Bloomberg

Lead Story

The US launched targeted military strikes on Iranian infrastructure around the Strait of Hormuz after projectiles struck two commercial supertankers late Monday, driving global energy prices and bond yields to dramatic highs. This escalation triggered a global bond rout, pushing sovereign yields to levels not seen since 2008 as investors dump longer-maturity debt on fears of resurgent inflation and imminent central bank rate hikes. In the US, the 30-year Treasury yield entered its worst stretch since 2006, while Japan’s 10-year yield touched 3% for the first time since 1996, highlighting the severe, interlocking pressure on global monetary policy.

Markets & Economics

• Global Government Bond Yields Surge to 2008 Highs as Inflation Fears Re-emerge: Yields on sovereign debt across G7 countries climbed to their highest average since September 2000, fueled by soaring energy costs and mounting fiscal deficits. Traders are actively purchasing protection against further losses as Federal Reserve officials, including Governor Michael Barr, signal their readiness to raise interest rates decisively if inflation fails to cool.
• Euro-Zone Inflation Jumps to Three-Year High, Cementing ECB Hike Case: Euro-area consumer price growth quickened to its fastest pace in almost three years in August, reinforcing expectations of an interest-rate hike by the European Central Bank next week. Although Bundesbank President Joachim Nagel hailed a cooling in underlying inflation as a positive development, Governing Council member Gediminas Simkus warned that a single September hike will not be sufficient to return prices to the ECB’s target.
• India Defies Global Oil Disruptions with 7.8% GDP Expansion: India’s economy grew at a faster-than-expected 7.8% last quarter, indicating that the nation’s long-stagnant private investment cycle is finally stirring despite a difficult global backdrop. To manage massive capital flows, the Reserve Bank of India’s net short dollar book jumped to a record $136.8 billion in July, reflecting rising obligations from special deposit programs for overseas Indians.
• Israel Defies Forecaster Splits with Third Consecutive Interest Rate Cut: Defying evenly split expectations from market analysts, Israel’s central bank lowered interest rates to support local exporters facing shekel appreciation. The rate reduction comes as military conflict settles and political pressure mounts ahead of upcoming domestic elections.

Business & Industries

• John Ternus Succeeds Tim Cook as Apple CEO After Historic Valuation Surge: Tim Cook officially handed the reins of Apple Inc. to John Ternus on Tuesday, concluding a historic tenure marked by a 2,275% stock price surge that established the firm as a reliable market bet. Ternus takes charge as Wall Street analysts turn cautious on US equities ahead of historically weak September performance and high-profile midterm elections.
• Shein Stock Plunges as Much as 10% in Highly Anticipated Hong Kong Debut: Shares of fast-fashion titan Shein fell sharply upon debut on the Hong Kong Stock Exchange, closing down as much as 10% in early trading. The lackluster launch highlights concerns that Shein’s peak growth years are in the past, just as the retailer faces mounting regulatory scrutiny, western tariff threats, and intense competition.
• SoftBank and OpenAI-Backed SB Energy Files for US IPO to Fund AI Infrastructure: SB Energy Corp., a renewable energy developer backed by SoftBank Group Corp. and OpenAI, has officially filed for a US initial public offering. The company aims to capitalize on the massive, artificial-intelligence-driven power demands that are straining the electrical grids of modern data centers.
• Veritas Agrees to Acquire UK’s Bodycote for £1.65 Billion Amid M&A Surge: Veritas Capital agreed to purchase heat-treatment specialist Bodycote Plc for approximately £1.65 billion ($2.2 billion) after raising its bid to outcompete CVC Advisers. The deal helps push the total value of British takeovers past the $100 billion mark this year, demonstrating persistent interest in UK corporate assets.

Policy & World

• US Seizes Geopolitical Opportunity with Historic Venezuela Crude Deal: The Trump administration defended its landmark agreement to take control of more than 65 billion barrels of Venezuelan oil reserves, displacing OFAC-sanctioned operators aligned with deposed leader Nicolás Maduro. The agreement awards the US board veto power and a right of first refusal, with Chevron Corp. finalizing contracts for two giant fields in the Orinoco Belt and Coinbase co-founder Fred Ehrsam seeking control of three additional fields.
• Kyiv Pleads for Air Defenses as EU Allies Press Greece and Spain for Patriots: European allies are actively pressing Greece and Spain to transfer their stockpiles of Patriot air defense equipment to Ukraine as Moscow’s nightly bombardments intensify. With PAC-3 interceptors in short supply globally, officials are considering retrofitting older PAC-2 systems, while Ukrainian President Volodymyr Zelenskyy warns he will deploy drone swarms to close Russian airspace.
• China Blocks G20 Joint Statement Over Trade Surplus Spat with US: Treasury Secretary Scott Bessent announced that China blocked a joint G20 communique in Asheville, North Carolina, due to an intense dispute over Beijing’s massive trade surplus. To address competitive imbalances, Germany plans to agree on a package of measures in the coming weeks to counter what it views as unfair Chinese trade practices.

Opinion & Analysis

• Odd Lots: Why Monetary Policy is Getting ‘Messy’ for the Fed: Adam Posen, president of the Peterson Institute for International Economics, warns that despite Fed Chairman Kevin Warsh’s hawkish tone at Jackson Hole, setting monetary policy will get “messy”. Posen argues that Treasury’s currency interventions threaten Fed independence and that Warsh’s push for an FOMC “family fight” will test the markets’ tolerance for dissent.
• US Treasury’s Spike Lee Strategy for the Bank of Japan: This analysis breaks down US Treasury Secretary Scott Bessent’s aggressive rhetoric toward Japanese monetary policy. By invoking director Spike Lee’s film Do the Right Thing to publicly demand rate hikes from Bank of Japan Governor Kazuo Ueda, Bessent has shattered traditional diplomatic boundaries to address currency imbalances.

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