House Dems Launch Effort To Impeach Secretary Linda McMahon For Downsizing Education Department

Authored by Jennifer Kabanny via The College Fix,

A Democratic representative from Oregon, backed by numerous fellow lawmakers in the House, has filed articles of impeachment against Education Department Secretary Linda McMahon, alleging she is illegally dismantling the U.S. Department of Education.

Congresswoman Suzanne Bonamici introduced the resolution last Thursday, arguing “I introduced an impeachment resolution because Secretary McMahon has made it her mission to close down the Department of Education, something she does not have the right to do.”

The legislation is cosponsored by 16 fellow Democrats, according to a news release from Bonamici’s office.

“Since taking office McMahon has unlawfully ordered the transfer of at least five offices and their multiple programs to other agencies – all without the consent of Congress,” it states.

“Congress created the Department of Education and only Congress can dismantle it. These transfers essentially gut the Department of Education and obstruct the Department’s ability to conduct statutory oversight and disburse Federal funds appropriated by Congress through its authority under Article I of the United States Constitution.”

The resolution came shortly after it was announced the Education Department’s Office for Civil Rights duties will shift to the Justice Department and its special education office to the Department of Health and Human Services.

McMahon clapped back at the impeachment effort in a post on X.

It speaks volumes that House Democrats think an impeachable offense is working to improve student outcomes and reduce the federal bureaucracy. They must not be bothered by chronic failures of our education system that result in historic low test scores, a failed FAFSA form… https://t.co/OMkrpvdqoz

— Secretary Linda McMahon (@EDSecMcMahon) June 17, 2026

“It speaks volumes that House Democrats think an impeachable offense is working to improve student outcomes and reduce the federal bureaucracy,” she posted.

“They must not be bothered by chronic failures of our education system that result in historic low test scores, a failed FAFSA form rollout, classrooms shuttered during COVID, designating parents as terrorists, and males in female locker rooms.”

“Washington spends billions of taxpayer dollars annually—having spent more than $3 trillion since the Department of Education was established in 1980—yet just one-third of children can read proficiently.”

According to Higher Ed Dive, “Bonamici’s legislation isn’t likely to go far in a Republican-controlled Congress. So far, Rep. Tim Walberg, the Republican chair of the House’s education committee, called the move ‘political theater’ in a statement shared with media.”

Tyler Durden Wed, 07/01/2026 - 13:05

Goldman Sachs Warns Oil Inventory Rebuild Won’t Prevent 2027 Supply Glut

The global race to rebuild depleted oil inventories will not be enough to offset a massive glut that’s coming to the market next year, as traffic through the Strait of Hormuz appears to be headed toward normalization, according to Goldman Sachs commodity strategists.  

First, arguing the bullish side, stockpiles of crude and refined petroleum products in many parts of the world have been depleted to multi-decade lows after governments raced to release strategic stockpiles in March after the Middle East crisis trapped millions of barrels of daily crude and product flows in the Persian Gulf. These inventories will now have to be rebuilt - a process that’s likely to put a floor under oil prices, Oilprice reports..

In the United States alone, the U.S. Strategic Petroleum Reserve (SPR) has been depleted to a 1983 low, while stocks at Cushing, the delivery point of WTI, have crumbled to operational-stress levels.

In addition, many countries, especially in Asia Pacific, are looking to build new reserve capacity to boost their energy security and never again be caught off-guard by a massive supply disruption like the one triggered by the closure of the most important oil and LNG chokepoint.

But Goldman Sachs takes the bearish side, and says that all these demand-supportive factors cannot erase the major glut coming next year. 

The investment bank expects the global oil surplus to be about 3 million barrels per day (bpd) next year, Samantha Dart, co-head of global commodities research at Goldman, told Bloomberg Television in an interview on Wednesday.

“We do expect a little over 1 million barrels a day just of SPR rebuilding globally, but still, that would leave us close to 2 million barrels a day of a surplus,” Dart added.

Other Wall Street banks have also started to predict a glut next year after the U.S. and Iran signed a memorandum of understanding in mid-June to negotiate a peace deal.

Morgan Stanley, for example, has slashed its oil price forecasts for the next 18 months as it expects the reopening of the Strait of Hormuz to accelerate a new supply glut.

More in Dart's latest note available to pro subscribers.

Tyler Durden Wed, 07/01/2026 - 12:45

Elon's Next Move: Your Money

Authored by Adam Sharp via DailyReckoning.com,

For years, Elon Musk has dreamed of turning X (formerly Twitter) into the “everything app”.

Now that X is part of SpaceX (SPCX), and the combined company just raised $112 billion, the time looks ripe.

Elon envisions X as a single place where you can bank, chat, earn, advertise, use AI, shop, and more.

X Money is a key part of that vision. And we just got the first idea of what it will look like.

The program just launched to a small group of users. To attract deposits, X is offering some pretty crazy (and likely temporary) perks:

• 6% APY on cash, no deposit limit

• 3% cash back on purchases (with exceptions)

• $10 million FDIC insurance (by splitting deposits up between banks)

A 6% yield is not sustainable long-term (at current interest rates). It’s a teaser rate to get people to switch to X Money. Same goes for 3% cash back. That’s 3x higher than the industry average, and will almost certainly not last long.

These teasers may get a lot of people to switch. But it’s unclear how long the perks will last, and it’s currently only available to a small group.

X is not a bank. At least not yet. It’s more like a “neobank”, which manages the marketing and customer relationship, while licensed banks handle the deposits.

But for the user, it feels like a bank account and debit card. Deposits, yield, wire transfers, autopay, P2P payments, etc.

The WeChat Model

Musk’s desire to build the “everything app” may have been inspired by China’s WeChat.

WeChat is owned by Chinese tech firm Tencent. It started out as a simple messaging app. But Tencent rapidly expanded its utility, and today it is basically a digital operating system for the country.

In China, WeChat is used for payment, invoices, government interactions, making appointments, videos, shopping, games, chatting on social media, and much more.

WeChat Pay holds a massive 38% share of payments in China. More than a billion people use the app. It’s so ubiquitous that many Chinese people essentially run their lives through the app.

Largely as a result of WeChat’s success, Tencent has become a $488 billion tech giant.

This is what Musk is aiming for. If X Money succeeds, it could help justify SpaceX’s lofty valuation of $2.2 trillion.

SpaceX’s Huge Ambitions

X (formerly Twitter) has been the least-discussed part of SpaceX.

All the attention has been on rockets and AI. For good reason. Those are both very exciting areas.

But X deserves attention as well. Musk aims to turn the social network into a super-app, much like WeChat. Musk purchased Twitter for $44 billion. If he succeeds, it could be worth much more over the long term.

But running what is essentially a combination bank and social network is no easy matter. For one thing, it makes security far more important (and challenging). It’s going to require a massive customer support team. And that’s one area where Elon’s X has struggled.

X Money is going to be a critical part of building the “everything app”. And the team is going big on the launch.

Think about the 6% APYs X is offering on deposits. Let’s say that X Money attracts $10 billion in deposits over the first year.

Paying a 6% yield on that much cash could cost SpaceX $240 million a year in losses. That’s assuming their own internal return on cash is around 3.5%, plus bank fees and other transaction costs. This is why I assume the 6% APY is temporary.

And the 3% cash back? That appears to be on a debit card, which doesn’t have the same fee support as a credit card. So that could be another very expensive tool to attract users.

But the losses could be worth it. The market they’re targeting is massive. Payments, banking, and eventually – everything.

So will X succeed in becoming a “super app”? Honestly? I think it’s a long shot.

X Money would probably need to be wildly successful and run away with the market.

One problem is that Meta/Facebook (META) will copy anything that looks to be working. The company is notorious for it. And they have a much larger user base. Meta also already has WhatsApp pay and several payment integrations with Facebook.

Another problem is that American banks are extremely profitable, and in some ways act like a cartel. They won’t appreciate X stepping onto their turf, and may fight back. With lawfare, lobbying, or other means.

A Beautiful But Difficult Model

The “everything app”, or the WeChat model has been the dream of every social media company in the world for a while. But it’s going to be very difficult to pull off at this stage of the game.

Then again, we should never count Elon out. If he’s going to go hard after this market, SpaceX certainly has a shot at winning it.

SpaceX just raised $87 billion in its IPO, then another $25 billion in bond sales. That is a massive war chest.

SPCX has big aspirations. And with a $2.2 trillion market cap, it has a lot of growing to do in order to justify that lofty price.

X Money is a calculated risk by SpaceX. One that could pay off big.

I don’t have a position in SpaceX, but it’s going to be fascinating to watch.

Tyler Durden Wed, 07/01/2026 - 12:25

Democratic Socialist Melat Kiros Ousts 15-Term Rep. Diana DeGette In Colorado Primary

As we've been noting of late, the Democrats have a problem: socialists are on the move. The latest - in a striking upset, democratic socialist Melat Kiros defeated 15-term U.S. Rep. Diana DeGette in Tuesday's Democratic primary for Colorado's 1st Congressional District. The victory extends a recent winning streak for the party's left wing and hands Republicans fresh ammunition heading into the fall campaign.

Democratic socialist Melat Kiros (L) ousted 15-term Rep. Diana DeGette in Tuesday's Democratic primary

Kiros, a 29-year-old former attorney, defeated the 68-year-old incumbent who has represented the Denver-based seat since 1997. DeGette, a member of the Congressional Progressive Caucus, had long been viewed as secure in the solidly Democratic district. Kiros's win, backed by Sen. Bernie Sanders and the Democratic Socialists of America, came just one week after the DSA notched several high-profile primary victories in New York City.

The result is likely to intensify internal Democratic tensions. While party leaders sought to minimize last week's New York outcomes, Kiros's success in a Western swing state makes it harder to dismiss the pattern as a purely local phenomenon confined to deep-blue urban strongholds.

According to Axios, Dems are freaking out. 

Rep. Diana DeGette (D-Colo.) was a staunch progressive, not a moderate, these members are privately fuming. So why did she become a target of the left?

•     "One more case in the growing dynamic of performative politics," one House Democrat, speaking on the condition of anonymity to share candid analysis on the results, told Axios.
•     "Diana was an excellent representative with seniority — but the style of someone younger and more outspoken has become more attractive to that cohort of motivated urban left voters."
•     A senior House Democrat called the result a "wake-up call" for members of Congress

Kiros drew scrutiny during the campaign for a letter she wrote criticizing the view that calls for the elimination of Israel constitute antisemitism. Despite those comments, she built a strong coalition among younger, college-educated voters who have moved into the district in recent years. With most votes counted, she held a roughly four-point lead when major outlets called the race.

GOP strategists quickly framed the outcome as evidence that the party's left flank is expanding its influence beyond traditional strongholds, according to The Hill. A spokesperson for the House Republican campaign arm said the result showed "the socialist takeover of the Democrat Party is no longer confined to deep-blue strongholds," arguing it would complicate Democratic efforts to flip the House.

Other Anti-Incumbent Signals In Colorado

Voters delivered additional rebukes to establishment figures on Tuesday. In the Democratic primary for governor, state Attorney General Phil Weiser defeated U.S. Sen. Michael Bennet, who had been considered the early frontrunner. Weiser, while a mainstream Democrat, ran an insurgent-style campaign that emphasized his record of suing the Trump administration 66 times and criticized Bennet for confirming some of President Trump's Cabinet nominees. He also portrayed the senator as too aligned with wealthy donors.

Bennet will keep his Senate seat and faces re-election in 2028.

In the U.S. Senate primary, Sen. John Hickenlooper successfully turned back a challenge from progressive state Sen. Julie Gonzales.

General Election Landscape Takes Shape

Tuesday's results also clarified several November matchups that could affect control of the House.

• Colorado's 1st District: Kiros is now the heavy favorite to hold the safely Democratic seat for her party.
• Colorado's 8th District: The contest remains one of the most competitive in the country. Vulnerable Republican Rep. Gabe Evans will face state Rep. Manny Rutinel, who won the Democratic primary. Cook Political Report rates the suburban Denver seat a toss-up.
• Colorado's 5th District: Army veteran Jessica Killin won the Democratic nomination to challenge Republican Rep. Jeff Crank. The seat has trended left in recent presidential cycles, though it remains in Republican hands.

Democrats currently need a net gain of three seats to retake the House majority.

The Colorado results add to a growing body of evidence that primary voters in 2026 are rewarding candidates who position themselves as outsiders - whether on the left flank of the Democratic Party or as critics of Washington incumbents more broadly.

Colorado's results come on the heels of last week's Democratic primaries in New York City - which turned into a referendum on the Democratic Party itself. 

Three socialist-backed candidates, backed by New York City Mayor Zohran Mamdani, won their races. The Democratic establishment got slaughtered, and the man left holding the wreckage is House Minority Leader Rep. Hakeem Jeffries (D-NY).

Every candidate Jeffries backed went down. That alone would be a bad night. What made it worse was the scene at the victory party for socialist-backed winner Claire Valdez, where the crowd erupted in boos when Jeffries's image appeared on screen, then broke into a chant: "You're next," a clear sign that his leadership position won't protect him from being a target of the Democratic Socialists of America Party.

Tyler Durden Wed, 07/01/2026 - 12:05

Is The SpaceX Asteroid About To Impact The TelCo & Cable Dinosaurs?

Authored by Simon Duff via BondVigilantes.com,

SpaceX’s IPO was a gargantuan event by any measure: US$75 billion proceeds raised, over US$2 trillion enterprise value, and an almost US$29 trillion total addressable market to feast on.  Few other companies can rival its industrial span and potential seismic impact on consumers and competitors.  SpaceX’s valuation is driven by its sci-fi AI segment replete with space-based data centres and moon bases.  However, its more immediate impact maybe felt in the more down to earth world of telecom.

SpaceX’s cash cow is the Connectivity segment where it operates a constellation of 9,600 low earth orbit (“LEO”) satellites under the Starlink brand. 

These provide broadband and in-fill mobile voice & data services to consumers in predominantly remote areas where terrestrial broadband and mobile networks are patchy or absent. 

In addition, Starlink offers broadband services to ships and aircraft where terrestrial networks are entirely absent. 

In 2025, the Connectivity unit generated US$3 billion free cash flow (EBITDA less capex) from almost 9 million broadband and over 6 million mobile global subscribers and from its corporate contracts with airlines and ship operators.  

By way of comparison, the 5 largest US telecom & cable players generated almost US$111bn free cash flow (EBITDA less capex) and had approximately 95m broadband subscribers and 275m mobile postpaid subscribers.  

Looking at those stats you would be forgiven for thinking that US telecom & cable operators don’t have all that much to worry about.  The problem is that this is just the beginning for controlling shareholder and CEO Musk who has proved himself a visionary with Olympian levels of ambition and matching access to capital.  

Using the latest and largest Starship rockets, Musk plans to launch 10,000 next generation V3 satellites from late 2026.  Each of these satellites will have 1 terabit of capacity, which is 10x the capacity of the current V2 satellites.  This ramped capacity will boost current median download speeds (225Mbps) to levels on a par with fibre and cable terrestrial alternatives.  It will also allow pricing to come down (vs the current US$66 average cost per month).  True, there are issues around the need for “line of sight” from the dish to the satellite in dense urban areas and practical difficulties around installation in multi dwelling unit (MDU) housing blocks.  But these are portions of the market and hence a break rather than a block on roll out and uptake. 

Obviously, the incumbent operators will not sit there like lemons waiting to be squeezed. Instead they can try to lock in their bases via converged broadband and mobile bundles, often at a discount (as both AT&T and Verizon’s recent offers implied).  Or they can simply cut their standalone broadband pricing.  Either way, the risk is broadband subscriber losses, or revenue per subscriber decline, or a combination of both.  And this would be in a market that no longer benefits from immigration or housing build tailwinds that historically increased the total available economic pie in the US.  Most exposed to this risk are the US’s dominant broadband providers: the cable operators. Both Comcast and Charter equity have fallen approx. 30% & 70% in the last year, respectively, with the pace of decline picking up notably as the SpaceX IPO bandwagon rolled into town. 

However, does Musk stop there? 

If we can think of an incumbent bundled defensive play then we are pretty darned sure that Musk can too. So how would he counter the incumbents’ counter?  In short, by going mobile. At present, the party line from the telecom operators is that Starlink’s “direct to device” (D2D) service is a pure complementary in-fill service to supplement mobile operators’ existing coverage and nothing more. However, their behaviour suggests otherwise.  All three players (Verizon, AT&T and T-Mobile) have been clear that they will not offer Starlink a “virtual network” agreement enabling Musk to re-badge and re-sell their mobile service.

Similarly, all three were swift to announce a D2D JV that would enable them to present a united front to Starlink on future negotiations.

Assuming the US mobile players hold this line and are allowed to do so by regulators, then Starlink has two options if it’s serious about offering mobile beyond remote areas: build or buy a terrestrial network.  To build its own mobile network Starlink would need spectrum and terrestrial infrastructure (towers, fibre backhaul, network radios).  Starlink already has access to 65 Mhz of terrestrial spectrum (different from the spectrum it uses to offer broadband) that was acquired from Echostar.  Although dwarfed by the incumbents’ spectrum holdings, Starlink’s network would be relatively empty and upcoming auctions offer the chance to supplement these holdings.   Furthermore, Echostar (a 3% SpaceX shareholder) could play a complementary role as either an acquisition target or partner that brings with it a range of network related assets/agreements that could facilitate a Starlink mobile network roll out. Not least of which is a multi-year AT&T national roaming deal that AT&T has been tight-lipped on confirming or denying a change of control break clause to prevent Starlink exploiting this valuable contract.   

And Echostar is not the only option.  When Musk was recently asked if he could consider buying Verizon he said that “it was not out of the question”.  To be clear, Verizon’s market capitalisation is less than 10% of SpaceX’s and also brings with it valuable FCF (YE25: US$20bn).  Lastly, we don’t think it is any co-incidence that the rumour mill has been spinning with regard to German incumbent Deutsche Telekom buying out its 54% owned subsidiary, T-Mobile USA.  If Musk is going to be on a shopping spree you probably want to own 100% of what he might want to buy and T-Mobile USA offers the best mobile network, deepest mobile spectrum portfolio and the least “redundant” broadband exposure of all the US players.  Unfortunately AT&T is probably overly endowed in this latter area with 38m fibre homes passed and hence unlikely to be of interest to SpaceX.   All in all, we see the potential for a single mobile player being acquired as cold comfort to the US telcos relative to the potential step change in the competitive dynamic across the broader ecosystem. 

And who is best insulated from all this potential disruption? 

From an industrial perspective, towers look well positioned. 

If the US goes to four networks, demand for space on the towers will increase whilst, if SpaceX acquires an incumbent, tower demand should at least remain steady no matter how squeezed the incumbent operators’ margins become.

From a geographical perspective, a combination of Europe’s lower pricing from years of fierce competition & regulation, SpaceX’s lack of terrestrial spectrum, and Europe’s higher urban and MDU density make it a much harder market to attack.

Ironically, European telcos that have long played second fiddle to their US counterparts on competitive dynamics, growth rates and FCF generation might now heave a sigh of relief and actually be thankful for the harsh regulation and competitive dynamics they previously railed against.

Tyler Durden Wed, 07/01/2026 - 11:45

Miller: Every Single Haitian Migrant Is Going Back To Haiti Under Trump

Authored by Steve Watson via Modernity News,

White House Homeland Security Adviser Stephen Miller delivered a clear and forceful message: every Haitian national on Temporary Protected Status will be returned to Haiti under President Trump.

The Biden administration's last-year extension of TPS turned what began as a short-term response to a 2010 earthquake into a permanent pipeline. Miller called the deliberate importation of these migrants into places like Springfield, Ohio, one of the most heinous acts the government has ever committed.

Miller laid it out without hedging:

Stephen Miller: "The illegal alien Haitians are going back to Haiti. They can build their country there."
pic.twitter.com/l56e2Tu5fH

— Defiant L's (@DefiantLs) June 30, 2026

"There's an earthquake in Haiti. So she's (Former DHS Secretary Janet Napolitano) announcing TPS for a few months while they're recovering from an earthquake. That was in 2010, 15 years ago. Then the Biden administration in its last year extends TPS to every single illegal alien from Haiti while they are flying them en masse into Springfield, Ohio, across the Midwest."

He continued, "It was a formal policy of replacing the communities that lived in, settled, and sustained these communities for generations. It was one of the most heinous things this government has ever done."

"And yes, under President Trump, let me be very clear, the illegal alien Haitians are going back to Haiti. They can build their country there," Miller further urged.

This directly follows the Trump administration's earlier termination of TPS protections for 353,000 Haitians, with those designations set to expire.

The move reversed Biden-era renewals that kept hundreds of thousands in the country long after any temporary justification had passed.

Springfield became the most visible example of the fallout. Local residents watched as federal policies funneled large numbers of Haitian migrants into their city, straining housing, schools, and public resources.

Stephen Miller says every single Haitian on temporary protected status is going back

He says The Biden Admin specifically imported them into Ohio to replace the native population and "It was one of the most heinous things this government has ever done"

"There's an earthquake in... pic.twitter.com/4mfehuGJkM

— Wall Street Apes (@WallStreetApes) June 30, 2026

Americans reported being priced out of apartments while migrants received housing assistance.

Parks saw geese and other wildlife targeted. In one city commission meeting, Springfield City Manager Brian Heck admitted he had "heard about" reports of Haitian migrants eating pets.

The conditions many of these migrants left behind in Haiti only underscore why prolonged TPS extensions made little sense. Armed gangs, including groups with documented histories of extreme violence and intimidation tactics, have dominated large parts of the country.

Earlier coverage highlighted how some media outlets appeared more exercised by conservatives simply stating these facts than by the violence itself.

In a separate but related immigration development today, the Supreme Court issued a 5-4 ruling striking down President Trump's executive order limiting birthright citizenship for children born to illegal immigrants.

BREAKING: In a 5-4 ruling, the Supreme Court struck down President Trump's executive order limiting birthright citizenship for children born to illegal immigrants in the United States. pic.twitter.com/XZDld7UkxT

— Breaking911 (@Breaking911) June 30, 2026

The decision keeps in place a policy that automatically grants U.S. citizenship to children born on American soil regardless of their parents' legal status.

Critics have long argued this creates powerful incentives for unlawful entry and serves as a form of chain migration that complicates enforcement.

One of the most destructive and outrageous decisions in the long history of the Supreme Court. American citizenship is not the birthright of the world. It belongs only and solely to Americans. No provision of the Constitution can be read to require our national self-obliteration. https://t.co/qZuwzZq5tr

— Stephen Miller (@StephenM) June 30, 2026

The 14th Amendment's citizenship clause was crafted in the aftermath of slavery to secure rights for freed people, not to function as a standing invitation for foreign nationals to secure citizenship for their offspring through illegal presence.

While the birthright ruling hands open-border advocates a victory and adds another layer of legal friction to enforcement, Miller's remarks show the administration is not pausing on other fronts.

TPS designations were always meant to be temporary. Extending them for 15 years while actively importing large numbers into specific American communities was never about humanitarian relief - it was about demographic engineering.

American towns like Springfield paid the price in drastically altered neighborhoods, and lost quality of life. Restoring the original meaning of temporary protection and returning those without ongoing legal status is not radical. It is the baseline responsibility of any government that puts its own citizens first.

The message from the White House is consistent: the replacement experiment is over. Those here under expired or terminated protections are going home.

Haiti's future will be built by Haitians in Haiti, not by continuing to offload its population onto American communities that never asked for the burden.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Wed, 07/01/2026 - 11:05

 

Funny story: I was supposed to have Bobby Bonilla on for Masters in Business, but it did not come to pass.1

That was a shame, because it’s a fascinating cautionary tale about hubris, fraud, misunderstanding risk, and all sorts of other amusing and fun BeFi issues.

I went deep down the Bobby Bonilla Day rabbit hole, and it led me to some really astonishing findings. The basic story is this:

In 1999, the NY Mets decided to cut Bonilla loose after the season ended. Rather than pay him the $5.9 million contract balance in a lump sum, they offered a deferred deal of $1,193,248.20 for 25 years beginning July 1, 2011. That is an 8% interest rate, resulting in a total deal value of $29,831,205 over 36 years.

Why would the Mets do this?

Through a combination of misunderstanding risk, overconcentration in a single investment strategy, and not recognizing when an investment scenario was too good to be true. Getting scammed by the biggest Ponzi scheme in modern history didn’t help either.

These errors led the Mets’ ownership to craft the dumbest deferred deal in MLB history.

Sterling Equities was run by Fred Wilpon (Chairman) and Saul Katz (President). They acquired a partial interest in the New York Mets in 1980 and became full owners in 2002. Both men had a close relationship with Bernie Madoff, and they (along with friends and families) were associated with 483 Madoff accounts. Generating 12% per year, guaranteed. (!?)

Instead of simply paying $5.9 million dollars in lump sum, the strategy was to generate a positive return on Bonilla’s buyout of $8,496,000 by 2011, and an additional net arbitrage of $5,900,000 over what was paid to Bonilla by 2035.

Of course, all of this presumed that Madoff was not a felon scamming billions from his clients, including Wilpon and the Mets.

I reverse-engineered the deal the best I could, and I believe the math looks something like this:

For the dozen years covering 2000-2011, the $5.9 million the Mets owed Bonilla would generate about $708,000 per year at 12%. By the time the team would have to start paying the deferred contract in 2011, they would have accumulated $8,496,000 in annual returns; this is 12% only, and does not assume any additional compounding!

From 2011 on, the Mets would pocket the difference between the 8% contract payout and the 12% Madoff returns. That difference is $236,000 annually, or $5,900,000 over the 25-year deal. It is not a coincidence that this is EXACTLY the buyout amount owed to Bonilla.

Oh, to be a fly on the wall listening to that pitch:

“Not only do we earn $8.5 million before paying a single penny to BB, but the net arb over the life of the deal covers his full $5.9M! It’s free money!”

Only, not so much. The cost of NOT paying the $5.0m payout was $23,931,205.

The lessons here are obvious:

-Simplicity beats complexity
-Money has a time value
-If it looks too good to be true, it probably is.

Also, don’t do business with conmen…

 

 

 

__________

1. There was some confusion with Neuberger, which has Bonilla as a spokesperson of sorts for their annuities; there was some confusion (a ridiculous demand by them, actually) about a co-branding sponsorship that violated all sorts of Bloomberg rules, so they unfortunately pulled out of the recording.

 

The post Reverse Engineering the Met’s Bobby Bonilla Deal appeared first on The Big Picture.

Russia Closes Border Crossings With Several NATO States After Finland Lifts Nuclear Ban

Finland's parliament has finally followed through with a previously threatened move to reverse its decades-long ban on nuclear weapons. The June 17 vote to lift the ban in effect legally authorizes the Nordic country to receive, transport, and facilitate the movement of nuclear weapons on its territory as part of allied operations, with the representatives' final tally at 125 to 61.

Finland officially became the 31st member of NATO in April 2023 - having abandoned its historic neutrality in the wake of the Russian invasion of Ukraine, in what was among the fastest accession processes in the Western military alliance's history. Now it is already willing to host allied nukes on its territory, making it a target of Russian retaliation.

Moscow has long warned against such an ultra-provocative move. The Kremlin said Monday that this requires a response - given also the fact that Russia and Finland share an over 800-mile long border, which is made up largely of Arctic frontier.

"The results of the vote represent both bright and unflattering victory of the blind Russophobia of the past few years over what we have always viewed as pragmatic sanity in Finland," said Russian Foreign Ministry spokeswoman Maria Zakharova.

via Atlantic Council

“And let nobody doubt that [response] measures will be taken timely and effectively. In this light, the Finnish people need to think whether this decision made by their elites will actually enhance security in Finland itself,” she added.

As a start, Russia has moved to shutter more rail crossings to NATO states, including Finland - which is to further severely impact trade:

Russia has closed seven railway border checkpoints with Finland, Estonia and Latvia, according to a government decree published Tuesday.

The suspension, which takes effect July 1, halts the movement of individuals, vehicles and cargo through the designated rail crossings. Five of the shuttered checkpoints are located on the Finnish border, while Estonia and Latvia each have one crossing affected.

Officials have not disclosed the reasons for the closures or when the checkpoints might reopen.

In Estonia, the Ivangorod freight and passenger crossing will remain open, and in Latvia, the Sebezh crossing will also stay open. However, the closures leave Finland with no open railway crossings with Russia, which normally exports fertilizer to Finland by rail.

Finland shut its eastern vehicle and pedestrian border crossings with Russia indefinitely in December 2023 following an influx of asylum seekers.

Since the Ukraine war began, and in context of ratcheting tensions with NATO over its military support to Kiev, Moscow has steadily militarized its border with Finland.

Russia will temporarily close a number of railway border crossings with Finland, Latvia and Estonia from July 1, 2026, for reasons unknown.

The appropriate executive order has been issued by the Russian government.

The decision concerns five crossings with Finland, one crossing… pic.twitter.com/Wy4X50SbfD

— Status-6 (War & Military News) (@Archer83Able) June 30, 2026

The most significant source of NATO's nuclear-sharing program is the United States. But lately France has expressed a desire to station some of its atomic arsenal in partner countries, and this could include in Finland, Sweden, Denmark and others.

Tyler Durden Wed, 07/01/2026 - 10:50

WTI Holds Losses As SPR Drain Slows, Cushing Just Off 'Tank Bottoms'

Oil extended its biggest quarterly drop since the pandemic this morning as traders monitored US-Iran peace talks and a market for real-world barrels that’s been in freefall.

WTI is holding below $70 as US negotiators Jared Kushner and Steve Witkoff had positive discussions in Qatar and technical talks with Iran are moving ahead, a senior administration official said, while President Trump said the meeting was good.

Crude has fallen in recent days as the warring parties continued discussions to reach a more lasting accord, although recent attacks around Hormuz have marred negotiations. Oil tanker traffic is now showing signs of recovery, and has picked up since the US and Iran exchanged strikes over the weekend, though vessel flows remain below pre-war levels.

“We expect that by the end of July this is done,” said Samantha Dart, co-head of global commodities research at Goldman Sachs, referring to the conflict.

“Once we have a normalization of flows through the strait, the expectation is that we go into an oversupply.”

API reported another sizable crude drawdown...

API

• Crude -6.1mm

• Cushing +500k

• Gasoline -2.1mm

• Distillates +2.9mm

DOE

• Crude -3.775mm

• Cushing +709k - first build in 10 weeks

• Gasoline -2.33mm

• Distillates +2.48mm

The official DOE data shows the 10th straight week of crude drawdowns, but stocks at Cushing rose (for the first time in 10 weeks). Products were mixed...

Source: Bloomberg

...BUT... Cushing stocks remain at 'tank bottoms'...

On the Gulf Coast, gasoline stocks are down to their lowest since October 2024 -- and the lowest for this time of year since 2015.

Nationally, they remain at the lowest for this time of year since 2014...

The SPR saw another drawdown last week, but it was notably smaller than recent declines...

A total of 89 million barrels of crude has been taken out of the SPR since late March under a program to release 172 million barrels as part of a relief plan coordinated by the International Energy Agency aimed at lowering energy costs.

The US still plans to release all those barrels.

US crude production remains near record highs as rig counts are rising rapidly...

Crude imports from the Middle East fell in the week to June 26.

Inflows from Iraq fell to zero, while 56,000 barrels a day of Saudi crude were offloaded. Customs data show that crude came from storage tanks in tanks in the Bahamas.

WTI was hovering around $69 ahead of the official print and dipped on the data...

In the meantime, Bloomberg reports that physical markets are looking weak.

Brent’s nearest timespread remained in contango (red oval in chart below) - a sign of oversupply - after expiry of the August contract.

Barrels from West Africa to the North Sea were offered at multiyear lows on Tuesday, as the rise in supply from Hormuz outpaces refinery demand. Saudi Arabia is making rare spot sales of oil as the kingdom’s shipments ramp up.

Finally, what Mr Trump really cares about - gas prices - are coming down...

...and look set to fall considerably further.

BUT... crack spreads are blowing out even as crude prices fall...

...signaling strong (and strengthening) demand for refined products (like gasoline or diesel) relative to crude supply (and potentially low inventories of refined products)... which could well keep pump prices more elevated than crude would suggest (and Trump would like).

Tyler Durden Wed, 07/01/2026 - 10:37

Microsoft Plans Thousands Of Job Cuts As Stock Suffers Worst Start In Years

Microsoft shares are on track for one of their worst starts to a year in two decades, down roughly 21% year to date as of Tuesday’s close, as a cloud and sales hiring freeze and a broader “reset” of the Xbox unit have made recent headlines. This comes on top of growing concern over Microsoft’s AI spending boom.

Like much of the technology sector, Microsoft and other tech giants became labor-heavy after years of overhiring before and during the early Covid period. Now, the AI capex boom is forcing a major reassessment.

Hyperscalers are pouring hundreds of billions into data center buildouts, while AI chatbots and automation tools are beginning to replace white-collar tasks. The result is a broad workforce reset across Big Tech, with companies such as Microsoft rethinking headcount.

Business Insider reports that Microsoft is preparing to announce yet another round of job cuts as early as next week. The report was based on people familiar with upcoming labor restructuring efforts.

The layoffs are expected to affect thousands of employees across sales, consulting, and Xbox, though the reductions will be smaller than last year’s reductions. The next round is expected to be around 2.5% of Microsoft’s roughly 220,000-person workforce.

Last year, Microsoft eliminated 6,000 jobs in May and another 9,000 in July, or about 4% of its total workforce.

In April:

• MSFT Plans First Voluntary Buyout In 51-Year History; Gates Foundation To Slash 20% Of Staff

A separate report from Bloomberg says that payroll data across the financial activities and information sectors, where AI adoption has been fastest, is currently shrinking jobs by about 28,000 a month on average so far this year.

Goldman analyst Sarah Dong wrote in a note on Tuesday that the current AI adoption rate across corporate America stands at around 20.6% and is increasing.

These white-collar layoffs are likely only beginning to accelerate.

Latest firings:

• Meta Axes 8,000 Workers As Zuckerberg Admits AI Is Watching, Replacing Labor

Our assessment is that displaced workers should not be looking to downshift into low-wage service jobs, such as bartending and server work, as in previous cycles, but instead toward the physical buildout of the AI economy. Data centers, power infrastructure, grid upgrades, cooling systems, and electrical construction are where labor demand is rising, wages are strong, and jobs are plentiful.

Tyler Durden Wed, 07/01/2026 - 10:30

Still The (Military) Base Case

By Michael Every of Rabobank

Hormuz traffic is climbing, but refined product prices are lagging, and crack spreads are blowing out: one can’t just look at the oil price to understand the overall energy dynamic.

On the geopolitical front, things are also still mixed. Talks about the US-Iran MoU in Doha, without either side speaking to the other, went well according to the US, who are staying on for what could be indirect talks today. However, the Wall Street Journal reports Iran is split, with political leadership focused on getting assets unfrozen and the IRGC on keeping Hormuz more frozen. Tehran has now rejected third-party offers to help demine the water way; they are in no hurry to see things return to normal as this removes their energy leverage. Iran is also opposed to allowing the southern passage via Oman, which the US favours, to become established - and there are still reports Oman wants to charge for access to this channel.

A WSJ headline is that Trump has been briefed on ‘all-out war options’ to finish the job but is sticking with talks while making clear that --as expected in our base case-- the 60-day MoU deadline ending 18 August will be extended. Until November at least, as we posit?

Meanwhile, Israeli PM Netanyahu visited south Lebanon and reiterated that as long as Hezbollah is armed, they won’t leave, as the US announced coordinated sanctions with Gulf countries against the Iranian terror proxy. So, Tehran reads the MoU as “peace, where Hezbollah wins the war though it lost the battle”, and the US reads it as “peace, where Hezbollah loses by Israel staying or by being disarmed.” That can easily lead to more conflict with Iran, who doesn’t care about the US midterm timetable.

Neither does Israel, perhaps: Defence Minister Katz warned yesterday Israel could resume war with Iran “within two days” if missiles are fired at it, presumably as Tehran’s response to what is transpiring against its wishes in Lebanon. There is an element of pre-election rah-rah in his statement, but the threat is serious. However, on balance the likelihood is that Iran won’t trigger a new phase of the war… yet. That said, the tail risks are clear and the weak foundations of the current ‘peacefire’ should be well noted.

On conflict and timetables, departing UK PM Starmer has handed his successor Burnham a £5bn defence black hole, pledging new, smaller systems (and far less than what the military says it needs, and many arriving after 2030 rather than in this parliament) without having a plan for where the money will come from. In the EU, while Macron wants higher taxes on foreigners to fund a €2 trillion EC budget, but Germany wants a €400bn spending cut to balance things: who will win, and what does that say about Europe’s trajectory?

Russia is meanwhile reported to be about to start importing gasoline as Ukrainian strikes have so damaged the local fuel system.

In geoeconomics, the Hong Kong press reports that the US is interested in using a hollowed out G20 in Miami for a Trump-Xi meeting. That’s as, in line with what the US has long wanted, the World Bank is to phase out lending to China, and the White House is looking to ban Chinese solar inverters for national security reasons.

The US has lifted national security restrictions on the export of Anthropic’s Fable 5 Model after a review; and Japan has announced a $2.3 trillion startup tech strategy just after South Korea’s $1.3 trillion pledge. The cash being splashed here is not small.

Closer to home, the US is also reportedly to declare that it wishes to trigger a decade-long countdown to exiting the USMCA trade pact. The Canadian press notes this opens the door to a reworking of the agreement into a ‘Fortress North America’, logically with a common external tariff set by the US, as long flagged as the only logical US economic statecraft target by us. Where would that leave EU and Australian plans to deal more with Canada rather than the US? And, by contrast, where would it leave a Donroe Doctrine bloc replete with energy, commodities, consumers, technology, and military vis-à-vis others? The NAFTA > NAPHTHA (North American Petroleum and Hydrocarbons Trading Hub Association) pun about potential realpolitik springs to mind.

At home, the Supreme Court ruled in favor of birthright citizenship, so anyone physically in the US gives birth to a US citizen regardless of whether they are there legally or illegally, or permanently or as a tourist. No change for the US trajectory on that front, but there is informed talk that this issue could be as energizing for the Republican base in the midterms as Roe vs Wade was for the Democrats when that was overturned. The Court notably also removed limits on election spending, handing the cash-rich Republicans a boost.

In data, today’s strong Japanese Tankan survey was much better than expected for large manufacturers in particular. The 10-Y JGB yield is now slightly lower at 2.70%, still near the highest since 1997, while USD/JPY is at 162.7, the highest since 1986.

Indeed, the dollar is again on a roll, catching out markets who had been expecting the opposite. Gold just had its worst quarter in more than a decade, as the Great Debasement suddenly isn’t; and despite crypto falling, it’s reported that Trump and his family made either $1bn, $1.4bn, or $2bn from crypto deals in 2025.

Moreover, as the Australian Financial Review puts it, 2026 is ‘The year the global markets got physical’, as “Until this year, investors sought solace in capital-light companies with reliable earnings. Now, in the age of disruption, nothing is safe.”

That remains our (military) base case.

Tyler Durden Wed, 07/01/2026 - 10:15

The post The Folks Who Invented Pet-Eating Migrants are Yelling Fraud! appeared first on CEPR.

US Manufacturing Expanded For 6th Straight Month In June As Inflation Fears Ease

With 'hard data' having deteriorated recently (except in the labor market), 'soft' survey data has been surprisingly strong (especially in the Manufacturing side of the economy).

• S&P Global's US Manufacturing PMI dipped from multi-year highs at 55.1 to 53.9 final in June (below the 55.7 expected).

• ISM Manufacturing also dipped from 54.0 to 53.3 (slightly below the 53.9 exp).

Both solidly above the '50' line suggesting growth...

Source: Bloomberg

Put simply: US manufacturing activity expanded for a sixth straight month in June as a war-driven surge in input costs eased.

Prices paid for raw materials, meanwhile, rose at a much slower pace in June.

The group's price measure dropped 9.1 points to 73, the largest single-month drop since July 2022, as an interim agreement between the US and Iran sent oil prices tumbling.

New orders growth moderated, but remained solid, while ISM's production gauge dropped to a six-month low.

Source: Bloomberg

“US manufacturers reported a further marked improvement in growth of output and order books in June, according to S&P Global’s PMI data," said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

Despite the slight decline from the flash print, the final June data is extending the growth spurt that has been reported since the outbreak of the war in the Middle East.

"Employment was nevertheless cut sharply as firms often sought to offset the rising cost of energy and raw materials.

“Supply chain delays and upward price pressures continued to be widely reported, albeit moderating thanks to recent news of an improving situation in the Middle East."

On the bright side, while still elevated, Input and Output prices are falling back, according to S&P Global survey respondents.

Some prices are up - can you guess which? Yep - AI supplier commodities...

However, Williamson concludes that despite the recent drop in energy prices and brighter outlook for shipping, business confidence has fallen sharply, "in part reflecting concerns that an end to war-related inventory building could start to act as a drag on sales.”

Tyler Durden Wed, 07/01/2026 - 10:05

Zelensky's Secret Police Being Looked At By Investigators For Monaco Bomb Attack

The manhunt continues, chiefly focused in France or also nearby Italy, for the culprit who committed a Monday parcel bomb attack on an exiled Ukrainian oligarch and his family at their luxury apartment building in Monaco.

The victims - Vadym Iermolaiev, his 'partner' (or wife, according to contradictory reports) and his 13-year-old child, all survived the bombing, with Iermolaiev and his partner having sustained serious injuries and in critical condition. The suspected would-be assassin was seen fleeing to the French border, after which "Dozens of officers were deployed in Monaco, while two helicopters and some 30 gendarmes scoured neighboring France for a man who left a package in a residential building near the border, according to the police and gendarmerie."

Vadym Iermolaiev, via X

Given that Iermolaiev had long ago been declared an enemy of the Ukrainian state, and has been under sanctions for years for his extensive business dealings in Crimea, Ukrainian intelligence is coming under the spotlight for possible involvement in the Monaco bomb attack - a first of its kind in the small, wealthy principality.

Le Figaro is reporting that the investigation focuses on Zelensky's secret police (SBU) in the Monaco bomb attack: "According to several concurring sources at Le Figaro, investigators are focusing on the possibility that the attack was orchestrated by the SBU, the Ukrainian intelligence service."

The report continues, "Vadim Ermolaev, a wealthy businessman residing in Monaco since 2021, as the magistrate specified, had distanced himself from his native country, exchanging his Ukrainian citizenship for a Cypriot passport in 2019, before being targeted by personal sanctions imposed by Kyiv in December 2023."

And Le Figaro notes further:

According to our information, the attack appears to have been more of a "warning" than a deliberate attempt at murder.

However, police did call it a "powerful explosion" - so significant that parts of Iermolaiev's partner (or wife's) legs were lost, reports said.

Wow! Le Figaro reports that investigation focuses on Zelensky's secret police (SBU) in Monaco bomb attack that injured exiled Ukrainian oligarch and his family:

"According to several concurring sources at Le Figaro, investigators are focusing on the possibility that the attack… https://t.co/Pk9BUBiBba pic.twitter.com/TFdHk9sJPb

— Ivan Katchanovski (@I_Katchanovski) June 30, 2026

According to more background of the Ukrainian tycoon's past:

“Iermolaiev is a real estate developer who was born and raised in the Ukrainian city of Dnipro. His company, the Alef Group, also has interests in agriculture and vodka production. In 2018 the oligarch gave up his Ukrainian passport and acquired EU citizenship from Cyprus. As well as Monaco, he is a frequent visitor to London and Paris.

In 2022, the newspaper Ukrainskaya Pravda identified the oligarch as a member of the “Monaco battalion”, an ironic reference to wealthy Ukrainians who live in comfort abroad while their fellow citizens experience daily Russian drone and missile attacks. Iermolaiev enjoyed the high life and drove a £250,000 Bentley Flying Spur, it noted.

The following year, Ukraine imposed personal sanctions on Iermolaiev after an investigation by the country’s SBU security agency. It said the 58-year-old oligarch continued to trade alcohol in occupied Crimea and paid millions of dollars in taxes to the Russian treasury. His assets were frozen and he was prohibited from doing business.

While Russia has long been accused of deploying intelligence-linked assassin squads in Europe to hunt down political enemies, there's lately been increasingly acknowledgement that Ukraine has been engaged in its own 'dirty war' of assassination hits, both within and outside of Russia.

Tyler Durden Wed, 07/01/2026 - 09:25

Meanwhile In The UK, You Simply Will Not Believe This...

Authored by Steve Watson via Modernity News,

A convicted predator who helped destroy the lives of vulnerable girls as young as 13 is days away from freedom in Britain, while Pakistan refuses to take him and archaic rules shield him from removal.

Shabir Ahmed's case lays bare how legal technicalities, political cowardice, and a refusal to enforce borders have turned the country into a revolving door for the most dangerous offenders.

Ahmed, now 73, arrived in the UK long before 1973 as a Commonwealth citizen. He was convicted in 2012 at Liverpool Crown Court on multiple counts of rape, aiding and abetting rape, sexual assault, and trafficking for sexual exploitation. He treated at least one victim as property, abusing her on an almost weekly basis. Part of a gang of nine men operating out of takeaways in the Heywood area of Rochdale, Ahmed and his associates targeted working-class girls from broken backgrounds.

A grooming gang leader cannot be deported back to Pakistan despite being stripped of his British citizenship due to a loophole in legislation. Shabir Ahmed is set to be released from prison on Thursday.

GB News National Reporter @CDP1882 has more. pic.twitter.com/Fdfv841Usm

— GB News (@GBNEWS) June 30, 2026

He received lengthy sentences that later expanded. His British citizenship was stripped. Yet, ludicrously, he cannot be deported. The barrier is a provision in the Immigration Act 1971 that exempts Commonwealth citizens who arrived before 1973 and have long residence from removal.

On release, expected imminently, Ahmed faces lifelong sex offender registration, exclusion zones around Rochdale, bans on contacting any child, strict curfews, and electronic tagging. Breaches mean immediate return to prison. Taxpayers will foot the bill for round-the-clock monitoring and staffed accommodation.

Criminal Lawyer Marcus Johnstone, who has handled grooming gang cases for nearly two decades, pointed out that outdated laws combined with excessive human rights legislation have made Britain the destination of choice for international sex criminals. The gangs are sophisticated. The system that should remove them is not.

'When you think it can't get any worse, it does.'

Criminal Lawyer Marcus Johnstone, reacts to a grooming gang leader who cannot be deported back to Pakistan after being released from prison despite being stripped of his British citizenship, due to a loophole in legislation. pic.twitter.com/4TH0VnJ6ZC

— GB News (@GBNEWS) June 30, 2026

Home Office statements emphasise thoughts with victims and the "darkest moments" of the grooming gangs scandal, insisting the full force of the law will apply through these conditions.

Labour MP Paul Waugh, whose Rochdale constituency was ground zero for the abuse, called Ahmed a "depraved paedophile" who should have been removed years ago. He said the people of Rochdale want him gone and urged ministers to amend the Citizenship Act if necessary.

This case fits a wider, years-long scandal of institutional failure and political cowardice.

Separate recent investigations laid bare mini-mart operations where vulnerable children were plied with alcohol and cigarettes in exchange for sexual abuse.

Illegal shops were caught handing out free vapes to kids in return for sexual favours.

And the weary response from parts of the establishment often boiled down to telling victims and the public to simply "get over it."

The common thread is the same: authorities slow-walked or buried evidence, prioritised community relations over child safety, and treated any mention of ethnic or cultural patterns as radioactive.

Official files had ethnicity redacted. In two-thirds of cases, perpetrator background went unrecorded. Police in some areas told victims the Asian men who abused them were "probably not going to catch them."

A 2020 Home Office report, relying on hopelessly incomplete data, pushed the false narrative that most grooming perpetrators were white - a claim parroted in Parliament and by broadcasters even after it was exposed as statistical sleight-of-hand.

The motivation was always the same: fear of "racism" accusations, dread of community tension, and the overriding imperative to protect the narrative that mass immigration and multiculturalism have been an unalloyed success. Working-class girls, often from broken homes or care systems, paid the price while officials and media looked the other way or actively smeared whistleblowers.

While Ahmed prepares for supervised release, London Mayor Sadiq Khan faces renewed scrutiny over his past claims. In January 2025 he told the London Assembly there were "no reported cases and also no indication of the grooming gangs" in the capital.

A Metropolitan Police review of roughly 12,000 potential child sexual exploitation reports since 2010 has since flagged more than 4,000 cases that may require reopening. Many had been closed without further action. These have been referred to the National Crime Agency under Operation Beaconport.

London's current review notes a broader mix of offender backgrounds than the classic Pakistani-heritage networks documented in Rotherham, Rochdale, Telford and elsewhere. That distinction does not erase the scale of what was ignored or the political class that spent years insisting the problem did not exist in the capital.

This London revelation drops just days after the release of Rupert Lowe's Rape Gang Inquiry Report, which documented a coordinated national campaign of rape, torture and abuse against up to 250,000 British girls by predominantly Muslim grooming gangs operating across 149 local authority districts.

Lowe's findings laid bare the same pattern of police warnings to rapists, political interference and deliberate suppression of evidence that protected predators for decades while treating working-class girls as disposable.

Britain does not lack the power to change this. Parliament can amend citizenship and immigration rules to close loopholes for serious offenders. It can assert sovereignty over international obligations that shield threats.

Other countries manage deportation of convicted criminals without descending into chaos. The question is whether the political class has the will to put the safety of British girls ahead of globalist pieties and domestic sensitivities.

Ahmed walking free under licence is not justice. It is the predictable result of a system that has spent years protecting itself from hard truths rather than protecting its children. British girls deserve a country that removes foreign criminals who rape its children and never looks back.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Wed, 07/01/2026 - 09:05

Preview And Watch Live: Kevin Warsh Speaks At Sintra ECB Forum

Watch live here:

Today’s main event takes place in Sintra, Portugal and the ECB’s annual symposium, where Warsh joins President Christine Lagarde and Bank of England Governor Andrew Bailey at 9 a.m. New York time.  Bloomberg Economics expects Warsh to strike a carefully balanced tone after signaling different messages to hawks and doves at the June FOMC meeting

Courtesy of Newsquawk, here is a prime of what to expect at the Sintra panel featuring Fed’s Warsh, ECB’s Lagarde, BoE’s Bailey & BoC’s Macklem, at 14:00BST/09:00EDT.

The panel is a ‘policy panel", lasting for one hour from 14:00BST/09:00EDT, with CNBC’s Eisen as moderator. Text releases are not expected.

Fed

Warsh has already become notorious in not wanting to provide forward guidance, so while traders will be looking to his appearance for clues on future policy, some analysts suggest that traders may be left disappointed. At his first policy meeting as Fed Chair, the FOMC held the FFR target range unchanged at 3.50-3.75%, via a unanimous vote. Warsh described the labour market as keeping pace with workforce growth, with unemployment little changed, while inflation remains elevated due to energy-related supply shocks tied to the Iran conflict. On the 2% target, Warsh reaffirmed the Fed’s “capability and commitment" to deliver price stability, calling the commitment “strong, unanimous, and unambiguous". Notably, he declined to submit his own SEP projections (though nine of the other eighteen officials projected the FFR target will end 2026 above the current range, pointing to hike risk). On the balance sheet, the Committee reaffirmed its policy of maintaining ample reserves in the banking system, with a dedicated task force reviewing the balance sheet tool’s transmission. Warsh also abandoned forward guidance, shortening the policy statement significantly, and launched task forces covering data, communications, and the inflation framework.

ECB

Lagarde has spoken extensively recently, and will have an opportunity to speak again during the closing Sintra remarks once the panel ends. Lagarde's remarks on the 22nd of June, alongside the post-MoU energy pullback, have driven much of the moderation in pricing seen in recent weeks, removing a back-to-back hike from the playbook ahead and instead placing focus almost entirely on September for the next potential move. To recap, Lagarde said they “see no evidence yet of de-anchoring of inflation expectations or second-round effects that would warrant a more forceful policy response at this stage” and, as it stood, the ‘current shock appears to be smaller in magnitude..." vs the last period of high inflation, i.e. when Russia’s war in Ukraine commenced. However, at the start of Sintra Lagarde was a touch more hawkish talking around inflation being “away" from target. Though, her commentary didn’t spark any real return towards a move in July. Since, the Flash EZ HICP for June came in cooler than expected, though Services remains above the April figure. While the PMIs are net-constructive, however, much uncertainty remains amid the Middle East situation.

BoE

Following the June meeting and despite the two hawkish dissenters, the narrative has shifted significantly to the BoE being on hold for the foreseeable future. Although Governor Bailey has expressed frustration that inflation is not back to target, he has continued to stick to the narrative that the BoE has time to judge the pass-through of higher energy prices onto the UK economy. There has not been anything to suggest that Bailey will deviate from this.

BoC

After the BoC's June meeting, Governor Macklem said any decision on possible rate hikes would depend on conditions, not a specific timeline. He noted that core inflation has ticked down, while inflation expectations will remain a key consideration. Economic weakness tends to put downward pressure on prices, adding that higher oil prices have not yet spread significantly into other goods and services, though food inflation remains a concern. He also said little had changed since the previous meeting, with no major data surprises, and that Canada's economy is not clearly in recession. On communications, Macklem warned that too much forward guidance can imply false precision and become confusing. Separately, speaking last week, he said widening global imbalances and rising non-bank lending increase the risk of economic disruption. He warned that large capital inflows into the US could be misallocated or reverse suddenly, spreading stress beyond US borders, and urged global officials to support higher US savings, Chinese consumption and European investment.

Tyler Durden Wed, 07/01/2026 - 08:54

Did META Just Expose The First Crack In The AI CapEx Boom?

If you're wondering why the Nasdaq is suddenly tumbling this morning, wonder no more...

Nasdaq moves lower after Meta announces it has capitulated in the race to build a leading frontier LLM it is to build a cloud business to sell its excess AI compute, weighing on cloud peers like AMZN, ORCL, MSFT, neoclouds like Coreweave and Nebius (who will now be racing to the bottom for customers) and chip and memory names like NVDA, MU, INTO, as demand for their products is now likely to be much less thanks to the excess META capacity on offer.

As Bloomberg reports:

Meta, which has been rushing to secure expensive data centers and other infrastructure to fuel its own artificial intelligence ambitions, is forming a business to generate revenue from excess computing power sold to outside customers, according to people familiar with the matter, who asked not to be named as the details aren’t public.

One potential plan includes selling access to various AI models that are hosted on Meta’s existing AI infrastructure, an approach similar to AWS’s Bedrock offering, the people said.

Meta would run the data centers and chips that power the models, including its own Muse Spark models, and charge developers to access them.

The report also notes that the company is considering selling access to “raw” computing capacity, taking a chunk out of the business of neoclouds like CoreWeave. Ironically, META just signed multi-billion deals with CoreWeave and Nebius, and now it is turning around to compete with the very suppliers it is paying. 

Development of these new business lines is part of Meta Compute, an internal initiative to build and manage the company’s AI infrastructure efforts, according to a person familiar with the plans. Meta Compute is led by Santosh Janardhan, Meta’s head of infrastructure; Daniel Gross, a leader inside the Meta Superintelligence Labs AI unit; and Meta President Dina Powell McCormick.

Despite the complexities, Meta Chief Executive Officer Mark Zuckerberg has signaled to investors that he’s open to selling excess computing infrastructure, or even a so-called API service where customers would pay for AI usage — a business that’s usually measured in “tokens,” or the amount of data used and generated for a customer query.

“It’s definitely on the table,” Zuckerberg said during a call with shareholders in May.

“Almost every week there are different companies that come to us from the outside asking us to both stand up an API service or asking if we have compute that they could buy from us at some premium to what we’ve bought it at.”

This move comes after SpaceX started leasing its 'excess compute' (which is struggling now that it has competition in selling 'compute'):

...raising questions about the potential for cutting CapEx which has perhaps overshot token demand...

...did META just shatter the market’s central premise has been that compute is scarce...

As Goldman Sachs 1-Delta desk-head, Rich Privorotsky, has been warning:

“The market’s central premise has been that compute is scarce.

If scarcity persists, prices should remain firm and justify continued capex.

If supply rises and rental prices continue to drift lower, that is a direct challenge to the shortage narrative.

The first place that pain shows up is hardware. 

ORNN H100 index rolling over last couple days worth watching.

The beneficiaries are the companies selling the complete platform and monetizing usage rather than simply selling picks and shovels. My working conclusion remains that hyperscalers are the structural winners through this phase.

The first moment they demonstrate they can deliver equivalent output with lower spend, the market will reward them.

The bigger risk sits further upstream in the hardware and infrastructure stack where expectations remain built around persistent scarcity."

Simply put, confessions of 'excess capacity' will crush the hyperbolic dreams of the CapEx cycle that underpins so much of the market's recent incredible performance.

And the pivot to rewarding CapEx cutters begins...

"Lots of underperformance in hyperscalers. Everyone still appears convinced they must keep spending simply to remain competitive, while token cost compression/advent of neoclouds puts pricing pressure on core business. If token prices continue to compress alongside falling compute costs, the benefits may accrue to users faster than providers.

Ironically, the first hyperscaler to signal that it can slow the pace of spending will likely see its share price rewarded.

If that happens, others will take notice.

That is the reflexivity that ultimately stalls the capex cycle… not a lack of demand, but investors deciding that incremental returns on the next dollar of spend are no longer attractive.

Watch hyperscalers share price as leading indicator."

Don't say you weren't warned.

UBS traders see it a similar way, noting that reports that META may build out a cloud business to monetize excess compute capacity is shifting the narrative...

...being interpreted as a sign that capex expectations are no longer skewed to the upside, allowing focus to shift toward free cash flow stabilization and a potential incremental revenue stream at what are seen as near-trough valuation multiples.

The reference to excess capacity is creating some unease around underlying AI demand and has negative read-throughs for neocloud players, while also raising questions around the durability of compute and memory bottlenecks.

Into earnings, the key question is whether in-line 2Q and 3Q guidance alongside reiterated full-year capex would be sufficient to sustain the current re-rating.

In semis, price action suggests investors are linking the announcement to a potential moderation in future capex growth and a shortening in the duration of above-trend demand, even if some argue hyperscalers could absorb incremental capacity.

Neoclouds are seen as clear losers on the development.

For hyperscalers, the read-through is more mixed, with a new potential competitor emerging but also some expectation of cost relief if supply constraints ease. Early conversations suggest concerns around overbuild remain more company-specific rather than indicative of a broader industry shift, particularly given relative positioning in AI investment cycles.

META shares are notably higher on the news...

Chipmakers are hurting...

The writing had been on the wall...

...and Premium Subscribers can read the full notes we have published over the past month here: 

• Memory, Monetization, & Multiples: Goldman 1-Delta Desk Breaks Down The Key AI Debates (& The Most Important Chart To Watch)

• 'How Far Can The Rubber Band Stretch?': Goldman 1-Delta Desk Says 'This Is The Breaking Point'

• Will 'Rampart' Wreck The Hyperscaler 'To The Moon' Narrative? Goldman 1-Delta Desk Deep-Dives

Buckle Up!

Tyler Durden Wed, 07/01/2026 - 08:52

Futures Fall To Start Now Quarter With Warsh Sintra Comments On Deck

US equity futures point to a softer start to the third quarter as investors await a fresh batch of economic data and the first major overseas appearance by Fed Chair Kevin Warsh. As of 8:20am ET, S&P futures are down 0.2%, off session lows, while Nasdaq futures are down 0.6: techs lags following NDX’s 3.9% gain over the last 2 days; in premarket trading, chipmakers, which did much of the heavy lifting as investors piled into AI beneficiaries, were weaker with Mag7s mostly lower. Nike dropped 2% following a cautious outlook. Software names including Microsoft gained. Cyclicals are under pressure with HC and Staples leading a Defensives bid. Overnight the US removed Anthropic’s foreign access restrictions. Bond yields are flat to down 1bp, and USD is bid as positive progress is reported in US / Iran talk. In commodities, crude prices are lower as distillates rise; WTI futures are down about 0.8% following the biggest quarterly drop since the pandemic.Metals are under pressure, with Ags bid as the group has been the recent outperformer. US economic data calendar includes June ADP employment change (8:15am), June final S&P Global manufacturing PMI (9:45am) and June ISM manufacturing (10am). 

In premarket trading, Microsoft outperforms Magnificent 7 peers in premarket trading. Business Insider reports that the company is planning to announce job cuts, impacting thousands of roles, citing people it didn’t identify. Shares are up 1.7%. Other Mag 7 stocks are mixed early Wednesday (Alphabet -0.4%, Nvidia -0.6%, Apple -0.09%, Tesla -0.4%, Amazon +0.9%, Meta Platforms +0.3%). Here are some of the biggest US movers today:

• Abbott Lab (ABT) shares are up 0.03% in premarket trading after Baird initiated coverage of the stock with an outperform rating, saying a clearer path to upside for the medical device maker is “beginning to emerge.”
• Alcoa Corp. (AA) is down 5.0% after the mining company agreed to buy South32 Ltd.’s bauxite, alumina and aluminum assets in a deal worth as much as $5.6 billion. Morgan Stanley expects a negative reaction on the transaction multiple and limited visibility on synergies.
• Bloom Energy (BE) shares rise 8.3% in premarket trading on Wednesday after the company expanded its partnership with Brookfield from $5 billion to $25 billion to help grow the fuel cell partnership globally.
• Dow Inc. shares are down 0.7% in premarket trading, after RBC Capital Markets downgraded the chemical company to sector perform from outperform. Mizuho cut its price target to $35 from $43.
• FMC shares rise 7.0% after the company said Tessenderlo Group will make a strategic minority equity investment of about $400 million at $13.30 per share. Shares in Tessenderlo gain 3.4% in Brussels.
• General Mills shares are up 4.89% after the packaged food company’s adjusted earnings per share for the fourth quarter beat the average analyst estimate.
• Grindr shares gain 6.9% ahead of the bell after Morgan Stanley upgrades the LGBTQ community dating company to overweight from equal-weight, highlighting monetizing opportunities. The upgrade leaves the stock with only buy-equivalent ratings.
• NASA selected Astrobotic, Firefly Aerospace and Intuitive Machines for four moon missions in late 2028 as part of the Moon Base Program. Intuitive and Firefly shares are up 7.2% and 2.7%, respectively.
• Nike shares fall 1.6% in premarket trading on Wednesday after the sneaker company said on its conference call revenue expectations for the next two quarters are now seen down low-to-mid single digits from down low single digits earlier.
• Klarna shares rise 6.9% after a Swedish Patent and Market court ordered Google to pay SEK14.3b ($1.47b) to Klarna’s subsidiary PriceRunner International following antitrust damages proceedings.
• Microsoft outperforms Magnificent 7 peers in premarket trading. Business Insider reports that the company is planning to announce job cuts, impacting thousands of roles, citing people it didn’t identify. Shares are up 1.7%.
• Shares in ServiceNow, Salesforce and Check Point Software rise in premarket trading as Guggenheim upgraded all three to buy from neutral, saying that the fatal AI bear case on software is a “hallucination.” ServiceNow +5.0%, Salesforce +3.3% and Check Point Software +3.1%.

US stocks just posted their best quarter in six years with fresh signs of economic resilience bolstering confidence in corporate earnings. The rally added more than $8 trillion to the S&P 500’s market value over the past three months. The SOX semiconductor index posted its strongest quarter on record.

“As long as earnings continue to be good and broaden out, I think we will get continued gains through the second half — probably lower than what we saw in the first half — but I think it will quite broadly based,” said Goldman’s Chief Global Equity Strategist Peter Oppenheimer. Technology remains the main driver of earnings growth even as hyperscalers have “derated” on concerns about longer-term returns, Oppenheimer said. Their heavy spending should continue to underpin growth and “trickle out” into parts of the economy supporting the AI infrastructure buildout, he told Bloomberg TV. 

Meanwhile, concentrated market leadership, passive investing, retail flows, leverage and a new volatility regime are increasingly dictating price action, Citadel Securities’ Scott Rubner wrote in a Tuesday note. 

In other assets, the global oil market is set to swing back into oversupply even after strategic reserves are replenished, according to Goldman Sachs. Japan’s currency chief suggested intervention was an effective strategy. 

Today’s main event takes place in Sintra, Portugal and the ECB’s annual symposium, where Warsh joins President Christine Lagarde and Bank of England Governor Andrew Bailey at 9 a.m. New York time. Bloomberg Economics expects Warsh to strike a carefully balanced tone after signaling different messages to hawks and doves at the June FOMC meeting. After his pledge last month to deliver price stability sent the dollar and shorter-dated Treasury yields higher, traders will be looking for further clues on the rate path for the year ahead.

“Given the absence of forward guidance from the Fed now, there is going to be intense focus on any comments” from Warsh, wrote Chris Turner, a foreign-exchange strategist at ING Bank NV. “A focus on price stability can keep the dollar bid.”

Investors are increasingly shifting focus to growing price pressures in an economy that’s firing strongly, with expectations building for a solid payrolls report on Thursday. 

European stocks also slipped in early Wednesday trading, with indexes dragged down by mining companies on the back of weaker commodity prices. The Stoxx 600 falls 0.2% to 640.52 with 229 members up, 361 down, and 10 unchanged. Among individual stocks, Switzerland’s Galderma fell the most in over a year after the US FDA turned down the firm’s Botox rival Relfydess. CMC Markets jumped to a fresh record high after raising its guidance.  Here are the biggest movers Wednesday:

• CMC Markets shares soar as much as 25% to a fresh record after the UK financial derivatives dealer raised its guidance for 2027 net operating income citing strong momentum
• Renault shares rise as much as 4.5% after the French carmaker hosted a pre-close call with analysts ahead of its first-half results scheduled for the end of the month
• Tecan shares rise as much as 10% after UBS raised its recommendation in the Swiss laboratory technology group to buy from hold, saying top-line growth has bottomed out and expected margin improvements are not yet priced in
• Aker ASA gains as much as 11%, the most since January, after it agreed to sell its shares in Cognite Holding to Schneider Electric, which meanwhile dropped as much as 3%
• ASOS shares gain as much as 12% after announcing it will sell its Atlanta fulfilment center and associated automation assets for net proceeds of ~£48 million
• RS Group rises as much as 5.1%, the most since May 20, as Deutsche Bank upgrades the distributor of electrical and industrial products to buy from hold on a strengthening recovery case
• Galderma shares slump as much as 6.6%, the most in more than a year, after the US Food and Drug Administration turned down the Swiss dermatology firm’s rival Botox treatment Relfydess
• AB Foods shares fall as much as 3.6%, the most in over two months, after the conglomerate delivered an underwhelming third-quarter update and downgraded the outlook for its sugar business in the 2026 and 2027 fiscal years
• Bucher shares fall as much as 3.6%, the most since April 28, after Kepler Cheuvreux cut its price target on the Swiss agricultural machinery company, citing capex sentiment indicators in Europe that are nearing recession territory
• Medacta drops as much as 4.1%, the most in a month, as Stifel cuts its full-year organic revenue growth estimates for the Swiss medical-implant firm to the midpoint of guidance

Earlier, Asian stocks fluctuated on Wednesday after capping their best quarter in 17 years, as investors paused to assess the outlook for the AI rally that has been a major driver of the gains. The MSCI Asia Pacific Index swung between gains and losses for most of the day. Declines in South Korean chipmakers Samsung Electronics and SK Hynix were a major drag, offsetting gains in Japan and Taiwan — which together account for about half of the benchmark. Hong Kong markets were closed for a public holiday. The Kospi declined as the National Pension Service was set to resume rebalancing its domestic stock holdings after a temporary suspension.

The Asian benchmark climbed 21% last quarter while a subgauge of tech shares soared a record 74%. However, the sector’s rally slowed in June as rising concerns over the payoff from hefty AI investments, coupled with elevated valuations and crowded positioning, sparked intermittent pullbacks, particularly in Korean shares. The AI trade within Asia has been “quite narrow,” Hebe Chen, senior market analyst at Vantage Global Prime, said in a Bloomberg Television interview. “That overcrowding is often exposed to a higher and sharper fall if the tide changes, because this rally has attracted so much liquidity,” she added.

In FX, The Bloomberg Dollar Spot index rises 0.2% to its highest level this week before Fed Chairman Kevin Warsh appears on a policy panel alongside peers from Europe and the UK.

Treasuries are narrowly mixed with yields less than a basis point away from their closing levels on Tuesday, when they climbed 7bp-9bp amid a flurry of month-end selling in futures. WTI crude oil futures are down, underpinning Treasuries, as traders monitor peace talks between the US and Iran. US 10-year yields are down 1bp to around 4.46%, Treasuries are little changed on the day while curve spreads are marginally steeper. European bonds lag Treasuries, following the late weakness in futures into the US month-end index rebalancing, which also saw the day’s steepening move accelerate. Focal points of US session include key manufacturing data and unscripted comments by Fed Chairman Kevin Warsh. 

In commodities, Brent extended declines, falling 1% to $72.20 a barrel. US negotiators held positive discussions in Qatar and progress is being made on technical talks with Iran, according to a senior administration official, as the countries seek to turn an interim peace deal into a permanent end to the war. That’s been of little support to European government bonds, however. UK and German 10-year borrowing costs rise 2 basis points each. Precious metals decline, with spot silver down over 1%. 

US economic data calendar includes June ADP employment change (8:15am), June final S&P Global manufacturing PMI (9:45am) and June ISM manufacturing (10am). Fed speaker slate includes only Warsh, participating in an ECB panel in Sintra, Portugal at 9am New York time

Market Snapshot

Top Overnight News

• Iran and U.S.-allied Oman are moving forward with plans to collect payment for ships transiting the Strait of Hormuz, despite public American objections. NYT
• US negotiators Steve Witkoff and Jared Kushner held positive discussions in Qatar and progress is being made on technical talks with Iran, according to a senior administration official, as the countries seek to turn an interim peace deal into a permanent end to the war. BBG
• The US removed foreign access restrictions on Anthropic’s Fable 5 AI model. The company said it will restore global access across its platforms starting today. BBG
• Xi Jinping signaled China’s ambition to play a more high-profile role, a strategy that involves rallying developing nations as a counterweight to what he views as fading US influence. BBG
• The yen pared some losses after Japan’s top FX official said past intervention efforts were successful, adding that Washington remains in close communication with Tokyo over FX policy. South Korea’s won slid toward its weakest level since the global financial crisis. BBG
• Euro-area inflation eased more than anticipated in June. Consumer prices rose 2.8% from a year ago, down from 3.2% a month earlier. BBG
• President Trump has weighed a return to all-out war with Iran, holding multiple conversations in recent days with Defense Secretary Pete Hegseth and Chairman of the Joint Chiefs of Staff Gen. Dan Caine on more strikes, but has decided to stick with diplomatic talks for now, according to U.S. officials familiar with the discussion. WSJ
• Microsoft plans thousands of job cuts, impacting less than 2.5% of workforce. Business Insider
• Republicans’ cash advantage just got a lot more powerful thanks to the Supreme Court — and the Democratic National Committee’s fundraising struggles just got a lot more concerning for their party. Democrats argue that the court’s Tuesday decision, which allows political parties to freely coordinate with candidates, will give the GOP the ability to offset Democratic candidates’ fundraising lead in battlegrounds. Politico
• The value of global M&A rose around 30% year-on-year to $2.6 trillion in the first half, on course to potentially pass 2021’s record haul. Companies struck 38 deals valued at $10 billion or more, the most ever in a six-month period. BBG
• US Challenger Job Cuts (Jun) 45.849K (Prev. 97.006K); cuts remain concentrated in tech, with AI continuing to reshape how companies think about headcount.

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks were mixed, in which bourses partially sustained the positive momentum from the tech-led gains on Wall St, where the S&P 500 and Nasdaq posted their best quarter in six years. The region also digested a slew of data, including the stronger-than-expected BoJ Tankan survey and numerous PMIs. ASX 200 was dragged lower by weakness in the consumer, financial, tech and telecom sectors, while sentiment was also not helped by a surprise contraction in Building Approvals data. Nikkei 225 rallied following the stronger-than-expected Tankan survey, which showed Large Manufacturing Sentiment was at the highest in 8 years, although the index gradually wiped out the majority of its gains amid intervention risks and as the data supported the case for the BoJ to continue normalising policy.
KOSPI pared opening gains and lingered in the red as SK Hynix and Samsung Electronics retreated. Shanghai Comp was underpinned on the 105th anniversary of the founding of the Communist Party of China, and as participants digested the latest RatingDog Manufacturing PMI, which remained in expansion territory, while Hong Kong markets were closed for a holiday.

Top Asian News

• Japanese top FX diplomat Mimura said they are in touch with US counterparts more than most imagine and that a US official made supportive remarks about FX action, while he also commented that recent intervention had meaning.
• BoJ official noted regarding the recent Tankan survey that most firms replied before the US-Iran peace deal on June 15th, so the impact of the deal is likely not reflected much in the Tankan outcome.

European bourses (STOXX 600 -0.1%) start Q3 on a softer footing, with Germany's DAX 40 (+0.4%) the only index printing modest gains; perhaps welcoming recent pension reform progress and the possible involvement of the Bundesbank. Final manufacturing PMI figures were broadly positive, with the majority of PMIs being revised higher. Commentary was relatively upbeat, with S&P stating that the sustained growth was accompanied by a welcome cooling of cost pressures. European sectors tilt to the negative side. Industrial Goods & Services (+0.5%), Technology (+0.5%) and Optimised Personal Care (+0.5%) are the top 3 sectors. To the downside lies Media (-1.7%), Consumer Products & Services (-1.5%) and Travel & Leisure (-0.1%).

Top European News

• French Presidential vote to be held on April 18th and May 2nd next year, with the official announcement expected on Wednesday, according to AFP citing sources.
• UK Labour MPs reportedly want Burnham to appoint McFadden as Chancellor, in order to block Miliband, Huffington Post reported citing sources.

FX

• Snapshot: G10s are mostly lower against the USD this morning, with clear underperformance in the Aussie, whilst the Kiwi fares a little better vs peers. USD/JPY continues to hold at elevated levels beyond the 162.50 mark, with further jawboning attempts seen overnight.
• DXY is firmer this morning and trades at the upper end of a 101.21-101.39 range (WTD peak at 101.43). The strength which comes amidst the markets’ continued hawkish shift at the Fed, seen following the last FOMC meeting. Markets also appear to be positioning for a hawkish commentary from Chair Warsh today, and then the NFP report on Thursday. On that note, Treasury Sec Bessent said he expects a strong jobs number, though clarified that he had not seen the report. Key releases today include: US ADP Employment, Challenge Job Cuts and ISM Manufacturing PMI.
• EUR and GBP have both been weighed on by the USD strength. The single currency has had a number of ECB members to digest, who are currently hosting the Sintra conference. Broadly speaking the remarks have been balanced, and with policymakers stressing data dependency heading into the July/September meetings. On the inflation front, today’s HICP release from the EZ saw the headline Y/Y cool from the prior (2.8% vs exp. 3%, prev. 3.2%). The Services figure also edged lower to 3.2% (prev. 3.5%). Some very mild pressure was seen in the EUR, and plays in favour of a hold in July. On the activity side of things, today’s Manufacturing PMI finals were subject to mild upward revisions, and the accompanying commentary was upbeat.
• JPY continues to remain in focus, with another jawboning attempt proving impotent. The latest attempt was by Top FX Diplomat who stated that Japan is in touch with US counterparts more than most imagine and that a US official made supportive remarks about FX action. This spurred some very mild pressure in the pair (05:30 BST / 00:30 EDT), falling from 162.79 to 162.56, before retracing about half of that move. A breach beyond the 163.00 mark could be difficult, given expectations that Japan may use the low-volume / holiday-thinned conditions on Friday (US Independence Day) to deliver effective intervention. Nonetheless, a hawkish Warsh and a strong NFP report on Thursday pose risk to the 163.00 level, which some have touted as the new “line in the sand”.

Fixed Income

• Global fixed income benchmarks are softer across the board, given Tuesday's post-settlement selloff. However, price action across the board has been range-bound, as markets look ahead to Fed Chair Warsh's first public appearance and updates from the US-Iran indirect Doha talks.
• Bunds (-18 ticks) have found support at the 127.00 handle, finding some stability after Tuesday's weakness, which was primarily driven by USTs. EZ inflation printed cooler than expected, with the headline figure at 2.8% Y/Y from 3.2% (exp. 3.0%) and ex-E, F, A & T dipping to 2.4% Y/Y from 2.6% (exp. 2.6%). Bunds did see some fleeting upside following the data, notching a new session high of 127.23 before falling back into the prior established daily range. ECB policymakers should find some comfort from the report, with some GC members starting to sound a bit more cautious on further rate hikes. On the supply front, a 2032 Bund auction was weak, with a poor b/c, though the average yield was less than the prior outing.
• USTs (-8+ ticks) oscillate in a narrow 109-18 to 109-23 band ahead of comments by Fed Chair Warsh at Sintra and the US jobs report on Thursday. Since his first remarks at the FOMC press conference, core PCE printed at 3.4% Y/Y, consumer confidence has surprised to the upside, and May payrolls printed strong (June payrolls due on Thursday). Given the backdrop, it would be hard for Warsh to soften his hawkish tone.
• OATs (-21 ticks) follow their European peers, but will come into greater focus as we near the Presidential elections in 2027. A date for the first round of elections has reportedly been set for April 18th, 2027, with a run-off set for May 2nd. The current President, Macron, cannot run in this election.
• Germany sells EUR 2.673bln vs exp. EUR 3.5bln 2.50% 2032 Bund: b/c 1.15x (prev. 2.4x), avg. yield 2.68% (prev. 2.8%), retention 23.6% (prev. 23.94%).
• UK sells GBP 1.25bln 0.125% 2031 I/L Treasury Gilt: b/c 4.26x (prev. 3.75x), real yield 0.933% (prev. 0.651%).
• Australia sells AUD 800mln 4.25% December 2035 bonds b/c 4.34, avg yield 4.748%

Commodities

• A contained start for the energy complex, but with modest pressure emerging across the European morning. As the benchmarks pullback from the highs in yesterday’s session and the brief, but within existing ranges, uptick seen in the US late-afternoon as tensions flared somewhat. Currently, the waiting game continues amid the Doha gathering, but there is a positive skew to current expectations as the US and Iran are expected to hold in-direct talks and after President Trump’s openness to extending deadlines over taking military action.
• As the morning progressed the downside extended with participants looking to the Doha indirect meeting, and indeed sources since suggest that has commenced, no move on that latest report. Kushner and Witkoff are reportedly not involved in the technical exchange.
• Action that pushed Brent to a USD 71.62/bbl base, printing a fresh WTD low and falling below the USD 71.93/bbl trough. The next leg higher/lower will potentially be determined by the readout and/or sources around the talks, before we look to possible comments from President Trump or others on the state of relations.
• Spot gold saw pressure overnight, moving below the USD 4k/oz handle once again. The yellow metal is currently trading at the bottom-end of a USD 3,960-4,018/oz range, with the trough approaching the WTD low at USD 3,942/oz range. The recent pressure has been attributed to the markets’ continued hawkish shift at the Fed, stronger USD and rising US yields. Price action for the remainder of the day will be dictated by key US data (ADP/ISM Manufacturing) and Fed Chair Warsh.
• Base metals are entirely in the red, following the subdued risk sentiment seen in Asia, which has filtered through into the London session. 3M LME Copper (-1.67%) has traded lower throughout the day, and currently holds at the bottom end of a USD 13,134.08-13,384/t range.
• US Private Inventory Data (bbls): Crude -6.1mln (exp. -4.1mln), Distillates +2.9mln (exp. -0.9mln), Gasoline -2.1mln (exp. -0.9mln), Cushing +0.5mln.
• Petrobras executive said they will cut diesel prices beginning July 1st.

Central Banks

• ECB's Nagel pushed back on a "insurance hike" narrative in an interview with Bloomberg TV. He added that inflation will stay high in 2026 and remain above target in 2027, while stressing data dependency and a meeting-by-meeting approach. On the future rate path, he kept options open for July and September. He finished by stating that the first round effects continue, which increases the chance of second round effects and that he is currently seeing pass-through of first round effects on wages.
• ECB's Wunsch told Econostream that the case for further tightening is receding and any surprise in EZ inflation before the July meeting is more likely to be on the downside. He added he would need stronger second-round effects to justify further tightening and that one hike could suffice if shock fades before significant second-round effects. More than one hike to depend on more persistence and stronger second-round effects.
• ECB's Demarco said the ECB should not rush into a further rate hike after the decline in oil prices, while he added the central bank can wait until next projections to decide if further hikes are needed, and that there are no signs of second-round effects, excessive wage pressures, or unanchored expectations.

Geopolitics

• Indirect US-Iran technical talks are reportedly underway in Doha, with Qatar and Pakistan acting as mediators. The sessions are to involve chief negotiators and specialist teams, sources suggest, however US envoy Witkoff and Kushner will not be attending the talks themselves.
• Iran is reportedly insisting on retaining control over the Strait of Hormuz, according to sources citing a senior Iranian official. Could see a recommence charging ships to transit from mid-August and are not going to discuss other points until Hormuz is agreed.
• US President Trump was briefed on all-out war options on Iran, but opted to stick with talks, while he told aides he's okay if talks go past the August 18th deadline, according to WSJ.
• US VP Vance said President Trump is ready to drop bombs again, while he added that they have two options, which are either to pursue a long-term agreement with Iran on the condition that it changes its behaviour, or consolidate the gains that they made. Furthermore, he said Trump asked them to use the memorandum of understanding to resupply the global economy with oil, then they will see how things develop, and they want permanent, verifiable commitments from Iran regarding its nuclear disarmament.
• US admin official said the US has not released any of the USD 6bln in Iranian frozen funds, and won’t until Tehran “performs”, according to NY Post's Doornbos.
• US official said ships are transiting the Strait of Hormuz at higher levels.
• Iran State Media said that a foreign container ship ran aground in the Strait of Hormuz after using a route which was undesignated by Iran.
• Oman presented a proposal regarding the future administration of the Strait of Hormuz to the US and other allies, while the proposal outlines a system for shipping companies to pay "service fees" for using the waterway, though sources differ on whether Oman is actively pushing for a fee-based structure, according to CNN citing sources.
• Qatar's PM and Foreign Minister met with US envoys Witkoff and Kushner, while they discussed the latest developments in the ongoing talks between the US and Iran, according to Qatar's Foreign Ministry.
• Israeli Broadcasting Authority cited a source that stated the start of the pilot phase in Lebanon has been postponed until a monitoring mechanism is reached between the Lebanese and Israeli armies.
• Israeli Defence Minister Katz said the IDF will remain in the security zones in Lebanon, Syria and Gaza.
• UKMTO said it received a report of an incident 76NM south of Yemen; the vessel being approached by multiple small craft but the crew reported safe.
• North Korean leader Kim pledged to deepen ties with China on shared socialist values and dispatched a congratulatory message to Chinese President Xi, on the Chinese Communist Party's founding anniversary, according to KCNA.
• Pakistan's air defence system shot down four rudimentary drones launched by Afghanistan's Taliban regime, while Pakistan's armed forces warned that continued provocation by the Taliban would be met with a befitting response that would cost them heavily.

US Event Calendar

• 7:00 am: Jun 26 MBA Mortgage Applications, prior 1%
• 8:15 am: Jun ADP Employment Change, est. 120k, prior 122k
• 9:45 am: Jun F S&P Global US Manufacturing PMI, est. 55.7, prior 55.7
• 10:00 am: Jun ISM Manufacturing, est. 53.85, prior 54
• 10:00 am: Jun ISM Prices Paid, est. 77.5, prior 82.1
• 10:00 am: May Construction Spending MoM, est. 0.1%, prior 0.4%

Central Banks

• 9:00 am: ECB’s Lagarde, Fed’s Warsh, BOE’s Bailey, BOC’s Macklem
• 9:00 am: Fed’s Warsh Appears on Panel at ECB Forum

DB's Jim Reid concludes the overnight wrap

There must be a lot of illness going round our floor today — looking at the team diary, an awful lot of people seem to be seeing a doctor. In fact, at 5pm sharp, it looks like everyone’s booked in with Dr Congo… let’s hope we all get a positive result.   

As it’s the start of the new quarter, Henry will shortly release our regular performance review for Q2 and indeed H1. The main headline was the signing of the interim US-Iran deal, which meant Brent crude oil prices (-38.4%) saw their biggest quarterly decline since the start of the pandemic in Q1 2020. So that meant stagflation fears receded, supporting bonds and equities across the board. In fact, the S&P 500 saw its best quarter since the post-pandemic rebound in Q2 2020, with a +15.2% gain in total return terms. That included an exceptional performance for chip stocks, with the Philly semiconductor (+88.0%) posting its best quarter since the index started in the early 1990s. See the full report in your inboxes shortly.   

Risk assets largely finished Q2 on a strong footing yesterday, with the S&P 500 (+0.79%) gaining for a second consecutive day. The biggest factor was the recovery in tech stocks, with the Mag 7 (+1.30%) up for a third consecutive day, whilst the Philly semiconductor index (+3.92%) posted another large gain. The rally was somewhat narrow with a majority of S&P 500 constituents lower on the day and just 8 of the 25 industry groups gaining. This left the equal-weighted S&P 500 -0.12% lower, while the small cap Russell 2000 underperformed (+0.46%) its large cap peers.

US data was mixed yesterday as strong job opening numbers were matched with weak housing and sentiment data. The JOLTS report for May added to the picture of labour market resilience from other recent releases. Job openings surprised on the upside, with 7.594m openings in May (vs. 7.296m expected). So that meant that the ratio of job openings per unemployed individuals reached 1.039, which takes it to the highest reading since January 2025. Moreover, the quits rate of those voluntarily leaving their jobs (a good barometer for tightness in the labour market) held steady at 1.9%. And yet the Conference Board’s consumer confidence reading missed expectations, coming in at 91.2 (vs. 94.4 expected), with the present labour market sentiment the weakest since 2021. Moreover, the overall present situation indicator fell to 116.4 (vs. 123.0 expected), marking its lowest level since February 2021 when the economy was still coming out of the pandemic. Consumer sentiment/confidence numbers have long decoupled from economic growth so we can't read too much into it, but the data is still striking. On housing, the FHFA House Price index showed a month-on-month decline in house prices (-0.1% vs +0.2% expected), with year-over-year home price appreciation now near its lowest levels since 2012.

However, the market keyed in on the strong job openings number and hawkish comments from Cleveland Fed President Hammack shortly after their release. She said in a CNBC interview that the US may “need higher interest rates to bring inflation back down to target”, and when asked about a July hike, said she was keeping an open mind at every meeting. So that raised speculation about a rate hike in just 4 weeks’ time, and market pricing for a July hike ticked up a bit to 34% by the close, up from 32% the previous day. Stand by for both Warsh and Lagarde speaking at Sintra today.  

Ahead of that, the hawkish newsflow led to a fresh selloff for US Treasuries, with the 2yr Treasury yield (+6.8bps) rising to 4.17%, whilst the 10yr yield (+9.1bps) hit 4.465%. There was a more muted reaction for European government bonds as yields on 10yr bunds (+0.3bps), OATs (+1.3bps) and BTPs (+4.8bps) all moved higher. This followed comparatively dovish European newsflow, with the flash CPI prints surprising on the downside in several member states. So the German print fell more than expected to +2.4% on the EU-harmonised measure (vs. +2.5% expected), whilst the French print also fell more than expected to +2.0% (vs. +2.3% expected).

So that raised hopes that today’s Euro Area-wide print might surprise on the softer side, and investors also dialled back expectations for ECB rate hikes this year, with just 23bps priced by the December meeting at the close, down from 27bps the previous day. Here in the UK however, 10yr gilt yields (+4.1bps) rose by more than elsewhere, which came as BoE Governor Bailey warned that inflation could still rise later this year. Otherwise in Europe, equities advanced across the board, with the STOXX 600 up +0.88% to a new all-time high. The move was clear across the continent, with gains for the DAX (+1.50%), the CAC 40 (+0.44%) and the FTSE MIB (+1.01%) as well.

Alongside the lower inflation prints, sentiment was also supported by oil prices holding steady, with Brent crude (-0.31%) down slightly on the day. This came as Bloomberg reported that US officials held positive discussions with GCC leaders in Qatar on Tuesday. There was further reporting from the Wall Street Journal overnight that President Trump had been briefed on potential war options but was opting to stay in talks and that he told aides that he was ok with talks continuing past the initial August 18th deadline. The dovish mood from the White House continues as the President seems reticent to restart the kinetic action and risk higher energy prices ahead of the November midterms.  

Asian equity markets have started H2 on a mixed footing this morning. The KOSPI (-0.70%) is leading regional declines, coming off one of its strongest quarterly runs in recent years. By contrast, improved manufacturing activity in Japan and China is supporting gains in Tokyo and mainland markets. The Nikkei (+0.63%) is moving higher, alongside both the CSI (+0.44%) and the Shanghai Composite (+1.08%), while Hong Kong markets are closed for a public holiday. S&P 500 (-0.23%) and Nasdaq (-0.24%) futures are both edging lower.

Early data suggested that China’s manufacturing activity moderated slightly in June relative to May, although robust export performance helped keep overall activity in expansionary territory. The RatingDog Manufacturing PMI edged down to 51.7 from 51.8, a three-month low, but still capped the strongest quarterly performance for the sector since Q4 2020.

In South Korea, exports surged by +70.9% year-on-year in June, accelerating from +53.4% in May and comfortably exceeding expectations. The increase was largely driven by strong semiconductor demand amid the global AI investment boom, reinforcing the Bank of Korea’s increasingly hawkish stance ahead of its July 16 decision. Separately, while factory activity expanded for a seventh consecutive month, the pace of growth eased slightly, reflecting softer export demand at the margin.

Elsewhere, the yen weakened to its lowest level against the dollar since 1986 overnight, currently at 162.72 (-0.10%) and fuelling speculation that Tokyo may be nearing direct intervention.

To the day ahead now, data releases include the US June ISM manufacturing index, ADP report, and May construction spending, along with the Euro Area flash CPI print for June. Central bank speakers include the Fed’s Warsh, the ECB’s Lagarde, Vujcic, Cipollone and Lane, the BoE’s Bailey, and the BoC’s Macklem.

Tyler Durden Wed, 07/01/2026 - 08:35

Trump Briefed On All-Out War Plans, Still Eyes Diplomacy, As Iran Reminds US: 'Muzzle Your Pets In Tel Aviv'

President Trump started this week by claiming that Iran had "requested" direct talks in Qatar, but as of yet the ground reality in Doha is that Iranian officials have refused, leaving US representatives Steve Witkoff and Jared Kushner to just bide their time and deal with Qatari and Pakistani intermediaries.

In this context of Tehran putting direct contacts on hold, Trump has reportedly been briefed on options for a possible return to broader war with Iran, but has for now opted to continue diplomatic negotiations, according to a report by the Wall Street Journal citing admin officials.

Source: White House/Getty Images

The late Monday report described that discussions on "all-out war" planning involved War Secretary Pete Hegseth and Joint Chiefs Chairman Gen. Dan Caine, with the focus of the briefing described as assessing whether the United States should abandon talks with Tehran and resume full-scale military strikes. The Journal characterized, citing the officials, the latter option as—

...a move some of them describe as "finishing the job." While not making a final decision, Trump has told aides he believes another round of full-scale attacks could derail diplomacy and hurt Washington’s chances of ultimately dismantling Iran’s nuclear program.

While Trump is said to be leaning toward diplomacy, the report suggests he had not made a final decision yet, as new large-scale strikes would certainly destroy already fragile negotiations.

The WSJ further specified the president has told advisers he is ready to allow nuclear negotiations with Tehran to extend beyond an August 18 deadline, giving breathing room and flexibility for talks to produce real results.

It should be noted that the Pentagon and US intelligence community routinely present 'options' for the Commander-in-Chief:

Pentagon briefings on a president’s military options in a conflict aren’t unusual, with Trump routinely holding formal and impromptu meetings on Iran. But the latest discussions suggest he is looking for ways to break the deadlock with Tehran and hasn’t yet ruled out a return to fighting. Resuming the conflict, some officials acknowledge, would be a tacit admission that the much-touted Iran deal failed.

Central sticking points remain the initial release of $6 billion in Iranian frozen assets, and the question of tolls or fees for Hormuz Strait passage. The US side has yet to see enough good behavior from Iran to release the funds - but perhaps the administration is more worried about domestic criticism from the hawks. Neither side has found agreement for moving forward.

In the meantime so-called hardliners within Iran are putting pressure on their negotiators to make Washington 'pay' if it won't honor its agreements outlined in the MoU. As geopolitical blog Moon of Alabama has laid out:

The U.S. is obviously not willing to fulfill the conditions set out in its Memorandum of Understanding with Iran. It will need more pressure from Iran to make the U.S. agree to its demands.

The current team of Iranian leaders who had negotiated and signed the MoU are President Masoud Pezeshkian -a good heart surgeon but unexperienced politician-, Speaker of the Parliament Mohammad Bagher Ghalibaf -a former IRGC leader and professional politician-, and Foreign Minister Abbas Araghchi -a longtime professional diplomat.

All three are now under critique for multiple breaches of the MoU by the U.S. and the perceived lack of Iranian responses to those.

Some 68 members of 88 men strong Assembly of Experts have published (in Farsi, in in English) a strong admonishing advice to the negotiators to stick to the ten points the Supreme Leader of Iran had defined.

The Assembly of Experts is the elected board of senior Islamic jurists which can elect and disposes of the Supreme Leader. It is residing in Qom. Its assembly building had been destroyed in one of the U.S. attacks on Iran.

The Assembly's statement from just days stated in part, "In accordance with the commitment of the respected officials to the leadership and the people, it is expected that any breach of the agreement and violation of the clauses of the memorandum of understanding will be responded to immediately."

The Iranian Foreign Minister's own rhetoric has grown more pointed and heated at this point:

The terms of the Islamabad MoU are crystal clear and public for all to see.

POTUS has committed the U.S. to muzzling its pets in Tel Aviv. If they ignore their master, Iran will school them.

Any threat against our People and Leadership will receive Immediate Powerful Response. pic.twitter.com/VrKa259gYd

— Seyed Abbas Araghchi (@araghchi) July 1, 2026

So far, the White House has tended to ignore such strong rhetoric coming from Araghchi - again, likely not willing to damage negotiations all based on some social media tit-for-tat exchanges.

But all of this without doubt demonstrates that Tehran won't so easily bend, and the two sides could be headed toward more direct clashes as absolutist demands and interpretations keep being presented.

Tyler Durden Wed, 07/01/2026 - 08:25

ADP Employment Report Shows 12th Straight Month Of Job Gains

With jobless claims still hovering near multi-decade lows and Job Openings soaring, and despite near record low consumer sentiment (particularly about the labor market), ADP was expected to report another strong employment report this morning with the US economy adding 120k jobs.

The actual print was a disappointing +98k, but still represented the 12th straight month of employment gains...

Source: Bloomberg

Once again Small Business led the charge with hiring, but the gains were seen across all firm sizes...

Interestingly, only the Natural Resources & Mining sector saw job losses...

The median pay gain for job-stayers was little changed at 4.4 percent, while year-over-year pay growth for job-changers accelerated to 6.6 percent.

"The pace of hiring is telling a story of both supply and demand," said Dr. Nela Richardson Chief Economist, ADP.

"We know it's taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation."

Still, this is hardly the collapse in labor market sentiment that surveys are suggesting...

Tyler Durden Wed, 07/01/2026 - 08:22