Macro

• Japan’s massive currency interventions have only delivered short-lived relief, highlighting that a wide U.S.-Japan yield gap continues to dictate the yen’s direction.
• Despite firmer June inflation, the BoJ sees price pressures easing ahead. Lower inflation forecasts strengthen the case for a gradual and patient policy approach.
• Options market continues to favour a weaker yen, with a 1.19 put-call ratio reinforcing growing bearish conviction ahead of the Fed’s next policy decision.

• Saudi Arabia: price of the war, official data is showing GDP declining by 4.9 % in Q2 from Q1.
• The fall was driven by a 21.5 % drop in oil activities. A 0.5 % surge in non-oil activities is not enough to lift numbers.
• Government activities were up 0.5 % on the period. GASTAT, Saudi’s official statistic office , reported in June GDP up 3 % y/y at the end of Q1.

Highlights

• June export earnings hold above US$336 million despite lower shipments

• Wintering and delayed monsoon keep Thai rubber supply under pressure

• Rubber prices peak above US$2,425/mt before sharp June correction

• It is good practice nowadays to call mainstream media, newspaper organisations, news networks obsolete, disseminators of fake news and out of touch with time.
• Investigative reporting finds less and less space. In European capitals, London included, finding a newsagent is like treasure hunting.
• If you are lucky, you might find a few newspapers in Waitrose or Tesco between pastries and Kleenex.

• The oil market once again is taking President Trump at his word that a deal between the U.S. and Iran is close, if not virtually consummated.       
• We would note, however, that our energy equities appear to be taking a somewhat different view, i.e. in general they declined less than the commodity yesterday.                 
• In any event, as discussed on Monday, we will believe a comprehensive deal when we see it, and as such we do not rule out a return to open conflict.            

• Global air freight rates edged up a little last week according to the latest data from TAC Index, the leading price reporting agency on air freight markets and calculating agent for the Baltic Air Freight indices. 
• The global Baltic Air Freight Index (BAI00) gained +1.3% over the seven days to August 3, leaving it ahead by +19.6% from 12 months earlier.
• The rise ended a series of five successive weeks when rates had continued to fall – despite a renewed spike in jet fuel prices following further hostilities in the Persian Gulf last month and the continuing uncertainties around the on-off ceasefire between the US and Iran.

• Iron ore remains on the back foot as deepening steel mill losses sap demand. Any lift from lower Fortescue shipments will likely fade without meaningful production cuts.
• Options traders are turning more bullish, adding upside bets above 100 while steadily unwinding downside protection despite weak near-term fundamentals.
• Managed money is leaning decisively bearish. With short positions jumping by 21% in July, participants are signalling iron ore’s downside risks are far from over.

• Crude futures were sharply lower on Tuesday after surrendering early gains following comments from a top US official that a US-Iran peace deal could be imminent.
• Oct26 ICE  Brent futures were 5.2% lower at  $79.41/b (2030 BST), while Sep26 NYMEX  WTI was at $75.81/b , down 5.6% versus Monday’s settle.
• Benchmarks dropped more than $6/b from the day’s highs after US Treasury Secretary Scott Bessent said that a deal with Iran could be announced as soon as tomorrow, taking markets by surprise with talks seemingly deadlocked.

• Crude oil futures opened the week sharply lower after President Donald Trump halted a planned major US/Israeli attack on Iran, which had threatened significant conflict escalation.
• Oct26 ICE  Brent futures were 4.9% lower at  $83.62/b (2138 BST), while Sep26 NYMEX WTI was at $80.06/b , down 5.4% versus Friday’s settle.
• Benchmarks rowed back after the president said over the weekend that he had called off planned strikes on Iran, indicating a possible diplomatic breakthrough in the five-month-long conflict.

• Luxembourg’s economy is expected to maintain a steady growth trajectory, with real GDP growth projected to reach 1.66% in 2027 and 2.11% in 2028, while growth rate for 2026 has been adjusted to 1.59%.
• Investment as a share of GDP is expected to remain low, increasing to around 15.62% throughout the projection period, while Gross National Savings are estimated to increase from 20.21% of GDP in 2025 to 20.51% by 2028.
• Both government revenue and expenditures are expected to rise significantly in the upcoming years, according to the latest IMF forecasts.

• The energy supply shock has intensified, forcing markets to care, but it is mostly seen in physical prices and low-inventory risks.
• ECB action helps EA inflation back to 2% in 2027, while UK excesses persist and the US outlook sits in between.
• We see hikes from the BoE in Nov-26 and the ECB in Sep-26. The hawkish BoE/Fed spread went far enough given the dovish bias.

• The Hong Kong Alpha portfolio gained 5.79% in July, outperforming its benchmark by 0.30%.  The portfolio has outperformed Hong Kong indexes by 52% to 74% since inception.
• The portfolio’s largest exposures are in the industrial, financial, and technology platform sectors. The portfolio has no exposure to the materials or energy sectors.
• The portfolio has generated a Sharpe ratio of 1.20 since inception, compared with 0.69 for the benchmark.  The portfolio’s annualized mean excess return is 19.4%.

• Despite the hawkish pivot in June, the FOMC left its policy rate unchanged after its latest meeting. Chairman Warsh failed to define price stability convincingly, scaring Treasury bond investors.
• Under Chairman Warsh, the Fed’s communication will shift from providing forward guidance and will become less frequent, thereby making it necessary to monitor policy conduct through different mechanisms.
• History suggests that new Fed leaders have often defied expectations after assuming office, but they have always respected the convention of the FOMC determining policy settings.

• Sentiment: Slightly Bullish. More noise than index-moving action. Rotation has shifted sentiment significantly beneath the surface, but much less at the overall market level.
• Technology Conundrum. Despite weaker performance, Technology sentiment indicators remain close to bullish extremes. There is no sign in our data that bullishness towards the sector has washed out.
• Value Reversal. Our Value SMA has been the biggest riser over the past few weeks. While Technology sentiment still looks remarkably bullish, its opposite has also become more popular.

• We produced a Peregrinations report earlier this week on trade and external balances, subtitle: Turbulence. It was a rundown for each country in the region of the import and export growth rates as well as the latest current account position. In short, it’s a very mixed bag across the region and, as we have been arguing for some time, very difficult to interpret given all the price changes that are going on just now.
• In other news, we have been arguing that, given normal profit cycles, Chinese profit data should be turning around this year given the poor run of returns in 2023 (negative) and both 2024 and 2025 (flat). Given the normal shakeout in industries, we should start to see a resurgence in profitability. To be fair, it hasn’t happened yet in ROE numbers but the latest data industrial profits data brought year-to-date profit growth to 18.7% YoY, which appears to be a significant turnaround.
• India’s industrial production for June came in at 7.3%, that was much higher than expectations. India continues to roll along quite nicely. We still believe that increased exposure to the Sensex would be a good equity strategy for international investors at the moment. The country remains the fastest growing economy in Asia at the moment.

• WTI ended the week lower as geopolitical risk premiums faded, though intraday price swings underscored how sensitive crude remains to developments in the Middle East.
• Options positioning remained broadly balanced, while the latest CoT data showed funds adding long positions and covering shorts, pointing to improving sentiment rather than a decisive directional view.
• Chevron converted higher oil prices into a decisive earnings beat through stronger execution and uninterrupted operations, while production disruptions and refinery maintenance limited ExxonMobil’s upside.

• President Trump has decided to hold off on any major military strikes against Iran that he previously threatened, apparently at the behest of GCC countries, particularly Saudi Arabia.       
• There is the suggestion in turn that negotiations will resume in earnest, but “we have been here before.”
• For the sake of the world economy we hope we are wrong, but “we will believe it when we see it” in terms of any progress on the diplomatic front.        

• A review of recent events/data impacting our investment themes and outlook
• A clearing event sets up the catalyst for a bounce in the AI/Memory names
• Joint Yen Intervention sets up the DXY for a breakdown

• The Korean market has become uninvestable for many foreign institutional investors, regardless of its inexpensive valuation metrics.  Foreign investors have withdrawn record amounts from the market since early this year.  
• The KOSPI has suffered from a convergence of high-concentration risks, extreme leverage through margin lending and leveraged ETFs, and continuous circuit-breaker triggers, resulting in historically high volatility.
• Although the government is instituting regulations to calm market volatility, many retail investors who have lost substantial amounts have vowed not to re-enter the market.

• Cargo-loadings from Taiwan extended their rebound, with a surge in shipments in the last 10 days of July.
• Cargo carrying a combination of Group II light and heavy grades loaded from Taiwan in the past week before heading to South Korea.
• Shipments from Taiwan to South Korea often then move on to other markets like the Americas.

• Crude oil futures were moving higher on Friday as investors hedged against further conflict escalation over the weekend, with diplomacy efforts seemingly stalled again.
• Sep26 ICE Brent futures were 1.2% higher at  $90.09/b (2050 BST) heading into the contract expiry, while Sep26 NYMEX  WTI was at $84.76/b , up 1.4% versus Thursday’s settle.
• Brent initially tumbled to an intraday low of $86.89/b before buying kicked in after operations at the Black Sea CPC were suspended again amid safety concerns after recent drone strikes.

Middle East Group III disruptions entered a sixth month, keeping exports at multi-year lows, while maintenance among other Group III producers threatened to tighten supply further. South Korea and India continued filling part of the shortfall, Singapore became a net base oils importer for the first time in five years, and slower replacement cargoes from Europe and the US pointed to limited spare supply ahead of August.

• In July foreigners sold US$34.8bn in Asia, the third worst in recent times, after March (US$69.9bn selling) and June (US$55.8bn). Taiwan (US$25.2bn) was the most sold, followed by Korea (US$11.3bn).
• India was bought (US$1.62bn), reversing last four month’s trend. Indonesia and Thailand’s July data is awaited. Till June, Thailand (+889m) is the only market bought this year. Indonesia sold (US$4.27bn).
• Our proprietary indicator of 6-monthly cumulative trade as proportion of market cap indicates Korea, India, Indonesia are oversold. Taiwan nearly there. FIIs beginning to buy India, correcting the oversold stance.

• A dovish repricing followed Fed and BoE announcements that appear reluctant to hike. Higher long rates and opportunistic JPY intervention are hardly signs of success.
• Inflation is rebounding from June’s brief relief amid renewed conflict, but EA GDP also trounced forecasts. UK money data were inconsistent with tight policy and the target.
• It’s a quiet week ahead, culminating in the US payrolls and unemployment data on Friday. Brazil, Mexico, and India bring the monetary policy decisions.

• Anthropic faces a potential “Down Round” in its IPO slated for later this year.  The dynamics of the AI sector have deteriorated substantially since the company announced its IPO filing.
• The private market valuation, based on funding rounds, tripled between February and May this year, adding roughly $600 billion to its market value. The company participates in AI circular financing.
• Valuation compression, competition from Chinese open-source models, regulatory challenges, slowing token usage, and market share loss are pre-IPO challenges for the company.

• The BOJ held the overnight call rate at 1%, with one hike‑seeking dissenter, reinforcing a tightening bias despite the widely expected pause.
• CPI forecasts are slightly lower but still above 2%, with upside risks from wages, energy and yen weakness, keeping further rate hikes as attractive options.
• Heavy MOF yen support highlights FX strains. Relying on intervention over rates is unsustainable. Yen dynamics will press the BOJ towards more tightening.

• Crude futures eased slightly although were largely consolidating the midweek gains, while markets remained tense as renewed military strikes continued into Thursday with the US hitting targets in Iran.
• Front-month Sep26 ICE Brent futures were 2% lower at  $88.92/b (2040 BST), while Sep26 NYMEX  WTI was at $83.47/b , down 1.2% versus Wednesday’s settle.
• The latest barrage came after President Donald Trump vowed to hit Iran “very hard” after a US base in Jordan was again targeted, while reports of strikes on two LNG tankers off Egypt’s Mediterranean coast added to growing tensions.

• Technology, US equities and Brazil are now consensus longs—but where has optimism become most vulnerable?
• CAD, sovereign bonds and Consumer Discretionary are deeply unpopular. Which offers the clearest contrarian opportunity?
• Sentiment extremes are not automatic signals. Momentum and narrative vulnerabilities help separate crowded trades from genuine opportunities.

• TOP STORIES Analysis: How Active ETFs Will Reshape Asset Management in China China’s exchange-traded fund (ETF) market is at a critical inflection point.
• After peaking at over 6 trillion yuan ($840 billion) in late 2025, the industry is expanding beyond passive index tracking into active management.
• In Depth: Thai Buddhist Amulets Draw China’s Anxious Young — and Laundering Networks Young Chinese facing a bruising job market, income anxiety, romantic setbacks and difficult odds of starting a business are looking for quick ways to improve their fortunes.

• UK active funds delivered strong absolute returns, but the FTSE All Share remained a difficult benchmark to beat, with just 26.3% of funds outperforming in H1 2026.
• Financials once again dominated market returns, while underweights in several of the UK’s biggest winners—including HSBC and Rolls-Royce—proved the largest drag on active performance.
• Six years of benchmark underperformance raises an important question: should active managers be judged against an increasingly concentrated index, or by the risks they consciously choose not to own?

• While we may see higher crude oil prices, the market may be “telling us something” given the lack of follow through after more attacks by the United States and Iran.       
• As a precaution, given our conservative nature, we are pulling our recommendation to buy NYMEX CL Oct-Nov calendar spreads, despite the relatively modest gains thus far.                
• NYMEX natural gas remains undervalued in our view; we recommend buying the Oct-Nov calendar spreads which settled yesterday at $0.22 per mmBtu, October under.

• The Fed held rates at 3.5–3.75% in a 9-3 vote as hawkish dissents crystallised. Debate centres on whether hikes are needed to restore 2% inflation and credibility.
• Rising real yields and AI capex make financial conditions and productivity payoffs pivotal for any decision to raise rates.
• The five‑year-long inflation overshoot, and counting, keeps hike risk live; cuts are unlikely until disinflation and expectations are firmly anchored.

• The long-awaited cornerstone IPO system is expected to start in Korea on 13 November 2026.
• Going forward, cornerstone investors who receive advance allocations of shares in an IPO will be required to hold those shares from six to ten months.
• Allocations vary by market. Up to 20% of the total offering in the KOSPI market and up to 30% in the KOSDAQ market can be allocated to cornerstone investors.

• The MPC’s 6-3 vote matched our relatively hawkish view, but the numerical drift toward hiking was more than matched by a dovish drift among the broader committee.
• Most members are patiently awaiting proof of second-round effects before considering a move, making them reactive, not proactive, and compounding inflation risks.
• Our conviction in a persistently excessive UK inflation outlook is increased, but the majority’s reaction function delays a still-likely rate hike to at least November.

• TOP STORIES In Depth: For Wildlife That Survives the Heat, the Cost Often Comes Later The monkeys fell from the trees like ripe fruit, hitting the ground with a thud.
• In May 2024, summer had come early and hard to the state of Chiapas in southern Mexico.
• In an ordinary year the temperature in the jungle would have topped out around 32 degrees Celsius.

• While we had become constructive on the oil market after the recent declines, we were not expecting the events that catalyzed yesterday’s spike.       
• An alleged pre-emptive strike by the IRGC against U.S. assets in Jordan and joint U.S.-Saudi strikes into Iraq seemed to come out of the blue, inconsistent with previous behavior.                
• Having said this, in our view there still remains the possibility of a resumption of U.S.-Iran strikes and counterstrikes on a larger scale.          

• A resurgence in the UK’s monetary data for June built on strength from policy overly accommodating the energy shock. Wage inflation has dominated higher lending rates.
• Recent lending growth is trending up by 6-8% on an annualised basis, devaluing the currency’s purchasing power to a point unlikely to be consistent with the CPI target.
• Fear of higher tax rates should slow loan demand, while the potential abolition of stamp duty should encourage transaction delays. We still see one BoE rate hike in September.

• As crude oil prices continued to decline, there nonetheless remain elements in the background that could reignite military activity between the U.S. and Iran.         
• One element is the Strait of Hormuz, with Oman now apparently proposing ways to jointly manage with Iran, which we would assume is still not acceptable to the United States.               
• Another element: a potential “off ramp” for the United States, i.e.  a major strike on Pickaxe Mountain, to show that in fact the nuclear issue was the “end game.”          

Highlights

• Exports at record INR 27,312 crore (US$2.87 billion) in FY2025-26

• Market diversification, capacity expansion, resilient demand, turn key

• Robust performance to trigger healthy rubber demand in FY 2026-27

• TOP STORIES Analysis: China’s Weakening Crude Demand Is Stabilizing Oil Markets In the high-stakes game of global energy, China has been playing the crucial role of shock absorber.
• When Iranian projectiles struck two U.S.-escorted supertankers near the Strait of Hormuz earlier this month, pushing crude prices back above $80 a barrel, the world’s largest oil importer was conspicuously absent from the buying panic.
• Armed with vast stockpiles and shifting domestic demand, Beijing was well-prepared for the market shock.

• Crude futures rebounded on Wednesday after three days of sharp losses as Middle East tensions flared again with the US and Iran trading fire, also igniting fears of a broader regional war.
• Front-month Sep26 ICE  Brent futures were 7.4% higher at $90.34/b (2032 BST), while Sep26 NYMEX  WTI was at $84.68/b , up 6.8% versus Tuesday’s settle.
• Benchmarks jumped after Iranian forces responded with a missile attack on American forces in Jordan following strikes by the US and Saudi Arabia against Iraqi militias, undermining prospects of a new ceasefire deal this week.

• The Hong Kong market has seen a rebound in July, while North Asian markets declined sharply as the global AI/semiconductor sectors de-rated.
• The financials sector has outperformed over the last 8 weeks, while the tech sector has shown increased strength and momentum.
• MGM China (2282 HK) share price rebounded over the last week before its August Q226 earnings announcement.  The company has increased its share of the mass-market gaming in Macau.

• On 28 July, the Financial Services Commission and the Korea Exchange announced the detailed criteria for this system of publicly identifying companies with low PBRs.
• This is a “shaming by naming” those companies with low PBRs to address situations where companies with low PBRs neglect efforts to boost shareholder value by publicly identifying them. 
• I provide a list of 150 stocks in KOSPI that could be included in this list. 

• Markets have stabilised since mid-June as Hormuz de-escalation and domestic policy repair buy Indonesia additional time, even as the underlying credibility deficit remains unresolved. 
• With external conditions now re-entering a more dangerous phase, pressure is growing both on Indonesia’s trade balance and domestic demand. Policy buffers are also thinner. 
• The institutional guardrails against policy mistakes have also been degraded. Intensifying intra-elite infighting also severely compromises the already-febrile business climate.  

• WTI rallied 9.2% last week as Middle East tensions lifted geopolitical risk premiums, before easing diplomacy unwound gains. Positioning suggests markets expect continued volatility rather than a sustained bull market.
• Investor flows favoured traditional energy, with XOP, IXC and XLE attracting inflows, while ICLN saw outflows, highlighting continued rotation away from clean energy toward oil and gas.
• NextEra’s EPS beat masked weaker-than-expected revenue and EBITDA, while stronger operating cash flow and AI-driven electricity demand continued to support its longer-term growth outlook.

Highlights

• NR production rebounds 9.1% MoM, but remains 16.7% below last year’s level

• Malaysia’s NR imports jump 36.3% MoM as exports tumble 23.1%

• SMR20 rallies to US$2,370/mt before retreating to around US$2,235/mt

• Global air freight rates were little changed overall last week according to the latest data from TAC Index, the leading price reporting agency on air freight markets and calculating agent for the Baltic Air Freight indices.
• The global Baltic Air Freight Index (BAI00) calculated by TAC edged lower by -0.6% over the seven days to July 27, a fifth consecutive weekly fall leaving it still up but now by only +16.8%  year-on-year – despite volatile conditions in global energy and jet fuel markets following renewed exchanges of fire across the Middle East.
• Sources suggested various factors keeping rates subdued – from extra passenger bellyhold capacity coming on stream during the summer holidays to the fact that carriers were more prepared for market shocks after being taken by surprise in March. 

• While the oil market is subject to “profit taking” in response to “negotiations,” there is no sign that traffic through the Strait of Hormuz or the Bab al-Mandeb is increasing.       
• In this regard, there is also absolutely no sign that Tehran will compromise on “managing” the Strait of Hormuz, either alone or with Muscat.              
• There therefore still remains the possibility of renewed conflict on a larger scale, as President Trump has threatened, irrespective of the U.S. weapons inventory.         

• Crude futures extended losses on Tuesday after the initial early-week selloff that followed the halt in hostilities between the US and Iran, but markets remain on edge despite renewed diplomatic efforts.
• Front-month Sep26 ICE Brent futures were 5.3% lower at  $83.70/b (2045 BST), while Sep26 NYMEX WTI was at $78.93/b , down 4.4% versus Monday’s settle.
• The latest fragile ceasefire came after Washington halted its bombing campaign aimed at Iranian targets, while Tehran also suspended its retaliatory attacks towards neighbouring Gulf states.

• Crude futures were sharply lower on Monday after the US paused its bombing campaign against Iran over the weekend, potentially giving diplomatic efforts a chance.
• Front-month Sep26 ICE Brent futures were down 9.4% at $87.66/b (2118 BST), while Sep26 NYMEX WTI was at $81.84/b , 8.5% lower versus Friday’s settle.
• Iranian officials also said on Sunday its forces had halted retaliatory attacks against Gulf countries hosting US bases, after Washington paused nearly two weeks of nightly bombings across Iran.

• In Profile: Billionaire Founder of Chinese Broker Futu Faces His Toughest Test From an early engineer at Tencent Holdings Ltd. to the billionaire founder of Futu Holdings Ltd., Li Hua built one of China’s most prominent online brokerages.

• Now, the cross-border business model that powered Futu’s rise has exposed the 49-year-old entrepreneur to the most serious regulatory and legal challenge of his career.

• A third defendant seeking to unfreeze assets in a more than $100 million U.S. insider trading lawsuit shares a name with an investor whose Hong Kong corporate takeover collapsed days after a U.S. court order.

• The Hong Kong market bounced off its long-term support levels in June and has outperformed the region in July, benefiting from rotational and southbound buying.
• In a positive sign, the financials sector has rallied this month and is the second-best-performing sector YTD at +11%.  Value and dividend factors continue to perform well.
• Youran Dairy (9858 HK) had a Descending Trendline Breakout after the company announced that Inner Mongolia Yili Industrial Group (A) (600887 CH) acquired a significant stake in the company.

• Countries are pivoting away from the old rules-based international order, thereby requiring new macro assumptions for cross-border investment. National security is playing an increasingly dominant role in formulating economic policy. 
• In a less globalised world, supply shocks have the propensity to produce more complex inflation and interest rate pressures. The dollar’s role as the main safe-haven asset is being questioned.
• Developed economies no longer enjoy pristine sovereign balance sheets, a historically key differentiator versus emerging markets. High debt burdens and pressure to raise military spending complicates fiscal policy sustainability strategies.

• Refining margins have become the key driver of energy profits as tight fuel markets, limited spare capacity, and geopolitical disruptions reshape the downstream outlook.
• Refiners are capturing outsized profits as product markets remain tighter than crude, with delayed capacity recovery and supply disruptions supporting elevated crack spreads into Q3.
• Refining margins are unlikely to normalise quickly, as refinery disruptions in the Middle East and Russia, coupled with limited spare capacity, continue to constrain global fuel supplies.

• It appears that, for the time being at least, the exchange of military strikes between the U.S. and Iran will pause, although we will see how long this one lasts.       
• President Trump is suggesting that he wishes to give the negotiating process another chance, but weighing heavily is the continued depletion of the U.S. weapons inventory, particularly defensive assets.
• If further depleted, it would reduce the “neutral” Gulf countries’ ability to defend themselves and therefore subject critical oil and gas assets to substantial damage.         

• The Group III shortage continued reshaping global trade flows, as Asia increasingly steps in to fill the gap.

• Asia showed tentative signs of export recovery, with Singapore shipments picking up and Taiwan loadings improving after two months of disruption.

• China’s strong June Group III production and base oils exports, together with India’s rising shipments, showed Asia increasingly filling supply gaps left by the Middle East.

• The DRAM supply demand gap has brought forth an IPO for the fourth player, CXMT of China, whose share price jumped almost 500% at the opening on the Shanghai STAR 50 exchange today.
• The biggest IPO in China since 2010, it was oversubscribed by 570x for the institutional portion and 244x for the retail side.
• For context, at an initial price of $1.28, that means Chinese retail had to lodge $1.2tn with the exchange

• Crude futures rowed back from recent two-month highs on Friday, although were holding on to most of the steep weekly gains as oil markets face the worst crisis since the start of the current Middle East conflict.
• Front-month Sep26 ICE  Brent futures were down 3% at $97.68/b (2115 BST), while Sep26 NYMEX WTI was at $90.08/b , down 2.3% versus Thursday’s settle, with the conflict avoiding further escalation in the last 24 hours.
• Benchmarks had gained around a third over the last two weeks with Brent hitting $102/b on Thursday after Iran effectively closed the Strait of Hormuz again, while its Houthi allies in Yemen targeted Saudi tankers in the Red Sea.

• Iowa, Illinois and Nebraska have spent much of this summer under real drought stress, and Corn and Soybean futures have moved with it.
• The instinct is to buy the drought. The position that has actually made money in our research is the opposite one.
• The trade that has actually made money in our research this cycle is not a long position betting the drought pushes prices higher.

• Analysts and IMF forecast GDP’s drop of 5 to 15 % for Kuwait and Qatar.

• Kuwait issues another 250mn KD and 6 bn $. Abu Dhabi, the real estate sector is not slowing down.

• GCC banks ‘s profits rise strongly.

• A review of recent events/data impacting our investment themes and outlook
• Oil price rise is pushing government bond yields higher globally, signaling the next inflationary wave has started
• Precious Metals and miners rally despite higher yields and a strong Dollar- a positive divergence

• The supply shock intensified this week as the war theatre expanded to affect already impeded traffic through the Red Sea, and as President Trump renewed his trade war.
• Inflationary pressures are rebuilding, making June releases transitory relief, with good news frontloaded. The ECB recognised the change and signalled a September hike.
• Next week’s BoE and Fed decisions are unlikely to offer such a strong presumption, but a 6-3 MPC vote would help build momentum towards a BoE hike in September.

• Given the projected influx of AI chips into the US market, there will be a shortfall of data centers to support them, exceeding current data center capacity.
• Constraints on data center rollout include power infrastructure & grid interconnection, regulatory & permitting friction, supply chain bottlenecks, labor shortages, and growing real estate & local opposition/protests. 
• Entities that control power-backed, permitted, and construction-ready data center capacity will hold a durable competitive advantage that capital alone cannot compete against.

Highlights

• India in bid to scale up production as prices hit record levels

• El Nino already impacting monsoon, causing 31% deficit

•  Idled plantations getting revived to cash in on prices

• Demand in the country will touch 1.8 million tons in the not-so-distant future from over 1.4 million currently.

• Based on the steep “slope” of the conflict escalation, we would not be surprised to see $100.00 per barrel, basis prompt NYMEX, approached in the not-too-distant future.      
• We have pulled our recommendation to short the Sept NYMEX CL RBOB crack since, as anticipated, the jump in crude oil squeezed the cracks toward fair value given current circumstances.
• Our latest outlook for the U.S. commercial crude oil balance suggests an even “tighter” peak through the end of August, with “less robust” easing thereafter.        

• $18 Million in Bribes: The Double Life of a Chinese Financial Official A mid-level official at China’s foreign exchange watchdog allegedly amassed 120 million yuan ($18 million) in bribes while living a cinematic double life — even renting a dilapidated home to hide his wealth from his superiors, according to an internal warning film and sources familiar with the matter.
• China Offers Brand-Name Drugmakers a Lifeline in Bulk-Procurement Tender China will allow more originator drugs to re-enter its national bulk-procurement program after missing the initial bidding round, expanding a mechanism intended to limit cutthroat price competition and preserve access to brand-name medicines in hospitals.
• FINANCE & ECONOMY China Mutual Funds Swing to $287 Billion Profit on AI Stock Binge China’s mutual funds swung back to profitability in the second quarter, raking in 1.94 trillion yuan ($287 billion) in net profit as active managers dumped traditional staples for AI and tech stocks.

• Crude futures raced higher on Thursday following a further escalation risk to oil flows after a Saudi ship was blasted in the Red Sea, while the Strait of Hormuz effectively remains closed.
• Front-month Sep26 ICE  Brent futures were up 6% at  $99.75/b (2042 BST), having posted a fresh two-month high of $102/b, while Sep26 NYMEX  WTI was at $91.48/b , up 5.4% versus Wednesday’s settle.
• Both benchmarks eased as the trade day wound down.

• Large Group II cargo with a combination of light and heavy grades was set to load from Taiwan at the end of this week.
• Shipment adds to a gradual pick-up in flows over the past week, although July volumes remain well down from month-earlier levels.
• Singapore took delivery of additional supplies from Qatar, triggering a strong rebound in shipments from that market this month.