Zero Rss

K-Shaped Economy: Reality Or Media-Driven Perception

Authored by Lance Roberts via RealInvestmentAdvice.com,

“What the K-shaped economy gets right, what it exaggerates, and what believing the worst version is costing a generation.”

The bottom half of American households owns about 2.5% of the nation’s wealth. That number is real, and it ought to bother you. However, that number is also higher than it was in 2019 and 2015, and roughly six times higher than the 0.4% low it hit in 2011. You will not read that in many places because it doesn’t “fit the narrative.”

Unfortunately, the K-shaped economy headlines have settled into a single unvarying note, and after a while, people stop hearing anything else. I’ve spent the past several weeks working through the underlying data. While there is some truth to the coverage, most of the claims are exaggerated for “clicks and views.” But the psychological damage is clear.

So, before we get into our discussion, here are some numbers for you.

Where The K-Shaped Economy Headlines Are Right

Let me start where the “Persistent Purveyors of Doom” crowd bases its argument, as there is indeed a K-Shaped economy. However, what is critical to understand is that the K-shaped economy is not new. In every economy throughout history, there has always been a K-shaped divide between those at the bottom and those at the top.

Nonetheless, as the headlines suggest, the wage compression of 2020 through 2023 was extraordinary. Autor, Dube, and McGrew documented it in their paper “The Unexpected Compression.” The 90/10 wage ratio fell far enough to reverse roughly a third of forty years of divergence.1 Then it stopped, and worse, it began running the other way.

The Economic Policy Institute data for 2025 show that real wages at the 10th percentile fell by 0.3%, while the median rose by 0.8%.2 The lowest-paid workers in America went from the fastest-growing group in the distribution to the only one moving backward.

However, the Cleveland Fed adds a detail that should end many K-shaped economy arguments. Between 2020 and late 2025, real wages at the 10th percentile rose 9.7% against 4.5% at the 90th. In dollars, that’s $1.34 an hour against $3.09.3 Percentage compression off a small base is not catching up. And the 2015 to 2020 dollar gains were LARGER at every percentile in the bottom half than the celebrated pandemic-era gains were.

The price level is also crucial to discuss, and is where I think most commentary goes soft. Inflation falling from 9% to 3.4% is a change in the rate, not the level. Since December 2019, consumer prices have risen by roughly 29% and have stayed there. That is a permanent shift in the cost of living, and it is the part of the K-shaped economy argument that sticks, and it hits households with no assets the hardest.

As I’ve written before, “wage growth as a leading inflation indicator” matters for policy. The level is where people actually live. McKinsey asked 30,119 Americans this April, and 60% named the cost of living as one of their top three barriers. That held even with those over $150,000 in income.

Furthermore, the hiring rate hit 3.1% in February 2026, the lowest reading outside the pandemic, while the share of unemployed workers for 27 weeks or more reached 27.5% in May. Separately, expiration of the enhanced ACA credits pushed average net marketplace premiums up 58% and average deductibles up 37% in a single year.4 That is a real, dated, 2026 hit to exactly the households everyone is arguing about.

The honest summary is that the ladder from the bottom of the K to the top got harder to climb, even as the rungs themselves stopped moving apart.

Where The K-Shaped Economy Headlines Are Exaggerated

The single most repeated statistic in this entire debate, the one anchoring roughly every set of K-shaped economy headlines you have scrolled past this year, is that the top 10% of earners account for about half of all consumer spending.

It comes from Moody’s Analytics. The number is shakier than it looks. Moody’s revised its own estimate down from 49.2% to 45.8% after a methodology change, and Mark Zandi told reporters plainly that he “wouldn’t die on the hill of the top 10% accounting for 45% of the spending.”5 Berkeley’s Antoine Levy points out the arithmetic problem: the top decile takes home 35% to 40% of disposable income and saves a fifth of it, so its spending share cannot be half. The BLS Consumer Expenditure Survey puts the figure at 22.9%.

While you may think that is just economists arguing amongst themselves, it isn’t. What is crucial to note is that when the number that anchors the entire narrative varies by a factor of two depending on who computes it, that is a problem. In other words, the narrative is doing work the data cannot support. Such is the nature of a story that has outrun its evidence.

Furthermore, the perception gap runs deeper than just one statistic. In that same McKinsey survey, 56% of consumers named food as the category with the largest price increase in 2024.6 Here is why that is important. During that same period, insurance, housing, and childcare all rose faster, meaning that people are not tracking the data.

In other words, people are tracking what they hear on television and read on social media, and the two have become detached.

Where The K-Shaped Economy Headlines Are Simply Wrong

Here is where it gets interesting.

Everyone “knows” wealth concentration is worse than ever. As I laid out in my earlier piece on the K-shaped economy and why the middle class moved up, the income story runs in the opposite direction from the coverage.

The wealth story is stranger still. Pull the Federal Reserve’s Distributional Financial Accounts and compute it yourself, and the top 10% share of household net worth peaked at 70.3% in the first quarter of 2019. It sits at 67.9% today. The bottom 50% share bottomed at 0.4% in late 2011, was 1.7% at the end of 2019, and is 2.5% now.

When looking at wealth concentrations, it is very easy to blame those at the top of the wealth pyramid. Yes,  the top 10% of the population held a 31.8% share of economic wealth in the fourth quarter of 2025. Yet the bottom half gains since 2019 came almost entirely from the 90th to 99th percentiles, which fell from 39.7% to 36.3%. In plain English, the professional class lost relative ground, not the working class. Such is a detail that changes who you think is complaining.

Furthermore, the recovery that no one called K-shaped was far worse. Between 2007 and 2016, median wealth for the bottom 30% of families fell 31% while the top 10% fully recovered.7 Saez found the top 1% captured 91% of real income growth from 2009 to 2012. Nobody ran a K headline in 2013. The data was uglier then.

The last false claim is the one that worries me most, because young people believe it about themselves. That is the real damage the K-shaped economy headlines have done. Vanguard’s administrative records show 401(k) participation among young workers at 54%, against 28% for the same age group in 2004. Savings rates are higher, and average balances have roughly doubled.8 Vanguard’s own model puts 47% of Gen Z on track to sustain their standard of living in retirement, seven points ahead of the boomers. The problem is NOT that young people stopped saving

McKinsey found the same thing from the other direction. Adults aged 18 to 24 face the worst entry-level labor market in decades, and 34% name mental health as their top barrier, against 14% of older adults. Yet they were more likely than any other older group to say their finances will improve and that their lives have momentum.

“The generation everyone is writing eulogies for has not read them.“

Do The K-Shaped Economy Headlines Become Self-Fulfilling?

This is the question I actually wanted answered, so I went looking for the research. Does talking constantly about a K-shaped economy help create one? The answer splits cleanly in two, and almost nobody reports both halves.

At the level of the whole economy, no. The Chicago Fed published the number in June. The correlation between the Michigan sentiment index and annual real consumer spending growth ran 0.69 before 2020. Since 2020, it has been roughly zero.9 Their composite estimate says Michigan currently understates sentiment by 25 to 30 index points. About 10 of those points trace to the 2024 switch from telephone to online collection. Then there is the receipt test. A Fed study matched roughly 10,000 survey responses to verified purchase records. Some 43% said they were doing worse than in 2019. Most had actually bought more.

Secondly, Barsky and Sims settled the mechanism years ago: confidence is a leading indicator, not a cause.

In the economy, confidence carries information that people already have; in a survey, they respond to what they have read or seen, rather than to what they expect. This is also the structural reason why the doom loop can’t close at the macro level. Bank runs feed on themselves because if you withdraw your money, it makes my withdrawal smarter. However, in the economy, consumption lacks this property. Your neighbor skipping a vacation does nothing to make skipping yours a better idea. Such is why sentiment can collapse, and spending can increase.

At the level of one household, yes, and this is where it bites. The K-shaped economy doom loop is real. It just doesn’t run through GDP. It runs through the handful of large, irreversible decisions a person makes over a lifetime.

The clearest evidence comes from Bailey and co-authors. They matched 1.4 million Facebook users to 525,000 housing transactions, then used the house price experiences of geographically distant friends to isolate the belief channel. When distant friends saw 5 percentage points more price appreciation, a renter’s probability of buying rose 3.1 points off an 18% base.10 Beliefs picked up socially, from people nowhere near your housing market, changed whether you bought a house.

Now apply that to a young person marinating in K-shaped economy headlines. I’ve pushed back before on the lazy version of this story, the one painting a whole generation as financial nihilists. That framing is still wrong. The behavior at the margin has gotten worse anyway. Baker and colleagues at Northwestern, using transaction data on 230,000 households, found that every dollar wagered on sports betting reduces net household investment by about 99 cents.11 Not lottery spending. Not other gambling. Savings.

The damage compounds from there. New York Fed researchers found credit card delinquency rates rising 1.02 percentage points among households under 40 in states that legalized. Furthermore, separate work by UCLA and USC estimates that roughly 30,000 additional bankruptcies a year are attributable to online betting.12 The same restlessness shows up in the options tape. Zero-day contracts reached 65% of total SPX volume in May 2026. Citadel Securities reports that nearly half of all retail options volume on its platform now expires on the same day, up from 13% in 2021.

None of that is saving or investing, and it is the real culprit behind the “K-shaped economy” narrative. In other words, the narrative is driving behavior that is creating the outcome. As we documented in our work on why retail traders consistently underperform, the average retail equity investor earned 16.54% in 2024, compared with 25.02% for the index. The performance gap is due to behavior, not access.

While everyone agrees that the economy is hopeless for the young, the agreement itself is the tell.

What To Do About It

Are there problems in the economy? Yes. Let’s recap what we know.

But here is the real question to ask yourself, particularly if you “feel” like your future is hopeless.

“Do you have the ability to change your outcome?”

That answer is unequivocally – “yes.” You just have to be willing to do the work.

First, fix your benchmark. You are not competing with a stranger’s vacation photos or the top 1% of a country of 340 million people. The relevant comparison is your own plan, and whether this year moved you closer to it. Everything in thinking like an investor rather than a speculator starts there. McKinsey found Americans with strong community ties were nearly four times as likely to feel their lives have momentum. Only a third felt they were connected. Trade some screen time for the other thing.

Second, stop gambling and call it what it is. Nobody ever bet their way out of the K-shaped economy. Will a sports parlay occasionally pay off? Sure. Will it build wealth over 30 years? The data is very clear that it doesn’t. More notably, the ones betting are also the ones who can least afford it.

Third, set goals you can actually hit. The $1.46 million “magic number” that circulates every January is a survey artifact from a company that sells retirement products. It is not your number. The number you need to focus on comes from your spending, your timeline, and your obligations, which is a smaller and far more solvable problem than headlines imply.

Fourth, automate the boring parts. The reason that Gen Z is projected to retire better than the boomers is not superior discipline. It is auto-enrollment. Company 401 (k) plans that enroll workers by default have a 94% participation rate, compared with 64% for voluntary plans. Design beats willpower, every time.

On housing, I recently argued that home affordability is better than the headlines suggest, and that holds for the monthly payment burden. Harvard’s housing center set home prices near five times the median income, up from roughly three times in the 1990s. That is indeed a barrier to entry.

However, the down payment for homes today is 3% versus 20% in the 1990’s. So, yes, the payment is manageable once you’re in, but the hard part is saving up for the down payment. I get that, and here is the hard truth. If you can’t save up a 3% down payment, you have other financial problems (e.g., overspending) that you need to resolve first. The mortgage payment is one thing; the taxes, fees, maintenance, and everything else that goes with the joy of homeownership is quite another.

The K-shaped economy is real, and it is old. What changed isn’t the shape of the economy; it’s just that the media found a narrative that gets lots of clicks and views, and we let headlines do our thinking for us.

Believe the headlines, and you will make exactly the decisions that guarantee they come true for you.

* * *

Tyler Durden Fri, 09/18/2026 - 13:40

Auto Stocks Slide As VW Cuts Outlook, Industry Urges Trump To Keep BYD Cars Out

Earnings pressure and trade-policy uncertainty are weighing on auto stocks on Friday.

Volkswagen shares fell as much as 7.5% after the struggling European automaker lowered its operating-margin forecast, reflecting a write-down on its Porsche stake and weak Chinese demand.

Separately, US auto industry groups urged the Trump administration to maintain restrictions on Chinese vehicles, according to a Bloomberg report.

"Allowing them to open a domestic facility would provide a foothold in the US market at the expense of manufacturers operating here," the coalition wrote.

Signatories include the Alliance for Automotive Innovation, whose members include Ford, General Motors, Toyota and Volkswagen, alongside Autos Drive America, the American Automotive Policy Council and the National Automobile Dealers Association.

The letter to the White House, seen by Bloomberg, comes less than a week before President Trump meets with Chinese leader Xi Jinping next Thursday. It warns that a flood of Chinese BYD vehicles would undercut and upend domestic automakers and parts suppliers.

Europe's move to welcome BYD has been nothing but trouble for the continent, which is seeing its industrial base hollowed out further.

The S&P 500 Automobiles & Components Index remains in a descending channel. 

In US markets, General Motors shares fell 5% this morning, their steepest intraday decline since June, as selling spread across the auto sector. Ford dropped 4%, while Stellantis' US-listed shares slid 5%.

Tyler Durden Fri, 09/18/2026 - 13:20

Yen Jumps On Report Of BOJ "Rate Check" But It's "Too Little Too Late"

Update: (12:40pm ET)

The Bank of Japan, not to mentioned Scott "the House" Bessent, have been most displeased with the yen plunge following today's BOJ rate hike, and so they once again do what they do pretty much every other week now: intervene in the market. 

As we said earlier (see below) when we predicted that some sort of central bank intervention was inevitable, the yen pared declines on Friday after Japan's Nikkei newspaper reported that the Bank of Japan had conducted a rate check in the foreign-exchange market.

Just as it was intended, the report immediately reversed some of the yen’s huge losses triggered earlier in the session by disappointment among traders who had wanted clearer guidance from the central bank on its plans to raise borrowing costs further to stabilize inflation, following a widely expected rate increase on Friday. Instead, what they got were two dissenters appointed by the ultradovish Prime Minister Sanae Takaichi, with two more members due to leave the board next year and likely also replaced by more dovish policymakers, thus kneecapping expectations for more rate hikes. 

Such intervention is meant to squeeze speculative yen shorts and accelerate a move in thin markets, but its ability to produce a lasting reversal may depend on monetary policy. The Fed’s renewed tightening cycle threatens to keep the US-Japan rate differential wide even after Friday’s BOJ rate increase, preserving the incentive for investors to borrow in yen to fund higher-yielding positions elsewhere.

Speculative positioning is also lighter than before the previous intervention. Leveraged funds halved their bearish yen bets in the week through Sept. 8, according to CFTC data, leaving fewer short positions to squeeze if authorities step in again.

The Japanese currency was down 0.6% at 156.83 per dollar at about 12:30 p.m. ET after losing as much as 1.3% earlier in the session. The Nikkei reported that the BOJ inquired with market participants about exchange-rate levels, without saying where it got the information. Such a move has previously preceded official intervention. 

“This is too little, too late,” said Win Thin, chief economist at Bank of Nassau 1982. “The BOJ had another chance to go big and they missed it, same as July. If they really wanted to boost the yen, they should have hiked more than expected and then intervene massively.”

As reported earlier, the yen had weakened to about 158 per dollar after BOJ Governor Kazuo Ueda sent mixed signals on the path for future rate hikes following the bank’s widely expected increase. While he said the stage for policy setting has shifted, he also said it was difficult to determine the terminal rate for the current tightening cycle. Analysts saw his remarks as falling short of the market’s increasingly hawkish expectations.

Japan has entered a holiday period through next Wednesday, when thinner liquidity could amplify the impact of any official intervention. Authorities used a similar window around the Golden Week holiday period this year, first stepping in after the yen weakened beyond 160 just before the holidays and then apparently intervening again during the thinly traded period.

Of course, neither of the previous interventions worked, and this one will fail as well. 

Japan and the US conducted a coordinated yen-buying operation this summer, the first since 1998, raising the stakes for traders betting against the yen. Japan spent a record ¥15.4 trillion on intervention in the month through Aug. 26, according to Finance Ministry data. US Treasury Secretary Scott Bessent has since continued to signal support for a stronger yen.

Despite the coordinate global attempts to boost the yen, the fundamental pressures weighing on the yen remain in place, including Japan’s wide interest-rate gap with other major economies, concerns over the fiscal outlook under Prime Minister Sanae Takaichi’s expansionary spending plans, and - of course - the biggest debt load in history, where every rate hike will lead to much more interest expense.

* * *

Earlier:

The yen sank to a two-week low against the dollar ​on Friday after two policy makers at the Bank of Japan dissented from a widely expected decision to raise ‌interest rates, extinguishing expectations for back-to-back hikes. Governor Kazuo Ueda now needs, at a minimum, to preserve expectations for a December move to prevent markets from unwinding most if note all of the tightening path already priced into rates.

While Japanese policymakers pushed rates to their highest level in 31 years at 1.25%, the move failed to boost the currency as traders felt there was a lack of explicitly hawkish guidance.

As a result of the dovish split, the yen tumbled and the US dollar rose more than 1.2% against the Japanese currency, hitting a a ​two-week high of 158.07 yen after wavering during BOJ Governor Kazuo Ueda's press conference. It was set for its biggest daily increase versus the ​yen since December and the largest weekly rally since September 2024.

Traders had already discounted the equivalent of another hike by year-end before today’s policy meeting, leaving a high bar for any hawkish surprise. The presence of two dissenters signals that support for another rate increase in October is weakening, with OIS assigning around a 20% probability to such an outcome. That leaves Ueda’s press conference carrying the burden of preserving expectations for a December hike and keeping the BOJ on a tightening path that at least matches the Fed’s recent pace.

"They've just clearly underwhelmed versus expectations here," ⁠said Ray Attrill, head of FX strategy at National Australia Bank in Sydney. "And I think that one of the more staggering aspects ​of it was that they couldn't even get the unanimous vote for that," he said. "That really raised eyebrows in the market."

"The statement offered little additional hawkish guidance to support ​bullish Japanese yen positions," said Frantisek Taborsky, currency strategist at ING. "The dissent from (Toichiro) Asada and (Ayano) Sato points to resistance against the fastest pace of rate ‌increases in ⁠more than three decades and suggests they may increasingly act as a brake on further tightening."

According to Mizuho strategists, the dissenters raise concerns that further rate hikes become harder to deliver, potentially steepening the JGB yield curve. Senior strategist Masayuki Nakajima said that Friday’s two dissenters were appointed by Prime Minister Sanae Takaichi. Two more members are due to leave the board next year and could potentially be replaced by more dovish policymakers

“Should their successors come from the reflationist camp, four of the nine Board members would become dovish,” he says; “While that would still fall short of a majority, it could reinforce expectations that sustaining the tightening cycle may become more difficult in the future”

“If so, concerns that the BOJ is falling behind the curve could re-emerge, potentially leading to further curve steepening,” he added.

Commenting on the market reaction, Bloomberg's Ven Ram said that the decision was: 

• marred by dissent from two policymakers who voted against the hike;
• there was none who called for a bigger margin of increase;
• and the accompanying statement, while vowing to continue raising rates, failed to signal a sense of urgency by not saying when they will come.

Japan’s benchmark rate still trails the neutral rate by a considerable margin, and without back-to-back interest-rate hikes, the yen will stay weaker for longer. Only the franc carries a lower interest rate in the G-10 economies, with the Swiss central bank due to meet next week. Should that monetary authority reiterate its preference for keeping rates at zero, it will engender low volatility in two of the major exchange rates that represent the preferred funding currencies.

After a slew of central bank meetings and with Brent crude headed for the first weekly decline this month, global bonds that were deeply oversold are finding some respite. Longer-dated gilts received a boost from the Bank of England’s plan to pause bond sales and stop selling securities that mature in 2049 or later. Gilts with a maturity of 30 years stand to benefit considerably, so an immediate follow-through of Thursday’s rally is likely even though the looming autumn budget realities may check the pace of gains.

Here are some other reactions to the split BOJ decision from Wall Street traders:

NAKA MATSUZAWA, CHIEF MACRO STRATEGIST, NOMURA SECURITIES, TOKYO:

"It's (the yen's decline) a knee-jerk reaction to the two dissent votes. The bottom line is I think it's not too hard for the BOJ to keep the currency pricing for market expectations of rate hikes, basically every three months. And I do think that's what the BOJ wants to keep, not necessarily suggesting an October hike."

RAY ATTRILL, HEAD OF CURRENCY STRATEGY, NATIONAL AUSTRALIA BANK, SYDNEY:

"They've just clearly underwhelmed versus expectations here. And I think that one of the more staggering aspects of it ​was that they couldn't even get the unanimous vote for that. I think that really raised eyebrows in the market. (There was) nothing to put the market more firmly on the sense of another increase in Q4. It's clearly on Governor Ueda to put the market back more firmly on that stance. If he fails to do that, then I think dollar-yen is headed higher. It's hard ‌to believe that just on the back of one quarter-point the (US) Treasury Secretary is going to be jumping for joy and as willing to replicate what they did in August (by intervening). The risk here is that we're heading back up to 160."

BART WAKABAYASHI, BRANCH MANAGER, STATE STREET, TOKYO:

"They raise rates and the currency loses 100 points - I think the market is looking at the BOJ versus the G3 and G10 central banks and the interest rate spread is what is in play. I think it's important that the six-month cycle has been broken, and that leaves the market to say, hey, these guys are willing to act if they have to."But there is a factor where they need to keep up (with other central banks)...if (Ueda) is not as hawkish as the Fed (at the news conference), dollar/yen could really take off higher."

DAVID CHAO, GLOBAL MARKET STRATEGIST FOR ASIA-PACIFIC, INVESCO, SINGAPORE:

"The BOJ has finally shed its long-term status as a monetary policy outlier and is joining the ranks of the other major central banks. The market fully anticipated this rate hike, but it has to be taken in context with what's going on with ​the rest of the world. The BOJ, Fed and ECB have all hiked rates in the same month."

MASAHIKO LOO, SENIOR FIXED INCOME STRATEGIST, STATE STREET INVESTMENT MANAGEMENT, TOKYO:

"Markets should focus less on the statement and more on Ueda's press conference. Expect a neutral-to-slightly hawkish tone, emphasizing that every meeting remains 'live' from here given resilient growth, persistent inflation risks and a policy rate (real yield) that remains accommodative even at 1.25%.More broadly, Japan is ​increasingly participating in a synchronized global tightening cycle. The debate is no longer whether the BOJ hikes, but how far rates ultimately go as major central banks continue to grapple with sticky inflation, AI-driven investment demand and rising term premium. Combined with higher domestic yields and growing confidence in the BOJ's normalization path, more capital is likely to ⁠stay in Japan rather than flow abroad. The bigger story remains that Japan is gradually ceasing to be a marginal buyer of foreign assets, not because it is selling aggressively, but because domestic alternatives are becoming more attractive."

CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:

"The fact that two BOJ board members appointed by Takaichi opposed a hike today suggests the government still leans against BOJ rate hikes. This, together with the lack of guidance on the future pace of ​tightening in the statement, triggered a sell-off in the JPY. As usual, Governor Ueda’s post-meeting press conference will provide more insights into the rate outlook. The risk is Ueda fails to match markets’ hawkish expectations, fuelling further JPY weakness. We expect a follow-up hike in December."

YUGO TSUBOI, CHIEF STRATEGIST, DAIWA SECURITIES, TOKYO:

"Overall, the decision is likely to be seen as dovish. There had been some concern, albeit limited, about a 50-basis-point rate hike, but that did not happen. With two dissenting votes, markets likely ​took the view that it would be difficult to assume the pace of rate hikes will accelerate rapidly. U.S. Treasury Secretary Bessent's negative comments on reflationary policy had also raised concerns about the potential economic damage from the BOJ becoming more hawkish than previously expected. Those concerns have receded, prompting a rise in stocks."

SHUN HONG LIU, CHIEF INVESTMENT OFFICER, HONG INVESTMENT ADVISORS, HONG KONG:

“Honestly, it is so hard to have a very strong view in this market, given things are so political everywhere else in the world. Just imagine Japan needing to get consent from the US for intervention—what can be done and what cannot be done will be coordinated by so many politicians. Last week, if you had asked me, I would have answered yes, it is the end of the yen carry trade (after the rate hike). But now I would answer no, as Takaichi confirms a 3.5% military spending target, while people suddenly believe that Warsh is an uber-hawk. So I just keep my eyes open and trade accordingly."

KANAKO NAKAMURA, ECONOMIST, DAIWA INSTITUTE OF RESEARCH, TOKYO:

"The expected dissent by two members suggests political pressure ​on the BOJ has not entirely faded. The reappointment of Minister Kiuchi in the cabinet reshuffle also signals continued support for expansionary fiscal policy, raising concerns that fiscal stimulus could add to inflation pressures."While the BOJ's statement showed readiness to address upside inflation risks, Governor Ueda's press conference will be key for assessing the future pace of rate hikes.With producer prices remaining elevated, oil prices rising on Middle East tensions, and a weak yen adding to inflation risks, we do ​not believe this rate hike alone will be sufficient. We expect the BOJ to accelerate rate hikes to roughly once a quarter."

PRASHANT NEWNAHA, SENIOR RATES STRATEGIST, TD SECURITIES, SINGAPORE:

"No real surprises from the BOJ decision to hike the target rate 25bps to 1.25%, and neither was the 7-2 split, with recent Takaichi appointees Sato and Asada voting against the hike. The statement retains most of the hawkish tone from the July Statement noting 'accommodative financial conditions are expected to be maintained' even after the hike, and the ‌Bank 'will continue to raise the policy ⁠interest rate'. The Bank reiterated its concerns that underlying inflation could deviate upwards from its 2% target, but we don’t see a smoking gun supporting a back to back hike in October. We stick with our call for rate hikes roughly every quarter with the next 25bps hike in December."

TOHRU SASAKI, CHIEF STRATEGIST, FUKUOKA FINANCIAL GROUP AND FORMER BOJ OFFICIAL, TOKYO:

"It's a little bit surprising to see that the yen weakened after the announcement. Maybe some market participants were expecting intervention like the last time before and after the BOJ's decision.Probably some were surprised because two members opposed the decision and maybe some were expecting some mention of a 50 basis point hike. It's a bit difficult to meet market expectations. Ueda-san has to be very hawkish to keep the yen from depreciating, but I think it's a bit difficult for him to be so hawkish. He has to say that the BOJ will probably hike the policy rate again within this year. But I think it's difficult for him to say, so the market will take it as a dovish press conference."

ANTHONY MALOUF, EBURY, SYDNEY:

"The seven-to-two vote is a touch wider than a clean hawkish consensus would suggest. Dissenters Asada Toichiro and Sato Ayano argued that inflation and growth have not accelerated enough to justify tightening now. The more telling split, though, sits elsewhere. Board members Takata Hajime and Tamura Naoki opposed the outlook language from the opposite direction, arguing underlying inflation has already reached a level consistent with ​the 2% target, which points to appetite for a faster pace rather than a slower one. The yen sold off ​after the decision. We interpret this as markets focusing on the two dissents, suggesting the board is ⁠less united behind a faster pace than the vote count alone implies, rather than doubting the hike itself. That fits our own view that the BOJ will deliver further hikes at a steady quarterly pace, with the next move in December and another in the first quarter of 2027, taking the policy rate to its neutral level near 1.75%."

KENTO MINAMI, SENIOR ECONOMIST AT DAIWA SECURITIES, TOKYO:

"The overall impression of the statement was dovish. BOJ’s new board members Ayano Sato and Toichiro Asada dissented from the decision. They were chosen by Prime Minister Sanae Takaichi, which suggests difficulties in raising rates in the future as the BOJ will have new board members going forward. "The statement indicated that the BOJ would raise rates at least ​once every six months, but this was in line with market expectations that the BOJ would raise rates every three months. These two dissenters were a dovish factor, which is why the yen started falling right after the decision."

MASATO KOIKE, SENIOR ECONOMIST, SOMPO INSTITUTE PLUS, TOKYO:

"I think the statement was hawkish, but markets had expected something ​even more hawkish, which is why the yen weakened after the announcement. "What ⁠struck me as hawkish was the explicit reference to accommodative financial conditions, and the wording that the BOJ will continue to adjust the degree of monetary easing. It also clearly mentioned upside risks. In addition, the BOJ cited a range of factors — not just crude oil, but price increases linked to AI-related demand, the weaker yen, and the mutually reinforcing mechanism between wages and prices. Those elements made the decision look hawkish overall. I don't think (Sato joining Asada in dissent) will have an impact when it comes to the pace of rate hikes being delayed. Sato's dissent was in line with expectations, but I see it as opposition to the timing or pace rather than a blanket objection to rate hikes. It did not come across as outright opposition, which I think is positive for the BOJ as it proceeds with further rate increases."

HIROFUMI SUZUKI, CHIEF FX STRATEGIST, SMBC, TOKYO:

"The rate hike itself was in line with market expectations, but the two dissenting votes came as a modest surprise, as only some market participants ⁠had anticipated them. The outcome has somewhat ​tempered expectations for further rate hikes and conveyed a dovish impression. The pace of future rate hikes is likely to depend primarily on the views of the BOJ's leadership. We therefore do not expect the pace to differ significantly from current market expectations.The yen initially weakened following the ​decision, but attention now turns to Governor Ueda's inflation outlook and policy stance at the press conference."

FRED NEUMANN, CHIEF ASIA ECONOMIST, HSBC, HONG KONG:

"The tone of the statement, along with two dissenters on the decision to raise rates, leaves lingering doubts that Japan’s central bank will be cautious in tightening monetary policy further. In addition, new inflation numbers out this morning for August showed that price pressures remained unchanged in August, rather than accelerate. All eyes are now on the press conference to be held by Governor Ueda, with the market looking for hawkish reassurances that the BOJ is prepared ​to raise rates again soon. While back-to-back hikes appear unlikely, investors will look for clues as to whether officials are prepared to raise interest rates again in December. Given that the Fed has tilted into a more hawkish direction, the pressure remains for the BOJ to follow suit: Governor Ueda will have to follow-up today's rate hike with by keeping the door open for another hike before the end of the year."

Sellside reactions aside, Governor Kazuo Ueda said that with the price trend very close to the bank’s 2% target, authorities now need to ensure inflation doesn’t overshoot.

“It has become important to stabilize the rate of price increases at a level of around 2%,” Ueda said in a post-decision briefing. “In that sense, I believe the phase of policy has shifted to a new stage.” The bank should act preemptively to avoid being forced into a situation where rapid hikes might become unavoidable, he added.

Traders also remained ​alert to the risk of intervention to prop up the currency after Finance Minister Satsuki Katayama said Tokyo won't hesitate to conduct further coordinated action, following a joint US-Japan move to boost the yen in late July.

The yen rallied sharply in early September to its highest since February as traders bet the BOJ ​would embark on multiple rate hikes, although those wagers came under question on Friday. 

The dollar rally against the yen helped the DXY dollar index climb 0.25% to 100.48, as broader currency markets remained focused on energy prices and the U.S. Federal Reserve. The index, which tracks the ​currency against six major peers, was ​up 1.4% for the week to ⁠around a six-week high after the US Federal Reserve hiked interest rates on Wednesday and signaled more increases could be coming.

Traders now see a roughly 55% chance of a quarter-point hike at the Fed's next ​two-day meeting next month, up from 27% a week ago, according to the CME Group's FedWatch ​tool.

Finally, it's worth noting that the BOJ dissenters directly jeopardized the plan of Steve Bessent for a stronger yen (and thus less fears of TSY selling to prop up the yen through intervention). According to Bloomberg, Warsh should "seriously consider a little Friday afternoon intervention to ensure that this bounce in USD/JPY makes a lower high than the prior ascent to just over 160."

Of course, the problem with constant meddling in market prices is the risk that the market tests you, forcing ever-more frequent action to keep things in line. At the very least anyone who stayed with the short-dollar trade has received a painful kick in the shin, which arguably will dissuade some punters from staying in the position the next time that the authorities step in. 

Tyler Durden Fri, 09/18/2026 - 13:01

Chinese DRAM Giant Enters Booming Flash Memory Market To Take On Samsung, SanDisk

Chinese chipmaking giant, CXMT, and the biggest IPO of the decade in the mainland market, is preparing to enter the booming flash memory ​chip market dominated by Samsung Electronics and other foreign rivals, Reuters reported citing sources, a move that would broaden ‌its customer base amid a global memory shortage.

The move would also pit the dynamic random access memory (DRAM) chip specialist against domestic rival YMTC, taking it into one of the semiconductor industry's fastest-growing segments.

The relentless, debt-fueled demand from AI servers (where ROI remains deeply negative) has created a global memory shortage that industry executives believe will persist through at least 2027. SK Hynix CEO Kwak Noh-jung said in July that 2027 ​could be the industry's worst year from a supply perspective, while TrendForce expects NAND supply tightness to ease only in the second half of next ​year, unless of course the bond market cracks first at which point all the hyperscalers will simply run out of money to buy massively overpriced DRAM and flash memory... which it will now that global yields are at decade highs. 

Manufacturers have also prioritized capital spending on DRAM and high-bandwidth memory, or HBM, limiting additions to NAND flash capacity, according to ⁠TrendForce, worsening shortages in this segment. DRAM provides the working memory used by processors, while NAND stores data in phones, computers and data centres. Both have seen costs explode in recent months, making memory the biggest cost driver of electronics purchases, with Goldman forecasting that memory prices will singlehandedly raise core PCE by 0.5%.

CXMT, also known as ChangXin ​Memory Technologies, plans to establish a research-and-development production line for NAND flash memory at its new plant in Beijing, according to the report; the company has ​also set up a research institute in the Chinese capital and projects there include NAND development, one source said.

CXMT has discussed its NAND plans with customers, including a newly established startup that intends to buy its NAND chips for storage products used in AI systems and supercomputers. 

Samsung was the world's biggest NAND supplier ‌by revenue ⁠in the second quarter with a 28% share, according to research firm Counterpoint. SK Hynix ranked second, followed by Micron. China's YMHT recently surpassed Sandisk, and is now tied with Japan's Kioxia for 4th spot in NAND marketshare. It will likely overtake Micron next quarter. 

CXMT and YMTC, known in China as the "twin stars" of the country's memory-chip industry, have largely operated in separate markets. CXMT dominates Chinese production of DRAM, while YMTC is the country's leading NAND manufacturer.

However, thanks to the biggest memory bubble in history, those lines have begun to blur. In April, Reuters reported that YMTC had sent low-power DRAM samples to customers as it weighed entry into CXMT's core market.

And now CXMT is entering the NAND market.

While ​the two firms lag behind larger international ​rivals and are more exposed to ⁠lower-priced products, they are growing at a blistering pace as tight supplies have strengthened their pricing power with some Chinese customers. In some cases, they have charged more than their foreign competitors, Reuters reported in July.

Both companies have emerged as key pillars of Beijing's drive to build a self-sufficient chip industry ​and close the gap in strategic technologies like AI. They grew with backing from China's national semiconductor fund and local ​governments. CXMT expanded with ⁠backing from Hefei, the provincial capital of Anhui province, in eastern China, while YMTC was built in Wuhan, the provincial capital of central Hubei province, reflecting competition among Chinese local governments to attract strategic industries through investment and incentives.

CXMT, which raised 57.92 billion yuan ($8.6 billion) in July in Asia's biggest initial public offering this year, plans a second memory-chip plant ⁠in Beijing and ​was in funding talks with a tech manufacturing hub backed by the local government, Reuters reported last ​month. YMTC's parent, CCSH, is also planning a Shanghai listing that aims to raise 33 billion yuan.

Washington's export restrictions have added urgency to China's drive to develop domestic memory suppliers. Washington placed YMTC on its Entity List ​in 2022 and later tightened China's access to HBM chips that are used alongside AI processors.

Tyler Durden Fri, 09/18/2026 - 12:40

"Good Manners" Have Never Been An Effective Strategy For Retaining Sovereignty

By Molly Schwartz, cross-asset macro strategist at Rabobank

10-year Treasury yields slid lower over yesterday’s session, retracing more than 9bps from Wednesday’s post-FOMC high of 5.02, with much of the move seemingly driven by falling oil prices, as Brent crude oil sank $3.5 to intraday lows below $102/bbl before retracing to $104/bbl. The UST yield curve has continued flattening, albeit in a bull-flattening fashion, as 2-year yields were dragged lower by almost 7bp. Given recent US economic data suggestive of a stronger-than-previously-thought labor market and hotter-than-preferred inflation, we maintain that the risk to our FOMC view of continued holds through year-end is skewed in favor of one hike this year, but believe that market-implied pricing of between one and two additional hikes in 2027 is unlikely (Read more about our FOMC view from Rabobank’s Fed whisperer, Philip Marey, here).

Politico reported yesterday that a trade deal is on the horizon between the US and Mexico, as some pointed to a recent call between Trump and Sheinbaum. An unnamed official said that “US-Mexico talks are active and continue to move in a positive direction…any notion that the call didn’t go well is wrong,” though “another person familiar with the call” referred to it as “so-so” and said that it “created a bit of noise.”

To those who have been following the trade negotiations between the US and Canada, this may feel uncomfortably similar to the days before the US-Canada trade relationship deteriorated completely in late August. However, Mexico already seems far better positioned to emerge with a favorable trade deal, simply by avoiding the headlines. While USD/MXN has recently been trading above the 17 level, we believe that trade progress remains constructive for the MXN and see continued resilience.

But the relationship between the US and Canada is only eroding further. Trump recently signed a Presidential Memorandum to “identify and take steps in response to Canada’s measures that have denied US firms access to Canada’s federal and provincial procurement markets.” This comes as Carney spoke to the EU Parliament in Strasbourg yesterday, further clarifying his position on where he sees middle powers fitting in an increasingly bifurcated world. He said that he is “not proposing a third bloc in order to become a great power rival, only with better manners…we are pursuing resilience so that no one, no one, can control our open markets, impair our sovereignty, threaten our territorial integrity, or undermine our freedoms.”

Canadian PM:

'I'm not proposing a third block in order to become a great power rival only with better manners...'

*Chuckles and applause*

'We do not seek power to dominate others... we are pursuing resilience so no one can control our open markets' https://t.co/nBXWnTCgF6 pic.twitter.com/T0KkDXRoqt

— RT (@RT_com) September 17, 2026

It should be noted that good manners have never been proven to be an effective strategy for retaining sovereignty. Carney also clarified that Canada is not seeking to become a “full member” of the European Union, while Canada’s EU ambassador-designate, Jonathan Wilkinson, asserted that Canada wants to “get as close as [it] possibly can to the EU without giving up significant chunks of sovereignty.”

Speaking of non-EU members, the Bank of England announced its decision to hold Bank Rate unchanged at 3.75% in a 6-3 vote. Rabobank’s BoE whisperer, Stefan Koopman, highlights in a Bank of England Comment that there is a case for the Bank to tighten borrowing conditions further, suggesting that November is a live meeting. Rabobank is forecasting a 25bp hike at the November meeting, assuming that the Autumn Budget is well absorbed. (Read more here).

* * *

Tyler Durden Fri, 09/18/2026 - 12:20

Ukrainian Drone Hits Russian Nuclear Plant Days After Trump Energy Truce Plea

President Trump raised eyebrows when on Monday he declared that Russia and Ukraine had agreed to stop attacking each other's oil and energy infrastructure, amid global crude and diesel supply problems related mostly to the Hormuz Strait crisis.

But then within days later it became clear that the default reality on the ground has persisted, as energy sites continue to get pummeled. And it's not only refineries and ports which have continued getting hit, but as of Thursday morning a Russian nuclear plant was apparently targeted in a Ukrainian drone attack.

Kursk Nuclear Power Plant, file image

A drone hit the cooling tower of a reactor unit at Russia's Kursk Nuclear Power Plant, the International Atomic Energy Agency has announced Friday.

The unit was operating at the time, but its operating mode was unchanged and no fire broke out. 

The UN agency's director Rafael Grossi declared in a statement that "all attacks on nuclear facilities are unacceptable as they could endanger nuclear safety and security, irrespective of where they occur."

He urged "maximum military restraint to prevent the risk of a nuclear accident" - which remains a top dangerous reality of the battlefield in the context of the Ukraine war.

In early July the same site had suffered a prior drone attack from Ukraine. One industry source reviews:

The Kursk Nuclear Power Plant (Kursk NPP) has been the target of several military actions and drone strikes. The most notable incident occurred in August 2025 when a drone detonated and damaged an auxiliary transformer, sparking a structural fire that had to be contained by emergency teams. The International Atomic Energy Agency (IAEA) monitored the event and confirmed that radiation levels remained normal.

The Kremlin going back to 2024 has accused Ukrainian forces of seeking a 'provocation' at the Kursk nuclear plant.

The Kursk Nuclear Power Plant (NPP) lies about 25 miles west of the city of Kursk, which is the administrative center of the oblast by the same name.

The plant continues to be a major electricity producer for Russia. Kremlin officials have long voiced alarm that Ukraine may seek to use some major provocation to draw its backers in NATO deeper into the conflict.

Apparently on Ukraine's target bank going back years...

Russia's Kursk Nuclear Power Plant seen through the camera lens of a Ukrainian Shark reconnaissance UAV. pic.twitter.com/bbwN8YQq4s

— Status-6 (War & Military News) (@Archer83Able) September 15, 2024

As a reminder, Trump began the week by declaring on Truth Social, "Ukraine has agreed not to hit Russian Energy targets. Russia has agreed to do, likewise! The World’s Diesel price rise is mostly caused by the Russia/ Ukraine War, not Iran." ...So much for that.

Tyler Durden Fri, 09/18/2026 - 12:00

Researchers Used Claude To Hack OpenAI Employee Accounts

Three security researchers used Anthropic's Claude to breach OpenAI employee accounts and gain access to private company software in a July attack that began with an image upload to the company's public help forum.

The researchers, Harsh Jaiswal, Mohan Pedhapati and Rahul Maini of Hacktron AI, described the July 25 breach in a report published September 13. They said the work took less than 72 hours from the initial discovery to demonstrating access to an internal OpenAI software repository. OpenAI subsequently paid them a $6,500 bounty.

The disclosure follows a separate incident earlier in July in which OpenAI's own AI agents escaped a testing environment and attacked Hugging Face, a platform used to host AI models and datasets. In that case, OpenAI says the agents took dangerous actions that weren't directed by a human - the incident being used to spook everyone into letting far-left technocommies run AI oversight. 

Hacktron's team directed its own operation, reported the vulnerabilities to OpenAI and stopped after demonstrating access.

On July 25, we hacked OpenAI.

Two bugs let us take over ChatGPT/Codex accounts of OpenAI employees (+some unaffiliated users) and reach connected services: Outlook, Slack, GitHub, etc.

We proved it with a PR in OpenAI’s internal codebase . It took us <72h. 🧵 pic.twitter.com/gVsmQZwSc8

— s1r1us (@S1r1u5_) September 18, 2026 How A Forum Upload Reached Internal Software

The entry point was OpenAI's public discussion forum, which runs on software supplied by Discourse (3rd party software that manages discussion boards). A flaw in an image-processing component called libheif allowed a specially crafted image upload to make the server execute the researchers' instructions. Discourse's security advisory confirms the vulnerability required no interaction from a victim.

Hacktron said the faulty code had been changed in 2025, but the change was not identified as a security fix. The forum was still running a vulnerable version.

Illustration via Hacktron

That gave the researchers access to the forum, but a second flaw turned the intrusion into something more serious.

OpenAI's shared sign-in system allowed people to use their OpenAI identity on the forum. The researchers found that the forum's sign-in tokens, digital credentials that keep users authenticated, carried permissions extending beyond the discussion site. A compromised forum session could therefore become a route into that person's ChatGPT and Codex accounts.

One employee's Codex account was already connected to OpenAI's private GitHub software repositories. The researchers used that account to have Codex submit a harmless proposed documentation change, known as a pull request, to an internal repository. A pull request proposes an edit for review; it does not, by itself, install a change in live company systems.

The researchers said they deliberately avoided inspecting sensitive code and halted testing after submitting the demonstration.

AI Accelerated The Exploit

Hacktron said an earlier Claude model produced a partially working exploit but struggled to make it function with the target's normal security protections in place. After Anthropic released Opus 5, the newer model produced a working version within hours. The company had access to Anthropic's program for authorized cybersecurity researchers, which relaxes some restrictions, its chief executive told Business Insider.

According to the company, skilled human guidance remained important - while AI reduced the time needed to turn a software flaw into an actual, reliable attack. According to Hacktron's timeline, OpenAI confirmed its sign-in fix roughly 14 hours after the initial report. Discourse separately patched the vulnerable image-processing component and added stronger isolation around image processing.

"We narrowed the permissions on Community sign-in tokens and revoked affected tokens and sessions," OpenAI said.

OpenAI also clarified that the $6,500 reward covered the flaw on its side of the sign-in system. Testing against the Discourse-hosted forum was explicitly excluded from its bounty program.

We reported the bug to Discourse and OpenAI. OpenAI fixed the SSO issue roughly 14 hours after our initial submission.

Discourse received our separate report Saturday, replied Sunday, and had a fix Monday.

OpenAI awarded us $6,500. pic.twitter.com/WeSzRtf14N

— s1r1us (@S1r1u5_) September 18, 2026 The Separate Attack By OpenAI's Own Agents

The Hugging Face intrusion arose from OpenAI's internal cybersecurity testing earlier in July. OpenAI was evaluating agents that could write code, use software tools and take multiple steps toward a goal, rather than simply answer a user's questions.

To measure their hacking capabilities, OpenAI deliberately reduced certain safeguards that normally restrict dangerous cyber activity. The agents were nevertheless supposed to remain inside isolated testing environments, without open internet access. The models involved included GPT-5.6 Sol and an internal research prototype that was not intended for public release.

According to OpenAI, the agents exploited a previously unknown vulnerability in a service used to download software packages. That provided a route to the internet. They also repurposed the shared service as an unauthorized message board, allowing agents that were supposed to work separately to exchange discoveries and coordinate. An independent investigation by METR (oh...) and Redwood Research found that roughly 1,200 agents used the message board, exchanging more than 70,000 messages and files. About 700 participated in the attack on Hugging Face.

The agents were trying to cheat a cybersecurity test called ExploitGym. METR's investigation concluded that the Hugging Face attack appeared primarily motivated by understanding how the test's automated scoring system worked, rather than simply stealing an answer key. That information could help the agents fool the evaluator instead of completing the assigned challenges as intended.

The investigators also found agents that recognized the attack was outside their assigned task and unethical, but participated anyway. 

Hugging Face reconstructed roughly 17,600 attacker actions between July 9 and July 13, including many unsuccessful attempts. It said the volume and persistence of the activity complicated detection: successful attacks were mixed into thousands of failed attempts across different systems.

OpenAI's report dates the compromise of Hugging Face's production infrastructure to July 11-13. OpenAI detected suspicious activity in its own environment on July 19 and publicly disclosed its responsibility on July 21, four days before Hacktron demonstrated its separate breach.

* * *

Tyler Durden Fri, 09/18/2026 - 11:40

South Korean President Announces No Military Support To US Hormuz Mission

South Korea has belatedly made a big decision after starting months ago it found itself among key Washington allies directly called upon by President Trump to provide urgent security help for Strait of Hormuz energy transit, amid the war with Iran.

President Lee Jae Myung has on Friday announced he will ⁠not deploy the military to the ⁠Middle East, though his statement also suggested troops could play a role on the peripheries of the conflict.

August 2025: President Trump meets with South Korean President Lee Jae Myung at the Oval Office, Reuters.

Resisting direct calls from Trump to support the campaign against Iran, Lee made clear to a news conference: "There won’t be deployment that would involve or enter war. I can tell you that very clearly. We won’t deploy military assets in any form to that end."

"It is also clear that we must do the minimum as other countries do to ​protect our commercial shipping and crude shipments, and also the safety of ‌our people," he said. At the moment, the South Korean Navy only conducts patrols off the coast of Somali as part of international anti-piracy efforts.

Lee's words did seem to leave open a potential greater future role in terms of South Korea safeguarding global shipping in the region, but it would obviously be significantly away from the potential reach of any Iranian missile or drones, or that of their proxies.

This is a long-awaited decision. While Europe and basically the whole rest of the world has rejected Trump calls to send military assets to assist in opening the Strait of Hormuz, South Korea is in a tougher spot given the many decades-long, large American troop presence on the peninsula, safeguarding the south from possible attack from North Korea. The country is also effectively under America's nuclear protection umbrella. 

Last week, Lee's press secretary stated the government had not yet finalized its policy but was "cautiously assessing it".

But then it got a warning from Tehran. Iranian Foreign Ministry spokesman Esmail Baqaei warned on X on Sept.7. "The military presence or operational participation of other nations in the Persian Gulf and the Strait of Hormuz would inevitably be viewed as direct support for the party committing acts of aggression, and would lead to serious consequences."

And so Seoul has found itself diplomatically between a rock and a hard place:

Trump has criticized Seoul for what he called insufficient support for the Iran war and scaled back major joint military drills by the two countries’ armed forces this summer, a move that unsettled the U.S. ally.

Committing South Korean troops to the Gulf region has also seemed unpopular among the Korean populace. Rare anti-war protests have been going strong this month in front of the US Embassy in Seoul.

Locals have at times carried signs that read "Do Not Join a War of Aggression" and "No Military Deployment to Hormuz," while protesters have chanted, "We cannot send our young people into a sea of death," according to prior descriptions by the AFP.

Not going to appease Washington: "the minimum necessary activities"...

South Korea will not deploy troops or military assets to intervene in the Iran war, President Lee said Friday.

“There will be no involvement or intervention in the war,” Lee said, adding Seoul would carry out only “the minimum necessary activities” to protect South Korean… pic.twitter.com/1lseOq10W1

— Clash Report (@clashreport) September 18, 2026

"Sending our troops to an illegal war waged by the United States is unacceptable," Choi Young-ok, a member of Korean Peace Solidarity for Sovereignty and Reunification, a group that is highly critical of the US military presence in South Korea, told AFP.

"There is no reason for us to send troops when no other country has done so or said it would," added Choi, who also warned that sending South Korean troops would "inevitably lead to casualties." Now, Seoul is nervously awaiting Trump's reaction and coming wrath.

* * *

Tyler Durden Fri, 09/18/2026 - 11:20

AfD Preps Talks With Moscow To Reopen Cheap Gas Flows To Germany

It didn't take long for the Alternative for Germany (AfD) party - fresh off its historic taking of 43.8% of the vote in the eastern German state of Saxony-Anhalt election earlier this month which left Chancellor Friedrich Merz and his Christian Democratic Union (CDU) shaken - to embark on ties which are a serious shot across the bow and slap in the face to both Berlin and Brussels.

Reuters is on Friday reporting that AfD leadership is preparing for possible talks with President Putin and his economic envoy and top negotiator Kirill Dmitriev focused on restoring Russian gas supplies to Germany.

via Reuters

The meeting could take place next year, as early as March 2027, and would be spearheaded by AfD co-leaders Alice Weidel and Tino Chrupalla.

This is precisely what German voters supported in the regional election, and the AfD made no secret of its plans to seek turning the Russian energy tap back on. Weidel made clear in a June interview, "Cheap energy from Russia was the secret of the success of 'Made in Germany'. We need it back." 

"The loss of this energy has set us back years. Hundreds of thousands of jobs have been lost," the AfD co-leader said at the time. "It has made us dependent on ​the United States, which sells us energy at far higher prices."

Russia had prior to the start of the Ukraine war supplied over half of Germany's natural gas, alongside more than a third of the country's crude oil imports.

Russian natgas to Germany was halted in stages, in tandem with the major Nord Stream bombings and investigation, as Berlin eventually found alternative suppliers like Norway, the Netherlands and increased its reliance on LNG imports.

Many Germans have been sick and tired of seeing daily living prices go up while resources and untold billions are siphoned off for the Zelensky government in the Ukraine war.

Getty Images

While nothing has yet to be officially announced or confirmed by the Russian side or through any AfD official statement, Reuters points to a key caveat based on its sources: "The meeting would only happen if a peace framework was agreed first between Russia and Ukraine, ​and the organisers hoped it would bring together the AfD, Russia and the United States, the person said. Possible locations for the summit included ⁠Israel, the United Arab Emirates or India, they added," the report says.

Earlier, we featured commentary by Andrew Korybko which seeks to summarize the mood in both Moscow and among the 'hard-rightward' turning German streets:

Finally, the economic errors concern the EU's sanctions on Russian energy, which led to the bloc replacing inexpensive long-term gas contracts with Russia with expensive market-priced imports from elsewhere. Prices are now nearly ten times higher than before and "may well rise even further." Putin also criticized the EU's gas storage policies for being "unconcerned with the technical condition of these storage facilities and the physical volumes involved." All of this adversely affects the EU's economy.

All in all, Putin is arguing that the AfD's rise is an electoral revolt against these policies, all of which center on Russia. This doesn't mean that the party or its supporters are "pro-Russian", let alone "Russian puppets", just that they understand the importance of pragmatic ties with Russia for their country's political interests, security, and economic development. Obsessive anti-Russian fearmongering, risking World War III over Ukraine, and dumping inexpensive Russian energy haven't helped Germany at all.

"Bests interests for Germany" being prioritized, where energy supplies "are cheapest, namely from Russia"...

German AfD Leader Alice Weidel on Russia:

We have to obtain fossil fuels from wherever natural gas and oil are cheapest — namely, from Russia.

It is in our own security interests as well as our economic interests to have good relations with Russia. pic.twitter.com/FkKKOpCDAo

— Clash Report (@clashreport) September 14, 2026

As a reminder, there were already some deeply provocative diplomatic AfD moves back in June, with AfD foreign-policy spokesman Markus Frohnmaier having traveled to St. Petersburg to meet with Dmitriev and Gazprom CEO Alexei Miller, urging the reopening of the Nord Stream pipeline.

* * *

Tyler Durden Fri, 09/18/2026 - 10:45

The Purge: Princeton Faculty Reach Perfect Zero Support For Republicans

Authored by Jonathan Turley via JonathanTurley.org,

We recently discussed how Yale faculty reached academic nirvana after years of purging departments of conservatives and Republicans. The university finally showed zero political donations to Republicans. Now Princeton can claim that it has succeeded in a similar cleansing, according to a new study by Princetonians for Free Speech (PFS). The study shows that 98% of political donations went to Democrats or Democrat-affiliated groups and 0% went to Republicans or affiliated groups.

Political contributions are one measure that helps gauge the degree of ideological orthodoxy and intolerance in higher education. While some academics simply do not make contributions and may still hold conservative views, the study still offers another insight into the political preferences of those who do make such contributions. The study does not mean that we can assume that the number of academics with conservative or libertarian values is zero. (There are obvious outliers such as Robby George). However, few would dispute that it reaffirms the extreme imbalance of ideological views at this and other universities.

Professors often express shock at the thought that there would be any political or ideological litmus test for hiring. I have also opposed such measures. However, the hypocrisy is crushing. Today's faculty are responsible for a near-complete ideological purging of their ranks. They have created a hostile environment for anyone with conservative or libertarian viewpoints, including students who rarely have the opportunity to hear from a professor from a center-right perspective at most schools.

Most recently, forty percent of college faculty admitted that they would vote against any Trump supporter seeking an academic position regardless of their scholarship or teaching ability. Keep in mind that this is only the professors willing to admit to such bias.

Some are more open than others.

I had dinner with a Harvard Law Professor, who expressed disbelief that I expected him to vote for any faculty applicants who held views he considered wrong. When I noted that I regularly vote for faculty candidates who hold opposing views, he just shrugged and said that, if he rejects their views, he cannot vote for those views to be taught to students.

There are few remaining conservatives or libertarians on law school faculties, which have been purged of dissenting voices through a biased hiring and promotion system. Despite years of complaints and declining public trust in higher education, faculty members continue to reinforce bias and orthodoxy in our schools.

I wrote about the rise of this new McCarthyism on the left seven years ago.

Recently, I discussed the example of Fordham University School of Law professor John Pfaff, who called for "repercussions" for professors who do not "recant" their view that the 14th Amendment does not protect birthright citizenship.

Not long ago, I debated Professor Randall Kennedy at Harvard Law School about the school's lack of ideological diversity. I respect Kennedy, and I do not view him as anti-free speech or intolerant. Yet when I noted the statistics on the vanishing number of conservative students and faculty in comparison to the nation, Kennedy responded that Harvard "is an elite university" and does not have to "look like America."

Of course, the problem is that Harvard does not even look like Massachusetts, which is nearly 30 percent Republican.

At schools like Yale and Princeton, they have achieved near 100% for Democrats (with only a couple of percent going for independent or socialist causes). Yet, if you ask faculty about the purging of their ranks, they will often shrug and say that they just cannot find a conservative or libertarian who is intellectually worthy of an appointment to their schools. It was the same absurd rationalization that was once used to justify not hiring minorities or women.

I just had a debate with a William & Mary law professor who admitted there is no other rational explanation for the virtual absence of conservatives and libertarians than systemic bias. Indeed, if a company were to go to court to say that there was nothing intentional in a virtual absence of minority employees, it would be laughed out of court.

Of course, nothing is laughable about the state of higher education. This generation of administrators and faculty are destroying our educational institutions because they cannot set aside their political bias and intolerance for the benefit of their schools. Higher education has reached record lows in public trust. Yet, these professors and deans are insulated from such public opinion. They are often financially insulated from the economic impact of such isolation. In higher education, the echo chamber works to their personal benefit, increasing their opportunities for writing and conferences. They also do not face opposing views of their scholarship or viewpoints.

Recently, I participated in a debate with the President of the American Association of University Professors (AAUP). He doubled down on his call for universities to pursue more political agendas and activism. AAUP later broke its long-standing apolitical tradition and endorsed Abdul El-Sayed in Michigan.

This is why I have advised university presidents who want to restore intellectual diversity that they cannot rely on faculty members. With enough donor and faculty pressure, deans may add a single conservative, but they have shown they are unwilling to make real changes to the academic echo chamber they have created.

In the same way, I have encouraged state legislatures to tie further public subsidies to real and substantial changes in creating intellectual diversity among faculty.

If we are to protect these bastions of free speech, legislatures will need to play a more active role in addressing the exclusion of both faculty candidates and speakers on public campuses. Too many faculty members still take the view that citizens are a captive audience expected to keep funding their departments, while excluding conservative or dissenting views held by many, if not most, citizens in a given state.

If faculty members want to maintain echo chambers for their own viewpoints, they should seek private donors to sustain such intolerance and orthodoxy.

Legislatures can demand evidence that schools maintain intellectually diverse faculty when determining the level of continued support from citizens. Otherwise, it is ridiculous to expect the public to subsidize their ideological echo chambers of faculty.

For schools like Princeton, donors clearly do not want or expect intellectual diversity. They keep donating to a school that has systematically purged its ranks and now runs from the left to the far left.

As these surveys confirm what we already know about the intellectual intolerance of today's faculty and administrators, they can at least spare us the performative denials. They should embrace their bias and dogmatism. Own it. This is what they have built through years of ideological agendas and intolerance.

After all, how many academic institutions can claim true perfection? Princeton is effectively a closed shop for Republicans. "Rah rah rah Tiger, tiger, tiger / Sis, sis, sis / Boom, boom, boom, ah! / Princeton! Princeton! Princeton!"

Jonathan Turley is a law professor and the best-selling author of "Rage and the Republic: The Unfinished Story of the American Revolution."

Tyler Durden Fri, 09/18/2026 - 10:25

Treasury Sanctions Crypto Exchange Behind Iran's Bitcoin Tolls On Hormuz Ships

Via Decrypt.co,

The U.S. Treasury has sanctioned BitBank, naming the Iranian exchange it says carried the Bitcoin that shipping companies paid for safe passage through the Strait of Hormuz.

Since June, the Office of Foreign Assets Control said, the Hormuz Safe Marine Services Authority has used BitBank to pass the payments it collects on to the Iranian regime. That authority was the body charging vessels in Bitcoin for transit rights, a scheme Treasury designated in July.

Today, as part of Operation Economic Outcast, the Department of the Treasury's Office of Foreign Assets Control (OFAC) designated key components of the Iranian regime's digital assets-based sanctions evasion infrastructure. Targets include BitBank, a priority digital assets...

— Treasury Department (@USTreasury) September 17, 2026

Between June and July, Treasury says, BitBank was used to move "hundreds of millions of dollars' worth of Bitcoin" to the Islamic Revolutionary Guard Corps.

BitBank is controlled by Babak Zanjani, an Iranian financier OFAC designated in January. Sentenced to death in Iran in 2016 for embezzling from the National Iranian Oil Company, he had his sentence commuted in 2024 and resurfaced last year backing regime-linked ventures. Treasury says he has been advertising BitBank on his social media accounts since at least 2024.

Four more designations

The action also covers Pishtaz Simorgh Electronic Trade Company, which built BitBank's software and is a subsidiary of the already-designated Dot One Value Creation Group, along with three Dot One executives: Hossein Ali Zaker Hossein, Mohammad Mahdi Zaker Hossein and Seyed Adel Heidari.

Treasury describes the first as involved in most of Zanjani's sanctions evasion, including oil exports, and says he has brokered digital asset transactions that ended up with the IRGC.

All five were designated under Executive Order 13902, which the administration extended in August to cover anyone operating in Iran's digital asset sector. It is the authority Treasury has been using since to work through the network, including the crypto exchanges it designated for laundering Iranian funds.

"Efforts to finance the Iranian regime using cryptocurrencies are not beyond OFAC's reach," said Treasury Secretary Scott Bessent.

"If you support the Iranian regime, the Department of the Treasury will sanction you."

The designations fall under Operation Economic Outcast, the campaign Bessent announced on August 24 and dubbed Economic D-Day, which Treasury says is aimed at severing Iran's remaining economic lifelines with help from the EU, the UK and Gulf partners.

U.S. assets belonging to the five are blocked, as are any entities they own half or more of, and non-U.S. firms dealing with them risk secondary sanctions.

Traders do not expect the pressure to lift soon. On Myriad, a prediction market developed by Decrypt's parent company Dastan, the odds of Washington announcing an end to its naval blockade of Iranian shipping by September 30 have fallen to 10%, down 30 points. Even a December 31 deadline is only a 60% shot.

Tyler Durden Fri, 09/18/2026 - 09:40

Despite 'Soft' Survey Strength, US Manufacturing Unexpectedly Tumbled In August

US Industrial Production disappointed in August, unchanged MoM vs expectations of a 0.3% MoM rise.

Capacity Utilization was flat MoM (slight disappointment to expectations...

Worse still, manufacturing production seemingly hit an unexpected wall in August, falling 0.3% MoM versus an expectation of rising 0.3% MoM. That was the biggest monthl;y drop since Oct 2025 and dragged growth down to just 0.9% YoY...

This was 'odd' since ISM Manufacturing survey data has shown a sizable uptick this year...

...or maybe it's just another useless survey signal?

Tyler Durden Fri, 09/18/2026 - 09:30

Defense Stocks Fall Out Of Favor. Polymarket Might Have The Answer As To Why

The S&P Aerospace & Defense Select Industry Index is little changed year to date, despite conflicts across Eurasia and expectations that a coming rearmament cycle will substantially boost missile and bomb production. The muted performance highlights a disconnect between investor appetite and the Trump administration's anticipated expansion of defense production.

Allyson Gordon, UBS head of Americas sector specialists, explained in a note to clients on Thursday that US aerospace and defense stocks were being weighed down by elevated bond yields and weakness in individual names.

ATI, Carpenter Technology, RTX and Lockheed Martin were among the names drawing attention, Gordon said. She said her trading desk attributed much of the weakness to broader sentiment and investor fatigue with the aerospace trade, rather than a clear deterioration in operating conditions.

"Some investors have pointed to Wednesday's weakness in Boeing as a possible contributor to today's pressure on original equipment names, although the desk has not heard anything from recent management meetings that would explain the magnitude of the move. In fact, recent feedback has generally been more constructive. On the aftermarket side, GE was said to have delivered a confident message on demand trends, with no signs of weakness emerging in 2026 or 2027," the analyst said. 

She continued: 

Defense shares also struggled, with LMT coming under pressure during management commentary on margins. However, the reaction appeared larger than any incremental change in the company's message versus Q2. More broadly, the sector has fallen back out of favor following the post-Q2 earnings squeeze, and investors remain reluctant to add exposure despite increasingly reasonable valuations. Feedback around Gavin's recent LMT upgrade has largely centered on a wait-and-see approach, with many investors preferring to stay on the sidelines until after the midterms.

The desk continues to field questions about whether defense could serve as a relative refuge amid broader market volatility. While that argument reflects a market increasingly driven by a process of elimination, investor interest has recently gravitated more toward select government IT names, where positive reactions to Q2 results have shown greater staying power.

A chart comparing the inverse 30-year Treasury yield with the UBS Aerospace basket highlights how a wide divergence that emerged earlier this summer has now largely closed, underscoring the extent to which aerospace equities have repriced alongside the rates backdrop.

The broader problem for defense bulls is a lack of willing buyers. Following a rally after second-quarter earnings, the sector has slipped out of favor again. Why is that?

One possible explanation is investor concern that a change in Senate control could complicate negotiations over the timing, size, and composition of defense funding. Congress determines appropriations, making congressional negotiations key to the funding process.

Our chart compares Polymarket pricing on Senate control after the midterms with the S&P Aerospace & Defense Select Industry Index, with one series inverted. The comparison may suggest why investors are exiting the trade. 

Beyond the repricing of defense stocks due to rising bond yields that Gordon described, uncertainty surrounding post-election defense funding negotiations offers another reasonable explanation for investor caution.

Tyler Durden Fri, 09/18/2026 - 09:20

Adult Film Stars Join Left-Wing Voter Registration Push Ahead Of Midterms

Via American Greatness,

A progressive voter-registration group is turning to adult film performers and a $100,000 advertising campaign in an effort to reach Georgia voters ahead of November’s midterm elections.

Hot2Vote’s Atlanta campaign features about 100 adult performers urging residents to check their voter-registration status, according to reporting Thursday on the effort.

The campaign is expected to use digital advertising, videos, pin-up-style posters and appearances, with some ads geographically targeted around adult entertainment venues.

Adult performers Kimmy Kimm, Cherie DeVille and King Noire are among those participating in videos directing Georgians to verify their registration.

The effort follows significant maintenance of Georgia’s voter rolls. In 2025, Secretary of State Brad Raffensperger’s office sent cancellation notices to 477,883 registrations that had remained inactive through the 2022 and 2024 general elections. State officials said the process was required under state and federal law and gave affected voters 40 days to respond before cancellation.

The cancellations have faced a legal challenge from voting-rights groups. Raffensperger’s office said in March that the lawsuit concerns nearly half a million inactive registrations canceled in 2025 and maintains the removals complied with state and federal requirements.

Georgia’s general election is scheduled for Nov. 3.

* * * Order by midnight Sunday

Tyler Durden Fri, 09/18/2026 - 09:00

Futures Flat Ahead Of Massive $7 Trillion Quad-Witching As Yields Resume Rise

US stock futures are little changed on Friday, with big tech stocks rising while sentiment is supported by another modest decline in oil prices; a near-record $7 trillion quad-witching and index rebalances add to Friday's set-up. US tariff-delay hopes, a flattening US curve and softer diesel and WTI prices ease inflation concerns, while AI bulls are back in charge. As of 8:00am ET, S&P 500 futures rose 0.1% to 7,713.25, erasing modest gains, while Nasdaq futures rise 0.3% as the market momentum after the risk-on rally yesterday holding well into today’s session with Tech continuing its leadership. In premarket trading, Mag 7 stocks are mostly higher led by GOOG/L (+2.0%); AMZN is flat after the 5% rally yesterday amid a long-term deal with Generac. Meanwhile, Brent crude traded near $104 a barrel. The dollar climbed 0.2%, while gold rose toward $4,400 an ounce. Treasuries resumed losses after a brief rebound, with the 10-year yield up three basis points to 4.97%. Overnight, the BOJ hiked by 25bps as expected, but the vote split skewed dovish as two Takaichi-appointed members dissented, which sent the yen sharply lower (USDJPY breaking above 157 for first time since early Sept) and Japanese stocks rallying (Tech > Banks). The USD is higher post BOJ decision. Oil is unchanged this morning; both precious and base metals are higher. Today’s macro data focus is on Industrial Production and Leading Index which are not expected to be market moving.

In premarket trading, Mag 7 stocks are mostly higher: Alphabet is leading Magnificent 7 peers higher as technology and AI-related stocks boost the US stock futures. Meanwhile, Apple underperforms the cohort (Alphabet +2.4%, Nvidia +0.4%, Apple +0.1%, Tesla +0.5%, Amazon +0.5%, Microsoft -0.1%, Meta +0.7%).

• Cryptocurrency-linked stocks are rallying in premarket trading, set to extend gains, after US SEC greenlit digital versions of securities to start trading in the US.
• European telecom stocks sold off on Friday, following US-listed peers lower, amid concerns over competition from satellite operators and disruptive impact from agentic AI tools.
• Fluence Energy Inc. received another downgrade on Friday, with Jefferies cutting the energy storage company to hold from buy, citing a recent cut to the company’s outlook.
• Intuit shares are little changed in premarket trading, after the tax-preparation software company hosted an investor day where it gave financial targets and discussed its strategy to deliver higher growth. Analysts say the stock remains a show-me story as the company navigates the AI era.
• Macom Technology Solutions Holdings Inc. shares are up 2.1% in premarket trading, after BMO Capital Markets upgraded the semiconductor device company to outperform from market perform, seeing an attractive valuation in the wake of recent weakness.
• Netflix shares drop 2.9% in premarket trading as Wells Fargo Securities downgrades to underweight from equal-weight, citing “worrying” engagement trends.
• Nvidia Corp. Chief Executive Officer Jensen Huang expects to sell twice as many chips in the coming year, fueled by the spread of artificial intelligence across different industries.
• Stubhub shares gain 3.5% in premarket trading as Citi upgrades to buy from neutral, citing “robust” third-quarter trends. .
• Tyson Foods shares are up 1.4% ahead of the bell as JPMorgan upgrades the meat producer to overweight from neutral.
• Xenon shares tumble 27% in premarket trading Friday after the bio-pharmaceutical firm voluntarily paused enrollment in clinical studies of major depressive disorder (MDD) and bipolar depression (BPD).

In other corporate news, Berkshire Hathaway Inc. founder Warren Buffett is stepping down as the company’s chairman to be replaced by his son Howard. SoftBank Group Corp. has increased its margin loan backed by shares of its chip unit Arm Holdings Plc by $5 billion to $25 billion, according to people familiar with the matter. Russia seized control of the local assets of Swiss food giant Nestle SA and French supermarket chain Auchan, placing their stakes in Russian businesses under temporary administration. More than a quarter of Anthropic PBC’s research and development work for artificial intelligence is driven by its Claude chatbot, according to the company. Morgan Stanley and CIBC have won the mandate to advise the Canadian government on selling the operating rights to the country’s four largest airports. Malaysia Airlines’s parent is said to be closing in on an order for Boeing 787 Dreamliners as the carrier seeks to renew its long-haul fleet.

Today's quieter tone signals a notable shift for markets that started the week with Brent crude at a four-month high, 10-year Treasury yields at levels seen 19 years ago and chipmakers under pressure on concerns that AI poses an existential risk to humanity. Since then, a US interest-rate hike has helped shore up the Federal Reserve’s inflation-fighting credibility, worries over crude supplies from the Middle East have eased and a persistent supply-demand imbalance in chips continues to underpin robust profit outlooks for semiconductor companies.

Friday’s main event saw the Bank of Japan raise its benchmark rate as widely expected, though in a split decision. The yen weakened 1.2% against the dollar after two board members voted against the hike, suggesting the bank may not embark on a series of increases as quickly as initially anticipated.  

Developments in the Middle East and the outlook for global rates will be the main steer for traders in the coming weeks, said Roberto Scholtes at Singular Bank. The risk of further energy-supply disruptions from the Iran war came back into view Friday as Saudi Aramco told some refining customers in Europe they won’t be allocated crude next month.

“Energy prices and monetary policy expectations will remain the main market drivers until the third-quarter earnings season begins,” Scholtes said. “The US midterm elections will gradually move into the spotlight, especially if leading candidates put forward bold policy proposals.”

An easing of geopolitical tensions should help both bonds and equities, according to Mohit Kumar at Jefferies. “The first couple of weeks of October could be a sweet spot to get some form of a deal between US and Iran, even if it’s a fudge,” Kumar wrote. “We are at a local peak in geopolitical tensions and see improvement in the coming weeks.”

Friday's quad-witching option expiration may remove positioning that has dampened realized moves, Citadel Securities says, with about $7 trillion of options notional value set to expire, one of the largest ever. Meanwhile Bloomberg notes that the equity dispersion trade’s golden age may be ending, with single stock volatility’s premium relative to the VIX plunging since July.

With the Fed’s communications blackout ending after Wednesday’s rate decision, focus on the policy outlook will shift back to the views of voting officials. Fed Vice Chair for Supervision Michelle Bowman is scheduled to deliver a speech in London on Friday.

US equity funds had the biggest weekly inflows in three months at $63.8 billion, according to BofA, citing EPFR data through Sept. 16. Index rebalances after the close tonight include Bloom Energy, Illumina and Everpure into the S&P 500 and SpaceX will get a weighting boost from a Nasdaq 100 rebalance.

In poltiics, the US is expected to hold off announcing new tariffs on China and other trading partners until after next week’s summit between Presidents Xi Jinping and Donald Trump. AI is widely expected to be a central topic at the event, with access to advanced US chips and safety standards among key points of contention. 

And on the subject of AI, SoftBank increased its margin loan backed by shares of its chip unit Arm Holdings by $5 billion to $25 billion, as the conglomerate finds ways to fund its expanding investments in AI. Software’s recovery, having been left for dead earlier by in the year by perceived imminent AI threats, is the focus of today’s Tech Watch.

Europe's Stoxx 600 falls 0.4% to 640.2 with Nestlé in the red after a decree from Russia’s President about its operations in the country. The telecom and insurance sectors weigh the most, while technology and healthcare are among the few gainers. Still, the region is set for its first weekly advance in three as oil retreats on optimism about diplomacy between the US and Iran. Here are some of the biggest movers on Friday:

• Infineon shares rise as much as 3.8% after being upgraded at Oddo BHF, which recommends investors return to the stock following a recent de-rating.
• Adecco rises as much as 2.1% as Bank of America says its underperform thesis on the company has played out, with the stock having derated ~40% between August 2023 and June 2026 due to two years of negative EPS revisions.
• Softcat shares fluctuate after the IT reseller raised guidance for FY26 operating profit growth, while announcing an acquisition that was partially funded by an equity raise.
• Nestlé shares drop as much as 1.9% after Russian President Vladimir Putin signed a decree transferring stakes in the firm’s local unit into temporary administration.
• Orange shares fall as much as 4.5% after the carrier was downgraded to underweight by analysts at Morgan Stanley, who see multiple headwinds ahead for the carrier.

Asian stocks rose, driven by gains in chipmakers as tech sentiment got a lift from declines in oil prices and a bullish outlook from Nvidia. Japanese stocks advanced after the nation’s central bank raised rates, as expected. The MSCI Asia Pacific Index climbed as much as 1% before paring some of the gains, with SK Hynix, Samsung and TSMC among the biggest boosts. A Bloomberg gauge of Asian chipmakers rose 3.5%, though most sectors beyond tech declined. South Korea’s Kospi led advances among regional benchmarks, rising 2.7%, while Taiwan, China and Hong Kong also gained. The tech-driven gains underscore the resilience of the AI trade even as the broader backdrop for Asian equities has become more challenging. The Fed Reserve and BOJ have tightened policy, while still-elevated crude and global bond yields have added pressure on financial conditions. Investors are still optimistic that strong tech earnings will help broader equities markets withstand headwinds. Chinese optical technology stocks rose after Huawei said it’s set to ship its first near-packaged optics modules in the coming quarters. Shares of Chinese robotics component suppliers extended gains after a local media report said that Tesla has begun a new round of audits at local firms to support mass production of its Optimus humanoid robot. Elsewhere, Philippines’ benchmark index was the biggest decliner in Asia and dropped the most in three weeks on expectations of higher local energy cost after rising oil prices.

In FX, the yen tumbles to 158 as Bank of Japan Governor Ueda’s comments following a split-vote hike by the central bank failed to meet traders’ hawkish expectations. The Bloomberg Dollar Spot Index is up by 0.1% and currency moves beyond the yen are relatively muted.

In rates, treasuries hold front-end-led losses in early US session, flattening key yield-curve spreads amid similar price action in bunds and gilts. US 2s10s is testing YTD lows reached in June, and 5s30s is lowest since March 2025, extending moves spurred by Wednesday’s Fed meeting.US front-end yields are 4bp-5bp cheaper on the day, flattening 2s10s by 2bp to 24bp, within 1bp of its June low; 5s30s is nearly 4bp flatter near 46bp; the 10-year is higher by 4bp near 4.97% with UK and German counterparts higher by 4.4bp and 2.5bp respectively. IG dollar issuance slate contains a couple of offerings so far; six were priced Thursday totaling $21 billion, with issuer paying about 3bp on deals that were 4.4 times oversubscribed. Dealer expectations for next week’s volume have been in the $35 billion area. Next week’s Treasury auctions include 2-, 5- and 7-year notes commencing Sept. 22.

In commodities, WTI crude oil futures are flat at $96, erasing an earlier drop. Gold is rising, nearing $4,400/oz.

US economic data slate includes August industrial production (9:15 a.m.) and August Leading Index (10 a.m.). Fed speaker slate includes Governor Bowman (9:30 a.m.) and Kansas City’s Schmid (11:45 a.m.).

Market Snapshot

Top Overnight News

• Pakistan’s army chief has urged Iran to try to rein in Houthi attacks on Saudi Arabia, referencing their mutual defense agreement with Riyadh. FT
• China has privately asked Tehran to help rein in Yemen's Houthis after an appeal to Beijing by Saudi Arabia following the Iran-backed group's military blitz in the past week. RTRS
• The Trump administration has approved visas for top Iranian officials, including the president and foreign minister, to attend next week’s U.N. General Assembly high-level meeting in New York even as the two countries are locked in a stalemated war. AP
• Amazon said AI models should be released only when “ready and safe,” calling for rigorous testing, safeguards and industry cooperation with government. BBG
• Cyber researchers broke into OpenAI using its key rival Anthropic’s software, highlighting vulnerabilities in the ChatGPT maker’s security as leading AI companies face mounting scrutiny over safety. FT
• The BoJ has raised interest rates to a 31-year high, accelerating monetary policy normalization under mounting pressure from Washington but failing to arrest an ongoing slide in the yen. The BoJ’s policy board on Friday voted for a 0.25 percentage point increase by a 7-2 margin, taking its target rate to about 1.25 percent. FT
• Turkey turned to two major banks to oversee the liquidation of 131 investment funds holding more than $18 billion. The move follows a week of turmoil in Turkey’s fund industry after funds at Tera and Pusula said they were unable to meet some investor redemption requests. BBG
• Reserve Bank of Australia Gov. Michele Bullock warned Friday that the central bank’s concerns regarding stubborn inflation are materializing. Inflation remains “too high” and recent developments suggest that “some upside risks to inflation appear to be materializing,” Bullock said in a testimony before parliament. WSJ
• Strategists are the most bullish on European stocks for September since 2018, a Bloomberg survey showed, as strong earnings help cushion the impact of energy prices and rising bond yields. BBG
• OpenAI CEO Altman, NVIDIA (NVDA) CEO Huang and Qualcomm (QCOM) CEO Amon plan to attend the Trump-Xi dinner next week, with AI expected to be a key focus in the summit on September 24th: Politico 
• The US administration is set to announce that all states will see MFN pricing for certain drugs in Medicaid programmes: Semafor
• US Department of Agriculture confirmed a case of New World screwworm in a horse in Grant County, New Mexico, marking the state's second case since the parasite entered from Mexico in June.

A more detailed look at global markets courtesy of newsquawk

APAC stocks were mostly higher as the region took impetus from the gains on Wall Street, where markets reversed the post-FOMC moves amid a Fed credibility boost and lower oil prices. ASX 200 lagged with the index range-bound trade as gains in tech and miners were counterbalanced by weakness in defensives, telecoms, energy and financials, while there were comments from RBA Governor Bullock that lowering inflation is essential and that the key question is whether the tightening in monetary policy to date will be sufficient to bring inflation back to the target in a reasonable time. Nikkei 225 rallied following the BoJ announcement to hike rates by 25bps, as widely expected, with the decision made by a 7-2 vote as Takaichi-appointed board members Asada and Sato dissented. The language from the central bank reaffirmed a hiking bias but didn't signal any major urgency, noting it will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving the inflation target, while the latest inflation data from Japan printed softer-than-expected on all key metrics of the report. KOSPI advanced with tech stocks buoyed following the outperformance in the Nasdaq stateside, while South Korean President Lee ruled out sending troops to the Strait of Hormuz. Hang Seng and Shanghai Comp conformed to the broad positive mood, with reports noting that the US is expected to delay announcing excess manufacturing capacity tariffs till after the Trump-Xi summit, while MOFCOM said Chinese and US trade teams remain in close contact over negotiations on mutual tariff reductions covering USD 30bln. In addition, the PBoC conducted 7-day and 14-day reverse repo operations ahead of the National Day holidays in early October.

Top Asian News

• Japanese Finance Minister Katayama said they will work to maintain an orderly FX market and will not hesitate to conduct further coordinated forex intervention. She added that they maintain close communication with financial authorities of other nations on FX and that it is important to maintain order regarding exchange rates and interest rates.
• Japan Economy Minister Kiuchi expects the BoJ to conduct appropriate monetary policy to sustainably and stably achieve its price target while working closely with the government, adding that details of monetary policy are for the BoJ to decide.

European bourses have started the final trading session of the week on the backfoot, despite the constructive risk tone in Asia-Pac equities and the downside seen in energy benchmarks. Optimism in Europe has risen and according to a Bloomberg poll, the STOXX 600 will finish 2026 at 670, implying gains of 5% from Wednesday's close. HSBC analysts highlight the improving macroeconomic data as a driver for the upbeat tone in Europe, while welcoming any downside in energy prices. Sectors point to a negative bias. Telecoms is the sector laggard, followed by Insurance and Retail. On the other hand, Tech is the sector outperformer, with Health Care and Industrials rounding out the sector gainers.

Top European News

• ECB Consumer Expectations Survey (Aug): 1-year 3.0% (prev. 2.9%), 3-year 2.9% (prev. 2.7%), 5-year 2.5% (prev. 2.4%).
• UK Retail Sales (Aug MM) 0.5% vs. Exp. -0.2% (Prev. -0.5%).
• UK Retail Sales (Aug YY) 2.4% vs. Exp. 1.9% (Prev. 1.2%).
• UK Retail Sales ex Fuel (Aug MM) 0.6% vs. Exp. -0.2% (Prev. -0.9%).
• UK Retail Sales ex Fuel (Aug YY) 2.7% vs. Exp. 1.9% (Prev. 1.8%).
• German PPI (Aug MM) 1.1% vs. Exp. 0.4% (Prev. 1.1%).
• German PPI (Aug YY) 4.6% vs. Exp. 4.1% (Prev. 3.0%).

FX

• Snapshot: G10s are mixed against the USD; the Aussie slightly outperforms, whilst the JPY is the clear laggard following the BoJ’s policy announcement.
• DXY is mildly firmer this morning and currently holds within a fairly narrow 100.19-38 range. The index still remains towards post-FOMC highs, benefiting from higher energy prices and as markets pull forward their calls for further hikes this year.
• The JPY is the clear underperformer this morning, after the BoJ decided to lift rates by 25bps (as expected), with the decision made by a 7-2 vote split. The two dissenters were PM Takaichi “reflationist” members; Asada noted that the economy was not strong enough, whilst Sato believed that price developments had not substantially accelerated. The announcement itself spurred immediate pressure in the JPY, given the two surprise dissenters and after the BoJ avoided any guidance surrounding a faster pace of rate hikes. Governor Ueda’s presser thereafter saw Ueda also strike a dovish tone, where he highlighted that easy monetary conditions are expected to be maintained, adding that rates have tightened, but bank lending and asset markets remain accommodative. USD/JPY is stronger by c. 1.3% on the session so far, and currently holding at the upper end of a 155.87-158.06 range. No doubt, if the theme of widening differentials between the Fed and BoJ returns, USD/JPY will likely head back towards the 158-160 range.
• EUR is mildly firmer this morning, amidst a slew of ECB speak, where a number of members are currently in Ireland for an informal meeting of EU ministers. ECB’s Kaasik and Kazaks struck a hawkish tone, with the latter suggesting that a September hike is unlikely to be the last, “unless we find ourselves in a very different scenario than the baseline”. Elsewhere, President Lagarde reiterated that they are not seeing second-round effects. A recent Bloomberg survey showed that economists believe that the Bank will wait until December before delivering a final interest-rate increase to quell inflation triggered by conflict in the Middle East.

Fixed Income

• Global fixed benchmarks are lower this morning. USTs (-3 ticks) are trading on either side of the unchanged mark, whilst Bunds (-30 ticks) and Gilts (-41 ticks) underperform. Pressure today for the latter two is likely an accumulation of factors: 1) BoJ rate hike, 2) elevated energy prices, 3) paring of recent BoE-related strength, 4) hawkish central bank speak from the ECB.
• JGBs are net firmer today, following the BoJ’s decision to hike rates by 25bps to 1.25%. However, the decision was subject to dovish dissent, which saw PM Takaichi's “reflationist” appointees vote to hold rates; Asada noted that the economy was not strong enough, whilst Sato believed that price developments had not substantially accelerated. The presser thereafter saw Ueda also strike a dovish tone, where he highlighted that easy monetary conditions are expected to be maintained, adding that rates have tightened, but bank lending and asset markets remain accommodative. The JGB curve is steepening this morning (in contrast to global peers which are flattening), with underperformance in the short end given the dovish tone from the meeting/Ueda.
• USTs are flat, trading on either side of the unchanged mark. Some strength was seen in early morning trade alongside the pressure in energy prices, but this ultimately reversed. Ultimately, USTs are subdued this morning, following global peers with worldwide central banks shifting hawkish – the BoJ the latest to do so. Markets will get clarity out of the Fed later today, with Schmid and Bowman on the docket.
• It is worth highlighting that yields are bear-flattening this morning; this indicates that elevated energy prices and hawkish repricing are the main themes in traders’ minds. The US 2s10s currently holds around 24bps vs 34bps earlier in the week.
• Bunds have had a number of hawkish ECB speeches today, namely Kaasik and Kazaks. This may, in part, be weighing on the benchmark this morning. A recent Bloomberg survey showed that economists believe that the Bank will wait until December before delivering a final interest-rate increase to quell inflation triggered by conflict in the Middle East. Bunds will eye the Mecklenburg-Vorpommern state election, particularly in the context of the AfD’s strong showing in Saxony-Anhalt a few weeks ago.
• Australia sells AUD 1.0bln 1.00% November 2031 bonds: b/c 4.47x, average yield 4.9936%.

Commodites

• Crude benchmarks continue to pull back from its peak seen earlier in the week, with escalatory strikes in the Gulf seemingly slowing down. There were a couple of UKMTO reports, which failed to move markets as traders now focus on next steps over any potential end to the war. Overnight, US President Trump told Axios he is at a "critical juncture" regarding the war in Iran, weighing whether to launch massive new attacks or pursue a different path to end the conflict. Further, this morning, a source close to the Iranian negotiating team said Tehran has informed Washington, via intermediaries, of its conditions for reopening the Strait of Hormuz, with the minimum conditions based on the “Islamabad understanding”, according to Al-Akhbar. WTI Oct'26 rotates in a USD 99.39-101.57/bbl range while Brent Nov'26 trades either side of the USD 103/bbl mark (USD 101.92-104.27/bbl range).
• Precious metals continue to climb post-Fed, with spot gold currently trading at the upper end of its USD 4,334-4,400/oz range. The narrative behind the recent gold upside seems to come from lower yields and energy prices, tempering worries of inflation.
• 3M LME Copper regains the USD 14.5k/t handle and rose to levels just shy of USD 14.6k/t, as the red metal prepares for its 4th consecutive day of gains. Supporting copper gains are signs that Chinese demand is re-entering the market. The Yangshan premium, a gauge of copper demand, rose to its highest level since November 2022 while domestic copper production fell slightly in August.
• Saudi Arabia has sold about 60mln barrels of crude from its Ras Tanura port inside the Strait of Hormuz for loading in September and October, Reuters reported citing sources.
• Venezuela nears an agreement to move USD 4bln gold reserve to New York which would allow the interim government to access funding, according to FT.

Central Banks

• BoJ hiked rates by 25bps to 1.25%, as expected, with the decision made by a 7-2 vote as board members Asada and Sato dissented and voted to hold. BoJ said it will continue to raise rates in response to economic and price developments as well as financial conditions. BoJ said inflation expectations are heightening moderately, with underlying inflation approaching 2%, and it will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving the inflation target. Furthermore, it said the accommodative financial environment will be sustained after the policy rate change, thereby supporting economic activity, and it is necessary to pay attention to the impact of the Middle East situation on financial and FX markets, the economy and prices. In terms of the dissenters, who are both known reflationists appointed by PM Takaichi, BoJ's Asada considered that with the rate of increase in the core CPI below 2% recently, it could not necessarily be said that the economic situation was strong and it was desirable for the Bank to maintain the guideline for money market operations, while Sato considered current economic and price developments did not appear to have substantially accelerated compared with before, and in this context, it was not appropriate for the Bank to raise the policy interest rate at this time.
• Overall, Ueda’s press conference did not signal any urgency to accelerate the pace of tightening. He mentioned that easy monetary conditions are expected to be maintained, adding that rates have tightened, but bank lending and asset markets remain accommodative. One hawkish aspect of the presser was that Ueda suggested that the BoJ believes the phase of policy has changed. However, he later clarified that this meant that the objective is now to stabilise underlying inflation at around 2%, essentially removing the initial hawkish remark. Ueda also did not mention anything related to increasing the pace of future rate hikes, which further added to the dovish tone.
• RBA's Governor Bullock said various indicators continue to suggest labour market conditions remain close to, but a little tighter than full employment, while she added that monetary policy is well placed to respond to developments. Bullock said lowering inflation is essential, and the key question is whether the tightening in monetary policy to date will be sufficient to bring inflation back to the target in a reasonable time. Furthermore, she stated they are in a world of higher-for-longer oil prices and that businesses are now more inclined to pass on cost increases.
• ECB President Lagarde, speaking on RTE Radio, said growth is a bit more promising than we thought and that they are not seeing second round effects yet. She also reiterated a meeting-by-meeting approach.
• ECB's Vujcic said market bets on further ECB rate hikes are being largely driven by higher energy prices and will look at a wider set of economic indicators when deciding the next policy move. Vujcic said higher inflation through Autumn will dampen GDP. On the current rate hike pace, he said it is worth keeping for the time being.
• ECB's Kazaks, speaking to Bloomberg, said the ECB must do everything to avoid second round effects and that all meetings are live meetings. On the neutral rate, he said they are near the upper end of neutral and that quite likely restrictive policy will be needed. Elsewhere, Kazaks told Econostream that the September hike will unlikely to be the last "unless we find ourselves in a very different scenario than the baseline". Kazaks highlighted that an October hike would still be consistent with the September projections. On considering the size of the moves, he said that if the move in inflation is very strong or core inflation is moving up, the ECB can take bigger steps.
• ECB's Kaasik said more tightening needed if inflation risks materialise but that the exact level of neutral rate is not a big concern now.

Geopolitics: Iran

• Source close to the Iranian negotiating team said Tehran has informed Washington, via intermediaries, of its conditions for reopening the Strait of Hormuz, with the minimum conditions based on the “Islamabad understanding”, according to Al-Akhbar.
• US State Department said the US will continue to bar Iranian UN mission officials, visiting officials and their dependents from purchasing wholesale club memberships or luxury goods, and urged New York area retailers to avoid complicity in violations.
• US is reportedly expected to send MQ-9 Reaper drones to South America, CNN reported citing sources. The report added that the plan is part of counternarcotics and counterterror operations and that there are still discussions on whether to send some drones to the Middle East.
• UKMTO received a report of an incident in the Strait of Hormuz. The CSO of a vessel has reported a tanker being hit by an unknown projectile causing a fire, which was extinguished.
• IRGC said Togolese-flagged tanker 'Trend' was hit and stopped after a fire, while it stated the tanker violated Hormuz rules and that the US instigated the transit.
• Houthis are reportedly expanding its minefield in Bab al-Mandab and Dhubab, Al Araby reported.
• South Korea President Lee said several countries are deploying military assets near the Strait of Hormuz, and added that they won't deploy troops to join conflict but limited actions to safeguard South Korean economic interests and citizens are possible.

Geopolitics: Ukraine/Other

• Turkish President Erdogan and US President Trump may discuss initiatives for negotiations on Ukraine in New York, RIA reported citing sources.
• US President Trump is making plans for the first-ever meeting with Venezuela's interim President Rodriguez as early as next week, although a meeting is not finalised, according to Axios.
• North Korea leader Kim's sister said there is no change to the course of strengthening nuclear war deterrence and the US-led multinational drills are the main source of worsening tensions on the peninsula.

US Event Calendar

• 9:15 am: August Industrial Production MoM, est 0.3%, prior 0.2%
• 9:15 am: August Manufacturing Production MoM, est 0.3%, prior 0.2%
• 9:15 am: August Capacity Utilization, est 76.4%, prior 76.3%
• 10 am: August Leading Index, est 0.1%, prior 0.2%

DB's Jim Reid concludes the overnight wrap

Welcome to the end of the week as I hit day 8 of manflu, a variant passed on by my 11-year-old daughter who was ill with it for precisely 18 hours. In other injury news, I've slightly sprained my wrist awkwardly cutting up a mango! I'll add that to the list of ailments my body is currently processing.  

Distracting me as I try to type through the slight pain, the main story overnight is that the Bank of Japan have delivered another 25bp rate hike, taking their policy rate up to its highest since 1995, at 1.25%. This is the second of the year and the 6th since they started hiking in March 2024. The move follows on from the Fed’s hike on Wednesday, and the ECB’s hike last week, which leaves us in little doubt we’re in a globally synchronised cycle of rate hikes again, with more likely ahead from all three.

Having said that, it was a more dovish hike than expected, with Ayano Sato and Toichiro Asada calling for a hold on the grounds that Japan’s economic outlook was uncertain. Both dissenters were appointed by Prime Minister Sanae Takaichi to the board. So there is some suggestion that this may infer less political support for the rate hike than has perhaps been indicated by US Treasury Secretary Bessent who has been quite firm on the fact that the US and Japan are aligned.

So although the central bank reiterated that it will continue raising rates if economic and inflation conditions evolve as projected, the market has reacted to the two high profile dissenters. The Yen is -0.72% lower at 157.10, having been at around 153.40 at the start of the week and the JGB curve has steepened, with 2yrs -2.2bps and 30yrs +3.2bps.  We'll see what the BOJ press conference brings at 7:30am London time.

The BOJ decision came just hours after the release of August inflation data, which showed price pressures remaining broadly stable and close to the central bank’s target. Core CPI, which excludes volatile fresh food prices, rose 1.7% year-over-year in August, slightly below market expectations of 1.8% and down marginally from the previous reading. Meanwhile, core-core CPI, a key measure of underlying inflation closely monitored by the BOJ, remained unchanged at 1.9%. Headline CPI also increased 1.9% year-over-year, matching the pace recorded in the previous month and reinforcing the view that inflation remains relatively stable.

The Nikkei (+1.67%) has moved higher on the back of the weaker Yen but Asia is stronger anyway following on from the global rally yesterday. The KOSPI (+2.59%) is leading regional gains, with semiconductor stocks extending yesterday’s rally. Meanwhile, mainland Chinese equities are posting solid advances, with the CSI 300 (+1.05%) and Shanghai Composite (+1.04%) both sharply higher, while the Hang Seng (+0.67%) is recording more modest gains. Elsewhere, the S&P/ASX 200 (-0.02%) is little changed and S&P 500 and Nasdaq futures are both +0.14% higher.

The yuan has strengthened to its highest level in more than four years as the PBOC continue to guide the currency higher ahead of next week’s planned meeting between Chinese President Xi Jinping and US President Donald Trump, where trade relations are expected to be a key focus. The offshore yuan is advancing +0.14% to 6.695 per dollar, marking its strongest level since July 2022. The PBOC also set a firmer daily fixing for the eighth consecutive session, the longest such streak since 2023.

Those overnight developments come after a very strong session yesterday, with markets rallying thanks to a clear drop in oil prices and a decent batch of US data. Indeed, the S&P 500 (+1.14%) posted its best day in over a month, whilst the 10yr Treasury yield (-9.2bps) saw its biggest daily decline since June as it ended a run of eight consecutive increases. So even though the first half of September was very weak, living up to the month’s bearish reputation, yesterday brought a clear shift in momentum and more positivity on the near-term outlook.

The reality is that although seasonals matter, the oil price probably matters more at the moment. And yesterday the oil price decline was the biggest catalyst, with Brent crude having now fallen by more than 3.5% in the last couple of sessions, closing yesterday at $104.82/bbl, and now another -1.35% lower in Asia. In part, the move was supported by the previous day’s news that Saudi Arabia was working to restore the damaged East-West pipeline. But oil then took a further slide after a Reuters report yesterday that China had privately asked Iran to help rein in the Houthis. So that added to hopes that the supply disruption might fade, and Brent crude came down -0.95% on the day.

With inflationary pressures coming down, that helped sovereign bonds to rally on both sides of the Atlantic. That was clearest for US Treasuries, as the Fed’s hike on Wednesday added to hopes that inflation would come down over the months ahead. So the 2yr yield (-7.3bps) was down to 4.66%, the 10yr yield (-9.2bps) fell back to 4.93%, and the 30yr yield (-7.7bps) fell to 5.28%. Interestingly, that now leaves the 2s30s yield curve at its flattest level since March 2025, at 62bps. Remember as well that the Fed’s blackout period around the meeting ends today, so we’ll start to hear from officials again and learn how they’re thinking about future rate hikes in the months ahead.

Whilst Treasuries were rallying, it was also a strong day for equities, which recovered from the previous day’s declines after the Fed. That was partly thanks to lower energy prices, but we also had a strong batch of US labour market data which cemented the view that the economy remained in good shape. For instance, the weekly initial jobless claims fell to 196k in the week ending September 12 (vs. 207k expected). Moreover, the continuing claims for the previous week fell to the lowest since January 2024, at just 1.730m (vs. 1.779m expected). So that kept up the optimism around US growth, and the S&P 500 (+1.14%) bounced back after a run of 3 consecutive declines. Chip stocks led the gains, with the Philly semiconductor index (+3.14%) posting one of the biggest outperformances yesterday, but there was strength across the tech space, with the NASDAQ up +1.69%.

Earlier in Europe, the main story came from the Bank of England, who kept rates on hold at 3.75%. The decision was in line with consensus, and the vote split of 6-3 to hold rather than hike was also expected, so there wasn’t a direct market reaction to that. However, there was a big rally in long-dated gilts after the BoE announced an adjustment in its QT plan, including an end to sales of longer maturity gilts. So they said that the gilts with redemption dates from 2049-2071 would be held to maturity by the Bank, with the purpose of indirectly backing current and future banknote issuance. Moreover, they said that QT sales would be paused until April 2027 as they worked through the operational details for the rest of the plan. So that meant the 30yr yield (-12.1bps) saw its biggest daily decline since May, coming down to 5.74%, whilst the 50yr yield (-17.9bps) saw its biggest decline since February 2023, coming down to 5.20%. Meanwhile, 10yr gilt yields (-7.4bps to 5.22%) extended their two-day move to -16.6bps, the sharpest such decline since last April.

On the rates decision, the BoE statement was clear that the Bank might be edging towards a hike, saying that the risk of second-round effects on inflation “is greater the longer higher energy prices persist or are more volatile.” Moreover, they said that “the risks to the inflation outlook are tilted to the upside, and more so than at the time of the July Monetary Policy Report”. Nevertheless, the fact they held, and the vote split remained at 6-3, suggested there wasn’t immediate momentum for a hike, and market pricing slightly dialled back the chance of a hike by the next meeting in November. So on Wednesday, investors were pricing in a 93% chance of a hike by the time of the November meeting, but that was down to 83% by the close yesterday. In turn, that helped yields at shorter maturities to come down as well, with the 2yr yield (-2.2bps) falling to 4.73%.

Elsewhere in Europe, the picture was also one of solid gains, as the respite on energy prices lifted assets across the continent. So that meant equities rebounded, with the STOXX 600 (+0.86%) posting its best daily performance in over two months. And for bonds, we saw 10yr yields on bunds (-2.9bps), OATs (-2.3bps) and BTPs (-2.4bps) all fall back as well.

Looking at the day ahead, data releases include US industrial production and capacity utilization for August, along with UK retail sales and German PPI for August. We’ll also hear from ECB President Lagarde, the Fed’s Bowman and Schmid, and we’ll get the ECB’s latest Consumer Expectations Survey.

Tyler Durden Fri, 09/18/2026 - 08:38

Winter Is Coming: Saudis Warn European Refiners Of Crude Shipment Disruptions Next Month

Hopes earlier this week that Saudi Arabia could restore roughly half the capacity of its East-West pipeline and resume crude loadings for Europe faded by the end of the week. The pipeline bypasses the Strait of Hormuz and carries crude to a Red Sea export terminal, making its recovery critical to restoring disrupted shipments to the energy-stricken continent.

Bloomberg reports that Saudi Aramco told at least two European refiners they would receive no crude deliveries next month, with the decision reportedly extending to all European buyers.

The suspension would force refiners to secure replacement barrels elsewhere and bid up crude in international markets, potentially raising feedstock costs and adding pressure to Europe's petroleum products market ahead of the Northern Hemisphere winter, when already tight diesel and natural gas supplies leave limited room for further disruptions.

OECD countries in Europe imported 577,000 barrels a day of Saudi crude in June, according to the latest data from the International Energy Agency. That figure illustrates the scale of the disruption.

Some European buyers are already panicking and rushing to cover the shortfall. Poland's Orlen has issued more than 10 tenders this week seeking alternative supplies, highlighting the urgency of replacing contracted Saudi barrels before winter arrives.

The East-West pipeline shutdown following a drone attack earlier this month has dealt a major blow to an oil market that had already seen Brent crude futures exceed $100 a barrel.

Saudi Arabia had operated the 7 million-barrel-a-day route at full capacity since the start of the US-Iran conflict, as Iranian attacks on shipping brought traffic through the Strait of Hormuz to a near standstill. Those attacks have continued to this week.

The chaos in the Middle East prompted JPM's head of commodities, Natasha Kaneva, to write a wild note to clients on Thursday, warning:

 "For the first time since the start of the Iran conflict, we don't have a baseline view. We simply don't know how to model the endgame."

Brent crude trades around $103 a barrel on Friday morning, while WTI trades at $101.

The US diesel crack spread trades around $112 as the global refining crisis raises the risk of "echoes of the 2008 gasoline shock," as recently explained by Bloomberg Intelligence senior commodity strategist Mike McGlone.

Tyler Durden Fri, 09/18/2026 - 08:25

Students In UK Ordered To Undertake White Privilege Training

Authored by Steve Watson via Modernity News,

Britain's universities have started the new term the only way the education establishment knows how: by sitting 18-year-olds down and asking them to confess their "White privilege" before they are even allowed to unpack in halls.

The same system that cannot keep White British children in grammar schools, and that now puts seven-year-old girls into taxpayer-funded mandatory hijabs, has decided the urgent problem on campus is that freshers have not yet internalised enough racial guilt.

New students at the University of Northampton have been told to complete an "Introduction to Race Equity" course as part of Freshers' Week induction.

?University students are being asked to complete a race equality course and write about white privilege.

Philip Kiszely: "There is NO WHITE PRIVILEGE in higher education. The anti-racism system is the problem, which is overtly racist!"@JuliaHB1 pic.twitter.com/zdO9MnN15n

— Talk (@TalkTV) September 17, 2026

The module is supplied by Advance HE, the sector body that sells this material across higher education. In the section titled "Whiteness, Privilege and Belonging," students are asked whether they were "aware of how White privilege operates and the impact it has on staff and students from Black, Asian and Minority Ethnic backgrounds." They are then told to list actions they will take to improve their "anti-racist practice" and "tackle race inequality."

Advance HE's own glossary is not subtle. It defines white privilege as an "unquestioned and unearned set of advantages, entitlements, benefits and choices bestowed on people solely because they are white."

It describes "structural white privilege" as "a system of white domination that creates and maintains belief systems that make current racial advantages and disadvantages seem normal."

The university claims the course is optional, that answers are not read by staff, and that anyone who skips it can still move into accommodation. It also admits that students who do not finish the modules will be sent "constant reminders."

Students are being forced to write about white privilege and racial inequality in the first few days of attending Northampton University.

There is no White Privilege White working-class boys perform worse than any other minority in education
Jobs advertise minorities only pic.twitter.com/3aYZReoOUk

— JP-ExileinDerry (@UkandNIbackup) September 16, 2026

A Free Speech Union spokesman put the real pressure in plain English: "Even though this course isn't mandatory and the answers aren't accessible to the university, it still sends a message that Northampton has taken a position on a number of politically contested issues and woe betide the student who disagrees with that position."

Northampton is unapologetic. "Inclusivity is one of our core values, and we make no apologies for that," a spokesman said. The same statement added that the university "share[s] a commitment to freedom of speech and respectful dialogue," and that the training is an "industry standard course." Industry standard is the giveaway. This is not one eccentric campus. It is the product the sector now treats as normal.

This stuff isn't restricted the the UK. In New York, the Bank Street School for Children has for years split pupils as young as six into race "affinity groups": a Kids of Color room and a White Anti-Racist group.

The New York Post reported that White children were drilled to raise their "awareness of the prevalence of Whiteness and privilege" and to challenge "notions of colorblindness," while children of colour were praised in a separate room.

Thousands of schools in America have implemented a program of separating their students into 'Affinity Groups'

Children are separated by race. White children are scolded and told about their white privilege and racism, the non-whites are praised and given cupcakes (THIS IS REAL)... pic.twitter.com/L5zq7W7PJ4

— Wall Street Apes (@WallStreetApes) September 2, 2025

Parents said the younger White pupils watched classmates return eating cupcakes handed out in the other group. An anonymous parent told the paper: "Ever since Ferguson, the school has been increasing anti-white propaganda in its curriculum."

Bank Street's own pages still list those race-sorted groups from first grade. The same sorting - White children as a problem to be fixed, everyone else as a constituency to be flattered - is now what Advance HE packages as "industry standard" for British freshers.

By the time a White British 18-year-old is asked to write about unearned racial advantage, the lesson has already been running for a decade.

Schools in Sheffield, led by Notre Dame High School, have taught pupils that Black people "cannot be racist" toward White peers. The materials state: "Black people can be racially prejudiced towards a white person which is wrong and totally unacceptable. However, this is not racism. Racism is racial prejudice plus power. In the UK, white people hold the cultural power."

Lessons for children as young as seven talk about "privilege," tell White pupils they are "likely to be privileged by the colour of their skin," and instruct them to monitor their language, challenge friends and report incidents.

Shadow education secretary Laura Trott called it "deeply alarming that children as young as seven are being exposed to divisive identity politics in schools under the banner of 'anti-racism education.'"

She added: "Labelling children by race and teaching them to focus on what divides them will only foster resentment and deepen division." Shadow minister Neil O'Brien called the same material "political indoctrination."

That is the official story of race in English classrooms: power runs one way, guilt runs the other, and the children of the historic majority are the ones who must sit still for it.

The results are not abstract. White British pupils are now a minority in England's grammar schools. Department for Education figures put their share at 44 percent in 2026, down from 66 percent in 2016.

At Dartford Grammar School for Girls in Kent the White British share collapsed from 52 percent to 7 percent in a decade. African pupils are now the largest group there.

At Reading School, White British applications fell from 49 percent to 7 percent before a partial rebound. Pate's Grammar in Cheltenham went from three-quarters White British to 34 percent.

Restore Britain leader Rupert Lowe called the Dartford figures "truly staggering" and said: "We must have the courage to say this is unacceptable."

An independent inquiry chaired by Baroness Morris and Sir Hamid Patel concluded that "the education system is not set up to serve white working-class children and families."

In 2025, just 36 percent of White British pupils on free school meals got a grade 4 or above in English and maths GCSEs - half the rate of pupils not on free meals. There are 1.25 million White British children on those meals.

White working-class children failed by education system, says inquiry https://t.co/PVG11nl9oj

— BBC News (UK) (@BBCNews) June 29, 2026

Sir Hamid Patel said: "Our inquiry found that too many white working-class children face barriers at every stage of their education. These figures suggest that those barriers may also be limiting access to some of the country's highest-performing schools. We should be far more ambitious for these young people."

Professor Peter Edwards warned of "huge ramifications for our young people, and our society as a whole," if disadvantaged White pupils "apparently see very little future in advancement through education."

The money tells you who the system prefers to fuss over. Schools now draw a record £572 million to support pupils who do not speak English as a first language - 1.8 million children, one in five.

Chris McGovern of the Campaign for Real Education said: "Stop pitying them, we obsess about it far too much and we don't need to fret about them - we need to worry about the white working-class kids."

While White working-class boys fall off the academic ladder, Labour-run Barnet Council has put an Islamic primary onto the public payroll with the dress code still attached.

Barnet Hill Academy in West Hendon became a voluntary-aided school on 1 September. Fees of more than £6,500 a year disappeared. The taxpayer now pays.

The governing body keeps the religious character, can select pupils and staff by faith, and until the row exploded listed a plain white hijab as compulsory from Year 3 - age seven.

The school's own site has described its uniform and Islamic dress code as "closely aligned with our school ethos, which aims at directing our children towards Islamic values and norms."

National Secular Society chief executive Stephen Evans wrote: "It is appalling that taxpayers are being asked to fund a school that forces girls as young as seven to wear the hijab. Women should be free to choose religious dress; young girls should not have it imposed upon them."

He added that state-funded schools "should bring children together, not divide them by faith and, by extension, ethnicity."

The school later added a line saying the hijab is "not a requirement for any non-Muslim students." That dodge does not help a girl the school classifies as Muslim. There is no equivalent religious clothing rule for boys.

Trott has now called the arrangement "outrageous," saying "a state-funded school is forcing girls, some as young as seven years old, to wear hijabs." She and shadow equalities minister Joy Morrissey have referred the policy to the Equality and Human Rights Commission, arguing it discriminates on religion and sex and may breach human rights law.

Education Secretary Lucy Powell has claimed the school "clarified" that the hijab was "not compulsory." Barnet Council still calls the policy "in line with other faith schools" and "legally compliant."

Primary school forcing pupils to wear hijabs accused of 'breaking the law' as policy 'violates human rights'https://t.co/G3E9puYZvv

— GB News (@GBNEWS) September 16, 2026

So the sequence is now complete. At seven, a girl in a state-funded London primary can be told the hijab is part of uniform because the school has decided she is Muslim. In the same years, other classrooms teach that racism only travels one way. By 18, the university emails a "race equity" module and asks the student to write about White privilege before the boxes are unpacked.

Grammar school places that once belonged to the national majority have been redistributed. The White working class is told, by official inquiry, that the system was never built for them.

This is not inclusion. It is a hierarchy with British children at the bottom and ideology at the top - paid for by the same public that is no longer allowed to say so.

Tyler Durden Fri, 09/18/2026 - 08:05

Exxon Eyes Venezuela Return Nearly Two Decades After Nationalization Exit

ExxonMobil is negotiating a return to Venezuela's Orinoco Belt, eyeing the Petromonagas heavy-oil project and neighboring Carabobo assets, Reuters reported Wednesday, citing people familiar with the matter. No deal has been finalized, and Exxon and state oil company PDVSA did not immediately respond to Reuters.

Petromonagas also has a Russian state-owned shareholder - though it remains unclear how that existing interest would affect any transaction.

The talks follow months of caution from Exxon's leadership. In January, CEO Darren Woods called Venezuela "uninvestable" under its then-existing legal and commercial framework and sought durable investment protections before returning. Exxon and ConocoPhillips had departed following the nationalization of their projects, while Chevron remained through agreements with PDVSA.

The wave of re-entries followed the capture of then-president Nicolas Maduro in January and President Trump's subsequent push for U.S. companies to invest. ConocoPhillips, for its part, is refusing to negotiate a return until it is paid roughly $11 billion owed by the country and PDVSA from the expropriation of its projects, Reuters reported.

That history makes contract durability central to the investment thesis - as the most important questions are not simply whether oil can be produced, but whether a company can finance a project, retain its agreed economic interest and recover its investment over many years. 

Other operators have already moved further along that process.

Chevron and Italy's Eni signed agreements on September 2 to expand Venezuelan projects. At the time, Reuters put national production at approximately 1.25 million barrels a day, compared with roughly 3 million at its late-1990s peak. The gap illustrates the scale of the potential recovery, but also how far the industry remains from its former output.

Continental Resources added another agreement Wednesday, signing a memorandum of understanding with PDVSA to develop the Ayacucho 2 block in the Orinoco Belt. That is a preliminary framework, not evidence that additional production is already flowing.

These announcements should not be treated as interchangeable. Negotiations, memorandums, definitive contracts, capital spending and completed production increases represent different stages of development. Counting them all as imminent new supply would collapse an investment process into a headline.

Chevron's financing plan provides another useful distinction.

CEO Mike Wirth said September 11 that its planned $7 billion Venezuelan expansion would be financed entirely with cash generated by existing local joint ventures, rather than money brought in from outside. The company is targeting approximately 600,000 barrels a day by 2031. Wirth also warned that oil buffers which had limited price increases earlier in the Iran conflict had been depleted.

A multiyear production target is not an immediate replacement for disrupted barrels elsewhere. And an investment funded from operating cash flow is different from an equivalent sum arriving upfront: spending capacity depends partly on the ventures' ability to generate that cash.

There are practical supply-chain requirements as well.

In February, the U.S. Treasury authorized exports and sales of American diluents to Venezuela. Those inputs are needed to produce exportable crude grades, according to the authorization reported by Reuters. The measure illustrates how an oil recovery depends not only on access to reservoirs, but also on the inputs and permissions necessary to turn production into marketable supply.

For oil markets, the useful indicators will therefore be committed spending, operating capacity and sustained export volumes, rather than the number of agreements announced.

Eni CEO Claudio Descalzi made the distinction plainly at the September 2 signing ceremony: "What we need is not just signing papers, we need barrels."

Tyler Durden Fri, 09/18/2026 - 07:45

Truancy Is Now A Mental Health Condition In Britain

Authored by Mary Gilleece via The Daily Sceptic,

Bunking off school used to be called truancy, but now 'Emotional Based School Avoidance', or EBSA, has joined the ever-growing list of supposed mental health conditions afflicting the nation's youth...

What used to be known as 'truancy' has had a smart rebrand to EBSA. Pronounced ebbsah, EBSA stands for Emotional Based School Avoidance. It is the latest woolly mental health acronym to proliferate amongst education-dodgers and those seeking to profit from them.

As nearly nine million children return to school in September there are over 200,000 children who remain at home, generally in their bedrooms scrolling on their phone or gaming. In 2025, 2.12% of pupils were severely absent, missing 50% or more of school. It's a troubling figure that continues to climb.

What was introduced as a term by West Sussex Educational Psychology Service (WSEPS) in 2018, has mushroomed across the education and mental health sectors. WSEPS defined Emotionally Based School Avoidance (EBSA) as: "A broad umbrella term used to describe a group of children and young people who have severe difficulty in attending school due to emotional factors, often resulting in prolonged absences from school."

Professionals, GPs, parents and social workers now authoritatively state that so-and-so 'has EBSA' even though it is not an officially diagnosable medical condition. Though it does not appear in any medically approved diagnostic manual, EBSA has somehow gained the imprimatur of respectability.

Parents of school-avoidant children have enthusiastically embraced this new 'condition'. Google searches for Emotional Based School Avoidance have increased by a breakout 5,000% in the past five years. The BBC has a parenting tips page dealing with the issue.

The theory around the pseudo-diagnosis of EBSA is that a child is anxious and upset about going to school; attending school is detrimental to his or her mental health; therefore he or she does not attend.

The local authority, however, is still legally obliged to provide education for that child. A wrap-around service of Alternative Provision, Non-School Education Providers or home tutors is arranged. The majority of Alternative Provision providers servicing the needs of so-called EBSA are privately owned, and their employment by county councils has escalated sharply, costing councils billions of pounds.

I work for one such operation. However, the figures for such children attending even these gentle alternatives are even worse than school attendance. Official figures report that overall absence rose in Alternative Provision to 41.35%, up from 40.94% in autumn 2024-25, with both persistent and severe absence continuing to climb.

This tallies with my experience. Every morning I will look at my timetable and see I am set to visit three children that day, but invariably I will receive such messages from parents as: "No session today, she's feeling overwhelmed." "He's still sleeping so won't be awake for session." "Not feeling it today."

The tragedy about the whole non-medical confection around EBSA is that there are indeed a great number of children who are anxious and do not enjoy going to school. They generally have a collection of conditions around them: ADHD (attention deficit and hyperactive disorder), PDA (pathological demand avoidance), ASD (autism spectrum disorder), anxiety and of course EBSA. The children that I work with live very narrow, limited lives within the terrifying space of the internet and their own minds. Their suffering is real even if the description of it is not.

The EBSA enthusiasts have it the wrong way round. The way to improve mental health is to attend rather than avoid school.

A widely ignored study conducted by Loughborough University and the Office for National Statistics revealed that absence from school causes deteriorating mental health. Based on a sample of 1.1 million children, the study reports:

The probability of presenting at hospital with mental health issues more than doubles (increases from 1.82% to 3.77%) when absences increase from 0% to 20%, and nearly triples (increases to 5.27%) at 30% absence.

Rather than saddling children with yet more spurious medical terms, it would be refreshing if educators, GPs, teachers, social workers and parents addressed the real issues that are enabling over 200,000 children to avoid school. Significantly: lack of sleep caused by phones and gaming kit in bedrooms, and insufficient exercise and nourishing food. Most importantly: lack of meaningful connections with real-life human beings. In other words: friends. These can be found at school.

Tyler Durden Fri, 09/18/2026 - 07:20

IRGC Announces Attack On Another Tanker In Hormuz, As Trump Mulls 'Annihilate Them Or Not' Decision

Update(1755ET): While the White House has signaled it wishes to see 'quiet' in the Strait of Hormuz and de-escalation when it comes to Iran, it doesn't seem heavily sanctioned-Tehran is yet willing to see it that way. Another foreign vessel has reportedly been hit, via Sepha News:

IRGC says Togolese-flagged tanker 'Trend' was hit and stopped after a fire, while it stated the tanker violated Hormuz rules and that the US instigated the transit.

Below is a machine translation of the IRGC statement that was released on Telegram:

Last night, the offending tanker Trend, flying the flag of Togo, attempted an illegal passage through the Strait of Hormuz under the instigation and deception of the child-killing U.S. military; it was struck and came to a halt after a fire broke out on board.

The IRGC Navy warns once again that illegal passage through the Strait of Hormuz will result in nothing other than the destruction of the offending vessel.

President Trump has still insisted the US can negotiate with the Iranians at any time, and that they are "begging" for it.

BREAKING: Just moments ago, Iran struck a tanker in the Strait of Hormuz attempting to cross via the Omani Route.

From Iran’s perspective, it is absolutely CRITICAL that they prove their ability to keep striking vessels transiting the Strait of Hormuz given the shutdown of the… pic.twitter.com/oZpxq3ZmIU

— Brett Erickson (@BrettErickson28) September 17, 2026

*  *  *

Update(1325ET): Some key lines of President Trump given to Axios on Thursday...

He told the outlet he is at a "critical juncture" regarding the war in Iran, weighing whether to launch massive new attacks or pursue a different path to end the conflict.

He has previously indicated his belief that war will continue through the November midterm elections. Trump has newly said:

"I have a big decision coming up. Do I want to go in and annihilate them [the Iranian regime] or do I not? It's a big decision. Anything could happen with me."

The war is increasingly unpopular among Americans, and Trump's rhetoric has appeared a bit more honest on this of late. What's the end game? After six months of conflict, Epic Fury has looked like a bombing campaign in search of a strategy. According to more of Trump's talk with Axios:

• Trump declined to say whether he'll decide on the path forward before or after the midterms.
• Trump and Hegseth have ordered the military to maintain its level of forces in the Middle East until the end of the year, to remain ready for a potential return to full-scale combat.
• The officials say Trump needs to decide soon on the way forward, partly because the US military can't stay in its current holding pattern much longer. "At some point you have to decide what is the end game"

The situation of global energy transit has over the past week become much more complicated with the Houthis advance across Yemen's Red Sea coastline, and drone damage to Saudi Arabia's East-West pipeline. The US looks to be staying on the sidelines of Yemen fighting, for the time being. New via Al Jazeera:

A senior US official told Al Jazeera: We are focused on ensuring navigation in the Red Sea and allowing our partners to manage security challenges.

And yet "partners" like the Saudis and its government in Sanaa are clearly not doing so well.

BREAKING: Yemen's Houthis have dug roughly 20 km of trenches in the mountains above the Bab el-Mandeb Strait, visible on Sentinel-2 imagery, with positions overlooking the strait's narrowest point near Dhubab and Perim.

The Houthi fighter filmed on the Murad coast last week said… pic.twitter.com/0kgmg3FiPE

— The Hormuz Letter (@HormuzLetter) September 17, 2026

*  *  * Add two to cart

Oil prices are falling on Thursday on some headlines signaling potential de-escalation moves out of the Saudi-Yemen conflict, both via Reuters:

• China reportedly presses Iran to help rein in the Houthis after Saudi appeal, according to Retuers citing sources
• Oil prices fell on Wednesday after reports that Saudi Arabia was offering additional crude cargoes through Oman eased some concerns about Middle East supply disruptions, while a smaller-than-expected draw in U.S. crude inventories added further downward pressure. 

US crude futures have extended their drop to fall back below $100/bbl. This also comes amid continued reports of better-than-expected recovery in Gulf infrastructure, as Saudi Arabia is claiming it is able to restore half the capacity of its East-West pipeline within merely days. The optimism could prove just wishful thinking, however - and the coming week will tell.

Starting last week, when the Houthis made their lightning-fast advance along the Red Sea coast, fragmenting the positions of the Saudi-backed coalition government, Riyadh turned to Beijing for help, the Thursday Reuters report indicates.

"Chinese officials did not issue any explicit threats ​or indicate that Beijing would seek to pressure Tehran economically if it failed to use its influence over the Houthis, the three Iranian sources said," the report adds.

The Chinese foreign ministry has responded to knowledge of the diplomatic maneuvering getting out that "China does not wish to see regional tensions further spill over into Yemen and the Red Sea. Escalating regional instability is not in the interests of ​any party".

"The sovereignty and security of all countries should be respected, and facilities vital to people's livelihoods must not be targeted. China calls for an end to actions that further complicate the situation and urges resolving issues through dialogue ​and negotiation," it said.

A senior Western diplomat in the region was separately quoted as saying "Beijing is one of the few capitals that can still ​press Iran to rein in the Houthis."

Given that the Iran-aligned Shia group has often shown a willingness to cooperate and coordinate action to Tehran's benefit, Ansar Allah leadership may listen if it gets a signal to de-escalate from Iran.

🇾🇪🇺🇸 Ansar Allah fighters put American anti-tank missiles on display after seizing them in recent fighting.​ pic.twitter.com/DKs3QpjeUq

— The Saviour (@TheSaviour) September 16, 2026

According to to some Thursday and latest developments via Al Jazeera:

• Yemeni government forces are trying to prevent Houthi advances on several fronts, including the strategic Kahbub mountains near Bab al-Mandeb and Taiz, with Saudi Arabia providing support with air strikes in areas around the city.
• President Donald Trump has told reporters that the US is “hopefully toward the end” of its war on Iran and notes that he has spoken with Iranians “directly”.
• UN Secretary-General Antonio Guterres urges de-escalation and diplomacy in the Middle East as fighting intensifies in Yemen and between the Houthi group and Saudi Arabia.
• Iran’s national security chief Mohsen Rezaei says the US must take practical steps to earn Tehran’s confidence, stressing that the country harbours zero trust in Washington.
• A UN fact-finding mission has found “reasonable grounds” to believe the US was behind two attacks, including the strike against a school in Minab in February, which it says constituted war ⁠crimes. ​

On the Yemen front, Al Jazeera writes, "The fighting is continuing and government forces are claiming that the Ansarullah Houthis have suffered a lot of casualties in the clashes that are occurring on a number of fronts, mainly in western Taiz and also in Kahbub, which is a mountainous area with strategic importance as it overlooks Bab al-Mandeb."

Throughout the conflict, both the Iranians and the Houthis have at various times said they are willing to grant China and other "friendly" countries like Russia "special considerations" when it comes to water transit and paying "fees" - the latter case related to the Strait of Hormuz.

Tyler Durden Fri, 09/18/2026 - 06:45