In today’s briefing:
- AI THREATENS HUMANITY: World Goes to DEFCON 1 !!
- BoJ: Hike Disappoints Markets
- HEW: Hawkish Peer Pressure
- Indonesia Economics: Partial Stabilisation, but New Finance Minister Faces Same Challenges
- Global Base Oils Cargo Flows: Week To 18 September
- CX Daily: Plunging Yields and Debt Swaps Are Rewiring China’s Credit Market
- Oil futures: Crude drifts lower, optimism grows on Saudi exports
- Oil futures: Crude eases as partial restart eyed on Saudi E/W pipeline
AI THREATENS HUMANITY: World Goes to DEFCON 1 !!
- Leaders of top US AI companies have said human extinction is possible and that AI model development should be slowed.
- With upcoming IPOs and rapid market-share losses to open-source Chinese models, safety risk declarations and calls for government regulation could help these firms cement an oligopoly in the US market.
- China has read this playbook clearly, calling it “malicious competition” and pivoting its strategy: building domestic chip infrastructure, releasing ultra-cheap open-source models, and positioning itself as the open-AI champion.
BoJ: Hike Disappoints Markets
- The BoJ’s 25bp hike to 1.25%, in line with consensus, came with an ongoing cautious tightening bias as inflation nears 2% and FX risks stay elevated.
- A 7–2 split vote and below‑target core CPI argue for gradual, data‑dependent hikes rather than a rapid or front‑loaded rate path.
- Yen weakness after the decision shows markets still see BoJ as lagging behind necessary action, leaving pressure for further rate rises if inflation and FX prove problematic.
HEW: Hawkish Peer Pressure
- UK inflation and unemployment data confirmed a significant hawkish drift in the BoE’s forecast, but its reluctance to respond disappointed overly hawkish market pricing.
- The Fed and BOJ both hiked like the ECB and are likely to go again, although FX traders also punished the BOJ’s caution. Doves were beaten by peer pressure.
- Next week is the turn of the Norges Bank, SNB and Riksbank to announce their policy decisions, with the latter two being some of the increasingly rare dovish holdouts.
Indonesia Economics: Partial Stabilisation, but New Finance Minister Faces Same Challenges
- Indonesia’s currency, reserves, and consumer confidence have stabilised since 2Q26’s turmoil, but the recovery’s foundations remain narrow and may renew amid external stresses.
- External risks are mounting — Fed hikes, Middle East tensions, agricultural pressures — any of which could inflict renewed turmoil for Indonesia’s economy.
- Prabowo’s sacking of Purbaya in favour of technocrat Suahasil Nazara is positive, but the rapid turnover signals institutional turbulence in a key economic policy role.
Global Base Oils Cargo Flows: Week To 18 September
- A larger-than-usual cargo with a combination of Group II light and heavy grades was set to load from Taiwan in the coming days, with India a likely destination.
- A large cargo of Group II base oils loaded from Taiwan at end-August headed to India, with arrival due this week.
- A large cargo with a combination of Group II light and heavy grades loaded from Taiwan at end-July headed to the US Gulf coast, with arrival due in late-September.
CX Daily: Plunging Yields and Debt Swaps Are Rewiring China’s Credit Market
- Analysis: Plunging Yields and Debt Swaps Are Rewiring China’s Credit Market Traditional bank loans have fallen to less than 60% of China’s total credit supply for the first time in seven years, as plunging interest rates drive corporate and government borrowers into the bond market.
- China Tightens Grip on Private Funds With New Monitoring Center China is preparing to set up a new Fund Monitoring Center to centralize oversight of the country’s public and private funds, in what would mark one of the biggest regulatory overhauls for the asset management industry in years, Caixin has learned.
- Hong Kong to Accelerate Push for International Gold Trading Hub Hong Kong plans to accelerate the development of an international gold trading market and is considering increasing the gold reserves of its Exchange Fund, Chief Executive John Lee said Wednesday.
Oil futures: Crude drifts lower, optimism grows on Saudi exports
- Crude oil futures early Friday continued to drift lower amid growing optimism that disruptions to Saudi crude after the East-West pipeline attack would be less severe than initially feared.
- Nov26 ICE Brent futures were 0.85% lower at $103.86/b (0115 BST), while Oct26 NYMEX WTI was at $100.97/b , down 0.9% versus Thursday’s settle.
- It left benchmarks relatively flat on the week as crude pulled back after Saudi Arabia indicated it could restore about half the capacity of its East-West pipeline within days by bypassing a damaged section, with full flows potentially returning by the end of October.
Oil futures: Crude eases as partial restart eyed on Saudi E/W pipeline
- Crude oil futures retreated for a second session Thursday on hopes that losses from the Saudi pipeline attack would not be as severe as initially feared, while there has been a midweek slowdown in military strikes.
- Nov26 ICE Brent futures were 1.7% lower at $104.03/b (2053 BST), while Oct26 NYMEX WTI was at $101.25/b , down 1.15% versus Wednesday’s settle.
- Oil prices had already dropped around 3% Wednesday after Saudi Arabia stepped up efforts to restore its East-West pipeline, easing concerns over how much crude supply will remain disrupted by last week’s drone attack on a major pumping station.
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