Bloomberg

Lead Story

US Treasury Secretary Scott Bessent’s unexpected decision to at least double long-dated bond buybacks has sent shockwaves through global markets, driving the dollar to a three-month low and fueling a massive debasement trade that pushed Bitcoin past $75,000 and gold toward a third weekly gain. The aggressive fiscal intervention is already drawing comparisons to Japan’s yield-containment policies and raising concerns that it undermines new Federal Reserve Chair Kevin Warsh, though the White House clarified that Bessent acted on his own authority.

Markets & Economics

• US Economic Outlook Brightens on AI Capex and Private Spending: Economists upgraded third-quarter US GDP growth projections due to strong consumer spending and massive artificial intelligence capital outlays, as real-time business activity expands at its fastest rate since 2022. The accelerating expansion is bolstering corporate confidence, driving a fresh wave of private-sector hiring and investment across the economy.
• Euro-Zone PMIs Diverge as German Manufacturing Rebounds and French Heat Wave Drags: Euro-area private-sector activity registered a surprise uptick in August, propelled by the fastest manufacturing expansion in more than four years, led by a strong rebound in Germany. However, the regional recovery remains uneven, as an extreme summer heat wave severely dampened services sector activity in France.
• UK Retail and Budget Data Expose Fiscal Hurdles Ahead of Autumn Budget: The UK posted an unexpected £1.8 billion budget deficit for July, compounded by the first decline in retail sales in three months as scorching weather and fewer discounts kept shoppers home. The disappointing data highlights the narrow fiscal path facing new Chancellor of the Exchequer John Healey as he drafts his highly anticipated autumn budget.
• South Korea’s Export Surge Supports Case for Higher Interest Rates: Strong early-August export figures show that South Korea’s economy is continuing to ride the wave of global artificial intelligence demand. The sustained trade momentum is reinforcing the Bank of Korea’s hawkish stance, adding further justification for potential future interest rate increases.

Business & Industries

• Monte Paschi Launches Defensive €34 Billion Multi-Bank Takeover Bid: Banca Monte dei Paschi di Siena SpA has launched an audacious, defensive €34 billion ($40 billion) all-share bid to acquire Banco BPM and Banca Generali. The double-acquisition strategy is explicitly designed to bulk up the Italian lender and shield it from a hostile takeover by its larger domestic rival, Intesa Sanpaolo SpA.
• Anthropic Prepares Blockbuster IPO to Rival SpaceX Records: Artificial intelligence developer Anthropic is drafting plans for a potential US initial public offering as soon as the end of August, aiming to equal or surpass the scale of SpaceX’s record-setting debut. The IPO preparation reflects intense investor appetite for generative AI startups, though details regarding valuation remain closely guarded by the firm’s leadership.
• Walmart Suffers Rare Sales Slump, Relents on Apple Pay Integration: Walmart shares fell as much as 10% after the retail giant posted a rare earnings-season miss, with US comparable sales rising just 2.6%—its slowest expansion in over six years—due to pharmacy pricing pressures. In a bid to streamline checkout and appeal to increasingly picky, budget-conscious consumers, Walmart is finally ending its long-running holdout and adopting Apple Pay.
• Tesla and Rivals Recall Millions of EVs in China Over Safety Hazards: Tesla Inc. and eight other automakers have initiated a massive safety recall of over 3 million electric vehicles in China due to defective door handles . The regulatory action addresses design flaws that have reportedly caused vehicle entrapment and several fatal accidents, marking a significant quality-control crackdown by Chinese authorities .
• Boeing Engineers Reject Contract and Authorize Strikes at Critical Juncture: Boeing Co.’s engineers union has overwhelmingly voted down management’s latest contract offer and approved strike authorization . This labor defiance threatens to disrupt operations and delay crucial aircraft certification schedules at a highly vulnerable moment for the American planemaker .

Policy & World

• US and Canada Race Against Midnight Deadline to Seal Trade Deal: Negotiators from Washington and Ottawa are working around the clock to finalize a North American trade agreement before a midnight deadline, aiming to avert 50% duties on billions of dollars of goods. Canadian Prime Minister Mark Carney has signaled willingness to accept limited concessions, betting that long-term investment certainty outweighs the immediate pain of metals tariffs, which former Deputy Prime Minister Chrystia Freeland warned would harm Detroit’s auto industry.
• Trump Blends Midterm Campaigning with Strategic Tariff Relief on Ground Beef: To combat soaring food inflation ahead of the November midterm elections, President Trump announced tariff relief on up to 300,000 metric tons of ground beef imports over the next 90 days, pledging a 25% price reduction for consumers. The populist policy move coincided with a campaign rally in South Carolina, where Trump urged voters to “pretend” he is on the ballot to help carry his hand-picked Senate candidate, Darline Graham, across the finish line in a tight primary.
• Iran’s President Pleads for Diplomacy as US Prepares Tightened Blockade: Iranian President Masoud Pezeshkian has issued a public plea to hardliners in Tehran, urging an end to the conflict with the United States through diplomacy while Iran still holds “power and dignity”. The diplomatic push comes as US Treasury Secretary Scott Bessent prepares to unveil a sweeping pressure campaign to economically isolate Iran by targeting its global trading partners, including China, which is already facing dwindling supplies of readily available Iranian crude.
• Ukraine Strikes Russian Urals Oil Refinery in Campaign on Energy Exports: Kyiv has escalated its drone operations with a major strike on an oil refinery located deep within Russia’s Urals region, significantly extending the geographic reach of its campaign against Russian energy infrastructure. The attack is designed to squeeze Moscow’s domestic fuel production and disrupt lucrative crude exports, further straining the tight global refining system.

Opinion & Analysis

• Lisa Jarvis on the Significance of the Merck-Moderna mRNA Cancer Breakthrough: Bloomberg Opinion columnist Lisa Jarvis argues that the successful late-stage trial of Merck and Moderna’s mRNA melanoma vaccine represents a landmark triumph for biotechnology. Jarvis contends that after years of post-pandemic political backlash and repeated developmental false starts, this success paves the way for a revolutionary new class of personalized immunotherapies designed to train the body to eradicate cancer cells.
• Bloomberg Opinion on How Index Funds Distort Market Capital Allocation: A provocative Bloomberg Opinion column explores how the automated, massive inflows of 401(k) paycheck contributions into index-tracking funds distort asset pricing . The analysis argues that because these passive funds buy the same stocks in fixed proportions regardless of valuation, they systematically enrich index-hugging firms and corporate insiders while penalizing active fund managers who attempt to allocate capital based on fundamentals .

📊 I can turn this digest’s market data into a publication-quality chart comparing the performance of the US dollar, Bitcoin, and gold during this week’s treasury buyback announcement.