Authored by SchiffGold via SchiffGold,

On Thursday, Peter joined host Danny on CapitalCosm to unpack the deepening cracks in the US debt market and what they mean for the dollar, oil, and the political landscape heading into 2026. He walks through weak Treasury demand, the fragile yen carry trade, and why “growing our way out of debt” remains a fantasy, before turning to how inflation is set to reshape the midterms and why the next Fed chair will likely follow the same inflationary playbook as his predecessors.

Peter starts with a recent Treasury auction that barely registered a ripple in the bond market, even though it revealed just how little appetite exists for US government debt. He explains that today’s yields simply don’t compensate investors for inflation risk over the long haul:

But the bottom line is, I mean, $6 billion is nothing. There’s so much debt out there that nobody wants because the yields are not high enough to offset what you’re gonna lose to inflation over the course of the maturity of these 10 year to 30 year US Treasuries. I mean, I know that 4.85, maybe that sounds like a high rate based on what we’ve had since the 2008 financial crisis. But prior to that crisis, this was not a high rate. And rates should be much higher now than they were pre 2008 because back then we had a fraction of the debt that we have now.

From there, Peter turns to Japan, where the yen’s volatility threatens to upend one of the world’s most important funding trades. He describes a dangerous feedback loop where currency moves in either direction could trigger a wave of Treasury selling:

Because if the yen keeps falling, that puts more pressure on Japan to sell treasuries to buy yen. So, best it is hoping that the yen rises so that the Japanese don’t have to sell those treasuries. But if the yen keeps rising, that blows up the yen carry trade. And then a lot of other owners of US Treasuries are gonna be selling. And owners of other US dollar assets that were purchased with the borrowed yen that they’re gonna be repaying if they’re getting hit by a stronger yen.

Zooming out from the mechanics of the bond market, Peter addresses the political fantasy that America can simply expand its way out of its debt burden. He notes that this promise has been recycled for decades without ever coming true, and that Washington’s newest hope rests on artificial intelligence delivering an economic miracle:

Politically, there’s no viable way out of this other than to grow our way out. And the problem is they’ve been talking about growing our way out of the debt for 40 or 50 years. This is not new and we haven’t done it. The problem keeps getting bigger and bigger because the debt grows faster than the economy. Now, they’re hoping for a miracle with AI – that maybe AI is a game changer and we may grow the economy faster than the debt.

Peter then shifts to the political fallout of rising prices, arguing that inflation will flip the script for the 2026 midterms. Where Democrats bore the blame for the cost of living crisis in 2024, he expects Republicans to take the hit this time around:

In 2024, it was Biden and the Democrats, so that was easy for the Republicans. But the Republicans now own the economy, and they own the prices, especially when the Democrats can point to the tariffs, can point to the Iran war, right, as other factors that are contributing to the cost of living crisis, and that would be accurate.

Turning to commodities, Peter predicts that a weakening dollar will send energy prices sharply higher in the years ahead. He points to past oil spikes as a benchmark for where prices could realistically head next:

I think oil prices are headed higher, especially when the dollar really starts to tank, which it will. And so I think oil got to $140 a barrel in 2011. It was $100 a barrel in 2008. We’re still significantly below that. I think we’re gonna hit $200 a barrel on the price of oil in the next few years.

Peter closes by addressing speculation over the next Federal Reserve chair, arguing that regardless of who takes the job, the incentives always point toward the same outcome. He explains why inflation isn’t an accident but a deliberate policy choice that every Fed chair, present and future, keeps making:

He said inflation is a choice, absolutely. All the Fed, all the former Fed chairs from Greenspan have chosen inflation. And Warsh is gonna make the same choice for the exact same reasons. Because the alternative is political suicide. They won’t do it. Because it means we have to bite the bullet and pay the piper.

Summary

• Houthis attacked a Saudi air base with missiles and drones, claiming major damage.
• Houthis seized more Red Sea territory, including Perim Island near the Bab al-Mandab Strait.
• Shipping risks are rising, with vessels avoiding the Red Sea and taking longer routes around Africa.
• Iran-Gulf diplomacy was postponed, delaying efforts to address the Strait of Hormuz crisis in what was to be a rare GCC-Iran meeting.
• Saudi oil exports face ongoing disruption after a pipeline shutdown, pushing oil prices above $100/barrel.

*  *  *

Yemen’s Houthis Attack Saudi Base, And Take Fire After Major Conquest

Yemen’s Ansar Allah — also known as the Houthis — claimed it fired drones and missiles at King Khalid Air Base in southern Saudi Arabia. Dozens of ballistic missiles and drones targeted military infrastructure in the rare and major cross-border attack.

The Houthis say the base suffered direct hits and extensive damage in a “large-scale military operation”, though this could not be immediately verified, after the operation which their military spokesman described as retaliation more than 300 Saudi airstrikes across Yemen over most of the past week. Early reports from open source analysts suggest serious damage sustained at the base.

The sprawling base in Khamis Mushait has historically been used at times by US and UK advanced fighter jets, and has hangars that are well-fortified, though it’s unknown the degree to which Western assets continue to be stationed there. For example, it was heavily utilized by the Pentagon during the first Gulf War, from where stealth fighters were launched to attack high priority targets in Iraq.

A Houthi spokesman has declared that the ongoing mission’s targeting includes “weapons depots and command and control centers that are managing the aggression against our nation and people.”

On Sunday, the internationally recognized Yemeni government — which controls neither the capital nor territory encompassing a majority of the population — said its air force launched three strikes on Houthi positions in the Taiz region. There were also reports of artillery fire on a Houthi stronghold in Saada province, on the northern border with Saudi Arabia.

In a blitz that caught the world by surprise, the Houthis late last week achieved an enormous strategic victory by conquering the remainder of Yemen’s western coastline it didn’t already control — positioning it to easily enforce its declared blockade against Saudi-related shipping entering or leaving the Red Sea via the Bab al-Mandab Strait. Houthi soldiers also took over Perim Island, which sits in the strait. 

As Associated Press noted, the seizure of the new territory puts the Houthis in much closer proximity to US forces: 

The Houthis’ advance puts them just 20 miles (32 kilometers) from the U.S. military base in Djibouti, on the other side of the Bab el-Mandeb Strait. It’s the main U.S. base in Africa and one of several foreign military bases in Djibouti, including those of China, France and Japan.

The Houthi blockade is positioned as retaliation for the Saudi coalition’s siege and blockade of Houthi-controlled areas of Yemen. Though the Houthi blockade only targets Saudi shipping, global cargo lines are highly wary of transiting the waterway that’s narrower than the Strait of Hormuz. Many are rerouting traffic all the way around Africa’s Cape of Good Hope, which requires at least 20 extra days and a lot more money. “Freedom of navigation and international trade in the Red Sea and Bab al-Mandeb are safe and orderly,” a Houthi official told Al Jazeera. 

While it’s too little, too late for Riyah’s hopes of some kind of big Washington intervention in Yemen, Saudi Arabia’s Crown Prince Mohammed bin Salman on Monday met US Central Command chief Admiral Brad Cooper in Jeddah, the Saudi Press Agency (SPA) has confirmed. Likely they reviewed the coalition’s narrowing options going forward, but President Trump has thus far expressed reluctance to get directly involved militarily, at a moment he’s still trying to figure out what’s next with Iran.

Iran Diplomacy Postponed

Cold water has been thrown on flickering hopes for finding an exit from the latest and most dangerous chapter in America’s “endless wars,” as a highly-anticipated Monday summit of Iran and other Persian Gulf states was postponed.

That bad news follows an eventful several days that saw Yemen’s Iran-allied Ansar Allah take control of a large swath of strategic coastside territory. Saudi Arabia’s critical east-west pipeline, shut down after a drone attack that originated in Iraq, may be the center of a major hit to global oil supply. 

The Monday meeting was set to take place in the Omani coastal city of Salalah, with attendees including foreign ministers of Iran, Oman, Iraq, Saudi Arabia, UAE, Kuwait and Qatar. Taking a US-friendly line, Bahrain had declined to attend, saying stability “cannot be preserved through a policy of appeasement” and demanding the strait be re-opened without “discrimination, fees or permits.” The tiny state that is was home to the US Navy’s Fifth Fleet also cited its ongoing suspension of diplomatic relations with Iran.   

The meeting was going to focus on a proposed arrangement by which Iran and Oman would jointly manage the flow of shipping through the Strait of Hormuz. Traffic through the vital waterway is at a near standstill, more than six months after the United States and Israel launched a war on Iran. Axios’ Barak Ravid, seen by many as a conduit for US-Israeli narratives, reported that Saudi Arabia had submitted amendments to the proposal. 

Saudi Arabia: I have an amendment to the strait of Hormuz agreement

Iran & Oman: pic.twitter.com/MVyRmhjxnN https://t.co/mRYxyyWrWD

— Nostra, House of Gold (@Nostre_damus) September 13, 2026

“At the request of some regional countries and by a joint decision of Oman and Iran, the meeting of foreign ministers of Persian Gulf coastal states, which was planned for Monday, has been postponed to another date,” Iranian foreign ministry official Mohammad Ali Bak told Iran’s IRNA. If the meeting comes to fruition, it would be the first one to convene top diplomats from Iran and the Gulf Cooperation Council since the war started on Feb 28. 

Previously, Iranian Foreign Minister Abbas Araghchi said attendees would be presented with route maps and other details about how ships would enter and depart the strait. Importantly, he emphasized that the proposal was not sufficient to actually reopen the strait. 

Closure of Saudi Pipeline Set To Remove 4% of Global Supply

A different lifeline was completely closed over the weekend, with no end in sight: Saudi Arabia’s east-west oil pipeline was shut down after a devastating attack on a pumping station that seemingly originated with Shiite militias in Iraq. The pipeline was playing a vital role in offsetting the closure of the Strait of Hormuz, by sending oil to Saudi Arabia’s Yanbu port on the Red Sea.  

Yemen’s Houthis said they struck King Khalid Air Base in Khamis Mushait with dozens of ballistic missiles and drones, targeting hangars, radars, runways and ammunition depots.

They said the attack was retaliation for more than 300 Saudi airstrikes on Yemen over the past five… pic.twitter.com/zt8y1wli4u

— Clash Report (@clashreport) September 14, 2026

Saudi oil traders told Reuters that, unless the pipeline is opened up within days, the kingdom will run out of export stock, removing as much as 4% of worldwide supply from the market. Even before the pipeline-pumping station attack, Saudi inventory had plummeted to its lowest level in 30 years.  

Though Saudi Arabia initially called the closure a mere “precautionary measure,” some observers have very little optimism about a quick resumption of pipeline flow. One source told Reuters it could take five to six weeks to repair. If you’d imagined the pumping station some small facility, this image should give you a proper orientation to what must be restored “in a few days” to avert a major disruption of global supply:

Overnight, West Texas Intermediate futures leapt by 2.89% to $102.94 a barrel. Brent was up almost as much, trading at $107.56. 

US futures are sliding, dragged by fears of a possible AI development slowdown as well as higher oil prices (Brent > 108), though bond yields are not reacting yet (10Y yield still under 5%). As of 8:00am ET, S&P futures are down 0.6%, and potentially facing their first down 1% day since late July; Nasdaq futures plunging 1.5% as AI-linked stocks like chipmakers and memory tumble in US premarket trading following a call to put the brakes on developing cutting-edge models. Semis are down 4.7% pre-mkt, driven by the AI pullback story though China is pushing back saying the statements are alarmist; expect additional pushback from Trump. Software is +1.5% but Mag7 are weaker with NVDA -3.2%, TSLA -2.1%, and META -1.2%. Staples / HC are bid with Discretionary / Fins mixed but slightly positive. Industrials are also getting hit with AI theme (less data center contruction). Brent is rising and sitting close to $108/barrel on the shutdown of a Saudi pipeline and as a meeting between Iran and Gulf nations was delayed. That’s weighing on European bonds, mostly at the short-end. UK two-year yields are up six basis points, German two-year yields by five basis points. Treasuries are little changed at the short-end, while 10-year yields are down a basis point.  The USD is seeing its strongest day in 3 wks, rallying with oil and the Bloomberg Dollar Spot Index is up by 0.4%, with the New Zealand dollar and Japanese yen among the underperformers. Gold prices are sinking and now below $4,300/oz. Commodities are mostly lower ex-Energy with WTI approaching $104/bbl with fuel prices higher; moves are driven by Saudi closing east/est pipeline and a delay on Iran/Gulf countries meetings to discuss Strait of Hormuz navigation. Base metals are outperforming Precious, but both are lower. US economic data slate empty for the session. Fed speakers remain in external communications blackout period ahead of Sept. 15-16 FOMC meeting

In premarket trading, Mag 7 stocks are mixed: Nvidia (NVDA) falls 2.3% as AI leaders called for a slower pace of development of their most advanced and lucrative models (Alphabet +1.8%, Amazon -0.4%, Apple +0.5%, Meta +2.6%, Microsoft +0.3%, Tesla -1.5%)

• Chipmakers and other artificial intelligence-related firms slide. Decliners include Intel (INTC) -6%, Micron (MU) -5% and CoreWeave (CRWV) -7%.
• Baldwin Insurance (BWIN) gains 6% after the Financial Times reported that billionaire Michael Dell’s family office is nearing a deal to acquire the insurance brokerage firm.
• Corning (GLW) falls 9% after entering into a $2 billion equity distribution agreement with Goldman Sachs.
• Definium Therapeutics (DFTX) rises 16% after the company announced that its Phase 3 Panorama study met its primary and key secondary efficacy endpoints.
• Hewlett Packard Enterprise (HPE) falls 7% after Evercore ISI downgraded the company to inline from outperform, citing valuation in the wake of recent strength.
• Olema Pharmaceuticals (OLMA) falls 9% after AstraZeneca’s Etcamah failed to meet the primary endpoint of progression-free survival in a late-stage trial in first-line advanced breast cancer.
• Rum Group (RUM) rallies 11% after the Information reported that Anthropic has struck a $13.7 billion compute pact with the firm.
• Scholar Rock (SRRK) rises 6% after the drug developer said the US FDA has approved its muscle-targeted therapy for spinal muscular atrophy. Analysts are positive about the approval, with many raising their price targets ahead of the drug launch.

In other corporate news, Anthropic was said to pick Nasdaq for a potential listing. It also told investors it expects a second straight quarter of positive adjusted operating profit, according to the FT.  OpenAI will not go public in 2026, Sam Altman told Fortune Magazine in an interview, citing need for safety-related work. Kalshi is filing for regulatory approval to offer the first single-stock perpetual futures in the US and is looking to expand the contracts in commodities to include agriculture. In deals, Apollo is in discussions to acquire Johnson & Johnson’s orthopedics unit for $20 billion, according to people familiar with the matter. Billionaire Michael Dell’s family office is nearing a deal to acquire The Baldwin Insurance Group, an insurance brokerage with a market value of $4.2 billion.

Stock futures slide, led by tech names after leaders of the biggest artificial-intelligence firms proposed slowing the technology’s development. An ETF tracking key chip stocks dropped 5% in early trading as traders fretted that efforts to rein in AI could weigh on the boom driving hundreds of billions of dollars in capital spending. OpenAI backer SoftBank slid the most in nearly three months, while South Korea’s Kospi index dropped 3.3%. S&P 500 contracts were down 0.6%. 

“There was a bit of irrational exuberance in the middle of the summer that’s been unwound,” said Chris Armstrong at Berenberg. “This is, I think, another leg bringing down expectations.”

Anthropic CEO Dario Amodei sparked the rout after saying on Saturday that the company would introduce fresh safeguards as he urged the industry to slow the development of its most advanced models. OpenAI’s Sam Altman backed the proposal, while xAI’s Elon Musk said “Dario is right.”

Questions remain over how committed AI leaders will be to moderate the pace of development, given intense competition from China. President Donald Trump downplayed the concerns, while China dismissed them as “fearmongering.”

“Having guardrails would help steer the direction of AI development, but we do not think it is going to slow it down,” noted Mohit Kumar at Jefferies. “The direction of travel, in our view, would still remain forward.”

Nevertheless, tech – the biggest weighting in the S&P 500 – is facing pressure on both sides of the valuation equation: Tighter financial conditions are pushing up the discount rate, while Amodei’s intervention puts fresh scrutiny on the growth assumptions underpinning the AI trade.

Fresh disruptions to crude supplies from the Middle East added to the dour mood. Brent jumped 3.7% to top $108 a barrel after Saudi Arabia closed its East-West pipeline as a precaution following attacks. The dollar rose 0.3% while treasuries slipped as money markets saw a nearly 90% chance of a Federal Reserve rate increase on Wednesday. Gold tumbled. 

“Two unwelcome headwinds collide,” said Tim Waterer, chief market analyst for KCM Trade. “Warnings that AI development needs to slow down, combined with another leg higher in oil prices after the Saudi East-West pipeline closure, are a difficult mix for risk assets.”

The selloff in tech stocks comes at the start of a week in which both the Fed and Bank of Japan face pressure to raise rates as policymakers meet Wednesday and Friday, respectively, against a backdrop of mounting inflation risks. Traders are pricing a 90% chance of a 25-basis-point Fed hike this week. Most strategists aren’t too worried, with those at banks including Morgan Stanley, JPMorgan and Goldman Sachs saying any declines driven by expected tightening are likely to be short-lived given healthy earnings.

While a Bank of England hike on Thursday isn’t anticipated, the prospect of a shift toward an increase in November remains on the cards. “We will take each decision when it is needed, and we will not waver when the evidence calls for action,” Kazimir said Monday in an op-ed on the website of Slovakia’s central bank, which he heads.

Europe’s Stoxx 600 dipped 0.3%. The region’s bonds underperformed as higher oil and gas prices worsened the inflation outlook. Yields on two-year UK gilts rose eight basis points to 4.89%. The euro hit a one-month low against the dollar. Here are the biggest movers Monday:

• Campari shares rose as much as 4.5%, the most in six weeks, after Morgan Stanley upgraded the stock to overweight, noting the beverage maker’s strategy is yielding results and that a cash-flow inflection is potentially on the horizon
• Axfood climbed as much as 4.3%, the most since January, as Handelsbanken upgrades the Swedish retailer to buy from hold
• European semiconductor stocks and those linked to data centers fell after leaders of some of the world’s largest AI companies called for a slower pace of development for safety
• Fallers include Soitec (-13%), Aixtron (-9.8%), Technoprobe (-8.0%), Infineon (-8.1%), ASM International (-9.2%), BE Semi (-7.1%) and ASML (-5.4%)
• GlobalData slumped as much as 26%, the most since Jan. 2009, as JPMorgan says the research and consulting solutions firm’s outlook reset is negative for sentiment
• Cerillion shares dropped as much as 21%, the most on record, after the billings software provider said full-year revenue will be below consensus expectations due to customer order delays

Asian stocks fell after leaders of the world’s biggest artificial intelligence platforms called for slower development of advanced models, citing growing risks from the technology. The MSCI Asia Pacific Index slipped as much as 1.1% before paring some of the loss, though a subgauge of tech stocks was down 2.4% — the worst-performance among sector groups. South Korea’s benchmark Kospi slumped more than 3% to be the top loser in the region. Indian markets were shut for a holiday. In Indonesia, President Prabowo Subianto removed Finance Minister Purbaya Yudhi Sadewa in his latest cabinet shakeup, and appointed Deputy Finance Minister Suahasil Nazara as the new finance chief. The nation’s benchmark stock index rebounded from an intraday loss of 2.6% to finish the session little changed. A gauge of Asian semiconductor stocks was down 2.4%, heading for a third day of declines, which would mark its longest losing run since July 30.

“Risk assets really had no other direction to head other than down, given the comments about the pace of AI development from the US tech heavyweights, and the fresh move higher in oil,” said Tim Waterer, chief market analyst at KCM Trade. “The medium and longer term sustainability of the AI bullish momentum trend is in tact, but questions over the speed of growth in the short term have resulted in traders hitting the sell button today.”

In FX, the dollar is rallying with oil and the Bloomberg Dollar Spot Index is up by 0.4%, with the New Zealand dollar and Japanese yen among the underperformers.

In rates, the latest jump in commodity prices has not fully weighed on bonds yet: treasuries are steady with yields broadly within a basis point of Friday’s close across the curve, outperforming bunds and gilts where front-end yields are cheaper by 5bp and 6bp following a jump in energy prices. US 10-year yield is back around 4.97% after barely exceeding Friday’s multiyear high near 4.98%; European bonds lag, flattening yield curves, with WTI crude oil futures up 2.7% after the shutdown of a Saudi pipeline. European bonds are lower, mostly at the short-end. UK two-year yields are up six basis points, German two-year yields by five basis points. IG dollar issuance slate includes a couple of offerings already; dealers expect around $55 billion this week, front-loaded ahead of Wednesday’s Fed decision. Treasury auctions this week include $13 billion 20-year bond reopening on Tuesday and $19 billion 10-year TIPS reopening Thursday.

In commodities, Brent is rising and sitting close to $108/barrel on the shutdown of a Saudi pipeline and as a meeting between Iran and Gulf nations was delayed.  WTI crude oil futures are up 2.7%. Gold prices are sinking and now below $4,300/oz.

US economic data slate empty for the session. Fed speakers remain in external communications blackout period ahead of Sept. 15-16 FOMC meeting

Market Snapshot

Top Overnight News

• Donald Trump played down the idea of further guardrails in most advanced AI models, saying the US needs to keep its lead over China. BBG
• China’s spy agency has warned that AI could pose a risk to the country’s political and social security, signaling growing concern in Beijing that rapid advances in the technology could be exploited against the country. FT
• Oil rose as a meeting between Iran and several Gulf nations on a temporary shipping lane was postponed, while Saudi Arabia’s East-West pipeline remained closed, following last week’s attacks by Iraqi militants. BBG
• U.S. President Donald ‌Trump on Sunday called on Ukrainian President Volodymyr Zelenskiy to stop targeting Russian diesel infrastructure, saying the attacks were causing a shortage of the fuel that is “hurting the world”. RTRS
• A wave of long-distance Ukrainian drone attacks on Russian oil refineries in recent months ⁠has reduced that country’s fuel production, triggering gasoline shortages across the country. RTRS
• Just as Ukraine was learning how to parry Russia’s drone attacks, Moscow has moved the goal posts with a new generation of innovative jet-powered weapons. WSJ
• The CMBS market is being reshaped by a surge in data-center deals, forcing investors to grapple with an entirely new set of risks. BBG
• A year after shifting production and sourcing out of China to avoid higher U.S. tariffs, some companies are learning that replicating the country’s factory ecosystem is not so easy and are bringing manufacturing back. RTRS
• Eurozone governments are gearing up for one of the biggest leadership reshuffles in the European Central Bank’s 28-year history, with a “grand package” over its three top roles expected to be agreed by the end of December, according to people familiar with the matter. FT
• The 10-year US Treasury yield surged to nearly 5% this week, reaching its highest level since October 2023. Following an above-consensus CPI print, Goldman economists expect a 25 bp hike at the FOMC meeting next week. Their rates strategists believe that the combination of rising oil prices, a repricing of the Fed path, strong economic growth, and AI investment have lifted long-term interest rates
• House Speaker Johnson said US President Trump’s proposed $5,000 dividend for every US adult would require congressional approval, contradicting Trump’s claim that the payments can be made without authorization.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were ultimately mixed after gradually improving from the initial risk-off mood seen at the start of the session, which had been triggered by AI-related selling after key industry executives called for a slowdown in AI development. There were also headwinds from the conflict in the Middle East after Saudi Arabia shut its East-West Pipeline following drone attacks last week, which threatens the loss of 4% of global supply, while Oman postponed the Persian Gulf meeting on Monday, where Iran had planned to formally unveil a temporary shipping lane agreement for the Strait of Hormuz. ASX 200 was kept afloat in range-bound trade amid resilience in defensives and the consumer sectors, while there were some comments from RBA Assistant Governor Hunter, who stated that Australian household spending is holding up okay and business investment is showing signs of strength, but also noted inflation remains above target. Nikkei 225 slumped at the open amid notable losses in Kioxia and with SoftBank dropping by double-digit percentages owing to its heavy AI exposure, although the index is well off today’s worst levels amid mixed yields in Japan and with the TOPIX index in the green. KOSPI underperformed amid losses in semiconductor heavyweights, while today marks the start of the Korea Exchange extending trading hours to allow stock trading until 8pm local time. Hang Seng and Shanghai Comp pared opening losses and moved into the green, but with upside capped ahead of tomorrow’s activity data, while US President Trump said he is not worried about Chinese President Xi cancelling their planned summit after reports that Beijing informed Washington it will cancel the planned summit if any new arms sales to Taipei are approved.

Top Asian News

• PBoC plans to expand the yuan offshore market and will consider expanding the central bank’s macroprudential and financial stability roles, adding that they will innovate macroprudential policy tools and support steady economic recovery and growth.

European bourses are broadly lower to start the week, with Italy’s FTSE MIB the underperformer, while the SMI and FTSE 100 print decent gains, helped by updates in the Pharma space. Sectors point to a mixed picture. Health Care tops the sector pile, with Optimised Personal Care and Food, Beverages & Tobacco rounding out the leaders. Tech leads the downside, followed by Basic Resources and Industrials. The overnight downside was driven by Anthropic CEO Amodei, urging a slowdown in the development of the most advanced AI systems to prevent AI from slipping beyond human control. The effect this has on semiconductors may be slower capex investment; however, Amodei insists that pacing AI capabilities will not necessarily translate into reduced spending or growth. As a result, SK Hynix and Samsung Electronics slumped overnight (-6.4% and -4.1%, respectively), while ASML is currently down by 5.2%, while US behemoth NVIDIA slides by 2.5% pre-market.

Top European News

• Exit polls showed that Sweden’s centre-left opposition is on course for an election win in a blow to the far-right, while broadcaster SVT’s revised projections suggest the opposition bloc is on course to win 175 seats and the incumbent right-wing bloc is on course to win 174 seats.
• Swedish election is reportedly too close to call as total count may take days.
• Fitch affirmed Italy at ‘BBB+’; outlook stable.

FX

• Snapshot: G10s are lower against the broadly stronger USD, as traders increase their bets on a rate hike this week. JPY is the clear underperformer this morning on widening yield differentials, followed closely by the Kiwi. The Loonie fares a touch better vs peers, thanks to higher energy prices and simmering down in US-Canada tensions; Trump recently downplayed leaving the USMCA, with both countries suggesting that a deal would be found “fairly soon”.
• DXY is stronger this morning and currently trades towards the upper end of a 99.07 to 99.60 range. Much of the upside comes as a number of sell-side banks bring forward their bets of a hike this week; Goldman Sachs the latest to do so. As it stands, money markets assign an 86% chance of a hike this week. There’s not a whole lot on the docket heading into the Wednesday meeting, so the index will likely remain within familiar ranges – though any updates on the geopolitical situation would spur a break in either direction.
• JPY is the clear underperformer this morning on higher expectations that the Fed will join the BoJ in hiking rates this week. Much of the strength in the JPY over the past couple of weeks has been attributed to narrowing yield differentials (hawkish BoJ), and joint intervention worries. Another bout of near-term strength in the JPY would likely require a hawkish BoJ on Friday, and particularly, board members explicitly guiding for a faster pace of rate hikes. Recent source reports have suggested that the Bank could do this. USD/JPY currently holds within a 153.37 to 154.61 range.

Fixed Income

• Global fixed benchmarks are mixed. USTs (+3+ ticks) hold afloat, whilst Bunds (-4 ticks) and Gilts (-3 ticks) have been pressured by another bout of strength in the energy complex. For reference, energy benchmarks are moving higher on a) postponement of Iran-Gulf talks on the Strait and b) Saudi shutting a key pipeline.
• USTs remain firmer this morning, and currently hold within a 106-03 to 106-10+ range. Strength which comes despite sell-side banks boosting their bets of a hike this week, and higher energy prices. The environment is clouded by fiscal and geopolitical uncertainty. This is made evident by sustained elevated yields; the US 10-year (4.96%) trades just shy of the 5.00% mark, and a hawkish Fed mid-week will likely see it top that mark.
• Bunds and Gilts have been pressured throughout the European morning as energy benchmarks gradually picked up. Gilts are pressured given their high dependency on external energy, and as traders eye the BoE this week.
• BTPs have steadily fallen throughout the morning and are currently at the lower end of their 111.96-112.57 range. After-hours on Friday, Fitch affirmed Italy at ‘BBB+’; outlook stable. The credit agency commented that the “continued increase in public debt/GDP over the medium term” is a risk that could result in a downgrade. Regarding the upcoming elections, Fitch observed that the “recent political stability has been a positive anchor for Italy’s sovereign rating”, and that the law to switch the proportional electoral system could favour a stable government.

Commodities

• Snapshot: Crude benchmarks are stronger this morning on a) the postponement of the Iran-Gulf nations meeting, and b) Saudi Arabia shutting the East-West pipeline. Spot gold is hampered by a stronger USD, whilst base metals have been dented by the risk-tone.
• To recap the geopolitical environment briefly, Oman postponed the Persian Gulf meeting on Monday, where Iran had planned to formally unveil a temporary shipping lane agreement for the Strait of Hormuz. Axios suggested that Saudi was concerned that the new Strait proposal would effectively establish a new status quo; however, the Iranian FM Spokesperson suggested that the meeting was postponed due to the Yemen-Saudi situation. On the supply front, Saudi shut the East-West pipeline, which reportedly threatens the loss of c. 4% of global supply. Marhelm sources pointed out that repairs could take over a month.
• Given the above, crude benchmarks gapped higher at the open and traded sideways for most of the APAC session. As the European session got underway, the oil complex caught another bid higher (on reports that the IRGC shot down a US drone, and following Iran FM comments). As it stands, Brent Nov’26 (+2.6%) holds at the top end of a USD 106.11/bbl to 108.65/bbl range; WTI Nov’26 (+2.6%) also holds at the upper end of a USD 101.59/bbl to 103.83/bbl range.
• Spot gold (-1.6%) has been hampered by a stronger USD (increased rate hike bets) and higher energy prices. As such, the yellow metal currently sits at the bottom end of a USD 4,279.28/oz to USD 4,355.40/oz range. This week, action for gold will be dictated by any geopolitical developments and the Fed mid-week. Elsewhere, base metals are entirely in the red, given the downbeat risk tone. 3M LME Copper currently trades at the lower end of a USD 14,100-14,236/t range.
• Saudi oil buyers and traders warned the kingdom could run out of oil stocks for exports if it doesn’t restart a major pipeline to the Red Sea within days, which could lead to a loss of up to 4% of global supply.
• Marhelm cited sources within Saudi Arabia that stated the damages to the East-West Pipeline will take over a month to repair due to a lack of spare parts and deeply impacted supply chains. Furthermore, it was stated that minor damages to the pipe have been repaired, but catastrophic damage to pumping infrastructure will take longer to fix.
• Exxon (XOM) executive said that they see US LNG supply growing to make c. 30% of global LNG supply by 2030.
• Shell (SHEL LN) executive said around 36mln tonnes of LNG from the Middle East have been lost to date.

Trade/Tariffs

• US President Trump said he’s not worried about Chinese President Xi calling off their summit scheduled for this month, while Japanese media reported that Beijing informed Washington it will cancel the planned summit if any new arms sales to Taipei are approved.
• US President Trump suggested he may be willing to permit a Chinese car company to build EVs in the US if it did so with US workers. It was separately reported that President Trump said the US will lift tariffs on Irish whiskey.
• US President Trump expressed optimism regarding resolving the trade dispute with Canada soon and downplayed prospects of leaving the USMCA, while Trump took verbal jabs at Europe regarding trade and immigration during his Ireland visit.
• Canadian PM Carney is set to meet with UK PM Burnham as Canada deepens its relations with Europe, while Carney proposed that Canada should become the EU’s first ‘associate member’, and the bloc is said to be open to the idea.

Central Banks

• ECB President Lagarde said the current inflation shock is longer-lasting, with the volatility and pressure on energy prices to continue amid the conflict in the Middle East.
• ECB’s Kazaks said the case is building for more tightening and the ECB can afford to act stepwise without rushing.
• ECB’s Simkus said he cannot exclude action at any meeting, adding that December is a natural time to assess the situation more.
• ECB’s Kazimir said all options will be considered for the next decision, but action will be taken if necessary.

Geopolitics: Middle East

• US President Trump said Iran-backed Houthis asked the US not to target them, while Trump reiterated that he expects the Iran war to end this year, possibly after the Midterms, but also suggested that the US could stay in Iran and keep the oil, like the Venezuela deal.
• Iran’s Foreign Ministry Spokesperson said that Saudi Arabia insisted that the meeting between Iran and Gulf nations in Oman not to take place and it will be postponed to another date due to the Yemen situation. The spokesperson added that the MoU between Iran and Oman is the result of weeks of intensive negotiations and was drafted with full respect for the sovereign rights of the two countries. On the situation in Iran, Baghaei said Iran has no interference in Yemen and denied any participation in the attacks on a Saudi oil pipeline. On the reports about nuclear activity in Pickaxe mountain, he called them “baseless”.
• Oman postponed the Persian Gulf Foreign Ministers meeting for an indefinite period. This was later confirmed by Iran.
• Oman’s Energy Minister said the Strait of Hormuz will be open and it’s probably a short-term situation, while he is pleased Oman is still able to continue producing oil and gas. Furthermore, he stated that skyrocketing oil and LNG prices are not sustainable and the situation should stabilise in the medium-term.
• Iran’s Akbari said “The Iranian route can be a sustainable alternative to the Red Sea route and ensure the connection of Asia, India, China and Singapore to Europe in times of crisis”
• Iran’s PGSA published an updated list of 77 vessels allegedly violating Iranian Strait of Hormuz protocols. The listed vessels could face future passage restrictions, including fines, detention or confiscation. Vessels cooperating with sanctioned ships will also be added to the list.
• Houthi Spokesperson claimed the attack on Saudi’s King Khaliq Air base, stating “The Armed Forces will continue to carry out significant military operations towards Saudi territory as long as it continues its unjust aggression against our people”.
• Saudi Crown Prince met the US CENTCOM chief to discuss the latest regional developments, according to Saudi state TV.
• Saudi civil defence issued emergency alerts for Khamis Mushait, Abha City, Jizan region and Najra province but said the danger has passed.
• Saudi Yanbu oil exports were halted after a pipeline attack, while weekend reports noted multiple explosions struck Saudi Arabia’s Yanbu Industrial City on Sunday.

Geopolitics: Other

• US President Trump said he could settle the UK-Argentina dispute regarding the Falklands, while he separately commented that he would love to see Ireland unified.
• North Korea fired multiple short-range ballistic missiles towards its east coast on Saturday.
• US President Trump said he warned Ukrainian President Zelensky to stop targeting Russian oil refineries as strikes have shut down diesel refining and helped lift prices of the fuel to record levels.

US Event Calendar

• No major events scheduled

DB’s Jim Reid concludes the overnight wrap

My new chartbook is on the Deutsche Bank Research Institute site here, where it is open to all. Titled ” The Home Straight “, it examines the key market themes as we enter the final stretch of the year. 

Welcome to a new week and one where I’ve started it with a severe case of manflu. My Whoop and Oura ring are flashing code red which was useful to show my wife as vague proof of my demise. While I coughed and spluttered, one of the more interesting developments over the weekend was a rare show of agreement amongst several of the most prominent AI leaders. The debate centred on whether frontier AI development is now moving so quickly that safety, oversight and our ability to fully understand the systems need more time to catch up. Whilst this falls a long way short of calling for a pause in development, it does represent one of the clearest acknowledgements yet from within the industry that there may be limits to how fast capabilities can responsibly advance. For markets, the key question is whether this is the first sign that the extraordinary AI investment cycle might eventually moderate. For now, that seems unlikely. The competitive race between companies and countries remains intense, and it’s difficult to imagine firms voluntarily stepping back while rivals continue to push ahead. It is hard to see China standing still. Indeed, that’s something President Trump said yesterday in response to the weekend news. He didn’t seem in favour of any kind of pause.  

I suppose another way of looking at it is that if leading executives are openly discussing the risks of increasingly powerful systems, it could be them trying to get across how transformative they believe the technology may become and help advertise the power of their product. So rather than signalling less spending, it could simply be that a greater share of AI investment is directed towards safety, monitoring and governance alongside the continued build-out of compute infrastructure. The debate may therefore alter the composition of AI capex more than its overall scale.  

Markets in Asia have reacted negatively to the story with the KOSPI (-2.74%) emerging as the region’s biggest underperformer. Chipmakers led the declines, with SK Hynix (-6.60%) and Samsung Electronics (-4.01%) weighing heavily on the index. The Nikkei 225 (-1.01%) is also under pressure amid broader weakness across the semiconductor sector. Major tech investor Softbank is -11.24% lower. Elsewhere, Chinese equities are mixed, with the CSI 300 (-0.32%) trading lower, while the Hang Seng (+0.35%) and the Shanghai Composite (+0.16%) are bucking the regional trend and remain in positive territory. S&P 500 (-0.50%) and NASDAQ 100 (-1.25%) futures are being notably impacted by the AI story, more than for Stoxx futures (-0.33%). 10yr USTs are around +0.6bps higher at 4.97%. The AI story would have probably led to a rally, but Brent is back up +2.82% to $107.56/bbl.

This follows the precautionary shutdown of a major Saudi pipeline late on Friday following recent attacks, and the postponement of today’s planned meeting between Iran and other Gulf states to discuss the creation of a temporary shipping corridor through the Strait of Hormuz. Several countries seem to have reservations about the plan. Meanwhile focus remains on the advances by the Iranian backed Houthis along the Red Sea around the Yemen coast, another important chokepoint.  

Moving on, it’s a bumper week for central bank decisions, with the Fed (Wednesday), BoE (Thursday) and BoJ (Friday) all meeting. Key data releases include US retail sales (Wednesday) and industrial production (Friday), UK inflation (Wednesday) and labour market data (Tuesday), economic activity in China (tomorrow), and inflation and trade in Japan (Friday and Wednesday respectively). Other events include the annual testimony of the US Treasury Secretary namely Bessent (tomorrow), and the State of the Union address in Europe (Wednesday).

Delving into more detail now and the main event for markets will be the Fed’s decision on Wednesday. Our economists have long expected a 25bp rate hike with the market now at 87% this morning up from around 35% two Friday’s ago just before Warsh’s Jackson Hole speech. Such a move would take the target range to 3.75%-4.00%. Our economists believe the accompanying projections are likely to show a somewhat stronger growth outlook alongside still-elevated inflation. They have also added an extra hike in March to their forecast which now makes it 75bps of hikes over the next 7 months. A big focus will be Warsh’s press conference and how he squares the circle between a dislike of forward guidance and calming markets which are baying for more info. See DB’s preview note  here.
Friday’s inflation data strengthened the case for action this week. Core CPI rose by 0.29% in August, a touch above expectations and up from 0.22% in July. The details were also firm, with notable strength in wireless services, airfares and lodging-away-from-home prices. Meanwhile, last Thursday’s PPI report contained hawkish elements, including stronger hospital and international airfare prices. Combining the latest CPI and PPI data, our economists estimate August core PCE increased by 0.27%, a pace they do not view as consistent with sufficient progress back towards the Fed’s inflation target.

Attention will now turn to incoming US activity data. Tomorrow, markets will receive Treasury Secretary Bessent’s annual testimony before the House Financial Services Committee. On Wednesday, August US retail sales are released and our economists expect a rebound to +0.9% month-on-month, following July’s -0.6% decline. They also forecast ex-auto sales at +0.6% and retail control sales at +0.3%, arguing that July’s weakness looked more like a temporary pause in consumer spending than the start of a broader slowdown. On Friday, industrial production is due and our economists expect growth to edge up to +0.3% from +0.2% previously.

Looking beyond the US, the BoE announces its latest policy decision on Thursday. Our economists expect Bank Rate to remain unchanged at 3.75%, with a 6-3 voting split, and continue to see the MPC remaining relatively cautious compared with some other major central banks. However, the bond market and energy moves at the end of the week make it a closer call than it was, with futures pricing in a 23% probability of a move, up from under 10% early last Thursday. See our economists’ preview here. Before that, UK labour market data are released tomorrow, while August CPI is due on Wednesday. Our economists expect headline inflation to rise to 3.04% YoY, while core CPI eases slightly to 2.53% YoY. UK retail sales, together with the GfK consumer confidence survey, follow on Friday.

In Asia, the BoJ concludes its meeting on Friday. Our economists expect a 25bp rate hike (futures price in a 98% probability now), and argue that external considerations, including pressure for greater FX stability, are likely to be at least as important as domestic economic fundamentals in driving the decision. See their preview here. Japan also releases trade data and core machine orders on Wednesday, followed by national CPI on Friday, where our economists expect core inflation excluding fresh food to remain at 1.8% YoY.

China’s August activity indicators are released tomorrow. Our economists expect industrial production growth to accelerate to 5.0% YoY from 4.5%, while retail sales and fixed-asset investment should also improve. Elsewhere, Germany’s ZEW survey is due tomorrow, while the ECB publishes its consumer expectations survey on Friday.

On the political front, the European Commission President delivers the annual State of the Union address on Wednesday, setting out priorities for the year ahead. Finally, the NATO’s Military Committee Conference takes place in Copenhagen at the end of the week.
Recapping last week now, the main story was a huge selloff for sovereign bonds, which pushed yields up to multi-year highs around the world. The main catalyst for that was a fresh surge in energy prices, with Brent crude oil up +8.65% last week (-2.81% Friday) to $104.61/bbl. Moreover, it wasn’t just confined to oil, as European natural gas futures also jumped +10.52% (-3.08% Friday) to €79.50/MWh. So that led to mounting fears of stagflation, along with growing speculation that central banks would hike rates more aggressively.

The prospect of faster hikes was given further support by the latest data. In particular, the US CPI print showed core CPI running faster than expected at +0.3% in August (vs. +0.2% expected), even as headline inflation was in line with consensus at +0.4%. So that led to mounting expectations that the Fed would deliver a rate hike at the next meeting, with futures raising the chance from 62% to 88% over the course of the week. Meanwhile, last week also saw the ECB deliver a hawkish 25bp rate hike, as their statement said that “inflation is set to remain well above target for an extended period”, and they upgraded their growth and inflation forecasts.

That backdrop meant that sovereign bonds sold off around the world. That was particularly clear at the front end, as the US 2yr Treasury yield saw its biggest weekly jump since the Liberation Day tariff turmoil in April 2025, up +25.9bps last week (+3.9bps Friday) to 4.63%. Moreover, it was also its highest closing level since July 2024. Otherwise, the 10yr Treasury yield saw its biggest weekly jump since May, up +18.5bps (+0.4bps Friday) to 4.97%. And over in Europe, the 10yr bund yield was up +16.5bps (+0.4bps Friday), ending the week at a post-2009 high of 3.50%.  

All that put mounting pressure on risk assets, with the S&P 500 down -0.80% last week (+0.86% Friday). Indeed, it would have been even worse were it not for the resilience of the Mag 7, which still rose +0.63% last week (+1.00% Friday). Then in Europe, there were even bigger falls given the continent’s greater exposure to higher energy prices, and the STOXX 600 fell -1.66% last week (+0.49% Friday). Elsewhere, credit spreads were more mixed. In the US, IG spreads (-2bps) and HY spreads (-2bps) saw a modest tightening. But it was the reverse picture for Euro IG spreads (+2bps) and HY spreads (+3bps).

European natural gas futures hit their highest level since December 2022 (early days of the Russia-Ukraine conflict) as domestic supplies remain well below the 15-year average. With the Northern Hemisphere winter approaching, the restocking phase may be jeopardized by maritime chokepoint madness across the Gulf and Red Sea, with the Strait of Hormuz and Bab al-Mandab Strait under threat.

Dutch benchmark futures jumped as much as 5.3% to 83.67 euros a megawatt-hour early Monday. Prices have tripled so far this year, and the latest surge comes after Saudi Arabia’s East-West pipeline was taken offline in recent days following a drone strike on pumping infrastructure.

Europe is heading toward the heating season with gas storage facilities just 68% full, well below the 15-year trend of about 85% for this time of year.

LNG arrivals into Western Europe retreated last week after an early-September recovery, while inventory replenishment slowed.

“The delay pushes any prospect of de-escalation even further out of reach,” analysts at ING Groep NV wrote in a note earlier.

A Timera Energy analyst warned that one consequence of low gas storage “is a more fragile winter balance,” adding, “That increases the potential for volatility if cold weather or another supply shock emerges faster than cargoes can respond.”

Translation: one cold snap this coming winter could trigger sharp price swings and intensify pressure on European households, as the energy-stricken continent is more than ever held hostage to conflicts in the Middle East.

Almonty Industries is positioning itself to “become the leading Western producer of tungsten,” potentially as early as 2027, as Western buyers confront a severe supply shortage sparked by China and, more broadly, what we’ve described as “resource nationalism.”

Bloomberg reports that Almonty has partnered with Rwanda’s government, securing a foothold in Africa’s largest tungsten-producing nation. The deal aims to accelerate access to existing production and develop a traceable, conflict-free supply chain for Western governments, reducing dependence on China’s quasi-monopolistic market position on not just tungsten but rare earths.

Under a binding agreement disclosed early Monday, Rwanda will receive a 25% stake in Almonty’s local subsidiary in exchange for an exploration concession and a processing license. The Dillon, Montana-based miner will retain a 75% stake. 

Almonty’s strategy to partner with Rwanda, as described by Bloomberg’s James Attwood, targets one of the West’s most pressing problems in its race to secure critical materials: new mines take years to build, while supplies are desperately needed. 

Attwood explained: 

Rather than waiting years for a new mine to be developed, the partnership plans to begin acquiring ore, pre-concentrate and panning tailings from existing licensed Rwandan producers, including small-scale miners. That material can initially be sold, upgraded or exported while the partners work toward building a permanent collection and processing facility in Rwanda.

CEO Lewis Black told Attwood in an exclusive interview that the Rwanda deal is the quickest and most viable solution to boost tungsten supply for the West, as new mines take years to develop and partnering with existing producers can deliver supplies more quickly. 

“Traders can play with the pirates,” Black said. “We’re only interested in licensed domestic output.”

Black said the US government helped structure the deal but is not funding the new venture. Tungsten will be shipped to customers in the US, Europe, Japan and South Korea, he added.

The US government’s involvement in the deal only suggests the urgency by the Trump administration to identify leading tungsten companies, such as Almonty, to quickly come up with solutions as China chokes the world of this critical material that underpins defense production, semiconductor manufacturing, AI data center buildouts, power grid upgrades and industrial tooling. 

Black also noted that the new venture plans to deploy a mobile processing unit near existing tailings dams and explore the roughly 12-square-mile Shyorongi concession. The deal boosts near-term supplies for Almonty while simultaneously developing a larger domestic processing and production base. 

Back said the deal with Africa’s largest tungsten producer and ranked seventh globally in 2025 serves as a blueprint for other countries where small-scale tungsten mining is practiced and it only seems like Almonty can take this blueprint and begin building out a rapid sourcing network of tungsten and become the early leader in deliverable tungsten on an ex-China basis. 

For Almonty, the deal expands its existing network, which includes a major mine ramping up in South Korea, operations in Portugal and projects in Spain and the US.

Almonty began processing ore at its crown jewel, the Sangdong mine in South Korea, in June, marking its transition to scalable tungsten ore production, with throughput potentially increasing to 1.2 million tons of tungsten ore in 2027.

In July, Almonty expanded its agreement with Pennsylvania-based Global Tungsten & Powders, extending the term to 21 years, increasing total contracted volumes by 40% and improving pricing by approximately 6.3%. This establishes a direct route into US industrial and defense supply chains.

Almonty’s most recent presentation describes itself as becoming the leading Western tungsten producer following Sangdong’s Phase II expansion and an extension at Portugal’s operating Panasqueira mine.

Almonty is pursuing that higher-value processing opportunity through a planned South Korean tungsten oxide plant with an initial annual capacity of 4,000 tons, then expanding to 6,000 tons.

Companies that can bring supply online sooner could capture a crucial early market advantage, including Almonty as it ramps up tungsten production in South Korea.

And that’s why Jefferies initiated coverage earlier this month. 

Jefferies initiates critical mineral companies Almonty, Materion, USA Rare Earth and Neo Performance with Buy; the firms are expected to benefit from increased demand for supply outside of China.

Almonty (buy, PT $26.25)

Sees Almonty offering public exposure to Western tungsten…

— zerohedge (@zerohedge) September 2, 2026

Across the tungsten industry over the last several weeks, there have been troubling developments of “resource nationalism”: 

• US Locks Down Scrap, UK Funds Mine, Zimbabwe Bans Exports, Vietnam Weighs Curbs

Last week, at the Jefferies Industrials Conference, MSC Industrial executive Martina McIsaac warned of a tungsten supply shock rippling through the company’s supply chain and continuing to drive up industrial tooling costs. 

China’s near-total control of the tungsten market …

… which Beijing’s February 2025 export-licensing requirements intensified the global shortage, contributing to a 70% decline in Chinese exports of ammonium paratungstate, or APT, through the first 11 months of 2025, according to Katusa analysts. 

Rotterdam APT prices jumped from around $390 per metric ton unit at the beginning of 2025 to roughly $3,400 this spring, according to Katusa Research. 

The shortage has spooked Wall Street, as mentions of “tungsten” on earnings calls have soared. 

Black said, “Better lucky than smart. Only need to be right once.” 

The advantage today belongs to producers that can turn deals into verified and conflict-free deliverable tungsten. In a market defined by scarcity, as former Goldman commodities head Jeff Currie has warned, early movers that deliver reliable supplies to the West will earn Wall Street’s recognition. That recognition could grow in the months ahead as the decoupling between China and the West accelerates.

Brent crude futures jumped overnight after Saudi Arabia shut its East-West pipeline following drone attacks last week, threatening a critical route for bypassing the highly contested Strait of Hormuz chokepoint and a loss of what could amount to 4% of global supply. 

The global oil benchmark rose as much as 3.7% to above $108 a barrel before trimming gains to $107.70 by 6:00 a.m. ET, while WTI futures traded around $103.

Riyadh described the shutdown as precautionary but gave no timetable for restarting the pipeline, which can transport upwards of 7 million barrels a day.

New geospatial intelligence shows what appears to be high-resolution satellite imagery of the aftermath of the drone attack that destroyed pumping infrastructure. Vantor produced this satellite imagery and shared it on X via The Hormuz Letter.

BREAKING: New high-resolution satellite imagery shows the pumping station on Saudi Arabia’s East-West oil pipeline burned out end to end, with the entire process area blackened and crude oil that escaped the site pooled across the desert beyond the perimeter, per Vantor imagery. https://t.co/DFJAplGNcC pic.twitter.com/uQEdn2YVFe

— The Hormuz Letter (@HormuzLetter) September 14, 2026

UBS energy expert Dominic Ellis summarized the weekend and overnight events unfolding across the Gulf region:

Brent has risen over $107/b on reports planned talks between Iran and GCC leaders on establishing a safe route through the Strait of Hormuz have been postponed indefinitely, and following reports Saudi Arabia closed its East-West pipeline following attacks late last week.

The pipeline, with capacity of 7mb/d, had played an important role in re-routing oil away from the Strait of Hormuz, and the impact of the pipeline’s closure on Red Sea exports (combined with recent Houthi efforts to disrupt Red Sea flows) will continue to support oil prices for the foreseeable future.

Near-term impact on energy equities is positive – the UBS team flagged 40% upside to consensus 3Q earnings earlier this month (with refining-leveraged names like Repsol, Galp and OMV having 80-90% upside), and while buy-side numbers have likely responded to rapidly-changing macro conditions more frequently than those on the sell-side, I still believe market-wide caution on the sector means there is upside to expectations. 

Saudi oil traders told Reuters on Sunday that if the East-West pipeline is not restarted promptly, then Saudi Arabia will run out of oil stocks for Red Sea exports. 

More color per the outlet:

Sources that spoke to Reuters gave varying estimates, with ​one saying the damage could take as long as five to six weeks to repair, while another said it could be fixed sooner ​and could resume pumping partially while repairs are ongoing.

Saudi Arabia’s government media office and energy ministry did not immediately respond to requests for comment.For the past six months, the pipeline running through the desert across the Arabian Peninsula has spared Saudi Arabia from the brunt of the impact of the ​wartime shutdown of the Strait of Hormuz that has crippled exports from its neighbours.

The world’s biggest exporter has used the pipeline to ​reroute around 4 million barrels per day — around 4% of global supply — to the port of Yanbu on the Red Sea.But with the pipeline out ‌of service, ⁠Yanbu now has stocks to maintain exports for just five to seven days, according to three industry sources familiar with Saudi exports.Saudi Arabia also has stocks to supply customers for several days from Egypt’s ports of Ain Sukhna on the Red Sea and Sidi Kerir on the Mediterranean, a fourth source said.

Yanbu storage capacity stands at around 35 million barrels, according to industry estimates, with Ain Sukhna and ​Sidi Kerir able to store 18 ​million and 20 million barrels ⁠respectively.Stocks are not full and will ultimately run out without the east-west pipeline resuming operations, the four sources said.Saudi oil supply has already fallen to a more than three-decade low in August on reduced ​flows via Hormuz and the Red Sea, the International Energy Agency said on Friday.World oil supply ​will decline this year by ⁠5.7 million bpd, or about 6%, the IEA, which coordinates Western energy policies, said.In addition to the attack on the pipeline, Houthi fighters in Yemen who have threatened Saudi oil shipments seized an island on Friday in the mouth of the Red Sea

Gulf developments over the weekend prompted Bernstein analysts Neil Beveridge and Brian Ho to warn that Brent could rally to between $120 and $150 a barrel as East-West pipeline disruptions collide with ongoing troubles along the Strait of Hormuz and the Bab el-Mandeb Strait in the southern Red Sea.

Beveridge described the market as “chronically undersupplied” and said their existing $90 Brent forecast for 2026 had been “overtaken by events.”

Combined flows through Hormuz, Bab el-Mandeb and the Suez Canal remain below 7 million barrels a day, compared with roughly 20 million before the conflict, according to Bloomberg.

One of the biggest restraints on crude prices this summer has been the 5 million-barrel-a-day reduction in Chinese imports. But analysts said that decline partly reflects Beijing tapping its estimated 1.5 billion barrels of SPR. Imports are now recovering and bidding up oil prices around the world.

Authored by Mark Nayler via FEE,

After another summer of heatwaves and wildfires, Spain is petitioning the EU to create a climate adaptation fund. In a letter sent to the EU’s climate commissioner Wopke Hoekstra, the Spanish minister for the ecological transition Sara Aagesen Muñoz said that Europe needs a blanket strategy to help its member states cope with climate change, and to mobilize the “resources needed to deliver the necessary investments.” The mobilizing strategy favored by Muñoz is a permanent windfall tax on energy companies, many of which have cashed in on higher gas and oil prices resulting from the wars in Ukraine and Iran. She also recommends more mutual debt financing, similar to the (supposedly one-off) Next Generation EU scheme introduced to help member states recover from the pandemic – an unpopular idea that is unlikely to be a feature of the EU’s next seven-year budget.

It wouldn’t be the first time that the EU has taxed exceptional profits. In 2022, in reaction to Russia’s invasion of Ukraine, Brussels imposed a minimum levy of 33% on fossil fuel companies’ surplus profits, defined as being 20% above their annual averages from 2018 (this in itself highlighted one problem with windfall taxes – namely, defining “surplus” profit). So far, however, the EU has resisted reintroducing what Meg O’Neill, the CEO of BP, calls a “highly flawed response to the situation”, instead pointing out that individual countries can introduce their own windfall taxes. Last month, Portugal imposed a tax of 33% on oil companies benefiting from the Iran war, saying that it was “both fair and necessary to create a solidarity mechanism.”

The fairness of windfall taxes, of course, is one of the most questionable things about them. As the Portuguese finance ministry said when introducing its windfall levy, the elevated profits of oil and gas providers this year have resulted “solely from external market conditions.” So why punish them? Advocates of an EU-wide windfall tax base their argument on this fact; but precisely the same circumstance provides a compelling reason to oppose them.

On this view, such taxes penalize oil and gas companies for benefiting from the operation of neutral market forces. These companies are also, of course, susceptible to market downturns – so one might expect to see them compensated by the state in hard times as well as heavily taxed during booms. That they are never compensated in this way suggests that windfall levies aren’t really about fairness. One suspects that many of their advocates want to punish energy companies, even when their extraordinary profits have been achieved without subterfuge, corruption, or creative bookkeeping. Proponents of windfall taxes also tend to assume that the resulting money would be better invested by governments than private entities. But as several controversies around the Next Gen EU scheme have reminded us, that is not a given.

Muñoz’s letter to the EU’s climate ministry comes less than a month after several EU member states put the idea of a EU-wide windfall tax to Ireland, which currently holds the six-month, rotating presidency of the Council of the EU. Germany, Spain, Portugal, Italy, Poland, and Austria are requesting that the presidency puts this idea on the agenda at the next meeting of EU finance ministers, due in Dublin on September 18 – 19. Echoing Muñoz’s call, they said that the EU needs a “common approach, one that ensures that those who are profiting from the crisis do their part to ease the burden on the general public.”

This is another questionable assumption – that an EU-wide tax on energy providers would transubstantiate into lower prices for consumers. But in some countries, it might have the opposite effect: as with Trumpian tariffs, higher operating costs could simply be passed on to customers. Patrick Pouyanné, CEO of TotalEnergies, has already warned that the company’s price caps of €1.99 ($2.30) and €2.25 ($2.60) for petrol and diesel, respectively – introduced in March and so far estimated to have cost the company around €200 million ($233 million) – would be scrapped if the French government imposed a windfall tax on profits connected with the Iran war.

Windfall taxes also create an unstable regulatory environment, which in turn can dramatically reduce share values. In July 2022, when Spain’s Socialist prime minister Pedro Sánchez announced a one-off “solidarity” tax on Spain’s biggest banks, Spanish-listed banking groups slumped by €5 billion ($5.8 billion; along with fossil fuel companies, banks are the most common target of morally-motivated windfall taxes). This “temporary” tax, which now operates on a sliding scale, has been rolled over until at least next year, highlighting another problem – that windfall levies often stick around well past their stipulated deadlines. The longer they exist, the less attractive the affected companies become to investors.

This was the main reason why ExxonMobil sued the EU over its “solidarity” tax in 2022, a year in which the American energy giant’s third quarter profits hit almost $20 billion, the largest it had ever posted and triple those of the previous year (“more money than God,” as then-US President Joe Biden put it). Filed through its Dutch and German subsidiaries at Luxembourg’s general court, ExxonMobil’s complaint stated that Brussels’s windfall tax would “undermine investor confidence, discourage investment, and increase reliance on imported energy and fuel products.” The case has yet to be resolved – but European courts would surely see many more like it if Spain’s recommendations are acted on.

The most devastating criticism of Spain’s proposal of a permanent windfall tax to combat climate change, however, is that it would be utterly self-defeating. It will cost an estimated €27 trillion ($31 trillion) for the EU to reach its 2050 climate neutrality goals, with the majority of that capital expected to come from the private sector. According to the European Central Bank: “Public policies should aim to remove structural rigidities, improve regulatory and administrative efficiency and foster green innovation.” The EU’s recent deregulation drive has those aims in mind; but a windfall tax on energy companies – especially if it remained in place for years, as Muñoz recommends – would have the opposite effect, by restricting the private sector’s ability to invest. Oil and gas companies are going to need more money than God to help facilitate the green transition.

In its focus on long-term prevention, rather than short-term reaction, the EU’s new wildfire strategy shows the direction in which the bloc should be heading with its climate policies. Punishing companies that have profited from geopolitical turmoil might cater to public anger at their windfalls; but in the long run it won’t benefit consumers, nor will it help Europe reach its climate goals. To realize those, the EU needs to work with its biggest energy companies, not against them.

Authored by Hussain Abdul-Hussain via RealClearWorld,

The U.S. is rightly pushing the UN Security Council to expand the Sudan arms embargo before it expires this Saturday. Outlined by Ambassador Mike Waltz and Senior Advisor Massad Boulos, the proposal would expand restrictions nationwide to cover all territory and warring factions. A comprehensive countrywide ban eliminates regional geographic loopholes used by illicit traffickers and provides the legal teeth necessary to choke off foreign weapons, especially drones, fueling Sudan’s devastating civil war, now in its fourth year.

To pass the resolution, America needs nine affirmative votes from the Council’s 15 members. Alongside permanent members France and the UK, Washington’s draft enjoys the support of Denmark, Greece, and Latvia. Panama and Bahrain could raise supporters to eight, one short of a majority.

Conversely, opponents include Somalia and Pakistan, two allies of Turkey and Saudi Arabia whose governments plan to continue arming the Sudanese Armed Forces (SAF). Two other African Council members, Liberia and Congo, are leaning “no,” joined likely by Colombia. Together with the permanent members Russia and China, the total no votes add up to seven, enough to block the resolution without forcing a Russian or Chinese veto.

Opponents of the full embargo argue that the SAF is the legitimate “state institutions” and should be allowed to arm itself while starving its rivals. This position aligns with SAF’s chief, General Abdel Fattah al-Burhan, who believes he can eliminate the Rapid Support Forces (RSF).

However, America correctly argues that the war in Sudan is a stalemate. Neither faction is strong or well-resourced enough to overcome its rivals, prevail, and govern the enormous Sudanese territory, an area larger than Texas, California, Montana, and New York combined.

Sudan is the third-largest nation in Africa, and its population of 53 million comprises over 500 distinct groups speaking more than 400 languages. While Arabic-speaking Sunni Muslims form the largest heritage group, they are fragmented into distinct regional and tribal confederations.

Historically, the Arab Riverine tribes – the Ja’alin, Shaigya, and Danagla – dominated Khartoum politically and economically, forming the backbone of Omar al-Bashir’s former regime and the mainstay of the SAF today. In contrast, the nomadic Baggara Arab tribes from Kordofan and Darfur serve as the demographic base for the RSF. Meanwhile, non-Arab, indigenous African communities include the pastoralist Beja of the Red Sea hills, the Nuba of the central mountains, and the sedentary Fur, who gave the Darfur region its name.

Since gaining independence in 1956, Sudan has been ruled by military autocrats and the Muslim Brotherhood. By the 1990s, severe droughts and desertification pushed nomadic Arab herders south into lands traditionally owned by sedentary, non-Arab African farmers.

In 2003, non-Arab Sudanese launched a rebellion. Khartoum organized Arab militias – the Janjaweed, predecessor of the RSF – to engage in widespread atrocities alongside SAF. These brutal, raid-based tribal tactics are being repeated in the current civil war.

Since independence, Sudan has experienced only four brief stints of democracy. The last began in 2019, when labor unions toppled the Islamist Bashir regime and began rebuilding a democracy underwritten by SAF’s Burhan and RSF’s Mohamed Hamdan Dagalo (Hemedti).

By 2021, the two generals deemed the civilian government redundant and dissolved it to rule jointly. However, former regime elements of the Muslim Brotherhood engineered a comeback by driving a wedge between the two men, convincing Burhan he could become the country’s undisputed ruler. Civil war erupted in April 2023. Burhan claimed the mantle of the legitimate government and declared the RSF an illegal militia. The RSF fought back, and the war continues to rage.

The U.S. State Department has already accused both sides of committing war crimes and has imposed targeted sanctions.

The Quad – comprising America, Saudi Arabia, Egypt, and the UAE – drafted a plan to end the war, requiring both generals to step down and restore civilian rule. Burhan, however, rejected the settlement, insisting the war will only end with the SAF’s total military victory.

As the conflict unfolded, the Quad clung to its toothless plan while the UN Security Council unanimously renewed an arms embargo every September that failed to stop foreign powers from supplying various factions. Now, America is coming to the UN with a plan that has teeth: a blanket arms embargo on all armed Sudanese factions.

The ongoing civil war has completely upended the alliances of Sudan’s past conflicts. The SAF alliance is heavily dominated by Arab and Muslim Brotherhood factions, earning it the backing of Turkey, Qatar, and Saudi Arabia.

Conversely, the RSF positions itself as anti-Islamist, receiving sponsorship from predominantly Christian and non-Arab Ethiopia, Kenya, and Uganda, alongside Chad and the UAE.

Treating all warring factions inside Sudan as equal aggressors and starving them of weapons is the best course of action.

A total embargo will lower the tempo of death and destruction, shut down the backdoor war economy, and might finally convince all parties that a military victory is impossible, leaving a negotiated political settlement as the only way forward.

It’s a curious position for European governments; for the past few years they have been rattling their sabers over the Russian war in Ukraine, calling for boots on the ground.  It’s the kind of intervention that would automatically trigger WWIII.  Yet, these same governments are completely unprepared in terms of military spending, armament and training.  

When the British government refused to join the US blockade against Iran in the Strait of Hormuz, almost no one cared because the British have allowed their navy to decay into irrelevance.  Twenty years ago, they had nearly 50 active fighting vessels and today they are down to 22 vessels.  Britain’s GDP per capita is currently lower than the state of Alabama.  And, they keep importing thousands upon thousands of third world migrants, with the vast majority relying on taxpayer funded subsidies. 

When given a choice between funding the British military or funding more immigrants, the government has chosen to fund more immigrants.  Britain has increased welfare spending by 16% in the past 5 years alone.    

A year ago the Brits, under pressure from the Trump Administration, took steps to expand their defense budget in order to better meet an increase in NATO obligations.  Multiple European countries have been avoiding these obligations for a long time, instead relying on the US to foot the bill while they enjoyed extra cash to spend on subsidized programs.  However, the British increase in their defense budget doesn’t mean much if the military is not actually allowed to spend any money.

The British Army has been ordered to pause most “non-essential” collective training (large live-fire drills, tank/Apache exercises, etc.) for UK-based units that are on standby (only 4% of British units are actually deployed).  The immediate reason is a shortage of cash in the Ministry of Defence’s day-to-day resource budget (RDEL). Fuel and ammunition prices have risen faster than planned, meaning routine training budgets drawn up years earlier no longer cover the same activity.

Their defense budget expansion is not even keeping up with inflation.   Leftists in the UK, of course, blame Trump.  But inflation in Europe hit well before Trump returned to office and the lack of accountability on the part of British progressives is not going to save them from the fallout.

Military officials warned two years ago that British training standards were outdated by a decade.  In June of this year, Defense Secretary John Healey quit after government refusals to provide adequate funding for training.  

Healey is now the Chancellor, and he’s due to present a budget in October that still has yet to find roughly £1.4 billion a year for the next three years to fund a plan stays within the government’s fiscal rules. The military is required to create a budget without diverting money from health or education programs. The training pause is a short-term cash-management measure – Longer-term funding questions remain unresolved.

An easy way to stockpile significant funding for British defense would be to stop all immigration and remigrate millions of third world residents who are feeding on government welfare.  But this is something the current leadership will never do.  Multiculturalism is their priority, for reasons that remain a mystery. 

On the bright side, less funding and less capability for Europe’s armies means a lesser chance that they will be shipped off to Ukraine to start a world war.     

Via Remix News,

Foreigners account for a massive share of thefts, sexual violence, and robberies on Paris public transport in 2025, according to new government data.

According to compilations from the SSMSI data files, foreigners accounted in 2025 for 87 percent of simple thefts on Île-de-France public transport, 60 percent of robberies, and 38 percent of physical assault.

In addition, foreigners account for 61 percent of sexual violence cases on Paris public transport and its surrounding regions.

National figures for foreigners committing crimes on public transport are lower but still high, approximately 76 percent of simple-theft suspects are foreigners and 71 percent of all theft suspects are foreigners.

Some groups are highly overrepresented among foreigners.

Maghrebi nationals, for instance, account for about 40 percent of theft suspects in transport nationwide, while making up roughly 2 percent of the national population, according to data analyst Marc Vanguard.

? Des chiffres CHOC sur l’insécurité viennent de sortir.

? Dans les transports en commun, les étrangers représentent 87% des mis en cause pour vols simples en Île-de-France, et 76% sur la France entière.

Tous les chiffres dans ce fil ??? pic.twitter.com/WK38I3FlKL

— Marc Vanguard (@marc_vanguard) September 10, 2026

INSEE’s latest estimate puts foreigners at 9.1 percent of France’s population in 2025, or around 6.3 million people. Their share is higher in Île-de-France, especially in the multicultural Seine-Saint-Denis department, but the crime for foreigners is still disproportionately high. In total, police and gendarmerie recorded 104,880 victims of theft, violence, or payment fraud in public transport nationwide in 2025, down 2 percent from 2024 and 22 percent from 2016 – the lowest level in a decade, including the pandemic years.

???? A Brazilian tourist was subjected to a vicious sexual assault on a French train on Wednesday morning, and only escaped being raped thanks to the intervention of a brave woman who filmed the assailant to scare him off.

Jhordana, 26, had been visiting her brother in Paris…. pic.twitter.com/pxOTu4fZXf

— Remix News & Views (@RMXnews) October 19, 2025

Theft without violence still accounts for 77 percent of those victims. Thefts and payment frauds fell but recorded physical and sexual violence rose slightly, jumping 3 percent. Drug-use and trafficking suspects in transport rose another 5 percent after the sharp Olympic-year jump in 2024.

It should be noted that among the “French” perpetrators, their potential migration background is not recorded. There are approximately 10 million people in France with a foreign background, including second-generation citizens with a migration background. As a result, a French citizen who is an ethnic Algerian, for instance, would be recorded as a French perpetrator in all crime statistics. France does not keep data on the race of crime suspects, as required by national law.

More broadly speaking, there are estimates that foreigners and French citizens with a migration background account for two out of three crimes in France.

??? This public awareness campaign in France shows a White man as the harasser on a bus.

French interior ministry stats from recent years have shown that 69% of violent crimes, including sexual assaults and harassment, on public transport in the greater Paris region were… pic.twitter.com/H3fRwEWtK2

— Remix News & Views (@RMXnews) July 3, 2025

Read more here…