that the Co. plans to expand into the US), Next (+1.9%, upgraded at Citi), CD Projekt (-6%, delays release of The Witcher IV), Gerresheimer (-5.7%, CEO Rohrhoff to step down as interim CEO), Siemens Energy (+1.5%, working with Goldman Sachs to field offers for a majority stake in its steam turbines business).

Top European News

• German real wages projected at 0.7% in 2026, Handelsblatt reported citing the WSI Archive.
• EU Commission is being urged by the EPP and RE groups to withhold EUR 770mln of funding from Romania, due to concerns around rule of law, Politico reported citing a letter.
• UK PM Burnham has shelved plans to put Thames Water into a special administration regime amid concerns about the costs and legal risks involved, according to The Times.

FX

• DXY was bid through APAC trade, marking a peak of 99.11 in Europe, thereafter entirely erasing gains to a 98.94 trough following an optimistic readout of the Pakistan-Iran meeting via Saudi press sources (see commodities for details). Focus remains on the geopolitical situation and its follow through to yields, where the US 30yr currently sits at the middle of Wednesday’s Treasury announcement fall, around 5.22%. Brent contracts trade USD 3/bbl off session highs, the Brent November contract looking below to 88.50/bbl. The session ahead is light with ADP’s weekly Employment Change data and a 2yr auction scheduled.
• EUR did not take too much of a lead from the aforementioned action in energy markets. TTF around EUR 67/MWh remains at an uncomfortable level for the ECB, which, alongside a strong Ifo, paints a hawkish mood in today’s session. EUR/USD is just off recent 1.17 highs, within 1.1651-1.1671. GBP action is similarly quiet with focus on the upcoming week’s risk events; domestic updates include PM Burnham failing to rule out tax increases in the Budget, remarks which have not given much of a lead to UK assets. GBP outperforms vs. USD just below 1.1650 and EUR, at 0.8550.
• SEK is weaker against the EUR and flat against the Buck with no reaction to Riksbank minutes, which showed members were optimistic about the Swedish economy, though revealed a split on the future rate path, with some members maintaining a wait-and-see stance.
• Barclays month-end FX: moderate USD selling against all majors.
• PBoC set USD/CNY mid-point at 6.7852 vs exp. 6.7219 (prev. 6.7841).
• PBoC sold CNY 15bln of 3-month yuan bills at 1.30% and CNY 15bln in 1-year yuan bills at 1.35% in Hong Kong, as previously indicated.

Fixed Income

• Fixed benchmarks saw some modest pressure in the first part of the APAC session, before lifting in the early European morning and then falling again on data, pressure that was unwound shortly after by energy action.
• The mentioned overnight pressure sent USTs to a 108-11 base, holding above Monday’s 108-08+ trough. Since, the benchmark has been as high as 108-16, and is holding flat on the day a tick or two off that high. Recent upside a function of energy pressure, as sources report that the US told Pakistan to tell Iran that it would halt the siege and lift sanctions under the MOU, if Hormuz opens and proxy attacks stop. We now await an update from Iran, who are said to be consulting and are expected to respond soon.
• Ahead, USTs look to 2yr supply, in addition to a handful of data points.
• Bunds in-fitting with the above, just with a slightly larger range. The overnight base was 123.76, since taken out by two ticks just after the cash equity open and into Ifo where the stronger-than-expected series sparked some fresh downside. In more recent trade, the discussed energy pullback has allowed Bunds to lift back into the green, to a peak of 124.03. Some of that upside came alongside a 2028 auction, which drew a b/c of 1.49x (prev. 1.37x). However, it may not directly compare because the prior outing had EUR 6bln on offer vs EUR 5bln today.
• Gilts in-fitting with the above, as UK specifics are light. Firmer by a tick or two in 86.02-48 parameters. A 2033 Gilt auction was well received, with a b/c of 3.4x (prev. 3.16x).
• TenneT Germany to sell EUR-denominated hybrid 30-year noted; yield guidance seen at 4.875%.
• Australia sold AUD 1.2bln 1.00% November 2031 bonds, avg. yield 4.6310%, b/c 3.63.
• UK sells GBP 4bln 4.125% 2033 Treasury Gilt: b/c 3.4x (prev. 3.16x), average yield 4.761% (prev. 4.519%) & tail 0.2bps (prev. 0.2bps)
• Germany sells EUR 3.83bln vs exp. EUR 5bln 2.70% 2028 Schatz; b/c 1.49x (prev. 1.37x), average yield 2.85% (prev. 2.78%) & retention 23.4% (prev. 24.1%)

Commodities

• On diplomacy, Pakistan has been optimistic once again. Energy futures saw downticks on reports that Pakistan has reported “significant progress” in high-level diplomatic talks held in Tehran, aimed at de-escalating the ongoing US-Iran war, whilst further downside were seen after Al Arabiya/Al Hadath sources said Pakistani Army Chief Munir conveyed an offer to Iran, from the US, to halt the siege and lift sanctions under the MOU, in exchange for opening the Strait of Hormuz and stopping proxy attacks. Tehran will continue its consultations to submit its response soon, according to these reports.
• WTI Oct and Brent Nov are subdued and hit new incremental lows on the Al Hadath/Al Arabiya reports from Pakistan. The former resides towards the bottom end of a USD 82.25-85.84/bbl range and the latter in a USD 87.92-91.29/bbl parameter. As it stands, the complex is at fresh incremental lows after the NYT reported that US is reportedly mulling returning diplomats to Middle Eastern embassies as soon as this week, “suggesting that the Trump administration does not anticipate a return to all-out hostilities”.
• Dutch TTF is choppy and flat at the time of writing, but still near elevated levels north of EUR 68/MWh after earlier finding support just under EUR 67.50/bbl and then briefly topping EUR 69/MWh. “Supply concerns continue to grow in the European natural gas market, particularly with storage levels, as the region moves closer towards the heating season”, ING posits, “At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season. This raises the prospects of forced buying, increasing upside risk for gas prices.”
• Metals are lower across the board with precious metals show slightly deeper losses vs base metal counterparts, with the former weighed on by a resilient DXY despite the losses in oil, whilst the latter is underpinned by continued hopes of Chinese stimulus. Spot gold resides in a USD 4,617-4,697/oz range after topping yesterday’s USD 4,681/oz high. Spot silver fell from a USD 67.56-69.95/oz. 3M LME copper resides in a narrow USD 14,197.25- 14,278.00/t parameter.
• Japanese Government is set to launch state support for construction of oil pipelines which bypass the Strait of Hormuz, Nikkei reported. PM Takaichi reportedly will announce this at the Green Transformation meeting on the 26th August.
• Oil refinery in Russia’s Rostov temporarily suspended operations following Ukrainian attack, TASS reported.
• Kazakhstan’s Kondensat refinery will process Russian crude and send 30% of refined products to Russia, IFX reported.
• Japan’s Trade Minister Akazawa said won’t release government oil stockpile in September and October.
• South Korean Finance Minister said stronger KRW will help ease rise in crude oil-related import costs, will extend naphtha supply steps through January.
• Kazakhstan Energy Ministry said oil production plans are to be tweaked due to CPC attacks, with production loss to reach 3.5mln tonnes.
• Kazakh Energy Ministry said repairs at Karachaganak are scheduled for mid-September, with oil production losses expected to reach up to 450k tons, Interfax reported.
• Mosaic (MOS) predicts a phosphate shortage in Brazil starting in September, citing waning domestic stockpiles, CNN Brasil reported citing an executive.

Trade/tariffs

• Canada is reportedly to announce retaliatory tariffs against the US on Tuesday, according to an AP source.
• US President Trump said in tele-rally that the country desperately needs aluminium and mainly gets it from Canada, while he also comments that he wants to get beef prices down.

Central Banks

• Former BoJ Board Member Adachi said the BoJ will probably raise the benchmark interest rate next month, stating the BoJ is pretty much boxed in, markets have almost fully priced in a hike, and if the BoJ doesn’t hike, the yen could weaken sharply.
• RBA’s markets head Jacobs goal is a system that can flexibly supply whatever quantity the banking system demands, while keeping the cash rate close to the board’s target. said:. As reserves become more demand driven active liquidity management will become more important for financial institutions.
• RBA Minutes from the August meeting stated board is ready to increase rates if upside risks materialise and several members judged it is possible upside risks to inflation would crystallise, others saw offsetting downside risks and time to assess data.
• Riksbank Minutes: Seim said still concerned that inflation might become too high. Seim: I am concerned that inflation might become too high. There are a further number of international factors that risk increasing inflationary pressures going forward, for instance, the extreme weather in parts of Europe and Russia’s war of aggression in Ukraine. Jansson: Overall, my assessment given this is that the inflation picture now is somewhat poorer than in June. But it deserves to be emphasised that the shifts are small. Currently have more of an impact on how we communicate future inflation risks than a direct quantitative effect on our monetary policy plan, in line with the text in the draft Update. Have scope to wait before adjusting our monetary policy, even if there are some risks of elevated inflation going forward. Thedeen: I am becoming increasingly convinced that the upturn in economic activity is now on firmer ground. My conclusion is that the level of vigilance with regard to rising inflation must be high. I assess that our next change in the policy rate needs to be a raise. Hjelm: It is appropriate to begin thinking about monetary policy in a scenario where the conflict becomes long-lasting and low intensive and where consideration for possible future escalation is no longer reasonable. It is appropriate that the policy rate remains slightly expansionary, which I assess the level of 1.75 per cent to be. I consider that the risk of an escalation of the war, resulting in substantial price increases, justifies a probability of rate increases over the year. Bunge: Overall, I think that it is reasonable to wait before adjusting the policy rate and to communicate today that the probability of a rate increase still stands since June.
• RBI is likely intervening to support the rupee, according to traders.

Geopolitics

• Ukraine military said it struck the Afipsky refinery (180k bpd) in Russia’s Krasnodar region.
• Oil refinery in Russia’s Rostov temporarily suspended operations following Ukrainian attack, TASS reported.
• Kazakhstan’s Kondensat refinery will process Russian crude and send 30% of refined products to Russia, IFX reported.
• Ukrainian forces strike Afipsky oil refinery in Russia’s Krasnodar Krai overnight.
• UK PM Burnham plans a US trip next month to lobby US President Trump on Ukraine aid.

Middle East

• Pakistani Army Chief Munir conveyed an offer to Iran, from the US, to halt the siege and lift sanctions under the MOU, in exchange for opening the Strait of Hormuz and stopping proxy attacks, Al Arabiya/Al Hadath sources report. Al Hadath reported Washington offered to halt the naval blockade and lift sanctions on Iran in exchange for opening the Strait of Hormuz and stopping proxy attacks. Pakistani Army Chief told Senior Iranian official that the agents’ attacks are ongoing despite the stopping of direct attacks. Pakistani Army Chief said that the direct attacks between Iran and America have stopped. Iran will continue the fighting in the event of a new escalation. Tehran will continue its consultations to submit its response soon.
• Iranian official said the visit of Pakistani Commander of the Army to Iran was highly fruitful…the results of which will soon become apparent.
• A senior Iranian official told Al Jazeera journalist that the talks with [Iran and] Pakistani Field Marshal Munir were constructive, with useful ideas exchanged, “though no messages were passed in either direction”. “The visit was aimed at reviving Pakistan’s role as a mediator between Iran and the US”.
• Pakistan has reported “significant progress” in high-level diplomatic talks held in Tehran, aimed at de-escalating the ongoing US-Iran war, Iran’s Press TV reported.
• Pakistan’s Interior Minister who accompanied the Chief of Defence Forces on his trip to Tehran wrote that Iran’s President clearly expressed his government’s view and we had a constructive exchange of views on the issues raised. said. There is big progress following talks with Iran’s leadership.
• Iran’s Supreme National Security Council Secretary Rezaei said during meeting with Pakistan Chief of Defence Forces Munir the US must change its behaviour and take practical actions regarding implementation of the terms of the memorandum of understanding. Munir said Pakistan has also made many efforts to establish security between the borders of the two countries.
• US is reportedly mulling returning diplomats to Middle Eastern embassies as soon as this week, NYT reports; “suggesting that the Trump administration does not anticipate a return to all-out hostilities”.
• Iran’s President Pezeshkian said on Monday that the US must change its tone and approach towards Iran, adds US reliance on coercion and bullying will only complicate executive processes.
• UKMTO said it received a report of an incident 9NM northeast of Oman’s Ash Shishah, with the master of an oil tanker reporting the vessel was struck by an unknown projectile causing damage to the engine room and disabling the vessel. Crew are reported safe and environmental impact is unknown at the time of the report.
• US F-35 fighter jet declared an emergency in Saudi airspace and is making a landing at the Mawaqaf Al-Sulti Air Base in Jordan, according to Iranian media.

US Event Calendar

• 9:00 am: United States Jun FHFA House Price Index MoM, est. 0.2%, prior 0.3%
• 10:00 am: United States Aug Richmond Fed Manufact. Index, est. 6.5, prior 5
• 10:00 am: United States Jul New Home Sales, est. 620k, prior 628k
• 10:00 am: United States Aug Conf. Board Consumer Confidence, est. 90.2, prior 90.8

Central Bank Speakers

• 8:00 am: United States Fed’s Barkin Speaks on Economy
• 4:00 pm: United States Fed’s Barkin Speaks on the Economy

DB’s Jim Reid concludes the overnight wrap

Markets started the last week of August in a mixed mood, with bonds supported by a decline in oil prices as the US announcement of economic pressure against Iran didn’t deliver material new measures. However, while yesterday’s decline in Brent crude (-2.35%) helped 10yr Treasuries (-3.7bps) recover, European bond moves were more subdued as European natural gas prices reached their highest level since early 2023. Equities also saw a more cautious performance with the S&P 500 (-0.28%) falling back amid a continued sell-off in chipmakers that saw Nvidia post its longest run of daily declines since 2022 ahead of its results tomorrow.

Starting with Bessent’s announcements on Iran, the US Treasury Secretary threatened secondary sanctions against any country enabling Iran’s economy, calling the move “economic asphyxiation” of Iran’s regime. He noted that Trump is calling world leaders with “specific requests to cease their interactions with the regime”. However, there were no concrete new steps other than sanctioning 60 Iran-linked entities and individuals, with Bessent saying “we are giving everyone the opportunity to remedy bad behavior”. He did add that the US would be sanctioning a major financial institution later this week without naming the target. One of the biggest questions is whether the US could sanction a major Chinese bank for facilitating trade with Iran, with Bessent remaining vague, saying “no one is above the reach of US sanctions” when asked on this.

Iran played down Bessent’s announcement, with its Economy Minister saying “we have been expecting these plans for a long time, and the government has a two-year plan under which it is fully prepared for these developments.” In the continuing war of words, Trump had also posted on Truth Social earlier in the day that Iran was “completely collapsing”.

In the absence of material escalation and amid continuing grey flows through the Strait of Hormuz, oil markets remained mostly in a wait-and-see mode, with Brent Crude falling back by -2.35% to $92.17/bbl after its +6.63% gain last week. It is largely flat this morning. The dip in oil prices helped bring some relief to bond markets, with US Treasury yields lower across the curve. That was led by the 10yr (-3.7bps to 4.70%) and 30yr (-4.5bps to 5.22%), while the 2yr was little changed (-0.3bps to 4.23%). Treasuries have given up some of those gains overnight, with 10yr USTs trading +1.5bps higher as we go to print.

Yesterday’s bond rally was also helped by a CNBC report that the US Treasury could use the cash in the Treasury General Account to help fund the increase in the buyback operations announced last week. Using the TGA may help fund the larger buyback operations without resorting to higher issuance of short-term debt. Note that while “excess” cash represents a relatively small portion of the $953bn currently in the TGA, this should still be easily sufficient for the larger buybacks planned for the weekly operations in September and October, which were increased from a maximum of $2bn to at least $4bn. However, the amounts involved are trivial in the context of the roughly $2trn annual US federal deficit. It’s also not clear if this reported TGA use will actually take place – Bessent refrained from any new signals on debt management strategy when asked during his press conference yesterday.

The rally in Treasuries also helped longer-dated bond performance in Europe, with yields on 10yr bunds (-0.5bps), OATs (-1.0bps) and gilts (-0.4bps) edging lower. However, shorter-dated yields rose across Europe, with the 2yr bund yield up +2.6bps to a 1-month high of 2.87% with 63bps of further ECB hikes now being priced by next June (+2.9bps on the day).

European bonds weren’t helped by a continued rise in natural gas prices. Front-month TTF prices rose +3.73% to EUR 68.94/MWh, their highest since January 2023 amid concerns over low gas storage levels. At 63% full, EU gas storage is the lowest for this time of the year since the current data begins in 2009. In other commodity-driven inflation concerns, wheat prices traded within touching distance of their two-year highs reached last month, before pulling back to +0.04% on the day after President Zelenskiy said that Ukraine will seek talks with Russia on grain exports and that Ukraine’s maritime grain exports are not fully blocked by recent Russian strikes.

In equities, sentiment was apprehensive, with the S&P 500 (-0.28%) and Nasdaq (-0.76%) moving lower, though the equal-weighted version of the S&P (+0.10%) inched up to within 0.5% of its all-time high. But the main indices were weighed down by renewed concerns over AI-chipmaker stocks, with Sandisk (-6.45%) and Micron (-5.83%) among the worst performers in the S&P 500 and the Philly Semiconductor Index falling -2.70%. Nvidia fell -2.91% ahead of its earnings release tomorrow, posting a seventh consecutive decline. That’s its longest losing streak since September 2022, two months before the public release of ChatGPT by OpenAI that then triggered Nvidia’s meteoric rise to become the world’s most valuable company.

Yesterday’s tech declines have largely carried over into Asian markets this morning, with the KOSPI (-0.72%) leading on the downside, though it has recovered from being down more than -2% down early in the session. Elsewhere, the CSI 300 (-0.46%), Shanghai Composite (-0.15%), and Hang Seng (-0.25%) are also trading lower. However, the Nikkei (+0.49%) and Australia’s S&P/ASX 200 (+0.54%) are bucking the negative trend. Meanwhile, US equity futures on both the S&P 500 (+0.12%) and Nasdaq (+0.35%) are slightly higher after yesterday’s declines.

In Europe, equities were mixed yesterday. The Stoxx 600 (+0.005%) was flat, with gains for the FTSE 100 (+0.35%) and IBEX 35 (+0.69%) offsetting losses for the CAC 40 (-0.37%) and DAX (-0.11%).

In yesterday’s other news, the tariff saga between the US and Canada continued as Trump announced a 50% tariff on cars, trucks and auto parts from Canada, effective Jan 1, 2027. Current US tariffs on Canadian automobiles stand at 25%. That followed comments from US Trade Representative Greer that trade talks had broken down because Canada had wanted more, and that political reasons were a driver for Canada. Meanwhile, Canada’s Prime Minister Carney said his government was still working on options for retaliating against the new 50% US tariffs on around $20bn of Canadian products that came into force late last week. With this escalatory backdrop, the Canadian dollar was the weakest performing G10 currency on Monday, falling by -0.61% against the US dollar.

In other overnight news, the Reserve Bank of Australia’s (RBA) minutes confirmed that policymakers considered a 25bps hike at their August meeting, reflecting growing concerns about inflation risks, though this was weighed against the possibility of a sharper slowdown in employment, housing activity, and overall demand. The board ultimately concluded that, after earlier hikes, there was sufficient time to wait before making further policy adjustments. Markets are currently pricing a 58% chance of another RBA rate hike by year-end (up from 54% yesterday).

Finally, Bitcoin rose by +1.97% yesterday and is trading another +1.7% higher this morning at just over $80k, its highest level since May. Gold also rose +1.07% yesterday to its highest level since May, at $4,652/oz.

To the day ahead now, we’ll get the US August Conference Board consumer confidence index, Philadelphia Fed non-manufacturing activity, Richmond Fed manufacturing index, business conditions, July new home sales, and June FHFA price index. The Fed’s Barkin will also speak and we’ll have the $69bn US 2-year note auction. European data releases include Germany’s August Ifo survey and France August consumer confidence.

Bloomberg’s continuous front-month uranium futures contract (UXA1 Comdty) briefly surged above $100 a pound in late January, driven by tightening supplies, renewed government support for nuclear power, and rising electricity demand from the AI infrastructure boom.

Uranium futures then retreated and remained range-bound between $84 and $87 for five months. But momentum has returned in August, with prices approaching $89 a pound, the highest level since early February.

The ongoing theme is that years of underinvestment have limited mine supply growth despite rising reactor demand. New uranium projects can take a decade to develop, leaving producers unable to respond quickly to higher prices. Output is also concentrated among a handful of miners, such as Cameco. 

Goldman analysts have routinely pointed back to these charts, which show that the uranium market has entered a deficit and that the gap will only widen as new reactor demand comes online in the years ahead.

China is firmly leading the global expansion and is expected to become the world’s largest nuclear power market by the end of the decade.

UBS analyst George Eadie noted earlier this month, “Continued strength in term pricing and signs of accelerating utility procurement offer further evidence that the uranium market is tightening structurally.”

Regular readers know that nuclear power sits at the intersection of several of our highest-conviction themes: powering up America, reindustrializing the nation, and meeting the massive new electricity demands of the AI buildout.

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Via Middle East Eye

Iranian hackers shut down a British power plant for four days in an unprecedented cyber attack, the Sunday Telegraph reported.

According to the newspaper, the incident appears to mark the first time Iran-linked hackers have successfully shut down such a British facility.

The incident occurred alongside an alleged series of attacks on US water infrastructure last month, which affected at least 12 states and caused concern in the White House.

The Telegraph said that British officials have refused to disclose which facility was affected, citing security concerns.

A spokesperson for the Department for Energy Security and Net Zero said that the attack impacted a “small-scale energy generator”, posing no “risk to the wider energy system”.

No outages were reported following the incident, according to the National Cyber Security Centre (NCSC), which deals with attacks on critical infrastructure.

The British government subsequently briefed chief executives of power companies and wrote to businesses with advice, direction and next steps.

The attack appears to mark an escalation following the UK’s decision to grant the US permission to launch “defensive operations” against Iran from British bases.

In March, Prime Minister Keir Starmer’s government had granted permission to the US military to use the Royal Air Force base in Fairford and the joint facility on Diego Garcia, for limited operations against Iranian missile facilities that “directly threatened British personnel”, regional allies, or sovereign assets.

The authorization was subsequently expanded, allowing the US to launch strikes against active Iranian missile infrastructure targeting commercial oil shipping channels in the Strait of Hormuz.

In June, an Iran-linked hacker-activist group, Handala, claimed responsibility for a cyber intrusion targeting water facilities in California, saying the action was carried out in retaliation for alleged US strikes on water infrastructure in southern Iran. 

The group said it had obtained data from the systems and described the breach as a warning to Washington.

In a statement, Handala said it had the capability to disrupt water supplies but “stopped short of actually cutting off water to American cities”, citing a different ethical code than its adversaries.

The group also said it had published five gigabytes of data as evidence of the intrusion.

In April, the group said it obtained at least 19,000 sensitive files after targeting the personal phone of former Israeli army chief of staff, Herzi Halevi.

“All your top-secret facilities, crisis rooms, maps, and even the tiniest details of your command centers have long been like an open book to us,” the group said in a statement posted on its website. 

BREAKING: Iran-linked hackers reportedly shut down a small UK power facility for four days in an unprecedented cyberattack, according to The Telegraph.

The incident is believed to be the first known successful cyberattack of its kind against a UK energy facility. It reportedly… pic.twitter.com/srUcgc5QsZ

— The Geopolitics (@Newstoday555) August 23, 2026

The files, some of which were seen by Middle East Eye, showed Halevi meeting with Arab officials.

In one undated photo taken in Qatar, Halevi could be seen attending a meeting with former US Central Command (Centcom) chief Michael Kurilla. 

We have warned that Europe is approaching a twin energy crisis, with the Northern Hemisphere winter now just three months away.

Dutch front-month gas futures, Europe’s benchmark contract, surged Monday morning to 67 euros per megawatt-hour, the highest level since early 2023.

Goldman Sachs commodities expert Samantha Dart warns that EU NatGas prices may need to more than double from her base-case forecast if LNG exports through the Strait of Hormuz remain constrained.

Dart said reduced Qatari LNG loadings have forced Europe to compete more aggressively with Asia for available cargoes.

“We have argued that, in the absence of an improvement in LNG exports through the Strait of Hormuz (SoH) (Exhibit 1), European gas prices (TTF) would need to rise to discourage Asia LNG demand, thereby freeing incremental cargoes to be sent to Europe to help manage European gas storage levels,” she said.

Dart warned that the most alarming scenario would emerge if Persian Gulf energy exports recovered only gradually through 2027. Under that scenario, she estimates December 2026 TTF may need to exceed 100 euros per megawatt-hour, more than double the previous 50-euro base case, while Asian JKM prices could approach $35 per million British thermal units.

She noted, “However, because LNG prices have only been this high once, during the 2022 European energy crisis, our conviction in the scale of demand response at such price levels is low, and we would see it more as a price-discovery process.”

Dart also pointed out that there “hasn’t been enough yet to steady European gas storage injections, with Aug storage injections thus far widening the miss relative to our expectations.”

Current NatGas storage levels for the energy-stricken continent stand at just 61.68%, well below the 15-year seasonal level of 72.5%.

The conflict in the Gulf area has severely constrained LNG flows to Europe, but it is not just the gas market that is constrained. The products market is also under pressure, as evidenced by the worsening diesel crisis.

On Monday, Treasury Secretary Scott Bessent held a press conference to announce the “single greatest financial offensive ever marshaled against an adversary.”

There was good news over the weekend, as the newly opened, US military-supervised shipping corridor off Oman saw a 400% surge in commercial transits, raising further questions about whether Tehran’s leverage over the Strait of Hormuz has eroded. TotalEnergies’ CEO was quoted early Monday as saying crude is moving through the critical waterway “very quietly.”