Market News

A September hike is now close to fully priced by markets, meaning the bigger risk for the yen sits with any surprise hold rather than with the move itself. Bessent's public nudge toward higher Japanese rates adds a political dimension, effectively narrowing the space for Tokyo's pro stimulus government to resist BOJ action. If Adachi's view proves right and the tightening cycle extends toward 2% or higher through next year, that would mark a materially steeper path than the median economist forecast, with implications for JGB yields, carry trades and yen positioning well beyond the immediate September decision. Soft consumption data complicates the picture, leaving open the question of how far the BOJ can lean into further hikes if…

The subpoenas mark an early but notable escalation of regulatory interest in one of the year's most dramatic hedge fund blowups,

• Did we just witness the largest single hedge fund rout of all time?
• He predicted the AI infrastructure boom, then leverage cost him control of a $16 billion portfolio

and could keep scrutiny on prime brokerage practices and leverage disclosure across Wall Street. Micron and SanDisk, the two stocks at the centre of the fund's forced liquidation, remain a reference point for how concentrated, leveraged positioning can amplify moves in AI-linked chip names during a drawdown. Citadel's rapid absorption and unwind of the acquired portfolio, alongside a strong July for its flagship fund, illustrates how the episode has…

• Trump on Canada: Someone should get these clowns to “fall in line"
• Bessent says no one is outside the reach of US sanctions on Iran, including China
• Trump says 50% tariffs on Canadian autos coming on January 1, 2027
• Canada July advance manufacturing sales -0.2%
• US set to impose a 7.5% tariff on Chinese goods - report

Markets:

• Gold up $51 to $4653
• US 10-year yields down 3.2 bps to 4.71%
• WTI crude oil down $2.02 to $85.04
• USD leads, CAD lags
• S&P 500 down 0.3%

The US dollar started the day soft but steadily climbed back. The turn came as Bessent spoke and delivered more threats on Iran than actual sanctions and a plan that was lightly throught through. In addition, his comments on the bond market sounded less like someone who wanted a real…

I previewed the Reserve Bank of Australia August meeting minutes here:

• RBA minutes due Tuesday to detail hike-versus-hold debate after August pause

Otherwise a quiet fort of data agenda ahead:

• Trump on Canada: Someone should get these clowns to “fall in line"
• Bessent says no one is outside the reach of US sanctions on Iran, including China
• Trump says 50% tariffs on Canadian autos coming on January 1, 2027
• Canada July advance manufacturing sales -0.2%
• US set to impose a 7.5% tariff on Chinese goods - report

Markets:

• Gold up $51 to $4653
• US 10-year yields down 3.2 bps to 4.71%
• WTI crude oil down $2.02 to $85.04
• USD leads, CAD lags
• S&P 500 down 0.3%

The US dollar started the day soft but steadily climbed back. The turn came as Bessent spoke and delivered more threats on Iran than actual sanctions and a plan that was lightly throught through. In addition, his comments on the bond market sounded less like someone who wanted a real…

U.S. stocks closed mixed, with the Dow managing a gain while technology shares—particularly semiconductor and AI-related stocks—came under heavy selling pressure.

The closing levels:

• Dow industrial average rose 140.03 points, or 0.26%, to 53,422.35
• S&P 500 fell 21.40 points, or 0.28%, to 7,652.96
• Nasdaq composite dropped 200.26 points, or 0.76%, to 25,980.19
• Russell 2000 declined 22.79 points, or 0.76%, to 2,995.08
• Nasdaq 100 fell 285.68 points, or 0.97%, to 29,023.18

The biggest sector story was the sharp decline in semiconductor, memory and AI-infrastructure stocks. The weakness extended across chipmakers, networking companies, optical suppliers and data-center-related names.

Some of the notable losers included:

• SanDisk:…

Morgan Stanley's upgraded forecasts point to a market that is tightening faster than expected, with falling oil-on-water and onshore inventories, including in China, reinforcing the bank's deficit call through into early 2027. The unusually wide gap between crude and refined product prices, with gasoil trading far above Brent, points to strained refining capacity alongside the crude-side tightness. On the equity side, Wilson's framing of oil as the single biggest risk to US stocks adds a cross-asset dimension, tying any renewed crude spike to higher bond yields and potential pressure on the Fed to respond. His preference for energy shares as a portfolio hedge, alongside quality names more broadly, signals how positioning may shift if the…

Crude sold off sharply despite the ratcheting up of US pressure on Iran, underlining how much of the recent risk premium had already been priced in after two straight weekly gains of over 5%. Traders treated Bessent's sanctions rollout as broadly telegraphed, with little fresh detail to justify holding onto recent length. Attention now shifts to whether Washington's threat of secondary sanctions can meaningfully curb flows to Iran's remaining buyers, chiefly China, since analysts flagged that outcome as the real swing factor for prices. Morgan Stanley's more bullish Brent call for the fourth quarter suggests the market is still pricing meaningful upside risk even after Monday's pullback, keeping the door open for renewed strength if…

There is something disquieting about a government fighting markets. There is a certain futility about it in large part because it rarely works. When it does work, it's usually of the Mario Draghi "whatever it takes" variety and some dramatic actions. Treasury Secretary Bessent talking about $4 billion in shifting maturity buying is almost comically under-armed.

Now they're floating using the Treasury general account but it's starting to look like they don't have a real plan. It goes back to Trump's impulsiveness and you get the sense that he tasks deputies with impossible goals.

Reuters is just out with a poll showing Trump's approval at 33% to match the lowest of his Presidency and the Iran war is increasingly unpopular as well. Just 31%…

The USDJPY is pressing against an important technical ceiling after rebounding from last week’s lows.

On Wednesday and Thursday last week, the pair briefly traded below its 200-day moving average (lower green line on the chart above at 158.33 currently), but sellers could not keep the momentum. Support emerged against the swing level near 157.96, and the failure to break lower gave buyers the opportunity to push the price back toward the shorter-term moving averages.

On Friday, the rebound initially stalled against the 100-hour moving average, but the price has now moved above that level at 158.91 and is testing the 200-hour moving average at 159.12. The current price is trading near 159.17.

That puts buyers in position to make another run…

US Vice President JD Vance said today that trade negotiations with Canada remain ongoing in something of a turnabout that's a hint that not everything is lost. Notably, Canada's counter-tariffs won't go into effect until Sept 7 and Trump is threatening Jan 1 tariffs on auto parts. The longer Canadian timeline and even-longer Trump timeline, suggest that both don't want to push things too far now.

I'm reminded of this great graphic from BCA, which is also a Canadian firm, it sketched out Trump's negotiating tactics based on plenty of precedents. 

You can even read today's message about Doug Ford as one where Trump doesn't actually want to escalate and wants a deal. But he doesn't want to be embarassed and used as a punching bag by Ford. The…

WTI crude oil futures are settling at $85.01, down $2.05 or 2.35% on the day. The low reached $84.36, while the high extended to $86.57.

Fundamentally, several factors helped pressure crude prices today.

First, there was some profit-taking following last week's gains, particularly ahead of the U.S. announcement of additional sanctions against Iran.

Second, although the U.S. announced a new campaign aimed at further isolating Iran economically, the initial measures stopped short of immediately imposing tougher secondary sanctions on countries continuing to trade with Iran. That appears to have reduced fears that significant amounts of Iranian crude would suddenly disappear from the global market. Iran also continues to export oil to China…