Wheat Futs Surge To Three-Year High As JPMorgan, HSBC Warn Global Food Shock Is Brewing

Wheat futures surged to a three-year high on Wednesday morning as traders repriced a nasty convergence of supply risks across the global agricultural supply chain. Ongoing drone and missile attacks on critical Black Sea shipping and port infrastructure are constraining Russian and Ukrainian exports, while severe Northern Hemisphere heat waves and disruptions in the Strait of Hormuz are amplifying concerns that another food-inflation cycle could rear its ugly head next year.

Bloomberg reported that the most-active Chicago wheat contract jumped as much as 2.4% to $7.2025 a bushel, its highest level since July 2023. Futures have gained about 12% so far this month.

Russia and Ukraine, two of the world's most important breadbaskets, account for more than a quarter of global wheat exports and are also major suppliers of corn, barley, and sunflower oil. The Black Sea conflict has escalated since early July, with both sides targeting bulk carriers, ports, and other infrastructure critical to transporting grain and other agricultural products to the rest of the world.

Earlier, Ukrainian President Volodymyr Zelenskyy said Moscow rejected Kyiv's proposal for a ceasefire covering ships carrying agricultural goods through the Black Sea. In return, Russia sought guarantees that Ukraine would stop attacking its energy infrastructure, including refineries.

Zelenskyy said Kyiv was prepared to discuss an energy truce, but only on a reciprocal basis. Reuters reported that the two sides remain divided.

Troubling new estimates suggest Ukraine's agricultural exports could collapse by 54% to about 29.6 million tons during the 2026-27 marketing year, down from an earlier estimate of 64.4 million tons. Wheat shipments alone could plunge by 53% to 8.3 million tons.

Meanwhile, Russian wheat exports in August are also expected to fall by more than 50% from a year earlier. Several terminals at Novorossiysk, Russia's largest Black Sea grain-export hub, suspended operations after sustaining damage in a Ukrainian one-way attack-drone strike. The two damaged facilities have a combined annual export capacity of more than 14 million tons, according to S&P Global.

Port bottlenecks are also growing. Bloomberg reported today that as many as 70 ships were queued near the Danube's Sulina Canal. Massive shipping delays have sent freight costs surging.

More broadly, the Bloomberg Agriculture Spot Index, which tracks 10 major crop products, has also jumped to a three-year high. 

Wall Street warnings that a food crisis could erupt as soon as next year are growing louder.

The latest came from HSBC economist Jamie Culling, who covers Australia, New Zealand, and global commodities. In a Tuesday note titled "Food Prices Rising Due to the Weather and Wars," Culling warned that global agricultural "buffers are now starting to run down."

Last week, JPMorgan global economist Nora Szentivanyi issued a similar warning, saying the next global food crisis "won't be short-lived."

Tyler Durden Wed, 08/26/2026 - 14:25

Trump Admin Defends Kennedy Center Name Plan, Warns Of Demolition Risk

Authored by Kimberly Hayek via The Epoch Times,

The Trump administration told a federal judge that the John F. Kennedy Center for the Performing Arts in Washington could face demolition without major renovations.

Lawyers for the Justice Department made the case in a late Monday filing in defense of a recent board resolution that would add language recognizing President Donald Trump on the building and rename the grounds.

The board of trustees for the center voted Aug. 13 to place the words "Restored and Renovated by President Donald J. Trump" below the center's formal name. It also approved calling the physical site the "President Donald J. Trump Plaza."

Rep. Joyce Beatty (D-Ohio), a board member, had asked U.S. District Judge Christopher R. Cooper to block the move. Beatty's emergency motion seeks an injunction against the name recognition resolution.

In response, Justice Department attorney Brantley T. Mayers wrote that the center sits in a "financial and structural death spiral." The filing describes the building as "dangerously dilapidated, outdated, and decrepit."

"Without those efforts, the Center will deteriorate further into an unsafe, decrepit structure that will be required to be taken down, with a determination to follow on what to build on the site," the filing states, pointing toward one long-discussed alternative in the form of a large outdoor amphitheater overlooking the Potomac River.

Mayers argued that blocking recognition of Trump would cause donors to flee, financial contributions to slow, and structural work to stop.

"The crisis is so acute that, without the Trump Administration, its people, and President Trump, the Center cannot survive, either structurally or financially," the filing says.

Cooper ruled in May that an earlier board decision to rename the institution the "Donald J. Trump and the John F. Kennedy Memorial Center for the Performing Arts" violated federal law. Only Congress can change the name, the judge found. Trump's name was removed from the facade in June.

The new resolution stops short of a complete rename. Administration lawyers contend it stays within the board's authority and does not violate the prior order.

A hearing is set for Thursday. The board has said it will not implement the inscriptions before Sept. 8 at the earliest.

The Kennedy Center opened in 1971 as a living memorial to the slain president. Its board, controlled by Trump appointees, has pushed renovations for months, with Trump describing the building as in poor shape and positioning the project as essential to its future.

The filing urges Cooper to deny Beatty's request, describing the recognition language as a necessary acknowledgment for the administration's role in any renovation and rescue effort.

Tyler Durden Wed, 08/26/2026 - 14:05

Yields Hit Session High After Subpar 5Y Auction Tails For 10th Consecutive Time As Foreign Buyers Shrink

While yesterday's 2 Year auction was absolutely blockbuster, today's sale of 5Y paper left quite a bit to be desired.

Starting at the top, today's sale of $70BN in 2Y paper priced at a high yield of 4.393%, which was modestly below last month's 4.408% if at the high end of all auctions in the past few years. It also tailed the When Issued 4.391% by 0.2bps, which was the 15th consecutive auction without a Stop Through, and the 10th tailing auction in a row.

The bid to cover was 2.37, an improvement to last month's 2.28 and better than the recent average of 2.32. It was also the highest bid to cover going back to November 2025. 

The internals were weaker, with foreign buyers taking down 61.5%, up from 59.2% last month if below the recent average of 65.4%. And with Directs hanging in there, and taking 28.4% of the auction, the most since January, Dealers were left holding 10.0%, the lowest since December. 

Overall, this was a solid, if notably weaker auction than yesterday's phenomenal 2Y sale, and the continued drift higher in the 10Y yield and the entire curve to session highs, confirmed the market's muted reception.

Tyler Durden Wed, 08/26/2026 - 13:49

The Unsustainable $40 Trillion National Debt

Authored by Jeffrey A. Tucker via The Epoch Times,

The national debt has now passed $40 trillion. It stands at 120 percent of GDP. That should alarm us and probably does but let's just be honest: no one can conceive of such figures. They are just floating zeros and no one has any sense of whether and to what extent this portends economic doom for us. Maybe it does or maybe it doesn't.

An electronic display shows the national debt in Washington, D.C., on Aug. 19, 2026. Mandel Ngan/AFP via Getty Images

You can perhaps conceptualize this better by considering household finance. The extent of the debt burden a household can handle depends on the ratio of financial inflows to outflows in the form of debt service. This is the debt-to-income ratio. Another consideration looks at assets that would need to be liquidated should bankruptcy arrive. That's the debt-to-assets ratio.

The usual financial advice for a household is to keep the debt-to-income ratio in the range of 30 percent. As for debt-to-assets, anything beyond 50 percent is overly vulnerable to shocks that could turn everything south and quickly, leading to tragedy with even small changes in interest rates, stock valuations, business fortunates, or real-estate hiccups.

And yet here we are with a 120 percent ratio of debt to GDP. This is higher than the brief blowout of the Second World War, a time when the nation was stuffed with real savings and U.S. creditworthiness was unquestioned. After the war, the nation got its fiscal house in order and it stayed that way for decades.

The turning point toward this scary debt cycle was the end of the gold standard and the Bretton Woods system that forced some degree of fiscal responsibility. Gold outflows were always going to be a consequence of extension. When the spending extravaganza of the Great Society plus the Vietnam War (guns and butter) tested the limits and nations around the world started demanding payment in specie, the United States panicked and closed the gold window for good. That was 1971 and by 1973, we had a new system: a world of floating fiat currency.

The crucial point here is that Congress no longer faced any real cost for authorizing endless spending of whatever sort. The Treasury creates the debt and sells it to bond dealers who dish it out to all takers. The buyer of last resort is of course the Federal Reserve. This is the creator of this moral hazard. It's why there is no real default premium on U.S. debt and no serious work to rate the quality of debt with any realistic measurement. It's because the Fed is there always and ever to be the buyer of last resort.

Let's put this in simpler terms. Why is it that states within the United States don't run these kinds of debts? If they do run deficits, their default risk goes up and the quality rating goes down. Most states do very well on this score with a AAA rating, whereas Illinois, New Jersey, Pennsylvania, and Kentucky have lower ratings. In states, there are consequences for fiscal mismanagement.

I've wondered how common the knowledge is to explain this puzzle. So I asked a conventional AI engine what it believed to be the explanation. To my amazement, the answer came back quickly and precisely: states in the union have no power to create money. Boom! That's it. That's the whole thing.

This is why every scheme for balancing the budget at the federal level has failed. There is no balanced budget amendment but it likely would not matter much anyway. We could have a quantity rule for the Federal Reserve but it would be completely unenforceable.

The only way to stop the debt madness at the federal level would be to legally prohibit the Fed's open market operations (OMOs) and related large-scale asset purchases. This would largely prevent the Federal Reserve from expanding the monetary base in its primary and most powerful way. This and this alone would bring fiscal accountability to the federal level that states face all day every year.

Absent that solution, the federal government faces the same problem that a household with too much debt faces. Eventually all its income flows will be eaten up by debt service. Right now, 19 percent of federal revenue feeds the debt machine but matters are getting worse. The latest estimates from the Congressional Budget Office forecast a coming fiscal trainwreck.

The new estimates are that if net interest averages 250 basis points (2.5 percentage points) higher than CBO's baseline assumptions, 100 percent of all revenue going to the federal government will go to paying interest on the debt by 2055. That's just not that far away. That moment spells disaster.

And this is one reason why there is such a push by both parties and all stakeholders to hold down rates as much as possible. Letting them float according to free market pressures would bankrupt the country in a period of years. But therein lies another problem. Artificially low interest rates feed inflation and distort production structures.

This is why I'm not optimistic that our problems with inflation are going away anytime soon. If the Fed were really to crack down on quantitative easing, the fiscal burden of debt would explode in ways that would limit the power of politicians and utterly blow up the bond market. It appears to me that U.S. elites have decided that a persistent 3-4 percent inflation rate is a necessary tradeoff to avoid a fiscal calamity.

I'm very sorry to be the bearer of this bad news. We've gone though heck and back over the last 5 years of inflation but the problem is not going away soon. Let's further assume that the Reality Index is correct that the real inflation rate is one-third higher than official reports. At this rate, the dollar might have lost a clean 50 percent across the board of its 2019 purchasing power in one decade. This means that the fight to achieve the American dream is ongoing.

Consider too that the unfunded liabilities assumed over a 75-year horizon is closer to $80 trillion-$90 trillion, numbers that are beyond comprehension. The answer to the debt problem, then, is to bring back fiscal discipline through serious monetary reform. Let rates rise to their market level, allow that increase to feed the fullness of the yield curve, close open market operations, and expect Congress to stop its wild behavior once and for all. There are pathways out of this mess but it will require genuine political courage to pursue them.

Tyler Durden Wed, 08/26/2026 - 13:25

Trump Sends Saudi Nuclear Accord To Congress, With Israel Normalization Still Attached

It's official - a proposed agreement with Saudi Arabia on civil nuclear energy has been submitted by the White House to Congress. 

The landmark nuclear accord would mean that uranium enrichment would eventually take place on Saudi territory. However, President Trump has included a major bombshell condition: he has not backed off requiring Saudi normalization with Israel.

Saudi state media sources

"The president's position has not changed that the agreement will only move ‌forward if Saudi Arabia joins the Abraham Accords," an admin official has made clear.

The Wall Street Journal reports that "The agreement, which ‌was reached in July and would allow U.S. companies to ​export civilian nuclear technology to the kingdom, was sent to Congress on Monday, according to the U.S. official, who ⁠declined to be identified."

But officials admit expected fierce debate in Congress, as WSJ also notes: "It was not clear how Trump expects ⁠sending the nuclear deal to Congress, which has 90 session days to consider it, will advance his objectives."

"The 30-year nuclear deal calls for the construction of AP1000 reactors, a project worth tens of billions ​of dollars that would benefit Westinghouse, jointly owned by Canada-based Cameco and Brookfield Asset Management," the same report details.

The Saudis cooled on the potential for normalization with Israel in the wake of the Gaza war. Riyadh has long been demanding nothing less than full recognition of a Palestinian state before it can join the Abraham Accords.

Given at this point that this seems an impossibility from Israel's perspective, which has effectively demolished the Gaza Strip and continues squeezing the West Bank, the Saudi nuclear deal is unlikely to happen anytime soon - and could yet be many years down the line, if at all.

Meanwhile, Tehran will seize on the hypocrisy of the West allowing uranium enrichment in Saudi Arabia - and thus potential nukes - while making war on Iran and sanctioning the country for its nuclear energy program.

Any future Saudi nuclear weapon might also assure an atomic arms race in the region, and certainly the Iranians would then have greater incentive to finally build one. And it could be that they already are in secret, following the US-Israeli unprovoked attacks during Operation Epic Fury.

Why a Saudi nuclear program is not worth ending Us proliferation

Spot on article by @StrickerNonpro analysing the proliferation risks if this deal. And i would add; these proliferation risks have only increased after the Mecca agreement. https://t.co/HlG3yCUJaV

— Brian McDonald B (@iamBrianBJ) August 26, 2026

Iran sees itself as in a war for its very existence, and so would naturally respond accordingly. It also looks at nations like North Korea, who gain automatic 'respect' from Trump and others on the mere basis of possessing a nuclear arsenal.

Tyler Durden Wed, 08/26/2026 - 13:05

SoftBank Credit Risk Rises As Firm Mulls $20 Billion Bond Sale For OpenAI Stake

SoftBank Group's 8.5% notes due 2036 fell as much as 2.5 cents to about 98 cents on the dollar after Bloomberg reported that Masayoshi Son's conglomerate is considering a $10 billion to $20 billion bond offering, prompting traders to price in additional leverage and supply risk as the investment firm plans to refinance the massive bridge loan backing its OpenAI investment.

Sources familiar with SoftBank's plans said the potential bond offering could be denominated in dollars and euros, though they stressed that its size and timing could change. Proceeds would be used partly to repay a $40 billion bridge loan secured earlier this year to fund SoftBank's OpenAI investment and partly to finance additional artificial intelligence investments.

Masayoshi Son's junk-rated conglomerate plans to invest more than $65 billion in OpenAI by October, funding one of the largest private AI bets in history partly with borrowed money.

"We are considering various options to refinance the bridge loan, but nothing has been decided, including the amount for each," a SoftBank spokesperson told the outlet. 

The report noted:

Unlike most of its international offerings, SoftBank is exploring a 144A format for the first time in more than a decade, which would allow the notes to be sold to institutional investors in the US, the people said. That would help the company tap a larger pool of capital and potentially boost demand for the sale, they added.

US hyperscalers are expected to pour trillions of dollars into data centers and other AI infrastructure over the coming years. These firms have already borrowed more than $410 billion so far this year, putting pressure on debt markets. There are also $3.1 trillion in hyperscaler off-balance-sheet commitments that have come into question, as we noted in our latest report here.

Tyler Durden Wed, 08/26/2026 - 11:10

Trump Admin Pauses All Visa Appointments Worldwide

Authored by Kimberly Hayek via The Epoch Times,

The Trump administration has paused visa appointments for applicants worldwide as the State Department launches a global training initiative at all U.S. embassies and consulates, according to a department spokesperson. Appointments for visa services will be rescheduled to accommodate the training.

The State Department offered no specific details on the training or its timeline. Officials said the initiative aims to help consular officers screen out applicants deemed likely to become dependent on U.S. public benefits. It is also intended to ensure evaluation of visa applicants comprehensively and consistently.

"A more prosperous America means ensuring that visa applicants are not likely to become a public charge, as defined under U.S. law and regulation, and not likely to become dependent on U.S. public benefits reserved for qualified Americans in need," a State Department spokesperson said in an emailed statement to The Epoch Times.

Immigrant visa applicants with scheduled interviews at U.S. embassies and consulates have been contacted about any changes to their appointments, the spokesperson said.

The State Department has not indicated how long the adjustments will last.

The step comes during an ongoing enforcement of federal immigration laws in President Donald Trump's second term. That effort has included revocations of visas and green cards, with applications rejected for reasons ranging from political opinions to participation in pro-Palestinian protests against U.S. ally Israel's war in Gaza.

A spokesman for U.S. Citizenship and Immigration Services (USCIS) said certain behaviors and statements "may raise serious concerns for USCIS personnel reviewing an applicant's file, including espousing terrorist ideologies, expressing hatred for American values, advocating for the violent overthrow of the United States government, or providing material support to terrorist organizations," adding that such actions "warrant closer scrutiny."

Trump campaigned in 2024 on stopping illegal immigration. His administration has also made legal immigration more difficult. One example involves new and expensive fees for certain work visa applicants.

The measures have faced legal setbacks. A U.S. judge on Aug. 21 struck down a Trump administration policy that suspended issuance of immigrant visas to applicants from 75 countries. The judge ruled the policy exceeded Secretary of State Marco Rubio's statutory authority.

U.S. District Judge Jeannette Vargas in Manhattan called the policy - issued by the State Department in January - "patently unlawful" and said it did not comply with federal immigration law.

"Consular officers were ordered to refuse immigrant visas to nationals of the 75 designated countries, regardless of whether the consular officer had, following an individualized assessment, determined that the applicant was not likely to become a public charge and that the applicant was otherwise eligible for a visa," Vargas wrote in her ruling.

Tyler Durden Wed, 08/26/2026 - 10:50

WTI Rises After Big Product Draws, Tiny Crude Build, SPR Nears 'Tank Bottoms'

Oil prices extended their declines for a third straight day after the US plan to ramp up economic pressure on Iran spared the country’s trading partners from harsher measures for now, while mediators said they were continuing efforts to end the conflict.

“There was a lot of buildup around the announcement but what we got was more a warning about where policy is heading than an immediate shock to physical supply,” said Haris Khurshid, chief investment officer at Chicago-based Karobaar Capital LP. “Until secondary sanctions start changing who can buy, ship or even finance Iranian crude, I don’t think traders have much reason to add another geopolitical premium.”

Oman and Iran said the countries' foreign ministers discussed an agreement to reopen the Strait of Hormuz under a temporary framework.

Negotiations between the two countries will continue "with a view to agreeing on a permanent navigational corridor and future administration of the strait," the joint statement said.

While positive, an agreement between Oman and Iran wouldn't result in oil flows through the strait returning to prewar levels, ING analysts Warren Patterson and Ewa Manthey said.

"We would likely need to see the U.S. lift its blockade on Iranian ports and ease sanctions on Iran before we see any move towards normalization."

All eyes on domestic supply (and demand) for the next tactical leg...

API

• Crude +4.2mm

• Cushing +1.0mm

• Gasoline -3.2mm

• Distillates -459k

DOE

• Crude +95k (+500k exp)

• Cushing +1.18mm

• Gasoline -2.54mm

• Distillates -2.23mm

Crude stocks rose for the 4th straight week (but it was a tiny 95k increase) while Cushing saw a modest build off tank bottoms. Product inventories saw large drawdowns..

The Trump admin drained another 3.6mm barrels from the SPR to 289.7 million barrels (1983 lows), approaching the minimum operational level for storage facilities, which ranges between 250 and 300 million barrels.

The combination of a tiny commercial crude build and sizable SPR drain created the biggest net crude drawdown in over a month...

Cushing stocks remain very near 'tank bottoms'

Distillates stocks fell back near 25 year lows...

...and the lowest seasonally on record...

US crude imports from Saudi Arabia picked up recently (but remain well below peak war levels). Crude exports fell below 4 million barrels a day, a threshold closely watched by the market to gauge demand. 

US Crude production remains near record highs and while the rig count dipped last week, it is still trending higher overall...

Refining utilization rates are at the highest seasonal level since 1998. That is, in part, due to a shrinking US refining fleet in recent years. But it’s also evidence of how hard fuel-makers are running their plants right now to capture wide margins. They plan to keep that up into the fall, with some companies even deferring maintenance.

US gasoline demand remains 'normal' for this time of year...

WTI was hovering around $81.50 (off the overnight lows) ahead of the official data (down from almost $88 last week)...

Crude is still up about 50% this year as the war - now in its sixth month - continues to disrupt the shipping of crude and refined fuels out of the Middle East.

The impact has been particularly acute in fuel markets, which have also faced a hit from Ukrainian attacks on Russian refiners. That’s helped push premiums over crude to stratospheric levels (but the crack spread is starting to decline)...

At the same time, large volumes of crude supplies continue to transit Hormuz with their satellite signals turned off.

Those volumes are in millions of barrels a day and have helped generally keep a lid on prices that had been expected to soar at the outset of the conflict.

Tyler Durden Wed, 08/26/2026 - 10:40

"This Is Crazy" - FTC Chair Responds To Soaring Chip Costs, Floats Possible Antitrust Action

We’ve covered soaring “chipflation” for months and the trend does not seem to be abating. Nvidia is reportedly informing its largest customers to expect price hikes of at least 15% for next year, possibly to set expectations of a still larger move upward… and meanwhile the semi component in the PPI looks like a 2021 memecoin:

All this has earned the attention of FTC Chair Andrew Ferguson, who apparently enjoys building his own personal computers. In an interview last week in Aspen, Ferguson said he was floored by the recent explosion in prices.

“I build my own desktops at home mostly for fun, and a year ago, I decided that my rig needed to be updated, and I was like, ‘Oh well, you know, RAM is pretty cheap right now, maybe I’ll do that.’ And then the job got busy, and I was like, ‘I’ll take a look at this later.’ In six months, I looked at RAM prices and went, ‘Oh my God, I’m not building this right now. This is crazy.’”

As we covered last month, consumer electronics across the board are forecasting price hikes in the double digits, with Samsung tablets and Xbox consoles expected to increase by 20-25% by next year, per Haver Analytics. On this topic, Ferguson added that he “[does not] want consumers to have to pay way more for chips than they have to for all sorts of other applications, including the phones that we have cast all about us.”

And just yesterday, Amazon announced 60% price hikes for its major hardware products, blaming the chip shortage.

In April, Senator Bernie Moreno, who represents many car manufacturers in Ohio, wrote to Commerce Secretary Howard Lutnick asking the government to restrict chip exports to increase domestic supplies, citing concern that the American auto industry won't be able to compete on the global market due to "higher prices and supply delays" of chips.

FTC Chair Ferguson floated the idea of using antitrust measures to crack down on some of the chip giants, in an effort to “focus on the meat and potatoes” of what’s fueling the broader AI-related inflation crisis.

“That we can do,” he said when asked about whether his agency could intervene. “That’s just ordinary industrial organization economics and antitrust,”

FTC chair Andrew Ferguson (right) sat down with CNBC’s Brian Sullivan last week at the Technology Policy Institute’s Aspen summit.

“We know when consolidation there becomes dangerous. We know when agreements are likely to raise prices or reduce competition or cut off innovation, as opposed to trying to get out in front of the AI developers,” Ferguson continued. “It would be insane for a regulator to say, ‘I know where it’s going, and I’m going to make predictive regulatory choices on that basis.’ But further back in the supply chain, that we can apply ordinary antitrust to.”

Pressed on a hypothetical merger between Nvidia and chip designer ARM, the chairman appeared to issue a soft warning.

“I think if Nvidia and ARM were to merge, we would have to take a very careful look at that,” Ferguson said. “That is antitrust enforcer speak for, you know, we would have concerns.”

Ferguson said earlier in the conversation that keeping AI’s raw inputs competitive is his top antitrust priority.

“I want to make sure that the markets for the inputs for AI remain competitive. I don’t want there to develop overnight sudden bottleneck monopolies in the inputs for AI that deprive downstream users of the benefits of competition because someone upstream in the supply chain gets to jack up everyone’s prices because it’s enjoying a monopoly and maintaining it illegally,” he said.

Some foreign chip makers are already under fire for potential collusion and price fixing.

In June, a class action lawsuit was filed against the three dominant DRAM makers - South Korea's Samsung and SK Hynix and America's Micron. The lawsuit alleges that the three companies, which control ~90% of the DRAM semiconductor, have conspired to restrict the supply of memory and have driven prices up 697% compounded by 2022 to 2026. The lawsuit alleges all three companies had simultaneous production cuts and have not expanded supply despite record prices.

The lawsuit notes: “DRAM is embedded in virtually every electronic device manufactured today. When Defendants coordinate to restrict DRAM supply and inflate prices, the cost increase is passed through to consumers across every one of these product categories—smartphones, PCs, gaming consoles, servers, automobiles, and consumer electronics. No device category escapes the impact.”

If found guilty, it wouldn’t be the first time.

In the mid-2000s, Samsung and Hynix pleaded guilty to fixing DRAM prices. Samsung paid a whopping $300 million fine, the second largest criminal antitrust fine in U.S. history at the time.

Tyler Durden Wed, 08/26/2026 - 10:00

Meta Settles With US States For $16.7 Billion Over Social Media Harms To Children

Meta Platforms has reached a $16.7 billion settlement to resolve a landmark claim brought by several states that the company designed Instagram and Facebook to addict children, improperly collected children's personal data, and misled consumers about their safety. 

The deal was in a Wednesday court filing in California after a lawsuit was brought by 29 states - with attorneys for  Colorado, California, New Jersey and Kentucky - leading the group. The states argued that features like infinite scroll were purposely engineered to keep young users hooked, that Meta misled the public about the safety of its platforms for adolescents, and that the company improperly collected and monetized children's personal data in violation of federal law.

As part of the settlement, Meta must implement daily usage limits and 'nighttime blocks' for teenagers who use the company's apps like Facebook and Instagram, as well as "enhanced age assurance measures" that would prevent children from using them, and also providing parents with additional tools, CNBC reports.

Additionally, Meta is tying another $5.3 billion of the settlement to Google and TikTok adopting similar teen safety measures - cutting default teen time limits from 2 hours to 1 hour per day. 

The attorneys general of Alabama, Alaska, American Samoa, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, the District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Northern Mariana Islands, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming joined the settlement.

Prior to the settlement, Meta warned that maximum statutory penalties could theoretically reach $1.4 trillion, while the attorneys general have indicated they may seek around $200 billion. That said, the company still faces thousands of lawsuits filed by school districts and individual plaintiffs alleging harms from social media. 

While shares spiked as much as 5% premarket on the news, the move was quickly reversed at market open.

h ttps://x.com/TrwendSpider/status/2092360371138932969?s=202

Tyler Durden Wed, 08/26/2026 - 09:19

Q2 GDP Grew At Modest 1.5% According To Latest Revision, As Expected

While far less relevant than the rest of today's data barrage, including the core PCE report and Durable Goods data which showed a mixed real-time picture of the economy as core prices rose more than expected while core CapEx missed expectations, the BEA also reported its second revision of Q2 GDP data - yes, for the quarter ended June 30 or almost two months ago - and which came in at 1.5%, right on top of expectations, and unchanged from the previous estimate.

According to the BEA, contributors to the increase in real GDP in the second quarter were increases in consumer spending, exports, and investment that were partly offset by a decrease in government spending. Imports, which are a subtraction in the calculation of GDP, increased. 

Compared to the first quarter, the deceleration in real GDP in the second quarter reflected a downturn in government spending and decelerations in investment and exports that were partly offset by an acceleration in consumer spending. Imports increased more in the second quarter than in the first quarter. 

As shown in the chart below, virtually all growth in Q2 GDP came from personal consumption, which added 2.31% to the bottom line 1.5%, GDP print, or more than all of it. On an annualized basis, personal consumption rose 3.4% q/q, beating the 3.2% median estimate and also advance reading. 

Another 1.2% came from Fixed Investment, all of which was the result of non-residential construction (data centers and intellectual property products). On the other end, Net Exports subtracted a total of 1.14% from the bottom line GDP print while the change in private inventories detracted another 0.72%. Finally government erased another 0.16% from the GDP print. 

There was some better news when it comes to real gross domestic income (GDI) which increased 2.2% in the second quarter, compared with an increase of 1.2% in the first quarter. The average of real GDP and real GDI increased 1.8%, compared with an increase of 1.7%.

And while it is especially irrelevant in light of today's much more up-to-date core PCE data, the price index for gross domestic purchases increased 5.8% in the second quarter, revised up 0.1% point from the previous estimate. The personal consumption expenditures (PCE) price index increased 5.3% revised up 0.2%, and the PCE price index excluding food and energy increased 3.6%, also revised up 0.2% point. However, as noted previously, this is for a quarter that ended 2 months ago so ignore all of the above.

Finally, profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $400.9 billion in the second quarter, compared with an increase of $74.4 billion in the first quarter

Tyler Durden Wed, 08/26/2026 - 08:45

Fed's Favorite Inflation Indicator Ticks Up In July As Americans Suddenly Start Saving More

Following the CPI and PPI internals, this morning's PCE data should not offer too many surprises with expectations for the headline price Index to rise just 0.1% MoM in July (after deflating for the first time since COVID in June).

The (old) Fed's favorite inflation indicator - Core PCE (a measure of price changes in consumer goods and services that excludes volatile food and energy costs) - printed in line with expectations (+0.2% MoM and +3.3% YoY), a very slight uptick...

Services costs continue to dominate the inflationary picture...

The headline PCE rose 0.2% MoM (hotter than the +0.1% MoM expected) with a small uptick for the YoY at +3.7%...

Non-durable goods prices continued to deflate in July...

The much-watched SuperCore PCE (Services ex-shelter) saw price inflation slow on a YoY basis...

The decline in crude prices dragged the Energy component of PCE lower...

Ironically, while semiconductor prices are major contributors to inflation, it turns out that a rising (or now sideways/falling) stock market is also driving up aggregate prices as portfolio management service costs soar...

This is important because it accounted for more than half of all Core PCE Services inflation...

Under the hood, it was all Portfolio Management & Advice Services...

Higher prices were met with higher spending (+0.2% MoM notional) and higher income growth (+0.4% MoM) - both stronger than expected...

Income and spending annual growth is slowing...

On the income side, both public and private worker wage growth slowed:

• Govt worker wages drop to just 1.4% YoY, lowest since March 2021

• Private worker wages drop to 3.8% from 4.6%, lowest since March 2026

Real personal spending growth dipped notably...

...which might help explain why the savings rate inflected higher from four year lows...

"The economy remains strong and inflation isn’t dropping," says TradeStation’s David Russell, Global Head of Market Strategy. 

 "Strong consumption, spending and durable goods orders suggest the committee has room to tighten without causing a recession. These numbers support hawkish policymakers at the Fed’s committee and increase pressure on Kevin Warsh later this week. It’s getting harder for him to dodge the issue of hiking rates."

Tyler Durden Wed, 08/26/2026 - 08:43

Futures Flat Ahead Of Key PCE Report, Nvidia Earnings

Stock futures are are flat and Treasuries slipped while oil stumbled heading into today's PCE report and NVDA earnings. As of 8:00am ET, S&P Futures are unchanged and Nasdaq futures drop 0.2% as NVDA and MRVL both rise 0.2% with Semis flat, Memory down 80bp, Korea down 46bp, Software down 1.3%, but Unprofitable Tech +83bp which point to continued de-risking into NVDA / MRVL where expectations are positive, but a stronger print may mean more for the ecosystem than for the individual stocks. Elsewhere, both Cyclicals and Defensives are mixed with Healthcare standing out to the upside and Energy to the downside. Bond yields are +1-3bp as the curve bear flattens, giving back some of yesterday’s gains. Confirming out report from Monday about Bessent's plan, JPM reports this morning that "There is chatter of CTAs accelerating buying as 10Y yield approaches / breaches 4.60%." USD is higher, crude is lower on US / Iran deal optimism, but WTI may have support at $80/bbl until a deal is announced. Base Metals are stronger, precious metals are weaker, and Ags are mixed but net higher. Today’s macro data focus is on PCE where consensus expects a headline PCE +0.1% MoM / +3.6% YoY and Core PCE +0.3% MoM / +3.3% YoY. Nvidia reports earnings after the close. 

In premarket trading, Mag 7 stocks are mostly higher as Wall Street is eagerly anticipating Nvidia’s earnings on Wednesday afternoon, not so much for what the numbers will say about the chip giant, but for what they mean to artificial intelligence investors and the market itself. Nvidia (NVDA) climbs 0.2%; Meta Platforms +1.5%, Amazon +0.2%, Alphabet +0.1%, Apple 0.0%, Tesla -0.1%, Microsoft -0.7%

• Bath & Body municatiWorks (BBWI) falls 3% after the retailer posted second quarter results and providing a year forecast.
• Dycom Industries (DY) falls 4% after the builder of fiber-optic systems for cable TV operators posted second quarter results and provided a forecast.
• Intuit (INTU) declines 11% after the tax-preparation software company gave a full-year forecast for both adjusted earnings and revenue that was weaker than expected.
• JM Smucker (SJM) rises 3% after the food company boosted its adjusted earnings per share guidance for the full year.
• Kohl’s (KSS) falls 4% after the department-store chain posted second quarter results.
• Neogen (NEOG) gains 3% as Piper Sandler upgrades the food processing firm to overweight following several consecutive quarters of improving performance.
• NCino (NCNO) falls 6% after the midpoint forecast for subscription revenue in the third quarter missed the average analyst estimate.
• Photronics (PLAB) climbs 17% after the semiconductor supplier reported adjusted earnings per share for the third quarter that beat the average analyst estimate.
• Semtech (SMTC) gains 4% after the semiconductor device company reported second-quarter results that beat expectations and gave an outlook that was much stronger than the analyst consensus.
• SolarEdge Technologies (SEDG) gains 7% as UBS upgrades to buy, saying the solar company is positioned for market-share gains following the FCC ban on new inverter model imports.
• Spyre Therapeutics (SYRE) sinks 11% after the drug developer said a mid-stage trial of its experimental drug for rheumatoid arthritis, an autoimmune disease, fell short of the company’s internal bar to develop it as a monotherapy.
• Summit Therapeutics (SMMT) rises 8% after the cancer drug developer gave results from a late-stage trial of its experimental therapy,
• ivonescimab, as a treatment for biliary tract cancer. Analysts note that its the drug’s first success in a late-stage trial outside of lung cancer.
• Zoom Comons (ZM) falls 6% after the software company gave outlooks for adjusted third-quarter earnings and operating income that were weaker than expected.

In other corporate news Northrop Grumman CEO said the Trump administration’s Golden Dome space defense system was becoming “very tangible” for defense contractors and that her company will end up with a “decent share” of a program that may eventually cost more than $1 trillion. Hyundai unveiled the biggest product push in the automaker’s history, announcing more than 100 model launches and refreshes to challenge Toyota in the hot US hybrid market.

With over $5 trillion in market cap, Nvidia’s earnings after the close are expected to shape sentiment decisively. The stock has fallen the day after each of its previous four reports, while options markets are pricing in a 5.4% move either way on results expected to show revenue nearly doubling from a year ago. The headline numbers, however, aren’t where the market’s attention lies. Investors are more interested in hearing what the artificial-intelligence bellwether has to say about spending by its biggest customers, the outlook for demand and a wave of financing deals.

“What’s really going to matter here is the guide,” said Stephanie Niven, portfolio manager at Ninety One. “And it’s not the growth that’s the question, but the rates at which that growth is either accelerating or decelerating.”

Nvidia fell for seven straight sessions before bouncing back on Tuesday. While the recent weakness may lower the bar for the quarter, “it does not materially lower the bar for the outlook,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

“If equities sell off, do we want to buy the dip? If the spread blows up that’s a signal that we do not want to enter,” Li said. “But if spreads are holding tight, and fundamentals are good, and if markets are selling off because of indigestion then maybe we could actually consider re-expressing our conviction which is overweight AI and tech in particular.”

Elsewhere, this morning the US government will publish the latest personal consumption expenditures price index. Economists estimate the index rose 3.6% in July from a year ago, the smallest annual increase in four months. Portfolio-management fees should drive more than half July’s core PCE deflator gain, with downward revisions likely in September. Nominal consumer spending probably rose just 0.1%. The expected slowdown isn’t cause for alarm, as activity was pulled forward into June by Amazon Prime Day and the FIFA World Cup.

“PCE can ease the immediate macro stress, but it cannot alone solve the Treasury-market problem,” said Ulrich Urbahn at Berenberg. “The more durable bullish outcome would be soft core inflation plus calmer oil, evidence of stable demand, and a subsequent decline in long-end yields that doesn’t rely solely on Treasury liquidity measures.”

Brent crude extended its decline to about 9% for the week as diplomatic efforts to normalize flows through the Strait of Hormuz gained further traction. In the latest development, Iran and Oman are working toward a potential deal to resume shipping through the waterway. Copper held near a record high, with short-term supplies continuing to look tight despite an easing of a severe market squeeze.

While corporate earnings have supported stocks for now, the asset class faces risks from AI-driven supply concerns and volatility ahead of the US midterms, according to Barclays strategists.

European stocks are edging higher, led by miners and with the technology and energy sectors trailing.Here are the biggest movers Wednesday:

• Hochschild Mining shares rose as much as 8.5%, trading at a three-month high, after analysts said the miner raised its all-in sustaining cost of production less than feared, a welcome development as gold prices hold onto recent gains
• Salmar rose as much as 5.5% to the highest since June after Nordea upgraded the stock to hold from sell, saying there’s “limited fuel for a sell case in the short term” following the Norwegian salmon company’s 2Q results
• Stadler Rail gained as much as 18%, the most on record, as analysts noted a solid set of first-half results from the Swiss train manufacturer, including a significant increase in orders
• SoftwareONE shares rose as much as 16% to their highest in nearly two years after the Swiss IT company beat profit expectations in the first half, though analysts noted the firm’s failure to boost guidance
• Truecaller shares rose as much as 11%, hitting their highest level since December, after analysts at JPMorgan raised their price target and predicted the software company can at least double in value over the next nine months
• DEME Group shares rose as much as 7.4%, the most since January, after the marine engineering contractor increased its profit guidance and beat net profit expectations
• Inventiva climbed as much as 7.2% — the biggest gain on the CAC Small Index on Wednesday morning — after KBC Securities increased its price target on the stock
• Major European software stocks traded lower on Wednesday in the wake of disappointing updates from US outfits Intuit and Zoom Communications, while a downgrade of German heavyweight SAP is also sapping sentiment
• SAP fell as much as 4.6% after UBS reduced its rating on the shares to neutral from buy, citing the software company’s slow progress in delivering AI products to customers
• Ambu fell as much as 18%, the most since November 2025, after the Danish healthcare-equipment maker reported earnings and updated its guidance, with JPMorgan saying sales were in line, while adjusted Ebit was a 19.5% miss excluding tariff refunds
• OVH Groupe shares fell as much as 10% after the announcement that CFO Stéphanie Besnier is to step down
• H&M fell as much as 2.3% after Handelsbanken cut its rating on the Swedish fashion retail group to hold from buy, saying the scenario presented in its June 2025 buy initiation has played out, with gross margins recovering thanks to internal and external factors

Asian stocks rose, led by an advance in heavyweight chipmakers before Nvidia’s quarterly earnings report. The MSCI Asia Pacific Index climbed 0.7%, heading for a second day of gains. Samsung and TSMC were the biggest contributors to its increase. Energy was the only sector to decline on the regional benchmark as oil fell for a third day, with Iran and Oman discussing an “interim framework” aimed at resuming shipping through the Strait of Hormuz. The MSCI Asia gauge has risen about 3% in August, on course for its first monthly gain since May. Taiwan’s key index gained the most in two weeks, while gauges in Japan and South Korea also advanced. Australian stocks fell after the nation’s core inflation was stronger than analysts expected in July. Abrdn is positive on Chinese internet firms Tencent and Alibaba after a recent selloff, as well as on financials and high-dividend consumer shares, Pruksa Iamthongthong, senior investment director, said on Bloomberg Television. India is starting to see some positive earnings revisions after a long stretch, while the financials sector offers some opportunities, she said.

In FX, the Bloomberg Dollar Spot Index is little changed, with the Aussie dollar the best performer among major currencies following an unexpected inflation overshoot.

In rates,treasuries hold small losses in early US trading, erasing a portion of Tuesday’s advance before release of PCE inflation gauges in July personal income and spending data and, later Wednesday, the monthly 5-year note auction.  Oil prices, which in recent sessions have led yields lower, decline further, limiting Treasuries’ losses. Front-end yields are higher by about 2bp with long-end tenors little changed, extending the recent yield-curve flattening trend; 10-year near 4.64% is less than 1bp higher on the day and slightly cheaper vs UK and German counterparts. Today we get a $70 billion 5-year note auction at 1 p.m. New York time has WI yield near 4.36%; last month’s 5-year sale drew 4.408%, the highest result since December 2024.New 2-year notes hold small gain vs Tuesday’s 4.204% auction stop, with yield just below 4.20%; cycle concludes with $44 billion 7-year note auction Thursday. IG credit new-issue calendar is anticipated to be light through month-end; three borrowers sold a combined $3.7 billion Tuesday

In commodities, Brent slips below $86/barrel after Iran and Oman push talks for an interim deal to reopen the Strait of Hormuz.  WTI crude oil futures are down about 2.5% amid assessment of Middle East supply outlook. Gold prices are down and Bitcoin is staying steady around $80,000. Copper held near a record high, with short-term supplies continuing to look tight despite an easing of a severe market squeeze.

US economic data calendar includes July personal income and spending (with PCE price indexes), July preliminary durable goods orders and second estimate of 2Q GDP (all at 8:30 a.m. New York time). Fed speaker slate includes Richmond Fed’s Tom Barkin, unscripted in a panel discussion (11:45 a.m. New York time)

Market Snapshot

Top Overnight News

• Secretary of State Marco Rubio has told several of his foreign counterparts in recent days that "for the time being" the U.S. is not expected to initiate new strikes against Iran, according to a U.S. official and a second source with knowledge of the matter. Instead, he's said the focus is on other means of pressure, including the sanctions initiative announced this week. Axios
• Iran and Oman have edged towards an interim agreement on managing shipping through the Strait of Hormuz, the first hint of diplomatic progress in weeks as mediators seek to defuse the battle over the strategic waterway. FT
• The US is discussing additional trade penalties against Canada as tensions escalate. Next steps may include higher tariffs, a White House official said. BBG
• China's Moonshot AI is negotiating revenue-sharing agreements with Microsoft, Amazon and Alphabet's Google that would allow the U.S. cloud giants to host its blockbuster Kimi K3 model, three people familiar with the ‌talks said. RTRS
• Japan will set up a study group for implementing a 24-hour blockchain based settlement system for stocks and government bonds. Nikkei
• US gasoline inventories fell by 3.2 million barrels last week, API data is said to show. That would cut total holdings to the lowest since November if confirmed by the EIA. Crude supplies rose 4.2 million barrels. BBG
• Australian consumer prices rose by more than expected in July, adding pressure on the Reserve Bank of Australia to raise interest rates again before the end of the year. The annual inflation rate stood at 3.5% in July, the Australian Bureau of Statistics said Wednesday. Economists had expected inflation of 3.3%. WSJ
• US Treasury secretary Scott Bessent’s bond market intervention is pulling in the opposite direction to the Federal Reserve’s battle against inflation, big investors warned ahead of chair Kevin Warsh’s Jackson Hole speech.
• The Money supply is growing quickly, a headwind for the Fed’s goal of cooling inflation. Barron’s
• Darlene Graham wins South Carolina Republican primary runoff for US Senate, according to DDHQ projection

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks were mostly in the green following the gains on Wall Street, where sentiment was underpinned amid Strait of Hormuz optimism, lower oil prices and a drop in yields, while participants await NVIDIA earnings. ASX 200 traded lower following another deluge of earnings releases and hotter-than-expected CPI data, while Construction Work disappointed with a surprise contraction, feeding into next week's GDP release. Nikkei 225 declined at the open following the firmer-than-expected Services PPI data, but then gradually rebounded and returned to above the 66,000 level. KOSPI saw two-way trade, but ultimately outperformed, with the price moves in the index largely driven by tech heavyweights, which were initially choppy. Hang Seng and Shanghai Comp were underpinned as participants digested a deluge of earnings, and with Alibaba shares supported after its founder Jack Ma bought more than HKD 600mln of the Co.’s Hong Kong-listed shares over two consecutive days, signalling confidence in its long-term AI prospects.

Top Asian News

• China's military said naval and air forces conducted routine patrol in South China Sea on August 21st-25th.
• Japanese PM Takaichi said they are considering incentives for firms to diversify fuel sources.
• Japan's Ministry of Justice has finalised its request of over JPY 80.7bln in its budget estimate, which is more than double this year's initial budget, NHK reported.
• Japan's Economy Minister Kiuchi said expect CPI to gradually rise due to conditions in the Middle East.
• Shinhan Financial Group (055550 KS) and Visa (V) signed a strategic partnership to test stablecoin issuance, remittances, redemption and card settlement, while jointly developing AI-powered payment models for South Korea.
• Japan Atomic Energy Agency and others have developed technology that can extract rare-earth elements from water and oil, reported Nikkei.

European bourses (STOXX 600 +0.1%) are mostly firmer this morning, but with gains only modest in nature. The market remains clouded by ongoing geopolitical uncertainty, with traders awaiting the much-anticipated Nvidia earnings. European sectors hold a slight positive bias. Consumer Products takes the top spot, joined closely by Basic Resources and Travel & Leisure. It appears to be the case that the cyclical sectors are benefiting the most in today’s session, aside from the Tech sector, which is the laggard. The latter is subject to pressure on three fronts: 1) SAP (-4%) received a downgrade at UBS. 2) Broader European software names drift, in a continuation of the action seen on Tuesday after Google announced Gemini Enterprise for financial services. 3) Poor Intuit results. Key stories: Banco BPM (+0.3%, acknowledges the unsolicited offer from MPS), SoftwareOne (+15%, H1 rev. beat), Ambu (-16%, decent headline metrics, but guidance downgraded). FTSE 100: Indicative FTSE 100 quarterly review changes show easyJet and Ithaca Energy are set to join, with Entain and Persimmon to be removed.

Top European News

• UK PM Burnham looks at giving mayors in England the authority to suspend the “right to buy” policy and block the sale of council homes, according to FT.
• POLITICO expects UK Energy Secretary Fahnbulleh to "stick to the script" on whether to allow new North Sea drilling.
• UK Ofgem energy price cap to increase by 4% from October 1st (exp. 4%), driven primarily by the Middle East.
• Swedish PPI (Jul MM) 0.1% (Prev. 0.1%).
• Swedish PPI (Jul YY) 6.4% (Prev. 7.4%).

FX

• G10s show mixed performance with AUD and JPY leading after data, while high-beta currencies mostly lag but sit within yesterday’s ranges.
• USD attempts to rebound today with broad based strength against high-beta cyclicals but weakness vs. Aussie and Yen after respective strong domestic data overnight. DXY attempts to rebound after modest losses on Tuesday, but remains within yesterday’s 98.86-99.11 range for now with macro catalysts light into PCE and NVIDIA earnings today.
• EUR is resilient to the modest USD strength with the pair flat today; action which comes after the influential ECB’s Schnabel said the “economy looks to be gaining further momentum.”, which ING suggests “should cement expectations for a 25bp rate hike” in September. EUR/USD lost steam at 1.1680 which has proven resistance over the past few days following a brief period above 1.17 last week. GBP tracks the weaker Buck with Cable continuing to range trade above 1.3620; the Ofgem price cap is to be lifted by 4% from October 1st as expected, while Cornwall insight sees a further 9% rise in January, unwelcome news for UK Policymakers.
• AUD is the G10 outperformer after Aussie CPI beat estimates, remaining above the RBA’s 3% upper inflation target with the RBA’s preferred measure, trimmed mean, unchanged at 3.6% Y/Y above expectations of 3.5%. Unwelcome news for the RBA where a hike in either Sept/Nov are not yet fully priced by markets; banks remain split on this matter with Westpac and UoB saying a November hike could be in play though others shifting calls towards November, while OIS for September doubled from 3 to 6bps. AUD/USD +0.3% on the day, the pair could look towards 0.72, a level briefly eclipsed in May, should pricing turn more hawkish. MUFG notes the risks are starting to shift to a stronger Aussie but cautions positioning is starting to look stretched, referencing the 2yr AU-US swap spread. JPY similarly outperforms after hot Services PPI data from Japan, USD/JPY around 159.00.

FIxed Income

• A contained to modestly firmer start for fixed. USTs and Bunds are slowly inching their way back towards Tuesday’s best, but remain around five and 30 ticks shy, respectively. Gilts differ slightly, in that they opened within reach of Tuesday’s 87.15 best, but have since eased and lost the figure, though still post relative outperformance.
• Today’s docket is headlined by US PCE, though any further updates to the geopolitical developments we saw late-Tuesday could ultimately overshadow. For PCE, the core M/M is seen at 0.2% (prev. 0.1%), which would be in-fitting with the CPI print. Data will help inform the Fed debate, with the inflation-side of the mandate still very much in the driving seat; however, near-term Fed bets may not shift dramatically ahead of Friday.
• For reference, current Fed pricing via CME has around a 64% implied probability of unchanged in September, and around a 30% chance of unchanged by end-2026, with a 45% chance currently to one hike by the end of the year.
• Bunds firmer but, as discussed, shy of Tuesday’s best. Currently holding in the green with gains of around 15 ticks, but a similar amount shy of the 124.65 peak. No move this morning to ECB’s Schnabel, who in a Bloomberg interview stuck to her known hawkish-bias, while noting the ECB’s data-dependent language. On supply, the 2048 Bund auction was well-received, but likely due to the low amount on offer. No move was seen following the auction.
• Gilts marginally outperform, but are also off best. Note, coverage remains on the September contract for now, but increasingly activity is turning to the December one, as a way of fully encapsulating what could be a significant September BoE meeting given the bond update that is due, in addition to the first budget of the Burnham government thereafter.
• Italy sold EUR 3.0bln vs exp. EUR 2.5-3.0bln 3.00% 2028 BTP: b/c 1.58x & average yield 3.02%.
• Japan sold JPY 649bln in 10yr, 20yr and 30yr JGBs in enhanced liquidity auction; b/c 3.20 vs. Prev. 2.68. Highest accepted spread -0.011% vs. Prev. +0.004%. Allotment of bids at highest spread 58.2741% vs. Prev. 87.6152%.

Commodities

• In geopolitics, much of the recent US-Iran reporting has tilted positive, albeit remaining unconfirmed by either side. Yesterday, Russian press RIA citing Pakistani and Iranian sources suggested “A ceasefire between the US and Iran has been agreed upon, it includes free navigation in the Strait of Hormuz and will be announced in the coming days”, albeit with no further details. For references, the formal 60-day ceasefire window officially expired in mid-August 2026, albeit hostilities have been minimal since. On the flip side, rhetoric from Iran has been more steadfast with the Iranian side suggesting, that east of the Strait of Hormuz, north of the Indian Ocean, the Arabian Sea, and the Oman Sea are under their operational control.
• WTI Oct and Brent Nov futures are softer by over 2% apiece at the time of writing, with desks citing ongoing optimism surrounding Iran and the US. Brent trades within a USD 84.56-85.99/bbl (vs yesterday’s USD 80.23-85.84/bbl range) range and WTI in a USD 79.62-81.31/bbl (vs yesterday’s USD 85.00-91.29/bbl range). Dutch TTF also pulls back amidst this optimism, clocking losses of over 3% intraday at the time of writing, with the front month contract back under EUR 64/MWh vs ~EUR 69/MWh earlier this week.
• Precious metals are softer as the DXY remains resilient to the lower oil prices. Spot gold trades in a USD 4,627-4,622/oz range, within yesterday’s USD 4,605-4,697/oz parameter. Spot silver resides in a narrow USD 68.20-69.73/oz range, finding support near its 100 DMA (USD 68.32/oz) and within yesterday’s USD 67.45-69.95/oz range. Base metals are flat as the resilient Dollar is countered by ongoing Chinese stimulus hopes, with 3M LME copper in a USD 14,321.13-14,437.40/t range at the time of writing.
• Shipping data shows Tankers loaded 4mln barrels of Saudi Crude in ship-to-ship transfer off Oman; cargoes heading for China.
• Japan's Cabinet office confirms plans to diversify oil procurement; aims to provide support with extra shipping costs.
• Russia's Novorossiysk grain terminal restoration may take between 1-4 months following suspension in August, according to reported.
• Five commodity vessels pass through the Strait of Hormuz on Tuesday which is significantly below the 10-day average of 15, according to data.
• South Korea plans to cut industrial power rates by up to 10% on the new regionally differentiated pricing scheme, according to Yonhap.
• China's Ministry of Agriculture and Rural Affairs issued the 15th Five-Year Plan for the national farm-product origin market system, targeting improved supply–demand matching and a modern circulation network. China is to largely complete modern farm-produce origin market system by 2030.
• US Weekly Private Inventory Data (bbls): Crude +4.2mln (prev. -0.3mln), Gasoline -3.2mln (prev. +1.1mln), Distillate -0.5mln (prev. -2.8mln), Cushing +1.0mln (prev. -1.4mln).

Central Banks

• Fed's Barkin (2027 voter) described the July rate decision as a close call and said officials will receive another full set of data prior to the September 15th-16th meeting. said:. Latest trade dispute with Canada was adding to uncertainty regarding how tariffs will affect prices and economy.
• Fed's Barkin (2027 voter) said there will eventually be a reckoning of US debt and debt will reach a point when investors will stop buying if it continues to rise.
• BoJ Governor Ueda will not attend this week's Jackson Hole meeting, with Board Member Tamura to attend on Ueda's behalf.
• Major newswire poll shows 57% of economists expect the BoJ to hike its interest rate to 1.25% at the September meeting, while a slim majority of economists see the BoJ hiking rates to at least 1.5% in Q1 2027.
• ECB's Schnabel said rates must increase further on inflation risks and ECB must prevent second round effects early on, Bloomberg reported.
• PBoC set USD/CNY mid-point at 6.7829 vs exp. 6.7166 (prev. 6.7852).

Geopolitics: Ukraine

• Ukrainian President Zelenskiy said that they struck 16 targets inside Russia in the past day, which involves oil facilities and logistics centres.
• Russia's Novorossiysk grain terminal restoration may take between 1-4 months following suspension in August, according to reported.
• Ukrainian President Zelensky said he is counting on China's strong diplomatic role in ending Russia's war against Ukraine, while he added that peace can be our shared achievement.
• Russian President Putin advisor said Japan only needs one year to possess a nuclear weapon, according to Al Arabiya.

Geopolitics: Middle East

• Iran's Deputy FM Ghalibaf refiles a post, which said,"Based on negotiations with Oman, the southern route will be completely closed, if Iran's requirements are not met".
• Iranian President Pezeshkian and Russian President Putin will meet on the sidelines of the upcoming Shanghai Cooperation Organization summit in Kyrgyzstan (31st Aug-1st Sep), Iran International reported.
• Iran and Oman outlined a joint proposal for a temporary shipping lane and launch a demining effort in the Strait of Hormuz, according to CNN.
• Iran's Deputy Foreign Minister Gharibabadi details temporary arrangement between Iran and Oman concerning the Strait of Hormuz while asserting that reopening of the waterway hinges on realisation of Tehran's demands, according to Press TV.
• Iran official said only Tehran knows Hormuz mine locations, reported Fars.
• Iran Deputy FM Gharibabadi said understanding with Oman on the Strait of Hormuz does not mean opening the Strait of Hormuz. Before taking any action to reopen the Strait of Hormuz, the US must fully implement all its violated commitments. In the understanding with Oman, the route into the strait is completely at our disposal, and part of the exit route is also in Iranian waters; also, the distance between the two routes is not long. US minesweepers are very good targets for us if they enter the region. If US goes ahead with its new sanctions against Iran, Iran will divulge new measures against US interests.
• Iranian Army said areas east of the Strait of Hormuz, north of the Indian Ocean, the Arabian Sea, and the Oman Sea are under our operational control, Al Jazeera reported. Iranian military said ships are under our surveillance hundreds of kilometers before they reach the Strait of Hormuz and can cross if they get our permission.
• Iranian Army Spokesperson Akraminia said in a possible future war, new issues could be raised, such as regional energy infrastructure.
• US President Trump sends nuclear agreement with Saudi Arabia to Congress, while he still insists the agreement is contingent on Saudi Arabia normalising relations with Israel, according to WSJ.
• US Secretary of State Rubio told foreign counterparts the US is shifting from strikes to sanctions on Iran and that for the time being, US is not expected to initiate new strikes against Iran, according to a US official and a second source cited by Axios. "U.S. officials say the clearing of mines from most of the Strait of Hormuz, coupled with the fact that more and more tankers have been moving through the southern lane of the strait in recent weeks, significantly reduces Iran's leverage over global energy markets.".
• Houthi military leader states "We reaffirm our unwavering commitment to our principled and faith-based stance in support of the oppressed Palestinian people and their just cause, which is the cause of the entire nation". said:. "- We will spare no effort in supporting the Palestinian people and their resistance fighters until the inevitable divine promise of the fall of the Zionist entity is fulfilled.".
• US Ambassador to Lebanon said "there is progress in the pilot areas, but what is on paper requires time for implementation", Al Hadath reported.
• IRIB news agency noted Palestinian sources report that Israeli forces raid two other settlements in the West Bank.
• Israeli force of 10 vehicles stormed the village of Jamla in the Daraa countryside in Syria.
• Israeli forces strike targets in multiple areas in southern Lebanon.
• Israeli PM Netanyahu said it is not possible to reach a diplomatic agreement with Iran.

US Event Calendar

• 7:00 am: Aug 21 MBA Mortgage Applications, prior -0.4%
• 8:30 am: Jul Personal Income, est. 0.2%, prior 0.2%
• 8:30 am: Jul Personal Spending, est. 0.1%, prior 0.29%
• 8:30 am: Jul PCE Price Index YoY, est. 3.6%, prior 3.67%
• 8:30 am: Jul Core PCE Price Index MoM, est. 0.2%, prior 0.1%
• 8:30 am: Jul Core PCE Price Index YoY, est. 3.3%, prior 3.29%
• 8:30 am: Jul P Durable Goods Orders, est. 0.5%, prior 0.5%
• 8:30 am: Jul P Durables Ex Transportation, est. 0.6%, prior 0.7%
• 8:30 am: 2Q S GDP Annualized QoQ, est. 1.5%, prior 1.5%
• 8:30 am: 2Q S Personal Consumption, est. 3.2%, prior 3.2%
• 8:30 am: 2Q S GDP Price Index, est. 6.2%, prior 6.2%
• 8:30 am: 2Q S Core PCE Price Index QoQ, est. 3.4%, prior 3.4%

DB's Jim Reid concludes the overnight wrap

Markets turned more positive over the past 24 hours amid a flurry of more encouraging, if non-definitive, headlines on Iran, including a report that the US and Iran may announce a ceasefire in the coming days. This has left oil prices likely on course for their biggest weekly decline since June, with Brent crude down -8.6% since Friday as I type. The easing in inflation concerns helped cement a global bond rally, with 10yr Treasuries (-6.8bps) and OATs (-7.3bps) yesterday posting their best days since June and May respectively. Equities also recovered, in part as AI sentiment turned more positive ahead of Nvidia earnings after the market close tonight.

As we said at the start of the week, in the past few years Nvidia’s earnings have often been a big macro event, with reactions on par with US jobs reports and CPI prints. But in the most recent quarters, the positive earnings surprises haven’t been as big as those in 2023-24, and after each of the last four earnings reports, Nvidia’s share price actually fell the next day. Ahead of the release, Nvidia (+2.19%) and the Philly Semiconductor Index (+1.44%) recovered yesterday. With the AI trade seeing more volatility over the summer, the Philly Semiconductor index is down -20.8% from its June peak, though it’s down only -1.9% from its level at the time of Nvidia’s last results on May 20 and is still up +63.6% YTD. The boost in AI sentiment helped the S&P 500 (+0.32%) and the Nasdaq (+0.66%) advance yesterday even as most S&P constituents fell on the day. US equity futures are little changed this morning.

In terms of yesterday’s market moves, Middle East developments were the key driver, as several headlines raised hopes for de-escalation. These included a couple of reports suggesting that the US administration does not expect renewed full-scale conflict with Iran. The New York Times reported that the US was preparing to send US diplomats back to the Middle East, while later in the day Axios reported that Secretary of State Rubio told allies that the US is not looking to initiate new strikes against Iran. Meanwhile, we heard that Iran and Oman discussed an “interim framework” aimed at resuming shipping through the Strait of Hormuz, with the initiative seeking to establish a “temporary joint maritime corridor” and to jointly work on clearing the strait of mines. And then, near the US close, Russia’s RIA Novosti reported, citing Iranian and Pakistani sources, that the US and Iran agreed a new ceasefire which is expected to be announced in the coming days and would include freedom of shipping via Hormuz.

This amalgamation of stories pushed oil prices lower. Brent settled -3.89% lower yesterday and is trading another -2.60% lower at just over $86/bbl this morning, extending its decline following the RIA Novosti report. With a -8.6% decline so far this week as I type, Brent has reversed more than half of its +13% rise over the previous two weeks. Meanwhile, European natural gas prices have retreated from Monday’s three-and-a-half-year highs, with front-month TTF gas down -2.54% yesterday and another -6.1% overnight.

With oil prices declining, bond markets rallied on both sides of the Atlantic. Treasury yields moved lower across the curve, including the 2yr (-5.9bps), 10yr (-6.8bps) and 30yr (-5.9bps). For 10yr Treasury yields this was the biggest decline in two months, taking them to their lowest level in almost three weeks at 4.63%. 10yr USTs are trading around 1bps higher overnight. So in the emerging debate over the credibility of a possible ‘Bessent put’ for the bond market, yesterday was one day in the Treasury Secretary’s favour. Sticking to this topic, our rates strategists published a note yesterday discussing what other measures a more interventionist Treasury could pursue 

In Europe, government bonds saw similar relief, with yields on 10yr bunds (-5.1bps), OATs (-7.3bps) and gilts (-6.9bps) all receding. This rally came as the amount of ECB hikes priced by next June fell -8.2bps to 55bps. In the evening, Reuters reported that ECB policymakers are ready to hike rates in September but that they have little appetite to signal further tightening after that. This appears in line with our economists’ view, who think a September hike could be effectively a done deal but that further tightening would require evidence of second-round inflationary effects which have been absent so far.

Turning to the Fed, markets lowered pricing of a September hike from 43% to 36% yesterday. That pullback came even as Boston Fed President Collins published an essay saying that without more sustained disinflation progress, it would be “appropriate to tighten policy soon”.  While Collins is a non-voter, our US economists previously pegged her as someone not supporting a 2026 hike, so the comments go to show that a September hike may be very much live for some of the centrists on the FOMC. US inflation will be in focus today, with the release of the July PCE reading. Our US economists expect core PCE inflation, the Fed’s preferred measure, at a monthly +0.18%.

Speaking of data, yesterday we also received mixed signals on the US economy. Consumer confidence for August slipped once more to 89.4 (vs 90.2 expected), its lowest reading since January. Yet despite the overall drop, the survey’s labour market differential saw its biggest monthly improvement since 2022 (from 2.7 to 7.5) after falling to a post-2021 low in July. Another encouraging labour market signal came from the ADP weekly employment report, which rose by 11.75k in the week ending Aug 8 (vs. 9.5k prior), its highest reading in a month.
Asian equity markets are mostly advancing this morning supported by lower oil prices and bond yields. Across the region, the KOSPI (+1.97%) is leading gains. The Nikkei (+0.76%), CSI 300 (+1.03%), Hang Seng (+0.82%) and Shanghai Composite (+0.72%) are also clearly higher with tech stocks rising ahead of Nvidia’s results. The S&P/ASX 200 (-0.15%) is bucking the regional trend after Australia’s inflation overshot estimates. 

That Australian inflation print saw headline CPI rise +3.5% yoy in July, down from 3.8% in June but clearly ahead of the +3.3% consensus. Trimmed mean CPI came in at +3.6% (vs. 3.5% expected). Following the release, traders have increased pricing of an RBA rate hike at the September 28-29 meeting from 10% to 32%. Indeed, our Australian economist has now moved to expect a 25bps September hike by the RBA, versus his earlier call for a pause for the rest of the year (see here).

European equities were also mostly stronger yesterday, with the Stoxx 600 (+0.35%), DAX (+0.61%) and the FTSE 100 (+0.29%) moving higher, though the CAC (-0.16%) fell back. The German outperformance was helped by the August IFO business climate reading which rose to a 12-month high (88.8 vs 87.2 expected). So that added to encouraging signals for the German economy and followed revised German Q2 GDP figures (+0.3% q/q vs +0.2% q/q prior), which contributed to our Germany economists upgrading their 2026 GDP view (see here).
In trade news, Canada announced tariffs ranging from 15% to 50% on a range of US products, including a doubling of its existing counter-tariffs on US steel and aluminium to 50%. These would become effective September 8 on $20bn worth of US exports, roughly matching the new US 50% tariffs on certain Canadian imports that came into force over the weekend. The Canadian dollar (+0.08% against the USD) stabilised after Monday’s decline though it was still one of the weaker G10 currencies on the day.

To the day ahead now, data releases include US July PCE, personal income, personal spending and durable goods orders. ECB’s Cipollone and Fed’s Barkin will speak. Earnings include Nvidia, Crowdstrike and Salesforce. We’ll also get US Treasury auctions with a 2yr FRN re-opening and a 5yr note auction.

Tyler Durden Wed, 08/26/2026 - 08:12

Colombia's New President Orders Immigration Raids, Vows To Deport Illegal Immigrants

Authored by Kimberly Hayek via The Epoch Times,

Colombia's new president has ordered immigration raids this week and promised deportations of immigrants without legal status.

Colombia's President Abelardo de la Espriella speaks during a press conference at the Palacio de San Carlos in Bogota, Colombia, on August 12, 2026. (Esteban Vega La-Rotta/AFP via Getty Images)

President Abelardo de la Espriella, sworn in three weeks ago, described the move as a crucial step in reducing crime.

The order went out during a security council session in Barranquilla, with police and the national migration agency tasked with the job. Operations are set to begin this week.

"I will not accept any illegal immigrants, wherever they come from," De la Espriella said in a video posted Sunday on his X account. "They will have to leave and be deported. It is a political decision I am taking responsibility for."

He is prioritizing those committing crimes, but will also focus on those lacking legal status to be in the country.

"Colombians must come first, second and third," he said. "Let the coordinated operations begin to find illegal immigrants, first those committing crimes, then those whose status is not regularized."

Approximately 2.8 million Venezuelans live in Colombia, representing the largest such group outside their country. Most fled economic collapse and political pressure at home, with previous governments under Presidents Ivan Duque and Gustavo Petro issuing temporary residence permits. Approximately 2.3 million Venezuelans held them as of July, according to the migration service.

Hundreds of thousands still lack regular status. Officials have not released an exact current count of those facing removal, and De la Espriella did not single out any nationality by name. Venezuelans make up the vast majority of foreigners in Colombia, a nation of 54 million people.

The president, a conservative closely aligned with President Donald Trump, took the oath on Aug. 7 in Cali. His campaign stressed security and a "Colombia first" approach.

Duque's administration rolled out the main temporary protection program in 2021 at the height of the outflow from Venezuela, and Petro kept much of it in place.

Colombia shares a long, open border with Venezuela. This week's announcement marks a clear break. For nearly a decade, Colombia absorbed the largest share of Venezuelans leaving their country. Humanitarian groups and successive governments treated the flow as a regional challenge requiring accommodation.

Arles Pereda, head of an association of Venezuelans in Bogota, Colombia's capital, said the new policy was troubling because the two earthquakes that hit Venezuela in June sent a new influx of immigrants into Colombia seeking opportunity.

Catherine Juvinao Clavijo, a member of Colombia's House of Representatives, was also unhappy with the new president's policy, posting on X that De la Espriella was "playing at a homegrown MAGA."

"It's heartbreaking to see so much xenophobia toward our brothers and neighbors and so much servility toward governments to whom we owe nothing," she said in her Monday post.

The U.S. Department of State in March updated its travel advisory for the Republic of Colombia, retaining a "Level 3: Reconsider Travel" warning for the nation.

"Street crime occurs throughout Colombia and can quickly become violent," the department advised. "If you are targeted by criminals, do not resist."

Colombia also faces risks of terrorist violence. Attacks could target U.S. government or local government facilities, tourist areas and attractions, shopping malls and markets, clubs, airports, restaurants, hotels, and transportation centers, with little to no warning, the advisory said.

"Police procedures and investigations in Colombia differ from those in the United States, and crimes against tourists are not always prosecuted," the advisory stated. "This can be a source of frustration for victims."

The Associated Press contributed to this report.

Tyler Durden Wed, 08/26/2026 - 08:05

US-Canada Trade War Threatens Electricity Imports, Prices

By Robert Walton of UtilityDive

An escalating trade war between the United States and Canada is once again threatening to ensnare the electric power sector at a time when consumers are already stretched thin.

Canada is expected to announce retaliatory tariffs on U.S. goods Tuesday after President Donald Trump’s 50% tariffs on about $20 billion in Canadian goods went into effect over the weekend, with threats of more on the way.

On Monday, Ontario Premier Doug Ford told the Associated Press that “everything is on the table,” including halting the province’s critical minerals and electricity exports entirely. The BBC reported Ford said he and Canadian Prime Minister Mark Carney discussed a 25% tariff on electricity to the U.S.

In 2025, amid a previous trade dispute, Ontario enacted a 25% tariff on power exports to the U.S. The two sides eased tensions shortly thereafter, and the tariff was eliminated a day after taking effect.

ISO New England, in a statement to Utility Dive, said that if Canada opted to reduce or eliminate electricity trade, it “would not anticipate reliability issues tied to reduced imports, at least under typical weather conditions.”

Under extreme temperatures, however, supplies in New England “could become tight, but that would hinge on many factors that are difficult to project,” the grid operator added.

“It’s also important to note that power flows both ways between the New England and our Canadian neighbors these days,” it continued. “In the event Canadian provinces reduce (or entirely cut) the amount of electricity they are sending to New England, we would expect the impact to largely be financial, in the form of higher wholesale market prices. We would also anticipate emissions in the region increasing.”

The U.S. Energy Information Administration, earlier this month, highlighted the growing value of electricity and natural gas trade between the two countries.

“The value of electricity trade between the United States and Canada totaled $3.2 billion in 2025, 67% of which was electricity imported from Canada into the United States,” EIA analysts noted. Electricity trade between the two countries “is relatively small compared to trade in other energy sources.”

The two countries’ electricity sectors are more intertwined today, however. In June, North America’s longest fully-buried transmission line began delivering Canadian hydropower to New York City. The $6-billion Champlain-Hudson Power Express is expected to meet up to 20% of the city’s electric needs.

The New York ISO is in “close and regular contact with Hydro Quebec and Ontario’s Independent Electricity System Operator,” Kevin Lanahan, senior vice president of external affairs and corporate communications for the grid operator, said in a statement to Utility Dive.

“The NYISO anticipates having adequate supplies to meet expected demand on the system,” Lanahan said.

Tyler Durden Wed, 08/26/2026 - 07:20

Oil Dumps As Iran, Oman Push To Reopen Hormuz; Satellite Image Shows Gulf Producers Ramping Up

Brent crude futures dropped for a third session as Iran and Oman advanced plans for a temporary maritime corridor through the Strait of Hormuz.

Brent tumbled to $85 a barrel early Wednesday, down more than 9% for the week, while West Texas Intermediate traded around $80. Crude remains up more than 41% this year following the US-Iran conflict and ongoing disruptions at the Hormuz chokepoint.

Earlier, Oman's state news agency reported that Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr Albusaidi discussed an "interim framework" establishing a temporary joint shipping corridor.

Iranian Deputy Foreign Minister Kazem Gharibabadi said both countries agreed on a temporary route and intend to negotiate a permanent corridor within 30 to 60 days, according to Tasnim. No timeline has been given for when the temporary deal to reopen the critical waterway would begin.

Talk of an interim deal comes as oil loadings from Iraq's Persian Gulf export terminals surged at the beginning of the week, offering one of the clearest signals yet that regional Gulf producers expect Hormuz tensions to dissipate.

Satellite imagery showed seven tankers collecting Iraqi cargoes, with a combined carrying capacity of roughly 13 million barrels, according to Bloomberg.

Maritime research firm TankerTrackers also reported on X, saying, "A busy day in the Gulf of Oman, where there are at least fifteen sets of STS transfer sessions taking place. We count 25 million barrels of crude oil; plus some refined products. The oil originates from almost every country in the region, minus Iran."

A busy day in the Gulf of Oman, where there are at least fifteen sets of STS transfer sessions taking place. We count 25 million barrels of crude oil; plus some refined products. The oil originates from almost every country in the region, minus Iran.#OOTT #IranWar #Tankers pic.twitter.com/TAba26mJiW

— TankerTrackers.com, Inc. (@TankerTrackers) August 25, 2026

"It seems crude is now beginning to price in a sooner rather than later peace deal," said Dennis Kissler, senior vice president for trading at BOK Financial Securities, who Bloomberg quoted.

Kissler noted, "With some oil still getting through the strait, Iran and the US are more likely to be in a newer state of de-escalation as both sides are looking for an off-ramp."

By now, readers know that the energy crisis is not necessarily about crude, but rather refined products, as diesel crack spreads in the US topped $100 a barrel. The good news is that, by midweek, the spread was trading around $88.

Related:

• Diesel Crack Spread Madness Deepens As Jefferies Finds No Easy Exit From Russia's Refining Crisis

Last week, veteran commodities strategist Jeff Currie detailed on X that the next commodities bull market was poised for another leg higher (read note).

The latest developments in the Gulf are promising signals, but an interim framework should not be mistaken for a durable normalization of regional tanker transits through the maritime chokepoint. Previous de-escalation efforts have repeatedly broken down, often returning the region to drone attacks on tankers and short-lived military tit-for-tat bombing campaigns. Until a permanent and enforceable shipping deal is set in stone, the Hormuz risk premium is likely to remain embedded across crude and refined-product markets.

Tyler Durden Wed, 08/26/2026 - 06:55

Zelensky Continues To Oppose Wartime Democracy Amidst Escalated Election Demands

Authored by John Weeks via Antiwar.com,

Ukrainian President Volodymyr Zelensky is facing mounting pressure to hold elections. The Ukrainian leader was elected to a five-year term in 2019, which expired in May 2024.

Last week, Ukraine's former defense minister Mykhailo Fedorov publicly called for elections, breaking what has been characterized as a "wartime taboo" within the nation's elite. He continued to demand elections over the weekend and also directly accused the Defense Ministry of corruption.

Fedorov is not the first high-profile Ukrainian figure to call for elections. Back in 2024, Kiev Mayor Vitali Klitschko denounced Zelensky and called him an "autocrat" for refusing to hold elections. But Fedorov is the first figure to have served within the upper echelons of the national government to publicly endorse the restoration of democracy.

On Sunday, Zelensky released comments slamming Fedorov's recommendation as a threat to Ukrainian national security. "I believe that if we want to destroy the country, then during such a war we can move in the selection of elections," Zelensky said.

While Zelensky has portrayed wartime elections as an existential threat to all of Ukraine, he also said he would be open to elections if the nation's allies secured "specific conditions" that would allow all military personnel and displaced civilians, millions of people, to participate. This pledge undid the myth that Ukraine is forbidden to hold wartime elections by its own constitution under material law. It is also such an unlikely scenario; Zelensky appears open to democracy while safely shielded from it. If elections were held, he would lose.

The challenge from Fedorov is significant because the 35-year-old was the youngest minister of defense in Ukraine's history, and his firing last month triggered protests throughout the country. Despite having no military experience, the former tech entrepreneur was viewed as revolutionizing Ukraine's drone warfare. He only served for a few months before a rift with Gen. Oleksandr Syrskyi, commander of Ukraine's armed forces at the time, prompted Zelensky to fire him.

After protests broke out following Fedorov's sacking, Zelensky tried to placate the people by firing Syrskyi as well. This has not turned down the temperature, as protestors want Fedorov reinstated.

The anger is understandable. Zelensky and his administration are keeping the nation at war, and there is no end in sight. The war has been the justification for martial law, and the martial law has been the justification for the temporary, indefinite suspension of democracy.

Tyler Durden Wed, 08/26/2026 - 06:30

Why Data Centers Favor On-Site Gas Power

Most data center developers opting for on-site gas power say that they see it as a “bridge” solution until a grid connection is secured. Yet economics may favor keeping those assets running even after grid power becomes available.

A recent BloombergNEF analysis shows the marginal cost of operating an on-site gas plant may be below industrial electricity tariffs, making continued generation from on-site assets the cheaper option in many cases. 

Marginal generation costs depend on fuel prices and variable operating expenses. BloombergNEF modeled the marginal cost of operating engines, turbines and fuel cells at a mid-scenario gas price of $3.97 per million British thermal units. Gas engines, such as ones manufactured by Wartsila and INNIO, have the highest marginal cost, at $43.2 per megawatt-hour (MWh). Fuel cells, most prominently procured from Bloom Energy, are the cheapest to continue running, at $21.5/MWh, benefiting from high thermal efficiencies and the lowest variable operational cost.  

Securing a grid connection does not necessarily make on-site generation redundant. Developers can continue using gas plants to supply most of a facility’s electricity while relying on the grid for reliability, reserve them for backup or peak demand, or in some cases export electricity to the grid.

The optimal operating strategy will depend on the relative cost of grid electricity, fuel prices and the marginal cost of operating the gas plant. More efficient technologies such as fuel cells and combined-cycle gas turbines are likely to be dispatched more frequently because of their lower running costs.  

The contracted electricity price will ultimately determine how often developers rely on the grid. Industrial electricity tariffs are forecast to average $88.6/MWh in 2027, while wholesale power prices are expected to range from $24.4/MWh to $74.7/MWh, according to the US Energy Information Administration.

Developers with access to low electricity prices may increasingly shift demand to the grid, while those paying the highest industrial tariffs could continue to favor on-site generation even after their grid connection is in place.

Tyler Durden Wed, 08/26/2026 - 05:45

When Paris Went Hungry Under Government Food Controls

Authored by Daniel J. Smith via The Daily Economy,

How does Paris get fed? Frédéric Bastiat famously explained in Economic Sophisms (1845) how market exchange reliably provisioned the (then) million people of Paris with agricultural produce from the countryside that they were able to enjoy "peaceful slumbers...not disturbed for a single instant...."

In stark contrast, Bastiat predicted that there would be "much suffering within the walls of Paris - poverty, despair, perhaps starvation..." if a presumptuous minister decided to replace the market with their own decision-making for what "should be produced, transported, exchanged and consumed...."

We can appreciate Bastiat's observation about the miraculous functioning of the market even more when we look at a time when Paris actually went hungry.

France's Experiment in Forced Provisioning

Leading up to the French Revolution in 1789, France found itself in a precarious fiscal position. It had accumulated crippling debt from the Seven Years' War and its support for the American colonies during their War of Independence. This heavy debt burden left the kingdom woefully unprepared to withstand the economic shocks that followed.

Economic shock came in the form of the eruption of the Laki volcano in Iceland in 1783, which contributed to climatic disruptions and poor harvests in France in the years that followed. These problems were compounded by a severe hailstorm in 1788 that devastated crops and livestock, raising prices, especially for bread, which was the main staple at the time. Increased demand for grain to support the military and its draft animals, when France declared war on Austria in 1792 (followed by war with Great Britain), pushed prices even higher. When France implemented a draft that drew agricultural workers into the military and then began requisitioning agricultural horses and wagons, the supply of grain was further reduced.

Henry Bourne, writing a two-part article in the Journal of Political Economy in 1919 about this era, notes that in the fall of 1792, "One of the longest and most important debates [of the National Convention] was upon the best method of insuring a supply of bread at a reasonable price." This was a problem that especially loomed over the major city of Paris. Bourne argues that the threat of starvation fueled not only the French Revolution, but the mob mentality and interventionism that followed. As Bourne writes, "People, in a panic because they do not know where next week's bread, meat, and coal are to be found, are not likely to apply the rules of evidence to every rumor." The French clamored for state intervention on the "fixed idea that dearness and scarcity were the result of speculation" rather than underlying economic conditions.

Transporting grain became a risky enterprise as mobs sprang up to seize it, further decreasing the supply of grain to Paris. To add insult to injury, the transportation of grain to major cities was further suppressed by inflation, which made the issued assignats unappealing to country farmers.

The National Convention and the Paris Commune turned to "a series of ventures in price-fixing and food control" to solve the problem. Bourne notes that "price-fixing became one of the characteristic features of the Reign of Terror." In 1793, the National Convention imposed a maximum price, or what economists today call a price ceiling, on grain. In a futile attempt to warn of the potential consequences, Pierre Vergniaud, who later that year was executed under the accusation of the radical Jacobin Maximilien Robespierre, urged that "If you destroy commerce, you decree famine."

French attempts to deny the economic reality reflected by market prices, by attempting to suppress them, resulted in severe shortages and long lines.

"The scheme not only failed to encourage the farmer, it threatened him with ruin," Bourne noted. "His expenses for tools, draft animals, and wages were steadily rising, but his profits were cut down, with the prospect of further losses every succeeding month."

But politically savvy politicians blamed these disappointing outcomes on greed and used them to justify further interventions backed by the threat of imprisonment and death. The National Convention created a Commission of Subsistence and Provisioning to be the "Food Director" of France. Swarms of officials were commissioned to survey farmers' inventories and fields in an attempt to enable government officials to redirect grain to where it was needed. Rules were issued detailing the precise percentage of bran that millers could extract and even dictated the one type of bread that would be allowed. A bread card rationing system was created but was abused as families failed to report the death of family members to continue receiving the same allotment. Bourne reports that in 1794, rations fell to a single pound of bread for each laborer and three-fourths of a pound for others, and that "it was practically impossible to obtain meat, butter, eggs, oil, and other articles of food commonly regarded as necessary," as price ceilings were extended to these items as well.

Officials attempted to appeal to the higher motives of the people, telling them that they were "brothers and that they should help" even if it meant turning over the grain needed for their family, for storage for future use, or even the seed necessary to plant the next year's crop. This proved insufficient, however, so the officials eventually turned to force.

Bourne writes that "An attempt was made to provide for Paris by compelling every farmer to furnish within twenty-four hours sixteen bushels of wheat for each hide of land." French dragoons were soon released upon the countryside to "scour the country" for food and to arrest any suspected hoarders. As Bourne notes, "merchants were thrown into prison upon the accusation of the first intriguer who shouted out his suspicions at a popular society. The local revolutionary committees acted as judges without appeal. To escape a similar fate the other merchants hastened to dispose of their merchandise and did not restock."

If a farmer had grain in the field but no laborers to gather it, laborers were drafted by local authorities. Millers and bakers in Paris were drafted and forbidden from abandoning their work without sufficient notice. Eventually, the National Convention even attempted to extend maximum price laws to the wages of laborers as well.

Despite the substantial and systematic efforts of the National Convention and the boards of the separate departments of France, Parisians and much of the rest of France, went hungry under government control. In Cahors, people "were so poorly fed that they were falling in the street from sheer weakness." In Nord, "grain of every sort disappeared from the markets..." The people of Paris would stand "with famished eyes" for hours in line "only to be told when their turn came that nothing was left." As Bourne concludes, "If the maximum laws were meant to save the common people from want and wretchedness, they failed."

Bastiat's Market-Fed Paris

It is unclear whether Bastiat, when writing in the 1840s about the remarkable way in which free markets coordinated the efforts of countless individuals to feed Paris every day, was implicitly contrasting this outcome with the French Revolution's earlier rejection of market exchange. He almost certainly knew that revolutionary France had experienced severe food shortages and government price controls, making the contrast between the two episodes striking even if he did not intend it.

As Bastiat stressed, government officials could not replace the information and incentives provided by market prices. Orders, price controls, requisitions, forced sales, and even forced labor failed to feed Paris. When the National Convention tried to do so, it produced exactly the outcome Bastiat had predicted more than half a century later: not peaceful slumbers, but long lines, empty markets, and widespread hunger. Notably, these outcomes began to recede as the Commission was abandoned and markets were restored.

Dr. Daniel J. Smith is the Director of the Political Economy Research Institute and Associate Professor of Economics in the Jones College of Business at Middle Tennessee State University. His academic research and policy work uses Austrian and public choice economics to analyze private and public governance institutions.

Tyler Durden Wed, 08/26/2026 - 05:00

ICE Begins Deporting Illegal Immigrants To Dangerous African Countries

Imagine entering the US illegally and enjoying the fruits of the American economy for years, only to wake up one day in the darkest of Africa in a country known for cannibalism?  The strategy might be ugly, but it might also be ingenious.  

Last year, illegal Cuban immigrant Yasmany Moreno de Armas was working and living in Florida. He's now in the Central African Republic, after the Trump administration sent him and dozens of deportees to the deeply impoverished and conflict-ridden nation.

The 31-year-old said he only learned the U.S. government was deporting him to Africa after he arrived there in late July, alongside detainees from countries across the globe, including Ecuador, Honduras, Serbia, Russia and Vietnam. 

"We cannot leave, we don't have documents and we're suffering and missing our families, in a continent we don't know..."

Armas claims he committed no crime, but he committed the crime of invading US borders without citizenship.  The ongoing narrative from the political left is that this particular crime somehow doesn't count.

Illegals shipped to Africa are appealing to the media to plead their case, though there's not a whole lot anyone can do about their situation.  Under the Immigration and Nationality Act (INA) the US government has the right to deport illegal migrants with expediency.  And technically, ICE isn't required to take these migrants back to the countries they originally came from.  

Cuban immigrant Yasmany Moreno de Armas says ICE never told him he was being deported to the Central African Republic, a deeply impoverished country that the State Department warns Americans not to visit for any reason due to widespread violence.

The conflict-ridden country is… pic.twitter.com/oGKF4ohXnd

— CBS News (@CBSNews) August 23, 2026

The US established an agreement with more stable countries like Liberia in West Africa to accept illegal migrant deportations over a year ago.  Liberia has recently accepted over 1200 of these deportations.  However, ICE and DHS are branching out to other countries in Africa that are not so stable.   

The Central African Republic has a history of extreme sectarian violence.  It also has a long history of cannibalism.  European explorers noted the cannibal practices of the Azande tribes in the 19th Century and the habit has continued into present day, with warlords in the region famously committing cannibalistic acts against their enemies. 

The seemingly random nature of these deportations and the severity of them might sound like unorganized brutality, but if we ponder it for a moment, it's actually highly effective.  Any illegal migrant from anywhere could win the African lottery; no one is guaranteed a ride home.  Therefore, it would be smarter for migrants to self deport and ensure they end up in a place they're familiar with.   

In other words, as news spreads that the US is dumping illegals in the middle of the worst countries in Africa, self deportations could skyrocket and ICE won't be required to hunt these people down in the streets.  It's brilliant.

Appeals to sympathy are having less and less effect as the political left continues to fail to drum up any substantial public opposition to deportations.  In fact, many Americans feel that the sooner illegal migrants are removed from the country the sooner the US can get back to normal business.  

Tyler Durden Wed, 08/26/2026 - 04:15