OIL LOADINGS SUSPENDED AT TOP SAUDI RED SEA PORT OF YANBU AFTER PREVIOUS ATTACK ON EAST-WEST PIPELINE - SHIPPING SOURCES
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JOHNSON SAYS AI MORATORIUM WILL LOSE COMPETITIVE EDGE TO CHINA
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BESSENT: TRUMP COMPLETELY ALIGNED WITH NVIDIA'S JENSEN HUANG
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BRENT, US CRUDE FUTURES RISE BY MORE THAN $3 AFTER SHIPPING SOURCES TELL REUTERS OIL LOADINGS AT SAUDI ARABIA'S RED SEA PORT OF YANBU HAVE BEEN SUSPENDED
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WALL STREET OVERWHELMINGLY EXPECTS FED HIKE

Nearly every major Wall Street bank now expects the Federal Reserve to raise rates in September, according to a WSJ survey.

Most forecast 50 basis points of total tightening in 2026, while Bank of America, Deutsche Bank and RBC see 75bps.

Market angle: expectations are shifting beyond this week’s hike toward another increase before year-end.
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MORGAN STANLEY'S DAN SIMKOWITZ SAYS WE ARE IN RELATIVELY EARLY TO MIDDLE INNINGS OF AI FINANCING
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*BESSENT: EXAMINING $5,000 CHECK PROPOSAL AT TREASURY
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BESSENT: TREASURY'S BOND BUYBACK INTERVENTION WAS SUCCESSFUL
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RUSSIAN OIL PREMIUMS SURGE AS MIDDLE EAST SUPPLY TIGHTENS

Russian Urals crude premiums in India jumped to $8/barrel over Brent, up from around $1 in August and the highest since May.

Middle East supply disruptions are pushing Indian and Chinese refiners toward Russian barrels, while Novorossiysk exports remain constrained.

Market angle: shrinking alternative supplies are dramatically strengthening Russia’s pricing power in Asia.
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BESSENT: FOR A NOMINAL AMOUNT, THE U.S. TREASURY WAS ABLE TO SIGNAL SUPPORT FOR JAPANESE POLICIES
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U.S., GULF STATES EXPAND HORMUZ TANKER TRANSITS

The U.S. military and Gulf countries have begun conducting daytime tanker transits through the Strait of Hormuz, according to a U.S. official cited by Axios.

Previously, escorted transits had reportedly been limited mainly to nighttime operations.

Market angle: expanded daytime crossings could improve shipping flows and ease some of the geopolitical risk premium embedded in oil prices.
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BESSENT: THE NEED TO ADDRESS DEFICIT IS ONE FACTOR AFFECTING 10-YEAR TREASURY BOND YIELD
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U.S. CONFIRMS WEAPONS IN ORBIT

The Pentagon has made its strongest acknowledgment yet that the U.S. possesses weapons in space, with Air Force Secretary Troy Meink confirming orbital systems capable of defending U.S. forces.

Space Command called the disclosure a “landmark” deterrence moment amid rising tensions with China and Russia.

The U.S. also recently conducted its largest-ever orbital military exercise, involving multiple satellites and international partners.
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BESSENT: GAS PRICES ARE LOWER THAN THEY WERE UNDER BIDEN
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FRANCE BACKS KNOT FOR ECB PRESIDENT

France would support former Dutch central-bank chief Klaas Knot to succeed Christine Lagarde as ECB president, provided a French candidate receives the powerful chief economist role, Reuters reports.

The proposal reportedly has Macron’s backing, with Pablo Hernández de Cos seen as Knot’s main rival.

Market angle: Germany is expected to resist the deal, setting up a major battle over the ECB’s future policy direction.
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SAUDI OIL PIPELINE COULD RESTART WITHIN DAYS

Saudi Arabia’s critical East-West Pipeline could resume crude flows within days, according to U.S. Energy Secretary Chris Wright.

The pipeline had been moving 4–5 million barrels per day, roughly 4–5% of global supply, before attacks forced its shutdown.

Market angle: a rapid restart could ease supply fears and remove some of the geopolitical risk premium supporting oil prices.
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IRAN CLAIMS HUNDREDS OF U.S. MILITARY SITES HIT

Iran’s foreign minister rejected claims that Iran is defenseless, asserting that hundreds of U.S. military sites have been destroyed and dozens of aircraft damaged.

He claimed the figures were based on Pentagon information and said Tehran will disclose additional details “in due course.”

The claims were not independently verified in the statement provided.
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*US 20Y BONDS DRAW 5.420% VS 5.400% PRE-SALE WHEN-ISSUED YIELD
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U.S. 20-YEAR TREASURY YIELD HITS 5.42%

The Treasury’s $13 billion 20-year bond auction cleared at a high yield of 5.420%, highlighting elevated long-term borrowing costs.

Demand remained solid, with a 2.57 bid-to-cover ratio, while indirect bidders took roughly $6.8 billion.

Market angle: persistently high long-term yields remain a major headwind for equities, housing and broader financial conditions.
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CBO SAYS THE WAR IN IRAN COST THE U.S. $38 BLN IN THE FIRST FIVE MONTHS, ADDING THAT ITS ANNUAL PCE INFLATION PROJECTION IS NOW 0.5 PERCENTAGE POINT HIGHER FOR Q1 2027
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NVIDIA CEO JENSEN HUANG: DO NOT NEED NEW LAWS OR REGULATIONS FOR AI SAFETY - SALESFORCE EVENT

NVIDIA CEO: ON AI SAFETY, SAYS COMPANIES SHOULD PACE THEMSELVES UNTIL THEY ARE ARE CONFIDENT THEY ARE RELEASING SOMETHING THE MARKET WOULD APPRECIATE
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