Individual Economists

French Bond Yields Rise After Le Pen Cleared To Run In 2027 Presidential Election

Zero Hedge -

French Bond Yields Rise After Le Pen Cleared To Run In 2027 Presidential Election

Marine Le Pen can enter the race to become France's next president after judges confirmed her embezzlement conviction on appeal but handed her a reprieve on an election ban.

Presiding Judge Michèle Agi confirmed Le Pen’s conviction, saying that she and several others at the National Rally party misused European Union funds earmarked to pay for aides.

But the appellate judges reduced her ban to 15 months, thus paving the way for her to lead her party into the next election.

“The court found that the enforcement of this penalty since March 31, 2025, has already remedied the breach of integrity to an extent compatible with the fundamental guarantees afforded to citizens, and that disregarding this would undermine the principle of freedom of candidacy, an essential condition for the democratic exercise of universal suffrage,” Judge Agi said in court.

Le Pen was initially convicted in March 2025 by first-instance judges, who gave her an election ban lasting five years and a two-year jail term that’s on hold while she appeals.

Her party was quick to react, with Bardella quipping on TV against what he described as the “tyranny of judges.”

Jordan Bardella, whom she has groomed as her chosen successor for years, is ready to take her spot as the lead candidate for the National Rally.

The 30-year-old would offer voters a somewhat different profile to Le Pen who has gained ground among voters in three successive presidential campaigns.

A recent poll suggested that either would lead the French election after a first round vote.

French bond yields are up modestly after the news, but were already higher before the decision...

For now, prediction markets show Le Pen's odds of victory improving modestly from an admittedly low level, while Bardella, has consolidated his position as favorite to win...

While Le Pen can still lodge a top court challenge, she has promised to announce whether she’ll run or not after this ruling.

Still, the court gave Le Pen a one-year jail sentence that it indicated she would likely serve with an electronic tag, for at least a portion of the term, and she has indicated she would likely withdraw if she was forced to wear the bracelet during the campaign.

The decision now rests with Len Pen as to her future - she is scheduled to speak in a television interview at 8 p.m. local time.

Tyler Durden Tue, 07/07/2026 - 08:34

Futures Fall, Chipmakers Tumble After Samsung Rout; Oil Climbs

Zero Hedge -

Futures Fall, Chipmakers Tumble After Samsung Rout; Oil Climbs

Stocks fell as freash volatility hit chipmakers after blowout earnings from Samsung Electronics were still not good enough (the company missed some buyside estimates) and left investors wanting even more, and sent its stock tumbling as much as 11%, forcing another 20 minute halt of the Kospi. As of 8:00am ET, S&P futures were down 0.2% and Nasdaq futures fall 1%, with chip stocks sliding in premarket trading (both Micron and Sandisk dropped more than 5%), following a tech led selloff in Asia, while SpaceX is joining the index today, potentially leading to positioning adjustments across global tech. European stocks are little changed. Meanwhile, Brent crude futures rise 1.5% and are back above $73 a barrel following another Iran attack on a Qatari LNG ship crossing the Strait of Hormuz near Oman. European natural gas futures are up around 4%. Bonds trade heavy as a result with a decline in Treasuries pushing US 10-year yields up 3 basis points to 4.50%. The Bloomberg Dollar Spot Index inches higher with modest moves across the G-10 complex. Precious metals fall as does Bitcoin. US economic data calendar includes ADP weekly employment change (8:15am), May trade balance (8:30am) and June New York Fed 1-year inflation expectations (11am).

In premarket trading, Magnificent Seven are mixed: Nvidia slips 2.2% afters Reuters reported that China’s DeepSeek is developing its own chip to help power artificial intelligence systems (Amazon +1%, Microsoft +1.5%, Meta +1%, Alphabet +0.4%, Apple +0.6%, Tesla -0.4%)

  • Chipmakers, neo-cloud firms and AI infrastructure names are under pressure after Samsung Electronics reported preliminary results that failed to meet high investor expectations.
    • Marvell Technology (-3.2%), Qualcomm (-1.9%), Intel (-3.4%), AMD (-3.1%) and Broadcom (-2.0%) are all lower
    • Storage and memory stocks are weaker, including Sandisk (-5.3%), Western Digital (-5.6%), Seagate (-4.4%) and Micron (-5.1%)
      Broadcom (AVGO) falls 3% after Erste Group downgraded the chipmaker to hold, noting the stock’s high valuation.
  • Cloudflare Inc. (NET) rises 3% as Scotiabank raised its recommendation on the technology company to sector outperform, anticipating upside from artificial intelligence.
  • Crinetics Pharmaceuticals (CRNX) surges 99% after Vertex Pharmaceuticals entered a definitive agreement to buy the company for $85 per share in cash, for a total equity value of approximately $10 billion.
  • Fiserv (FISV) is up 5.6% after the Wall Street Journal reported that big Wall Street banks have held preliminary discussions about a deal to acquire a debit network owned by the financial-technology company.
  • Plug Power (PLUG) climbs 2.3% after receiving an electrolyzer order to power a hydrogen project in Australia.

In other corporate news, Vertex Pharmaceuticals agreed to buy Crinetics Pharmaceuticals for $10 billion in cash — its largest deal ever — to expand into endocrinology. Investors in a KKR retail private credit fund got back all of their requested cash in the second quarter, a sign that individual investors’ skittishness over the asset class may be easing

As reported earlier, Samsung - the world’s biggest memory maker - tumbled as much as 11% in Seoul after its quarterly report failed to wow traders even after profit surged 19-fold. Peers such as Micron Technology and Sandisk tumbled more than 5% in US premarket trading. Nasdaq futures were down more than 1% with SpaceX set to join the index, potentially leading to positioning adjustments across global tech. 

“Overnight was ugly, despite a monster Samsung operating profit beat,” said Rich Privorotsky, head of European One Delta trading at Goldman Sachs Group Inc. “Classic ‘travel then arrive’ price action.”

The sell-side is jumping on board Elon Musk’s rocket, with at least six brokers, including Morgan Stanley, Goldman Sachs and UBS, initiating on the stock with buy-equivalent ratings. While investors expect SpaceX’s inclusion in the Nasdaq 100 to trigger some mild swings, the rocket and AI company is winning a clear buy consensus. At least six brokers, including Morgan Stanley, Goldman Sachs Group Inc. and UBS Group AG, have initiated coverage of the stock with buy-equivalent ratings.

“The SpaceX inclusion will undoubtedly cause some volatility today, but ultimately it should benefit shareholders through improved liquidity,” said Michael Field, chief equity strategist at Morningstar. “Short-term pain, long-term gain.”

For Marija Veitmane, head of equity research at State Street Global Markets, the latest tech selloff in tech again creates a buying opportunity. “Samsung earnings confirmed the insatiable demand for everything IT that the AI revolution has created,” she said. “There is no other sector that has similar earnings power.”

Elsewhere, WTI oil is rallying, back above $69 a barrel, after a Qatari ship was attacked in the Strait of Hormuz. Defense is back on traders’ radars as the two-day NATO summit starts in Turkey. Trump meets Zelenskyy there on Wednesday.

European stocks are little changed. Europe’s Stoxx 600 saw a majority of its members rise even though the index was 0.1% lower, as declines in mining and tech sectors fail to offset gains in personal care shares. Here are some of the biggest movers on Tuesday:

  • Saab shares rise as much as 7.2% after Morgan Stanley double-upgraded the Swedish defense firm to overweight, citing an attractive valuation and strong order momentum.
  • Carrefour shares rise as much as 4.3% after being named as RBC’s top pick among European food retailers, based on the French grocer’s more focused approach.
  • Shell shares gain 3.4% after a trading update from the oil major showed strong oil and gas trading profits amid the turmoil caused by the Middle East conflict.
  • Kion shares rise as much as 5.9% after Morgan Stanley upgraded the industrial firm and upped its price target by a third, pointing to an attractive entry point and scope for a re-rating.
  • Victrex shares surge as much as 18% after the British thermoplastic company reported revenue growth in the third quarter.
  • NCC rises as much as 7.5% after the cybersecurity business said it plans to return cash through a tender offer priced at a premium to Monday’s closing price.
  • Keller Group shares rally as much as 19% as the ground engineering specialist raised its outlook for the year on strength in North America.
  • European semiconductor stocks are falling across the board after Samsung Electronics, the South Korean memory chipmaker at the heart of the AI trade in the past few months, reported preliminary results that failed to meet higher investor expectations.
  • Siemens Energy shares fall as much as 6.9% on a broadly weak day for so-called AI winners after Barclays downgraded its recommendation to underweight, seeing limited upside to consensus through 2030.
  • ITV shares fall as much as 6.4% after JPMorgan downgraded the stock to neutral from overweight, saying terms of the Sky deal failed to meet higher expectations.
  • DiaSorin falls as much as 3.1% after BNP Paribas cuts the stock to underperform from neutral, saying initial epidemiology data doesn’t support the Italian healthcare company’s guidance for the year.
  • PolyPeptide drops as much as 8.3% after RBC Capital Markets cut the stock to sector perform from outperform, saying it’s moving to the sidelines following the Swiss company’s recent share outperformance.

Asian stocks fell, led by technology shares as investors rotated into other sectors after earnings from leading memory chipmaker Samsung Electronics. The MSCI Asia Pacific Index dropped more than 1%, with Samsung among the biggest drags along with peers SK Hynix and Kioxia. South Korea’s Kospi tumbled 4.9%, leading declines among regional benchmarks. Stocks rose in Singapore and the Philippines. Samsung’s 19-fold quarterly profit surge underwhelmed the market, sending investors flocking to more defensive sectors. Non-memory AI plays also benefited, with shares of Japanese banks and a gauge of Chinese technology stocks advancing. “Buy side expectations sat well above consensus” for Samsung, said Billy Leung an investment strategist at Global X Management. “My view is this is a positioning reset within a structural story, not the end of it.” The market is also looking ahead to the US trading debut of SK Hynix on Friday. Outside of tech, other key events this week include earnings from heavyweights Fast Retailing and Tata Consultancy Services. Here Are the Most Notable Movers

  • Kuaishou shares fall in Hong Kong after Tencent’s move to trim its stake in the firm and cease to be a substantial shareholder. Chinese robotics supplier stocks rise as investors’ sentiment is boosted by Shanghai bourse’s approval of Unitree’s IPO registration.
  • LG Energy shares closed 6.4% lower on the Korean Exchange after the company reported preliminary second-quarter earnings that missed analyst estimates, as lackluster US support for electric vehicles failed to offset surging demand for energy-storage systems.
  • Sapporo shares gained the most since August 2024 after the firm unveiled a strategic joint venture with Carlsberg.
  • Shares of Zhipu, which trades as Knowledge Atlas Technology, gained in Hong Kong as investors’ concerns over lockup expiry eased.
  • Trent shares tumble after first-quarter standalone revenue growth misses some analysts’ estimates.
  • Meituan shares rose 4.5% in Hong Kong, after its investee Unitree Robotics’ IPO plan was approved by the regulators.

In FX, the Bloomberg Dollar Spot Index inches higher with modest moves across the G-10 complex.  The yen was a touch stronger around 161.90 per dollar even as positioning data showed hedge funds turned the most negative on the currency since 2007.

In rates, bonds traded heavy as a result with a decline in Treasuries pushing US 10-year yields up 3 basis points to 4.50%. Treasuries hold small front-end-led losses, lifting 2- to 5-year yields by about 3bp and flattening the curve. US yields are 2bp to 3.5bp cheaper across the curve with 2s10s and 5s30s spreads flatter by 0.5bp and 1.5bp; 10-year, higher by about 2bp near 4.49%, slightly underperforms bunds and gilts in the sector. European bonds are also under pressure from rising oil prices after attacks on shipping in and around the Strait of Hormuz. European government bonds nurse similar sized losses. A major bond issuance announcement from Amazon, which is kicking off an 8-part IG bond deal added further pressure to US yields. IG dollar issuance slate includes a few names already, headed by Italy’s benchmark 5Y/10Y/30Y borrowing. Seven issuers priced nearly $12b of new US investment-grade bonds Monday, paying about 3bps in concessions on deals that were 2.9 times covered. Here is the main event that was just announced:

  • *AMAZON.COM SEEKS TO RAISE AT LEAST $25B IN US DOLLAR BOND SALE
  • *AMAZON.COM KICKS OFF EIGHT-PART US INVESTMENT GRADE BOND SALE

July Treasury auctions kick off with $58 billion 3-year new issue, to be followed by $39 billion 10-year and $22 billion 30-year reopenings Wednesday and Thursday. WI 3-year yield near 4.175% is ~2bp richer than last month’s, which tailed by 0.3bp.

In commodities, Brent crude headed for the biggest gain in more than a week., rising 1.5% and are back above $73 a barrel following attacks on shipping in and around the Strait of Hormuz. WTI crude oil futures rose about 1% after reports of vessels being hit around the Strait of Hormuz. European natural gas futures are up around 4%. Precious metals fall as does Bitcoin. Gold slipped to around $4,145 an ounce.

US economic data calendar includes ADP weekly employment change (8:15am), May trade balance (8:30am) and June New York Fed 1-year inflation expectations (11am). Fed speaker slate includes unscripted opening remarks by Governor Bowman at a Financial Stability Board Virtual Outreach Event (7am).

Market Snapshot

Top Overnight News

  • Samsung’s record profit failed to meet the lofty expectations fueled by the AI chip boom sending Nasdaq futures lower. The company’s shares sank 9%, leading a plunge in the Kospi that triggered a circuit-breaker suspension. BBG
  • AI giants OpenAI, Anthropic, and others are offering extremely aggressive discounts in computing power to win business from startups. WSJ
  • Iran’s Islamic Revolutionary Guard Corps fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, according to a senior U.S. official, marking an escalation that threatens to complicate negotiations to end the U.S.-Iran war. WSJ
  • The boss of the world’s biggest freight forwarder has said using land routes to transport goods into the Gulf is not a sustainable alternative to voyages through the Strait of Hormuz because of extra costs and delays. FT
  • China has stepped up its purchases of oil from producers in the Middle East in recent days, with deep discounts offered by its main supplier Saudi Arabia on Monday seen as likely to boost its buying. FT
  • Japan’s 30-year bond sale drew its strongest demand since 2019. BBG
  • Belarus’s president Alexander Lukashenko has said his army will not take part in Russia’s invasion of Ukraine, seemingly dismissing Kyiv’s fears that Moscow was pressuring Minsk to join its war effort. FT
  • SpaceX won bullish ratings from at least six Wall Street brokers after its IPO quiet period ended. BBG
  • Airlines are finally getting some relief at the jet-fuel pump. Fliers may not share in the savings, though. Jet-fuel prices doubled in the weeks after the Iran war started, and carriers raised fares to keep up. Now fuel prices are down 40% from their peak in April, but analysts say fares aren’t likely to follow because travelers keep paying up. WSJ
  • Trump posted on Truth Social, calling on senators to pass Reconciliation 3.0.

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded entirely in the red, failing to follow on from the positive sentiment seen stateside, as Samsung's Q2 preliminary earnings seemingly disappoint despite beating estimates. ASX 200 fared better vs peers, though still traded with mild losses. IT topped the sector pile while Metals & Mining was the sector underperformer, as precious metals gave back some of last week’s gains. Nikkei 225 traded with losses in excess of 2%, as Kioxia was weighed on by losses in Samsung. KOSPI slumped, with circuit breakers triggered twice, following losses in Samsung. Samsung reported Q2 prelim. figures, in which operating profit beat estimates while revenue printed mid-range of analyst’s expectations (KRW 171tln vs exp. KRW 169-173.9tln). The outlook also included the provisions for employee bonuses, after the Co. agreed to give bonuses equivalent to 10.5% of business performance earnings. Despite the recent selloff, investors are still quite bullish, with analysts citing the increased volatility due to leveraged ETFs as a main reason for the extended selloff, with profit-taking also a key reason. Elsewhere, Hanwha Ocean fell after Canada preferred TKMS (TKMS GY) for its submarine project. Shanghai Comp.and Hang Seng were softer, but to a lesser extent than the Nikkei and KOSPI. Key movers were Tencent and Kuaishou Technology, after the former sold part of its stake in the latter.

Top Asian News

  • China State Council approved in principle the 15th Five-Year Plan for building China into a tourism power.
  • Japanese top FX diplomat Mimura said have been in close contact with South Korean FX authorities on FX movement.
  • China smartphone sales fell 13% Y/Y during the 618 shopping festival as brands raised prices to offset higher memory costs, according to Counterpoint Research. All major Chinese brands except Huawei posted double-digit drops.
  • HKMA's Chief Exec. said they are to study 7-day offshore CNY tender mechanism. HKMA's securities regulator said that China and Hong Kong is to build a new electronic trading platform for bond and forex trading in Hong Kong.
  • Japanese PM Takaichi is to hold talks with Ishin leader Yoshimura this evening, according to Kyodo.
  • Japan's Economy Minister Kiuchi rejects reported that the government is pushing the BoJ to lower rates; said the government blueprint's reference to monetary policy is no different from its previous approach. Japan is not loosening fiscal discipline but rather showing in verifiable form in the economic blueprint.

European bourses (STOXX 600 +0.1%) opened on a modestly firmer footing after losses on Monday. European Tech is in focus after Samsung Electronics shares fell 9.5% as earnings, which topped most analysts' expectations, failed to convince investors of its valuation. European sectors opened with a positive bias, with tech the underperformer as chip names slump following Samsung (STMicroelectronics -5% and ASML -4.6%). Optimised Personal Care is the leader (Unilever +2.5%, makes up 30% of the sector) Autos also does well, Renault +2% was said to have been approached by BYD on two separate occasions in recent years to propose acquiring a stake.

Top European News

  • BoE FSR: Proposes the easing of some bank capital rules; the leverage ratio proposal would reduce the requirement by 20bps.
  • The EU is set to delay the launch of its European Travel Information and Authorisation system until next year following technical issues and border congestion, the FT reported.
  • Andy Burnham has decided not to split the treasury as part of a radical drive to boost Britain's growth, according to FT sources.

FX

  • G10s are mostly weaker against the Buck, which attempts to return to levels made on Monday above 101 in DXY. Carry continues to be a theme today as it was on Monday, with high-yielders NOK, GBP flat against the Buck and low yielders underperforming, ex-JPY. On that front, the currency appears to be benefiting from commentary via Japan's Economy Minister who rejected reports that the government is pushing for lower rates.
  • GBP is flat against the EUR and Buck with the absence of catalysts giving no bias to the currency today. Some political news overnight incl. reports that likely incoming PM Burnham is considering delaying the announcement of his chancellor until the day he is expected to become PM (potentially 20th July).
  • Elsewhere on politics, EUR looks to the Paris Appeals Court ruling on Le Pen’s misappropriation scandal where she is expected to announce at 19:00BST whether she or Jordan Bardella will run in the 2027 French Presidential election as the candidate for National Rally (RN). To recap stances, POLITICO writes “Bardella appears more of a traditional economic right-winger”. While Le Pen has a “mix of right-wing nationalism on migration and left-wing social policies”. Despite the implications for French policy ING writes “we doubt this event has great market potential". EUR/USD -0.1% at 1.1428.
  • Antipodeans are weaker against the Buck. Kiwi looks to the RBNZ tomorrow, where analysts and markets are divided on whether the Bank will hike, or keep rates unchanged (expectations biased to tightening). Westpac’s note this morning opined a relatively market-neutral scenario would be one where the OCR is unchanged and a tightening bias is retained. Meanwhile, Aussie is lacklustre and lacks direction.

Fixed Income

  • A bearish session for fixed income thus far. The space has been driven lower by renewed energy upside, and while there was some relief from the very strong 30yr Japanese auction, benchmarks have since reverted back to session lows.
  • USTs lower by 3+ ticks in 109-13+ to 109-22+ confines. Further downside brings into play 109-12+ and 109-12 from last week, before a handful of levels on the way to the figure and then 108-27 from June 11th. The US docket today begins with commentary from Fed’s Bowman before we turn to RCM/TIPP, the SCE and a 3yr auction, while on the lookout for commentary from President Trump.
  • Bunds on the backfoot, lower by around 30 ticks and the marginal underperformer. Specifics include potential updates to the draft parental savings reform, according to Politico sources. Reforms aim to save around EUR 1.6bln/yr, though it will take several years for that figure to be seen.
  • OATs await their own political updates, heading into the Paris Appeals Court ruling on Le Pen’s misappropriation scandal. Following the ruling, Le Pen is expected to announce at 19:00BST whether she or Jordan Bardella will run in the 2027 French Presidential election as the candidate for National Rally (RN). Irrespective of the court ruling or the candidate, polling has RN leading into the 2027 campaign.
  • Gilts opened relatively contained, but saw some choppiness after the BoE FSR. Gilts spiked higher by around 10 ticks, as the BoE is looking at easing some capital rules. However, as the release does not point to a carve-out or similar for Gilts, the move has unwound with Gilts a tick or two beneath pre-FSR levels. Currently down by c. 25 ticks, and holds within a 88.42 to 88.87 range.
  • UK sold GBP 4bln 4.125% 2033 Treasury Gilt: b/c 3.16x (prev. 3.38x), average yield 4.519% (prev. 4.550%), tail 0.2bps (prev. 0.2bps).
  • Japan sold JPY 454.9bln 30-yr JGBs; b/c 4.55x (prev. 2.94x, strongest demand since 2019), and average yield 3.993% (prev. 3.860%).
  • Germany sold EUR 1.318bln vs exp. EUR 1.5bln 1.30% 2027 Green Bobl & 2.60% 2041 Green Bund.

Crude Benchmarks

  • Crude benchmarks are firmer this morning, having gradually moved higher throughout the APAC session. Action which has been facilitated by reports that Iran’s IRGC fired at least two missiles at ships in the Strait of Hormuz, with one said to be a Qatari LNG tanker another reportedly Saudi-flagged. Fars clarified that the Qatari tanker attempted to pass through the Omani route and ignored repeated warnings.
  • As it stands, for as long as ships continue to sail through the Strait, the crude complex can remain towards recent lows. Therefore, the mild upward bias seen in the complex this morning appears to be some pricing in of some risk of a wider-escalation, but not another long-term disruption. Brent Sept’26 (+1.2%) currently holds just off the day’s highs, and within a USD 72.04-73.1/bbl range.
  • Spot gold (-0.9%) is on the backfoot this morning, and trades at the lower end of a USD 4,116-4,168/oz range; the trough today marks the WTD low. Pressure today appears to be a bit of unwind of the strength seen in the prior week, and amidst the slightly firmer USD/firmer yields. For gold specifically, China extended gold purchases for the 20th straight month. China’s gold reserves at the end of June 2026 were 75.44 million troy ounces. Elsewhere, base metals are mixed vs broadly lower overnight. 3M LME Copper is currently flat and trades within a USD 13,325.13-13,427.2/t range.
  • Saudi Arabia is said to be planning to expand East-West crude oil pipeline capacity by up to 2mln BPD to increase exports via the Red Sea, according to sources. Project aims to reduce reliance on the Strait of Hormuz.
  • Kazakhstan Energy Ministry said it is trying to fulfil its OPEC+ obligations, while hoping to maintain production plans for 2026.
  • China has reportedly purchased more soybeans from the US, Bloomberg reported; Cofco has booked at least 6 cargoes for loading between Sep-Oct.
  • Germany plans emergency gas reserve for up to EUR 1.5bln plus operating costs, according to sources.
  • Hong Kong chief executive confirms the launch of central clearing system for gold.
  • Data shows that two Japanese-owned supertankers carrying Saudi crude are transiting through the Strait of Hormuz to exit the Gulf region.
  • Shanghai Gold Exchange has agreed to admit Hong Kong Precious Metal Central Clearing System as an international member.
  • Syrian President Shala said the government has signed energy-sector contracts to add around 5k MW of generation capacity and rebuild power plants and is drafting plans to rebuild and modernise state institutions.

Trade/Tariffs

  • Democratic State AGs object to US President Trump's plan to impose tariffs of up to 12.5% on 60 countries over forced labour concerns.

Central Banks

  • ECB said it gives Euro Zone banks until October 31 to draw up plans against AI-powered attacks.
  • ECB's Panetta said the latest energy shock does not compare to 2022.
  • PBoC injected CNY 10bln via 7-day reverse repos with rate maintained at 1.40%.
  • PBoC set USD/CNY mid-point at 6.8054 vs exp. 6.7838 (prev. 6.8066).
  • PBoC Governor Pan said monetary policy maintains a supportive stance, will be increasing the southbound bond connect quota to CNY 800bln from CNY 500bln. To support more good companies to list in Hong Kong. Will keep increasing China's FX reserves allocation in Hong Kong. China will support Hong Kong to launch CNY-denominated commodities futures trading.

Geopolitics: Russia-Ukraine

  • Russia's Defence Ministry said 452 Ukrainian drones have been shot down over the regions since Monday evening.
  • A Russian governor said a fire has broken out at an industrial enterprise in the Kaluga region after a UAV attack.
  • Russia's Moscow Mayor said a drone attack on Moscow has been repelled and emergency services are responding to debris, Interfax reported.

Geopolitics: Middle East

  • UKMTO received a report of an incident 8NM East of Limah, Oman, with the tanker reportedly hit by an unknown projectile and causing a fire.
  • Iran’s IRGC fired missiles at two commercial ships near the Strait of Hormuz early Tuesday, according to the WSJ citing a senior U.S. official. One of the vessels was an LNG tanker owned by the shipping arm of Qatar's LNG industry.
  • Iran's IRGC fired at least two missiles at ships in the Strait of Hormuz, a US official tells Axios' Ravid; Two commercial ships were hit and suffered significant damages but no casualties.
  • A Saudi-flagged crude oil tanker was reportedly damaged near Oman around the Strait of Hormuz after another LNG tanker was struck in the same area.
  • The Qatari oil tanker was planning to pass through the Omani route in the Strait of Hormuz with the support of the US Navy and was attacked after ignoring repeated warnings, Fars reported citing sources.
  • Iranian Foreign Minister Araghchi said negotiations on a final deal will not commence if threats continue.
  • The European Aviation Safety Agency have extended the validity of the warning regarding flights over the airspace of the conflict areas in the Middle East and the Persian Gulf until July 8th.
  • Lebanese President Aoun is preparing a visit to the White House to meet US President Trump before the end of July, according to Al-Nahar.

Geopolitics: Syria

  • A series of explosive devices have detonated in proximity to the hotel in Damascus where French President Macron is staying, Reuters reported citing sources.
  • "Al Arabiya correspondent: Macron's convoy left his residence in Damascus shortly before the explosion", Al Arabiya reported.
  • French President Macron's motorcade left the hotel in Damascus around one hour before the explosions took place.

Geopolitics: Other

  • China's coastguard said it lawfully expelled a Japanese vessel near Senkaku Islands.
  • US State Department said China launched a nuclear-capable ballistic missile into the Pacific Ocean, urges China to engage in meaningful arms control discussions.
  • Japan's military build-up and overseas aggression are a reality, not hypothetical and they are rapidly expanding pre-emptive strike and long-range attack capabilities, KNCA reported.

US Event Calendar

  • 8:30 am: United States May Trade Balance, est. -78.4b, prior -55.9b
  • 11:00 am: NY Fed Inflation expectations, 

DB's Jim Reid concludes the overnight wrap

This year’s “Charts to make you go WOW!” pack returned yesterday for a 2026 edition. The chartbook is designed to surprise, challenge, and reframe the big macro and market stories of the moment. It’s become my favourite pack of the year to produce, and I hope you’ll enjoy and go “WOW!” at least once, and preferably a number of times. You can see it here at the Deutsche Bank Research Institute.
One theme in the pack is how astonishing moves in the South Korean equity market have been over the last year. This morning the extreme volatility continues with the KOSPI down -8.03%, with Samsung Electronics -9.3% lower, despite reporting a 19-fold increase in quarterly profit. Results were "only" 6% ahead of estimates and it seems to have brought in a bout of profit taking. The other KOSPI heavyweight SK Hynix is down -10.0% following the official launch of the marketing process for its planned US listing. Other tech heavy Asian markets are also lower with the Nikkei down -1.84%. Nasdaq futures are -1.03%, dragging the S&P equivalent -0.30% lower too. Elsewhere, the CSI and the Shanghai Composite are -0.83% and -1.04% respectively. Additionally, the Hang Seng (-0.42%) and the S&P/ASX 200 (-0.44%) are trading moderately lower.

In other corners of the market, Japan’s 30-year government bond auction saw its strongest demand since 2019, with a bid-to-cover ratio of 4.55, up from 2.94 previously and above the 12-month average of 3.41, as higher yields ahead of the auction attracted investors. JGBs are fairly flat on the day now.  

Before all that, markets put in a decent performance yesterday, with a generally quiet session as the US reopened after the holiday. On paper the headlines were pretty decent, with the S&P 500 (+0.72%) hitting a 3-week high thanks to a rebound in chip stocks, closing back within 1% of its record high. But under the surface, things weren’t quite as robust as they seemed. For instance, most of the S&P’s constituents actually fell on the day, as it was primarily the chip rally that lifted the index higher. Moreover, some of that US strength was just a post holiday catch-up to last Friday’s global performance. So over in Europe (which was open on Friday), the STOXX 600 fell -0.35% instead, and the 10yr bund yield (+1.3bps) rose as well.  

In the meantime, US Treasuries also saw a modest rally yesterday as they returned after the holiday, with the 2yr yield (-2.7bps) down to 4.11%, whilst the 10yr yield (-1.4bps) also fell modestly to 4.47%. That came as we heard from Fed Governor Waller later in the session, who argued that the risks facing policymakers have “completely flipped around” over the last year. Previously those concerns were focused on labour market weakness, but he said that employment conditions now appear to be stabilising whilst inflation has been “taking off”. As such, Waller made clear that the Fed's commitment to its 2% inflation target was unwavering, describing it as both credible and non-negotiable. And interestingly, market pricing for a July rate hike continued to creep back up again (after slumping on Thursday following the jobs report), with futures now pricing the chance at 25%. Meanwhile, Waller also stressed that the Fed would not keep rates artificially low to help finance growing US fiscal deficits, a timely comment given ongoing concerns around the US debt trajectory and the prospect of persistent budget shortfalls.

Waller's comments also fed into the increasingly lively debate on central bank communication. He said he’d personally prefer an inflation target range rather than a precise point target, but he acknowledged that adjusting the framework now would risk undermining credibility. And on forward guidance, he argued that if the Fed's reaction function is clearly understood, policymakers shouldn’t need to say very much about the future policy path. Interestingly, he interpreted recent comments from Fed Chair Kevin Warsh at Sintra about the demise of forward guidance as a reaffirmation of the primacy of the 2% inflation target rather than a shift in regime.

Whilst rates were subdued, things were a bit more eventful on the equity side, with the Philly semiconductor index (+2.17%) recovering after last week’s decline. That included a decent gain for Broadcom (+3.73%), which followed the news that they’d be partnering with Apple (+1.31%) on developing new custom chips, with an expanded partnership that will now go through 2031. So that helped to lift the S&P 500 (+0.72%), which closed back within 1% of its record high. With the tech sell-off in Asia we'll see how much of this reverses today.  

Looking forward, one of the main highlights this week will be the NATO leaders’ summit, which is taking place today and tomorrow. Given President Trump’s recent criticisms of NATO, particularly around the Iran conflict, it could be an eventful one, and this summit is expected to advance the emerging “NATO 3.0” agenda, under which European NATO members take on more responsibility for their own conventional defence. 

Earlier in Europe, markets struggled by comparison, with equities and bonds both selling off. In part, that followed hawkish comments from the ECB’s Schnabel, who said that the peace deal didn’t mean they were back to the pre-war situation, pointing out that gas prices “are still around 40% higher than before the war.” So investors grew more confident that the ECB would still hike rates this year, with markets now pricing in an 89% chance of a hike by the December meeting up from around 70% last Thursday after Sintra. And in turn, yields moved higher on the day, with those on 10yr bunds (+1.3bps), OATs (+1.1bps) and BTPs (+0.9bps) all rising. Equities lost ground too, with the STOXX 600 down -0.35%, although Germany’s DAX (+0.15%) outperformed modestly yesterday. There appears to be growing optimism that Germany’s recent reform announcements may finally translate into something meaningful, particularly when combined with the significant fiscal stimulus unveiled last year. Enthusiasm for the German trade faded towards the end last year, with the Iran conflict adding another layer of uncertainty. However, some green shoots of optimism now seem to be re-emerging.

Staying in Europe, today is the day we find out, via a key court ruling, whether Marine Le Pen will be eligible to stand in next year’s French presidential election. 

Amidst everything else, we did get a few data releases yesterday, but they didn’t provide much excitement. Indeed, the ISM services index for June was exactly in line with consensus at 54.0. And there wasn’t much of a story to write from the subcomponents either, as the prices paid reading was also broadly as expected at 67.7 (vs. 67.5 expected). So the direct market reaction was pretty limited, although there was some relief after the employment component (51.2) was back in expansionary territory for the first time since February.

Looking at the day ahead now, data releases include German industrial production and the US trade balance for May. From central banks, speakers include the ECB’s Panetta and Kocher, whilst the BoE will release their Financial Stability Report. Otherwise, the NATO leaders’ summit begins today.

Tyler Durden Tue, 07/07/2026 - 08:31

Double-Tap Bombing Rips Through Damascus Near French President Macron's Hotel

Zero Hedge -

Double-Tap Bombing Rips Through Damascus Near French President Macron's Hotel

Major explosions ripped through an area in of the Syrian capital near the hotel where French President Emmanuel Macron had been staying, during an official visit of the French leader to Nusrah Front (Syrian AQ) founder and now self-appointed Syrian President Ahmed al-Sharaa.

Macron is said to be safe, after talks with Sharaa at the presidential palace, but at least 18 people were injured when explosive devices went off - an attack which was captured on video from various angles.

It appeared a double-tap explosion, leading some pundits to speculate that it could have been a drone attack. It also happened near the Ministry of Tourism in central Damascus, home to some high-end hotels as well as government buildings.

According to one eyewitness speaking to the BBC:

They said that while security forces were searching for suspicious objects after the first bomb detonated, "a second explosion occurred approximately 20 meters from the site of the first blast".

"The first explosion caused material damage but no casualties. The second explosion, however, caused injuries to several members of the public security forces and the traffic police," the eyewitness told the BBC.

Security forces later indicated one bomb had been detonated from inside a parked vehicle while another had been in a bin on the street.

The Associated Press notes that "It was the second blast to rock the capital in a few days, and a setback for the country’s new president as he welcomed his first visit from a western leader since ousting longtime dictator Bashar al-Assad. Syria’s new rulers have wrestled with outbreaks of violence as they work to assert control, but the capital has been been largely peaceful."

And specifically of the French leader's whereabouts during the attack, "Emmanuel Macron was inside the presidential palace when the explosions happened."

"An official from the Elysee Palace said he was safe and that the meeting with Syrian President Ahmad al-Sharaa continued, speaking on condition of anonymity to discuss Macron’s whereabouts and security," the report continued.

No group has initially claimed responsibility for the attack. In the wake of Assad's overthrow by Western/Gulf sponsored jihadist groups, various foreign fighters as well as Syrian al-Qaeda and ISIS groups have pretty much had free reign in Syria. 

President Macron will head to Ankara, Turkey next for the NATO summit and there are reports that even Sharaa is expected to be there.

Tyler Durden Tue, 07/07/2026 - 08:20

As NATO Summit Braces For Trump, Ambassador Warns Allies: 'We're Not Going Away, Just Doing Less'

Zero Hedge -

As NATO Summit Braces For Trump, Ambassador Warns Allies: 'We're Not Going Away, Just Doing Less'

Just on the eve of the annual NATO summit, and as President Trump is en route to attend the Ankara-hosted meeting, Washington has reaffirmed its vision of withdrawing from NATO leadership in order to allow other countries to shoulder the collective defense burden.

America's ambassador to the alliance told CNBC on Monday that pressuring allies to spend more - which has created tension among some European allies - reflects necessary "growing pains" rather than a crisis, 

"The target is that Europe takes over the conventional defense of the European continent," Ambassador Matthew Whitaker stated. That's when he emphasized: "We’re not going away, we’re just doing less."

via Associated Press

"I see these as just the challenges that we've worked through before," he continued, while commenting that there are still "laggards" which still have to reach higher and higher commitments to catch up.

At last year's summit President Trump laid out before allies the bold new defense spending target of 5% of gross domestic product (GDP) for each member country, more than doubling the prior 2% benchmark.

Leading NATO members are reportedly ready to tout a success story when it comes to a higher defense spending bar:

European NATO allies are heading into this week’s summit in Ankara convinced they have a compelling case to present to Donald Trump on defense spending, industrial cooperation and aid for Ukraine, but diplomats privately acknowledge the president remains the biggest source of uncertainty.

Speaking in the run-up to the annual summit in the Turkish capital, diplomats said the two-day gathering should showcase allies’ increased defense spending and include a string of defense industry announcements, including new letters of intent, joint projects and more transatlantic co-production. 

“There is a good story to tell,” one NATO diplomat said, pointing to a sustained shift in the alliance’s burden-sharing. “The numbers don’t lie.” 

The same publication writes that "According to figures compiled by the Stockholm International Peace Research Institute, military outlay by European countries that are also members of NATO rose more quickly than at any time since 1953 through last year, with Germany and Spain – two countries often singled out by Trump as laggards – seeing booms in defense spending."

Hudson Institute think tank senior fellow Can Kasapoğlu has described of the view from Washington and Brussels, "When the alliance is back to its Cold War default, the question of what you are bringing to the table is getting more important."

Rutte preps a positive narrative ahead of Trump's arrival...

He added in comments to Fox: "The nations bringing hard-power capability to NATO are going to get VIP treatment." They see Russia as a major looming threat to long-term European security, as the Ukraine war only shows signs of likely escalation, now it its fifth year.

Tyler Durden Tue, 07/07/2026 - 08:05

Manslaughter Charges Filed Following Fatal Tesla FSD Crash

Zero Hedge -

Manslaughter Charges Filed Following Fatal Tesla FSD Crash

A fatal crash involving Tesla's driver-assistance technology has resulted in manslaughter charges against a Texas man after his vehicle slammed into a home near Houston, killing a 76-year-old woman inside, according to the Wall Street Journal.

Prosecutors say 44-year-old Michael David Butler told first responders he had been using Tesla's Full Self-Driving (Supervised) feature while making a DoorDash delivery on June 19. Butler claimed he changed the music on the touchscreen before losing consciousness. Authorities said he was the only person in the car and that toxicology tests found no evidence of alcohol or drugs.

However, data recovered from the vehicle paints a different picture. Investigators said Butler repeatedly overrode the FSD system by pressing the accelerator, with the Tesla reportedly reaching speeds as high as 73 mph in a residential neighborhood. Officials also said there was no braking in the final moments before the vehicle crashed into the home. Investigators further uncovered Google searches indicating Butler had been frustrated that the software was not driving aggressively enough.

The WSJ reported that Tesla has pushed back on Butler's version of events, stating that vehicle data shows the accelerator was held down by the driver both before and after the collision. The crash is now also under investigation by the National Highway Traffic Safety Administration as part of its ongoing scrutiny of advanced driver-assistance systems.

The crash is likely to intensify the long-running debate surrounding Tesla's Full Self-Driving technology. Although the software is marketed as capable of handling steering, braking, and acceleration in many driving situations, Tesla has consistently maintained that the system requires a fully attentive driver who is prepared to take control at any moment. Despite its name, Full Self-Driving is not an autonomous driving system.

Critics have argued for years that the branding has created confusion among some drivers, leading them to place more trust in the technology than Tesla's own warnings recommend. Regulators have repeatedly examined whether drivers are using the system as intended, while safety advocates have questioned whether the software encourages a false sense of security behind the wheel.

The National Highway Traffic Safety Administration has opened numerous investigations into crashes involving Tesla's advanced driver-assistance features over the past several years, including several fatal incidents. Those investigations have fueled ongoing scrutiny of the company's autonomous driving ambitions as Tesla continues to make artificial intelligence and self-driving technology central to its long-term strategy.

Tyler Durden Tue, 07/07/2026 - 06:55

Britain Vs America: 1976 Vs 2026

Zero Hedge -

Britain Vs America: 1976 Vs 2026

Authored by John Perry via AmericanThinker.com,

July 4, 1976, the American bicentennial.  

Along with other American students at University College, Oxford, I attended a grand banquet celebrating the occasion.  In the high-vaulted dining hall, our familiar, plain wooden tables and benches were awash in linen, china, fresh flowers, silver, silver, and more silver: candlesticks, ewers, wine coolers, chargers, and items a young man from Spring Branch, Texas could not readily identify.  We feasted heartily, drank really good wine, heard speeches, and toasted President Gerald Ford.  It was a great night to be an American.

Looking back at that celebration fifty years on, it’s clear that the U.S. and Britain have gone in very different directions since then.  

Britain in 1976 seemed to this novice traveler like a downtrodden older cousin, tired and worn around the edges yet with a sense of history and purpose, a proud past, a charming personality, and the notion that “there will always be an England.”

Unfortunately, immigration, lawlessness, blind obedience to the global warming hoax, and a fading confidence in their own brilliant history have rendered Great Britain a shadow of its former self.

Britain today seems to have lost its way, given up, and virtually turned itself over to third-world invaders.  Great Britain resolutely held off foreign invasion through two world wars.  But over the past fifty years, in an era of relative peace and prosperity, they have turned one of history’s truly great and accomplished cultures over to gate-crashers who have diluted it almost beyond recognition and possibly beyond saving.

Fortunately, history has shown America a different way, though millions of illegals flooded in before our leaders saw the light.  With its ruinous and indefensible open borders policy, the U.S. nearly went down the same dark path as our British friends.  Only a change of command and a resurgence of common sense saved us in the nick of time.  For now.

In another unfortunate misstep, Britain has spent years destroying itself before the false god of climate change.  Their people freeze and roast while vast and easily extracted stores of coal sit unused.  Their North Sea oil and gas riches wait offshore, largely ignored and untapped today after an initial bonanza of energy production.  Windmills, solar panels, and electric car mandates will do still further damage.  Yes, the climate is changing.  It has always changed.  (Ask the Vikings who lived in Greenland until it got too cold in the 1400s.)  But fossil fuels don’t cause climate change.  And nothing the world does — or doesn’t do — will stop it.

Thank goodness America’s current leadership has the sense to throw out decades of junk science and embrace energy development that keeps Americans comfortable, healthy, and safe.  And gives us freedom to choose.  If you want an electric car, Elon Musk makes the best in the world.  If you can’t resist a scorching V-8, America has some brand-new ones that will make your eyes bug out.  

Even in 1976, the British seemed different from people back home.  Americans appeared more prosperous, ambitious, hopeful, independent, curious, and confident.  They had more sparkle and optimism.  On the train one morning in Oxford, I struck up a conversation with a passenger who was about my age.  Hearing my accent, he pumped me for information about the American West — Montana, Wyoming, the Dakotas.  He dreamed of going there to work on a ranch and have his own place one day, he said, because in Britain the land was all bought up and no one had any way to improve his prospects.  No one expected to get ahead.  To him, America was the shining New World of opportunity.

I wrote in my journal that summer about crowds in the street seeming gray and listless, shuffling through the day in a joyless, inevitable sort of way.  I didn’t know exactly how to describe what I felt, but it centered on what my fellow passenger had said about how Americans seemed to have optimism about the future, a sense they could change their lives for the better, while the British were shunted onto a path somehow and that was it.  No New World for them.

Fifty years after my bicentennial celebration abroad, despite all the slings and arrows arraigned against it, the United States is still the United States.  Still the freest, most prosperous country in world history.  Still maintaining the highest per capita income and standard of living in the world (not counting Monaco, Liechtenstein, etc., which have no Democrats).  Still defending its founding principles anywhere and everywhere. 

On the other hand, the Britain of 1976 has disappeared, a victim of irresponsible and short-sighted leadership whose immigration and energy policies have driven the country to its knees.  A nation that was once quirky and a little past its prime, yet still solid at its core and capable of renewal, has devolved into one that is morally and culturally spent, bereft of an identity, embarrassed at its past triumphs, and imprisoned by forces determined to bring it down.

Many noteworthy comparisons between ’76 and today are in the little things.  In 1976, the mail in Oxford came twice a day.  This was of course so one could get a letter in the morning and, like any civilized correspondent, answer it the same afternoon.  Twice-a-day mail delivery is history now.  In fact, unless you pay a premium, routine mail is delivered only every other day and not on weekends.

British trains in ’76 looked as though Hercule Poirot might step off onto the platform at any moment.  Each car had individual compartments connected by an interior corridor along one side.  They were quiet, plush, and easy to get in and out of.  They had plenty of storage, and they lent a degree of British elegance to even the most routine train journey.  It’s all gone today.

Table service in ’76 was a dream for anyone who enjoys the experience and spectacle of dining.  The most mundane meals were enhanced by traditional tea service (strainer, stand, sugar cubes and tongs, milk pitcher), toast racks, fish knives, and an array of spoons from coffee (doll-like, half the size of a teaspoon) to soup (massive; don’t put the whole thing in your mouth).  Even expensive restaurants hardly make the effort now.

At the opera, excellent binoculars were provided in racks on the seat backs.  Those are long gone, I suspect, because they started disappearing.

But the biggest disappearance since 1976 is that in ’76, Britain was full of British people, and in ’26, they have disappeared.  During the course of a day, a visitor can interact with dozens of cashiers, shopkeepers, drivers, clerks, waiters, guards, officials, and strangers at the bus stop without encountering a single native English speaker.  What happened to them?  And why would any business hire employees who cannot clearly speak the local language when it’s the language of the world?

The British today seem embarrassed by their Britishness.  Swamped by a tidal wave of political correctness, they’ve been cowed into submission for even thinking about defending one of the great cultures of the world.

By any reasonable measure, Britain is better than any immigrant homeland.  Their courts, schools, hospitals, law enforcement, business environment, and other institutions are better.  Otherwise, why would hordes of people from Africa, Asia, and elsewhere clamor to get to the British Isles?

Britain has been diluted beyond recognition by foreigners who come not to build a career, but to mooch off the British welfare system.  Rather than compel them to pull their own weight and contribute to the greater good of the Commonwealth, the government allows them to fester, holding on to their third-world ways and customs — sharia courts, Islamic schools — chipping away at all the institutions that shaped Britain, brought it to life, and sustain it today. 

England’s laws are the bedrock of modern jurisprudence.  Its industry has been the template for the modern world.  Its culture and civilization led the way into the industrial age.  Its language is the first international language in history.  Yet somehow the English have allowed themselves to feel inferior to a host of invading cultures and civilizations.  Let us hope that the Spirit of ’26 — or ’76 — will inspire them anew.

After following Great Britain up the ladder to prosperity and influence, America came too close to following it back down these past fifty years.  Yet by God’s grace, our history has led us along a different path, upward to an ever stronger, safer, more prosperous nation — a shining New World of opportunity for all. 

On this glorious occasion of America 250, that’s truly worth celebrating.

Tyler Durden Tue, 07/07/2026 - 06:30

Priced Beyond Perfection: Samsung Electronics Tumbles As Soaring Profit Not Good Enough

Zero Hedge -

Priced Beyond Perfection: Samsung Electronics Tumbles As Soaring Profit Not Good Enough

The memory bubble appears to be rapidly deflating.

After the semiconductor/memory sector was walloped in Monday US trading without any clear negative catalyst, the semiconductor-chasing world was eagerly waiting to hear what Samsung - the world’s largest memory maker - would report in its preliminary Q2 earnings report as investors sought to justify sky-high investments and valuations around AI. In the end, it was not good enough, and the stock is down 5% at last check. 

Samsung Electronics’s quarterly profit surged 19-fold due to relentless demand for memory chips needed in AI data centers. For the 3 months ended June 30, the company reported preliminary operating income of 89.4 trillion won ($58 billion) not only beating the median analyst estimate of 84.2 trillion won, but dwarfing its performance for all of 2025. Revenue more than doubled to 171 trillion won, also modestly beating expectations (Samsung will release a full financial statement, including net income and divisional breakdowns, around the end of the month).

Yet while the historicals were clearly strong, they were not strong enough for a company that had been priced beyond perfection, and where it didn't take much to disappoint investors just looking for a hint to take profit. And they go it:

  • *SAMSUNG DROPS 4.5% IN PRE-MARKET ON NEXTRADE AFTER 2Q GUIDANCE

Indeed, investors had harbored extremely high hopes for Samsung, its peer SK Hynic and other chipmakers that are posting unprecedented profit margins thanks to a historic buildout of AI infrastructure worldwide. Yet that capex buildout is likely ending, after META lobbed the first shot across the bow of unlimited capital spending last week and sparked the biggest 2-day selloff of high beta momentum stocks since covid. 

“We will be looking for signs that this represents a sustainable step change in the company’s annual free cash generation,” said Brian Cho, a portfolio manager at Causeway Capital Management, adding that he would also be looking at management’s shareholder return policy.

A shortage in memory chips has become a key bottleneck for AI development, executives including Nvidia CEO Jensen Huang and OpenAI COO Brad Lightcap have warned. Manufacturers are giving priority to high-end memory development to meet data centers’ needs, leading to inadequate volumes of conventional memory as well. Analysts expect shortages to last through 2027 at least, giving Samsung and rivals SK Hynix and Micron enormous pricing power. Meanwhile, China's own DRAM giant, CXMT, is rapidly catching up to its Korean peers, and rapidly taking market share, sparking concerns that China may soon do to commodity memory chips as it has done to, well, pretty much every other product it has competed against: sparked a deflationary tsunami. 

But not yet: the average operating profit margin for the big three chipmakers is projected to trend around 75% to 80% in the June quarter, according to market research firm Counterpoint. Some argue that such margins constitutes excessive profiteering, it said in a report. “There can be regulatory pressure on memory players if this situation continues,” it said.

Shares of Samsung, which has broad portfolio of chips and consumer electronic, have underperformed cross-town rival SK Hynix’s, which is more focused on high-end memory geared for AI’s computation needs. Samsung’s shares, which were hurt by a selloff in the five days to Friday, are up 165% this year, compared with SK Hynix’s roughly 260% gain.

Korea is hoping that the cartel pricing of Samsung and SK Hynix ends up creating an impenetrable moat which benefits the entire country: the two chipmakers are central to South Korea’s ambitions to pull ahead of other countries to take leadership in AI. Samsung Group and SK Group plan to build two chipmaking plants apiece in the nation’s southwest for a total of 800 trillion won to expand capacity quickly. The country aims to double its memory production capacity within five years. For 2026, Samsung has announced plans to spend over $70 billion in production capacity expansion and research. However, as we reported last night, one thing Seoul apparently forgot is the Chinese threat, and contrary to conventional wisdom that Chinese memory tech is far behind, Korean experts have warned that CXMT is closing the gap with Korea "far faster than expected."

And with Korea opening for trading, it's not surprising that Samsung stock, which was priced beyond perfection, is down as much as 5% in early trading

Tyler Durden Tue, 07/07/2026 - 06:19

Coffee Shorts Get Roasted As Arabica Stages Biggest Jump Since Dot-Com

Zero Hedge -

Coffee Shorts Get Roasted As Arabica Stages Biggest Jump Since Dot-Com

Arabica coffee futures jumped the most since the Dot Com era as worsening weather in Brazil and shrinking exchange-managed warehouses intensified concerns about near-term supply. This comes as El Niño threats rise across critical agricultural belts worldwide.

New York prices jumped as much as 18.5% on Monday to $3.57 a pound, the highest since January. This was the largest single-session gain since July 18, 2000.

Context on the squeeze: Traders had been expecting a large Brazilian crop, but rains have slowed the harvest, and growers are holding back sales in hopes of better prices.

Bloomberg noted: 

Technical factors also were at play. The Intercontinental Exchange last week raised margin requirements as prices increased, making it costlier for traders to maintain positions and potentially pushing some out of the market, said Judy Ganes, president at J. Ganes Consulting.

"This move is just one of those fear days and people covering," Ganes said. But it's hard to justify it fundamentally."

Bloomberg quoted Rural Clima meteorologist Marco Antonio dos Santos as saying that rain is forecast for a large part of Brazil in mid-July, which will be "detrimental" to crops, including coffee. "This is directly linked to El Niño, which has been gaining strength week after week," he added.

The rally adds to a broader El Niño-driven surge across soft commodities, with sugar, rice, and cocoa also rising.

Latest El Niño coverage:

Arabica inventories in exchange-monitored warehouses are at their lowest levels since March 2024.

Tyler Durden Tue, 07/07/2026 - 05:45

UK Police Crack Down On Dangerous New Threat – People Standing Around Doing Nothing

Zero Hedge -

UK Police Crack Down On Dangerous New Threat – People Standing Around Doing Nothing

Authored by Steve Watson via Modernity News,

British policing has reached new depths of absurdity and authoritarianism. Officers are inventing pre-crimes, harassing citizens for lawful filming or standing in public, and deploying to pubs to warn people off tweeting about councillors.

All while the same forces stand guard over brand-new taxpayer-funded houses handed to migrants and turn a blind eye to patterns of two-tier enforcement that have defined recent years.

In one widely shared incident, a female officer was caught on camera confronting a man peacefully filming in a public space.

In the footage she claims his mere presence "might" wind people up and lead someone else to lose their temper, threatening arrest to "prevent a breach of the peace."

No actual crime had occurred. No law was being broken. As the man pointed out, the logic is straight out of the dystopian story Minority Report: punish the law-abiding person in case an offence is later committed.

The man was simply exercising his right to record in public. The response is to treat him as the threat.

This is far from an isolated incident.

Another viral video shows a male officer with wild, agitated behaviour confronting a citizen for filming. He threatens arrest for a "technically public order offence," then pivots to demands for details, ultimately detaining the man.

Observers note the officer appears erratic, with exaggerated facial expressions and eye movements that have sparked widespread comment about his fitness for duty. The citizen was going about lawful business. The officer escalated without clear legal basis.

In Birmingham, police harassed a citizen journalist for filming in public, repeatedly citing "breach of the peace" while one officer grew visibly agitated and another followed the filmer continuing the same vague threat. The man being targeted remained calm and pointed out he was doing nothing illegal. The officers created the tension.

Sheffield saw similar overreach. After police used significant force on a 17-year-old boy during a protest, slamming him into a metal bollard, officers then turned on a journalist filming the aftermath. They put hands on him solely for recording the incident up close. The pattern is consistent: document police actions and you become the problem.

Even standing still draws attention. London officers moved in on people simply standing around in a public square doing nothing.

A female Merseyside officer was caught on camera calling a man legally filming in public a "nonce." Public filming remains lawful. The verbal abuse was not. Calls for her dismissal followed, but the incident fits the broader climate where officers feel empowered to insult citizens exercising basic rights.

Another citizen journalist was arrested at a Chesterfield hotel protest for alleged breach of Section 14. Critics argue the application was selective and aimed at silencing documentation of events authorities prefer not to highlight.

When the situation is inverted and police are standing around or filming the public, complaints have ironically led to further harassment of the public.

Officers have grabbed people and demanded details for the "offence" of shielding their features on the street from facial recognition cameras. Covering your face while walking is not a crime. Yet compliance with mass surveillance is apparently now enforced with physical intervention.

When not targeting cameras or idle citizens, officers turn to social media. In Chiswick, two policemen entered a pub, asked a man to step outside, and threatened him over a tweet criticising a councillor's plan to ban outdoor seating at pubs.

The officers admitted on camera that he had broken no law. Their visit was pure intimidation - a warning to watch what he posted about local officials. This is modern Britain: police resources deployed to police tweets rather than actual crime.

Similar visits and warnings over "insults" or critical posts have been reported repeatedly. The message is clear: lawful criticism of those in power can bring uniformed officers to your door or local pub for a "chat."

These developments arrive against a backdrop of documented two-tier policing. In Birmingham, three black individuals assaulted a white British teenager. Footage shows a female officer shielding the aggressors and directing aggression toward the white victim.

The attackers walked away. Multiple officers then swarmed the victim, used foul language, shoved him into a police car the wrong way, dragged him out after the botched attempt, and restrained him forcefully. A bystander trying to explain that the white lad was the victim was ignored.

West Midlands Police have been accused of trying to limit circulation of the footage rather than addressing conduct. When pressed, they reportedly reviewed material and found nothing wrong.

The same pattern appears in Rotherham, where South Yorkshire Police used aggressive force against teenage girls at a school leavers' event - shoves, batons swung, girls knocked down, a punch, Tasers pointed. Rotherham carries the heavy legacy of grooming gang failures that saw an estimated 1,400 young victims, mostly native British girls, betrayed by authorities terrified of racism accusations. Now the same forces apply heavy hands to the daughters of those communities.

While officers invent reasons to arrest or intimidate native Britons for filming, standing, or tweeting, other resources are visibly committed elsewhere. Police have been filmed providing 24-hour guard for empty £250,000 new-build homes prepared for migrants.

This is not policing in any traditional sense. It is selective enforcement that protects certain groups and narratives while treating ordinary citizens exercising their liberties as the threat. Pre-crime logic, facial recognition enforcement, pub visits over tweets, and aggressive handling of native Britons in disputes all point to the same direction: a state that has lost sight of its duty to the people it serves and has instead become an instrument for managing dissent and demographic change.

The public is noticing. Trust is eroding. When officers spend time threatening people for holding cameras or posting opinions rather than confronting real violence, the social contract frays.

Britain deserves police who protect lawful behaviour, not invent crimes to justify targeting it. Until that changes, the dangerous new trend will remain the one the authorities have embraced: treating the governed as the problem.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Tue, 07/07/2026 - 03:30

Lithuania To Lift Ban On Nuclear Weapons, Following Finland

Zero Hedge -

Lithuania To Lift Ban On Nuclear Weapons, Following Finland

First it was Finland which lifted its ban on the deployment of nuclear weapons, declaring its willingness to host NATO's arsenal (which is largely provided by the US), and now Lithuania has become the latest European country to move to do the same.

Lithuania, which has been a NATO member state since 2004, has newly declared its willingness to be part of the alliance's nuclear sharing program. "We would like to be the integral part of this nuclear deterrence," Lithuanian President Gitanas Nauseda said at a conference in Berlin on Friday, according to AFP.

Source: Baltic Defence College

"A few days ago, I initiated a constitutional amendment to remove the existing restriction on the possible deployment of nuclear weapons in Lithuania," Nauseda added.

Soon on the heels of this speech, a group of 50 Lithuanian lawmakers submitted an amendment, but which is still expected to be formally presented before parliament.

Nauseda touted that there is "practically unanimous" support among lawmakers for repealing the ban outlined in Article 137 of Lithuania's Constitution.

“Almost all parliamentary faction leaders expressed the view that Article 137 has become obsolete and should not merely be amended but removed,” Nauseda said.

As for the current constitutional prohibition in question: 

Article 137 of Lithuania’s Constitution currently states that weapons of mass destruction and foreign military bases may not be located on Lithuanian territory.

Finland's parliament has already voted on its own reversal last month, after which Russia moved to secure more border areas with NATO countries.

This is expected to further severely impact trade and worsen official relations with these countries:

Russia has closed seven railway border checkpoints with Finland, Estonia and Latvia, according to a government decree published Tuesday.

The suspension, which takes effect July 1, halts the movement of individuals, vehicles and cargo through the designated rail crossings. Five of the shuttered checkpoints are located on the Finnish border, while Estonia and Latvia each have one crossing affected.

Officials have not disclosed the reasons for the closures or when the checkpoints might reopen.

In Estonia, the Ivangorod freight and passenger crossing will remain open, and in Latvia, the Sebezh crossing will also stay open. However, the closures leave Finland with no open railway crossings with Russia, which normally exports fertilizer to Finland by rail.

Finland shut its eastern vehicle and pedestrian border crossings with Russia indefinitely in December 2023 following an influx of asylum seekers.

Since the Ukraine war began, and in context of ratcheting tensions with NATO over its military support to Kiev, Moscow has steadily militarized its border regions with Baltic and Scandinavian states.

via BBC

The most significant source of NATO's nuclear-sharing program remains the United States. But lately France has expressed a desire to station some of its atomic arsenal in partner countries, and this could include in Finland, Sweden, Denmark and others.

Tyler Durden Tue, 07/07/2026 - 02:45

NorCal Couple Scammed Of $18,000 From Fake Checks And Online Payments

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NorCal Couple Scammed Of $18,000 From Fake Checks And Online Payments

A retired Northern California couple is speaking out after scammers allegedly drained nearly $18,000 from their checking account through a combination of counterfeit checks and unauthorized online payments, setting off a weeks-long battle to recover their money, according to ABC 7.

The couple first realized something was wrong after stopping at an ATM and noticing that their account balance was far lower than expected. A review of their bank records uncovered three checks they say they never wrote, along with 17 electronic transactions they did not authorize. The fake checks totaled more than $6,500, while the online payments added another roughly $11,400 in losses.

According to the couple, many of the payments were directed to accounts with Verizon, Capital One, and Wells Fargo that had no connection to them.

The report says that they immediately reported the fraud to Chase and closed the compromised checking account. The bank quickly reimbursed the counterfeit checks, but the dispute over the electronic payments proved much more difficult. The couple says they were initially asked to provide documentation showing they did not own the recipient accounts, a process that became frustrating because the other financial institutions could not discuss accounts belonging to other customers.

After filing a report with the local sheriff's office, they were informed their fraud claim had been denied due to insufficient evidence.

The case eventually drew the attention of a local consumer advocacy news team, which contacted Chase on the couple's behalf. After reviewing the matter again, the bank reversed course and refunded the remaining disputed funds, stating that it was able to credit the full amount after receiving the appropriate documentation.

Although the exact source of the breach remains unclear, the couple believes the fraud may have originated after they ordered new checks from a third-party printing company that required them to mail in a voided check. They suspect someone obtained their account and routing numbers during that process and used the information to produce counterfeit checks and submit fraudulent bill payments. The incident highlights how easily criminals can exploit the banking information printed on a paper check if it falls into the wrong hands.

Tyler Durden Mon, 07/06/2026 - 21:20

UAE Crude Output Nears Record High Following OPEC Exit Amid Surge In Chinese Buying

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UAE Crude Output Nears Record High Following OPEC Exit Amid Surge In Chinese Buying

The United Arab Emirates raised ‌its crude output to near record highs above 3.8 million barrels per day in June, after the Gulf nation quit OPEC to escape production caps, Reuters reported citing two sources familiar with production data said on Monday. Bloomberg data showed even higher UAE exports, rising to 3.94mmb/d, just shy of the record hit in late 2025.

June's output was the highest since April ​2020, according to Reuters estimates, exceeding levels seen before the Iran war and providing an early ​vindication of the UAE's decision to leave OPEC and OPEC+ on May 1 ⁠to free production from quota restrictions.

The UAE told OPEC it pumped 2.11 million bpd of crude in May at the height of the conflict shut-ins, down from about 3.40 million bpd in February. The International Energy Agency, however, assessed a much higher production level for ​both months, seeing May ​output at 2.8 million ⁠bpd and February at 3.64 million.

Underscoring the supply surge, Abu Dhabi National Oil Company (ADNOC) has been selling crude through tenders at discounted prices, traders told Reuters. The rebound has outpaced that of ​other Gulf producers, many of whom have restored exports through the Strait ​of Hormuz but ⁠remain well below pre-conflict production levels.

Abu Dhabi has argued that years of investment in production capacity ​justified greater freedom to produce oil, with Energy Minister Suhail al-Mazrouei saying at the time of the OPEC exit that the UAE owed it to investors to supply what global markets required "without restrictions".

The jump in output comes as oil markets ​have shifted from concerns over severe supply disruptions during the Iran war, to worries about surplus supply. Brent crude, which hit a four-year high above $126 in late April, was trading at about $72 a barrel on Monday, ‌around levels ⁠seen before the outbreak of the Iran war in late February.

Other Gulf nations also saw a surge in output: combined crude and condensate exports from Saudi Arabia, the UAE, Kuwait, ⁠Iraq and Iran rose by more than 3.5 million bpd from May to 10.07 million bpd, Kpler ​data shows. Vortexa, another cargo analytics company, estimated June flows at 10.2 million bpd, up from 7 million bpd in ​May but still way short of the 16.5 million bpd a year earlier.

Saudi crude exports averaged 4.32 million bpd in June, according to Vortexa data, around 3 million bpd below February levels.
Kuwaiti output rose to 1.65 million bpd in June, roughly triple ⁠May levels ​but still nearly 1 million bpd short of pre-conflict production.
Iraq, ​OPEC's second-largest producer, exported about 780,000 bpd in June, roughly one-fifth of volumes shipped before the conflict, Vortexa data showed.

Since the June 17 agreement between the U.S. and Iran to halt the conflict and restore shipping through the Strait of Hormuz, the backlog of crude stranded in the ​Gulf cleared more quickly, leaving about 23 million barrels still to transit the waterway, said Kpler analyst Johannes ​Rauball.

Meanwhile, in a curious twist, Sparta senior oil market analyst June Goh said that Chinese teapot refineries have emerged as buyers in Adnoc’s latest oil tender, drawn by wider discounts amid a short-term glut. Adnoc sold about 18 million barrels of crude via in fifth tender for loading through August; Upper Zakum was the main grade sold, while some Das also changed hands.  

The observation in this tender is that the Chinese teapots are now out buying, whereas in previous tenders they were not even in the buyer list, indicating that the current discounts are now at a level that competes with Iranian and Russian alternatives.

According to Sparta, the current ‘mini-glut’ reflects mismatch of prompt availability vs usual trading window two months ahead, where Mideast barrels should now be trading for September loading instead. However, unless Asian buyers pile up to refill empty SPRs, these extra barrels will need to first fill up commercial storage and then relieve the pressure in arbitrage trades to the West.

It wasn't just China: California is also buying UAE oil - some cargoes of Adnoc grades moved to US buyers via private negotiations, with likely destinations to US West Coast refineries.

Brent-Dubai EFS doesn’t necessarily need to widen that much more because diving crude differentials are doing most of the heavy lifting to keep the arbs open into northwest Europe

Tyler Durden Mon, 07/06/2026 - 20:55

Has The Breakthrough Moment For Soccer In America Arrived?

Zero Hedge -

Has The Breakthrough Moment For Soccer In America Arrived?

The World Cup is turning into a major ratings boom for US broadcasters, with Fox Sports, Telemundo and Peacock drawing record audiences.

The US Men's National Team (USMNT) is currently 1-0 down against Belgium in a Round 16 match, a game that could mark a breakthrough moment for soccer in America.

About a month into the 39-day tournament, top matches featuring the US, Mexico, England, France and Argentina have helped drive viewership levels rarely seen outside NFL games, according to Fox Sports analytics chief Michael Mulvihill.

"The U.S. matches have out-delivered expectations, but what's been more surprising is some of these matches that are between nations where the American sports fan doesn't know a lot of players and they don't even have that much familiarity with the country itself. A lot of those matches have done really well," Mulvihill said, who was quoted by Variety.

The tournament's broadening appeal has been a boon for advertisers, with unusually strong multi-generational viewing.

The question now is whether the USMNT can secure another win and continue the momentum.

Even before tonight's USMNT results, UBS analyst Robert Krankowski believes that the breakthrough moment has already arrived.

America's youth appears to be highly engaged in the sport.

It appears that moment has already arrived. 

Tyler Durden Mon, 07/06/2026 - 20:30

Micron Breaks Ground On $9 Billion Hiroshima Memory Chip Plant

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Micron Breaks Ground On $9 Billion Hiroshima Memory Chip Plant

US memory giant Micron Technology on Saturday broke ground on the expansion of its factory in Japan's Hiroshima Prefecture, a ¥1.5 trillion ($9.3 billion) undertaking to produce advanced memory chips, Bloomberg reported. 

The Boise, Idaho-based company is building the facility in Hiroshima Prefecture to make chips such as high-bandwidth memory crucial for AI processors like Nvidia’s, with shipments to start around the summer of 2028. The Ministry of Economy, Trade and Industry has allocated up to ¥500 billion to help cover the cost.

The move is part of a global ramp up by memory-makers to meet relentless demand for artificial intelligence. Micron is building two leading-edge fabs in Boise and in January held a groundbreaking ceremony for a $100 billion production site outside Syracuse, New York, part of a pledge to increase DRAM production on American soil. South Korea’s SK Hynix and Samsung Electronics are also boosting manufacturing capacity. Meanwhile, Chinese memory maker CXMT, is preparing for what is set to be one of the biggest IPOs in Chinese history. 

Micron Technology Inc.’s factory in Higashihiroshima, Hiroshima Prefecture, JapanSource: Micron Technology Inc.

“Micron’s very first HBM production wafer — for the memory technology at the heart of AI — was made right here in Hiroshima,” Micron CEO Sanjay Mehrotra said during a ceremony attended by central and local government officials. “When American boldness meets Japanese craftsmanship, you do not get a compromise. You get the best in the world.”

The factory expansion in Japan will help Micron raise power and transmission efficiency in chips needed for AI services and self-driving vehicles. Along with funds to support research and development, the Japanese government has earmarked roughly ¥775 billion for the US company to date.

Japan’s support for Micron, now the only maker of DRAM within the country’s borders, has “invaluable worth,” said industry minister Ryosei Akazawa, who attended the ceremony. But should other overseas chipmakers seek to build factories in Japan, the country is ready to do “all that it can” to help, he said. And judging by the profit margins currently generated by memory companies, in many cases north of 80%, expect an influx of companies willing to be funded by Japan's government to make what is ultimately a cyclical commodity product.

Since 2021, Tokyo has set aside tens of billions of dollars of support for semiconductors and AI, seeking to gain leadership in a sector seen as central for national security. Last month, Prime Minister Sanae Takaichi released a roadmap targeting private and public investment into chips and AI to the tune of ¥101.6 trillion through March 2041, without giving a breakdown on how much would come from government coffers.

“The Hiroshima factory’s strength lies in its ability to quickly deliver cutting-edge and high-performance products to customers,” said Kota Nosaka, representative director of Micron’s Japan unit. “Creating next-generation chips here is directly tied to Micron’s strategy.”

Micron took possession of the Hiroshima factory when it acquired bankrupt Japanese DRAM maker Elpida Memory in 2013 (yes, there is a downside to the memory cycle too, as the world will soon realize).

Japan is home to many corporate linchpins in advanced chip materials and gear, but it has largely ceded leadership in finished semiconductors. Roughly 80% of chip materials the Hiroshima factory needs now comes from Japan, Nosaka said.

Tyler Durden Mon, 07/06/2026 - 20:05

"Reaching A Climax": Hedge Funds Turn Most Bearish On Yen Since 2007, As Former FX Czar Sees 20% Undervaluation

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"Reaching A Climax": Hedge Funds Turn Most Bearish On Yen Since 2007, As Former FX Czar Sees 20% Undervaluation

For much of the past year, when the USDJPY disconnected - initially playfully and then terminally - from 2Y yield differentials, FX traders have been asking when and how will this gaping divergence finally converge. Alas, that answer remains elusive still, even as the collapse in the yen has pushed the currency to a generational low, and become an increasingly political topic leading to a surge in Japanese bankruptcies, and a relentless battering of what little is left of Japan's middle class. 

Source: Japan Bankruptcies Surge To All-Time High As A Result Of Plunging Yen

And yet, despite the yen's push into what until just two months ago were seen as unthinkable lows by the BOJ no less (which promptly spent $50BN to prop up the currency this April when it touched 161), the fact that the Japanese central bank allowed the yen to resume its descent through the July 4th holiday despite the unprecedented divergence from fundamentals, where it is now about 25 big figures too cheap...

...  has encouraged hedge funds to keep piling on yen shorts seemingly encouraged by a theory proposed by Mizuho’s Jordan Rochester that the USDJPY has become negatively correlated to yield differentials, essentially representing the EM-ification of Japan (as Bloomberg reminds us, veteran currency traders will recall that we have seen this sort of thing before, via the “Japan premium” applied to short rates and swap yields around 1997-98 as the country’s banking sector was in the process of imploding).

Another source of pressure on smaller businesses may be foreign-exchange hedging, including the use of so-called reverse knockout options, according to Yuji Saito, executive adviser at SBI FXTrade. Such products are widely sold by regional banks as structured hedging products, particularly to small and regional importers seeking to minimize upfront option premiums.

Once the exchange rate reaches a preset knockout level, the option expires and the hedge ceases to provide protection. Companies needing dollars must then either purchase them in the spot market, enter into a new hedge - often at less favorable levels - or leave themselves exposed to further currency moves.

“The weaker the yen gets, the more importers roll into increasingly risky option structures,” Saito said. “Once the knockout level is breached, they are forced to buy dollars in the spot market, creating a negative spiral that puts even more downward pressure on the yen."

Analysts estimate that remaining reverse knockout levels are clustered between 163 and 170 yen per dollar, territory that many firms didn’t think the currency would reach as intervention from the central bank would likely be forthcoming due to the adverse economic impact of such unprecedented currency collapse.

“The number of knockouts could increase if the yen weakens further,” said Hiroyuki Machida, director of Japan FX and commodities sales at Australia & New Zealand Banking Group. “The situation is becoming significant for companies that are unable to pass on higher costs.”

And yet, despite the clear adversely consequences to both Japan's economy and society, the perception that Japan's new PM Takaichi doesn't want higher rates or a stronger yen, is leading to ever greater pile ups inside the short yen trade, which was clearly visible today when the latest CFTC Commitment of Traders data showed that hedge funds are most bearish on the yen since 2007, just before the housing bubble burst. 

An even more remarkable CFTC chart is the one showing non-commercial spec net positioning in the yen, which over the past two years has completed one of the most dramatic swings in history, from record bearish, to record bullish, and back to record bearish again!

The cherry on top was the overnight reco by the Goldman Sachs FX team which capitulated on its bullish yen bias, but instead now sees the currency dropping to a new 40 year low of 165 next. This is how the bank explained it: 

With USD/JPY near its weakest level in 40 years, intervention risk is elevated. But it can only have a short-lived impact if macro fundamentals continue to push in the other direction (as we’ve already seen this year). We think the trend higher in USD/JPY should extend, barring a negative US growth shock or a BoJ pivot towards more aggressive policy tightening—neither of which appears likely over the coming year. Therefore, we are revising up our USD/JPY forecast path to 162, 163, 165 (vs. 160, 158, 155 previously). Without rising recession risk or a pivot towards aggressive BoJ tightening, we think the trend higher in USD/JPY should extend and continue to favor it as a funder for high-carry EM expressions

So with the bulls capitulating and everyone already bearishly positioning, what happens next? Usually precisely the opposite of what everyone expects, since there is nobody left to add to the bearish side. 

Which brings us to the rare contrarian view: pushing back against those speculating that the currency might continue its slide - which as we showed above is pretty much everyone - Japan's former top FX official said the yen should be as much as 20% stronger than it is, or around 130 per dollar

“This isn’t about fundamentals anymore — it’s about how people’s expectations have shifted,” Tatsuo Yamasaki, who served as vice finance minister for international affairs a little over a decade ago, said in an interview Monday with Bloomberg. “But we are reaching a climax.”

Former vice financial minister of international affairs Tatsuo Yamasaki

“I wouldn’t be surprised if the yen were around 130 to the dollar. That’s honestly how it looks to me,” he told Bloomberg, an outcome that would lead to the liquidation of countless FX trading desks. 

Yet, as noted, he remains a lone hawk in a world full of yen bears. The slide along with a relatively tepid response from Japanese authorities has some speculating the rout may have room to run. Jesper Koll, expert director at Monex Group, and Calvin Yeoh at Blue Edge Advisors consider 200 and beyond within the realm of possibility should the Bank of Japan fall further behind in tightening policy.

Yamasaki, now a senior professor at the International University of Health and Welfare, doesn’t see that happening. The BOJ is likely to continue raising rates, while the odds of another Federal Reserve rate hike remain roughly 50%, making a further widening in the Japan-US rate gap far from certain, he said.

“As far as interest rate differentials, yes, the BOJ’s next move is definitely a rate hike, maybe followed by several rate hikes, while the Fed’s next move is still uncertain,” he said. Even if the Fed hikes, it will likely be a one-off move, he said.

“They’ve already issued the warning, and anyone who is still holding short yen positions knows that they risk being punished by an intervention - that is, being forced to unwind those positions,” Yamasaki said. “The finance ministry has already moved beyond the warning stage, and the authorities have demonstrated they’re willing to act.”

Yamasaki also downplayed concerns that Prime Minister Sanae Takaichi’s latest economic and fiscal policies point to a worsening of Japan’s fiscal position. Last month, Takaichi unveiled a growth plan featuring a 14-year, ¥370 trillion investment program combining private- and public-sector outlays, while projecting that Japan’s debt-to-GDP ratio will continue to decline even as the government commits ¥10 trillion in annual spending. The plan appears designed to pair an ambitious investment agenda with assurances of fiscal discipline.

Yamasaki said the market will have a much clearer picture of Takaichi’s fiscal and monetary policy stance later this year as the government compiles its budget for next year. “At that point, I think the market will recognize that there wasn’t a fundamental case for such a weak yen in the first place,” he said. 

Until then, however, Yamasaki said authorities should be prepared for a prolonged battle with speculators.

“If you’re facing a long fight, spending tens of trillions of yen every time the market moves isn’t the answer, because the currency will simply move back again,” he said. “The priority should be to prevent the yen from weakening much further. Once people come to believe that the fundamentals actually point to a stronger yen, I think the currency will appreciate on its own.”

Yamasaki added that “stealth intervention” — small-scale operations that avoid drawing immediate market attention — could be an effective way to keep speculators off balance. Having said that, Tokyo isn’t likely to get any help from its counterparts. He said it would be politically difficult for the US to join such efforts while maintaining its standard opposition to currency manipulation by other nations.
“Basically it’s not going to happen,” he said.

There is another reason why the BOJ will have no choice but to tighten soon: the 20Y JGB yield just hit a new record high overnight, rising 4bps to a new all time high 3.816%. It was 0 in 2019.

Ironically, Yamasaki headed the Finance Ministry’s foreign-exchange market division during a period when Japan was attempting to prevent the yen from doing the opposite, namely strengthening. Authorities spent about ¥35 trillion on intervention between 2003 and 2004 in that campaign. 

Even with Washington unlikely to jump into the market, Yamasaki doesn’t expect any pushback if Japan intervenes.

“I don’t recall a time when the US was on board with Japan’s intervention intentions as much as it is now,” he said, reiterating comments made recently by current forex chief Atsushi Mimura. In a Bloomberg interview last week, Mimura highlighted what he described as “closer-than-ever” communication between Tokyo and Washington on currency matters.

More recently, when the yen was foundering in September 2022, Yamasaki warned of intervention risk. Two days later authorities intervened to support the yen.

Tyler Durden Mon, 07/06/2026 - 19:40

White House Report Accuses Smithsonian Leaders Of 'Extreme Political Activism'

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White House Report Accuses Smithsonian Leaders Of 'Extreme Political Activism'

Authored by Aldgra Fredly via The Epoch Times,

A White House report accused leaders of the Smithsonian Institution of adopting an ideological framework that shifted the National Museum of American History away from its mission of historical education toward what it called an "extreme political activism."

People visit the Smithsonian Museum of American History on the National Mall in Washington, on April 3, 2019. Pablo Martinez Monsivais/AP Photo

The 162-page report, released by the White House Domestic Policy Council on July 4, alleges that the National Museum of American History - which is run by the Smithsonian Institution - "fails to substantively present America's founder and founding" in its exhibits.

The report states that the Smithsonian Institution, particularly the National Museum of American History, "cannot be trusted to tell America's story honestly and in a way that is inspiring, unifying, and worthy of our great republic."

"By the intention and at the direction of current museum and Smithsonian leadership, [National Museum of American History] has become the subject to institutional capture by a radical, activist ideology that is fundamentally opposed to telling the noble, honest story of the great country we know and love," it stated.

The council said the museum has not established any exhibit specifically dedicated to the Founding Fathers, the Second Continental Congress, the Declaration of Independence, the American Revolutionary War, or the nation's path to independence and the establishment of constitutional rule of law.

"Our central finding is not that the museum has simply added overlooked stories, corrected perceived errors, or broadened its historical scope," the report stated.

"Rather, it is that museum leadership has explicitly adopted an ideological framework that no longer treats the American story as a shared national inheritance to be taught or celebrated, but as a political instrument to divide, dispirit, and discourage our citizens."

A Smithsonian spokesperson told The Epoch Times by email that the institution "has served the American public with nonpartisan and independent scholarship" for more than 180 years and will remain "committed to doing so."

The National Museum of American History, located in Washington, was originally named the National Museum of History and Technology when it was opened in January 1964. The museum was renamed in October 1980 to better reflect its responsibilities.

According to its website, the museum's collection includes more than 1.7 million objects representing the nation's heritage in the areas of science, technology, society, and culture.

The White House report followed President Donald Trump's March 2025 executive order directing the Interior Department to ensure that public monuments "do not contain descriptions, depictions, or other content that inappropriately disparage Americans past or living."

The order states that many national parks promoted what it described as "distorted narrative driven by ideology."

"It is the policy of my Administration to restore Federal sites dedicated to history, including parks and museums, to solemn and uplifting public monuments that remind Americans of our extraordinary heritage, consistent progress toward becoming a more perfect Union, and unmatched record of advancing liberty, prosperity, and human flourishing," Trump stated in the order.

Tyler Durden Mon, 07/06/2026 - 19:15

2028 Democrat Presidential Hopeful Exposes Party Civil War Against Its Socialist Wing

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2028 Democrat Presidential Hopeful Exposes Party Civil War Against Its Socialist Wing

Gov. Josh Shapiro sat down with Dana Bash on CNN's State of the Union this weekend and said the quiet part out loud: his party is being overrun by its socialist and far left flank.

Bash pressed Shapiro on Darializa Avila Chevalier, who won the Democratic congressional primary in New York’s 13th congressional district last month while running as an open socialist.

Chevalier's platform includes abolishing prisons, opening the borders, ending deportations, and granting mercy even to violent criminals. 

Bash also noted that Chevalier attended a pro-Palestinian rally on October 8, 2023, one day after Hamas terrorists slaughtered, raped, and kidnapped their way across southern Israel.

According to Bash, that rally featured antisemitic rhetoric defending the attack. Bash asked Shapiro how he feels, as a Democrat, about someone with those views heading to Congress.

Shapiro tried to have it both ways.

"Well, her district voted for her," he said. But that statement also came with a convenient disclaimer. "But I have profound differences from that particular candidate, based on the citations that you read there. And she's not someone who, you know, seemingly, I would agree with on many things, or that we share similar values. She ran on the Democratic ticket, I guess as a socialist; her voters in that district determined that she was the one they wanted representing them."

Note the hedge. Shapiro was describing someone who wants to shield violent criminals from deportation and who reportedly stood in solidarity with people cheering a massacre of Jews. Yet, the strongest word he could summon was "seemingly."

Bash followed up by asking what Chevalier's win says about the Democratic Party. Here Shapiro dropped whatever remained of the diplomatic pretense. "I think that what our party has to go through, that will be very healthy, and something that we've not really done since the 1992 elections, is to have a battle over what we believe in," he said.

That's a rather pointed reference because 1992 is the year Bill Clinton dragged his party toward the center with promises of welfare reform and law and order, and Shapiro seems to be arguing that's the direction the battle needs to go again, which is clearly not the direction the party is going in.

Trump Derangement Syndrome has spent the better part of a decade radicalizing rank-and-file Democrats who once considered themselves moderates, and the party's growing communist and socialist wing has capitalized on that fever by dragging positions on wealth, taxes, crime, and immigration further left with every election cycle.

The party has also grown more hostile toward Israel, with some pundits arguing it has grown outright antisemitic. That climate may explain why Shapiro sidestepped Bash's question about whether his Jewish faith could complicate a 2028 presidential run. Meanwhile, fellow Pennsylvania Democrat, Sen. John Fetterman, has shown far more willingness to call out his party's antisemitic drift. 

Shapiro, being Jewish and a supporter of Israel, places him on a collision course with a Democratic base growing comfortable nominating candidates who marched in solidarity with people, justifying an attack that included the massacre of more than a thousand Israelis.

On paper, Shapiro is the strongest hand the Democrats hold: a two-time statewide election winner in a key swing state.

But the Democratic Party isn’t the same party it was in 1992, and Shapiro’s remarks on CNN made one thing clear: the party’s civil war is already underway.

Tyler Durden Mon, 07/06/2026 - 18:50

Key Dems Pull Out After Platner Campaign Rocked By Sexual Assault Allegations

Zero Hedge -

Key Dems Pull Out After Platner Campaign Rocked By Sexual Assault Allegations

Update: That didn't take long... key democrats including Sen. Ruben Gallego (D-AZ) and Rep. Ro Khanna have pulled their endorsements of Platner following the allegations, according to Fox News' Bill Melugin. 

"These allegations are very serious and credible. Graham Platner should drop out from the race. I am withdrawing my endorsement," Khanna wrote on X. 

Looks like he's done?

//--> //--> Will Graham Platner drop out by July 31?
Yes 90% · No 10%
View full market & trade on Polymarket

* * * Extremely high quality (BMS 7+) Wagyu. The fat just melts like butter... 

Graham Platner's Senate campaign was thrown into turmoil Monday after a woman publicly accused him of sexual assault in a detailed report published by Politico.

Jenny Racicot, a 41-year-old Maine woman, told reporters Jessica Piper and Adam Wren that Platner sexually assaulted her in late 2021, near the end of an on-and-off consensual relationship that began after the two matched on Bumble in 2019. Before publishing the allegations, Politico interviewed Racicot three times over two weeks, spoke with a man she dated after Platner, and reviewed therapist emails and years-old Facebook messages.

Racicot said she texted Platner that night, telling him not to come over. Then she heard footsteps on the stairs. Platner had let himself into her unlocked rural home, and by her account, he smelled of alcohol and hovered near blackout drunk. She said he climbed on top of her on the couch and kept grabbing her as she told him to stop, knocking over an antique sewing kit and scattering needles without pausing. When she tried to leave the room, he followed her into the bedroom and had sex with her against her will.

"I remember him grabbing my pelvis and being really forceful of me," she said. "I remember the specific moment where I thought to myself, like, 'This is no longer my choice.'"

He fell asleep in her bed. She said she considered forcing him out but feared a blackout-drunk driver on rural Maine roads might kill someone. The next morning, when he tried to put his arm around her, she pushed him away and asked if he remembered the night before. He said he did not. She told him to leave and never contact her again.

Racicot waited several weeks, making sure she was sure she was not pregnant from the assault, before sending Platner an Instagram message stating the encounter was not consensual. That message no longer exists because Racicot deleted her old texts and social media exchanges with him and could not recover them for Politico. Nor did she file a police report, citing shock, confusion, and fear of retaliation. Her therapist heard the account at the time, and emails Racicot shared with the paper show that she sought help to corroborate it. A man Racicot began dating in 2022 also said she described the incident in pieces before sharing the full account in 2023, and his version matched hers.

Politico also reviewed Facebook messages from 2023 in which Racicot warned an acquaintance against getting involved with Platner, telling her that he does not listen when he is drunk. A friend she confided in last summer recalled her describing him as very drunk and unwilling to accept no as an answer.

Platner's campaign called the allegations a coordinated hit by outside political operatives and noted the story landed about a week before Maine's ballot deadline, echoing the timing of allegations that surfaced before the primary. The problem is that Racicot's politics align with Platner's, and her hesitation to come forward stemmed from a conflict between supporting his platform and disapproving of him as a person; she wanted voters to have a full picture of who he is.

The New York Times contacted her in spring 2026, and she shared the assault claim off the record; the resulting article described his behavior in general terms while coverage centered on accuser Lyndsey Fifield, whose Republican ties gave Platner's allies an angle to deflect the accusations, which ultimately did not impact his campaign. His candidacy had already survived offensive online comments and earlier claims he mistreated women, which he denied while attributing past behavior to mental health struggles and alcohol abuse. Prior to the New York Times story, Platner had assured Senate Democrats that no more scandals would come out about him.

Despite the damning allegations in the New York Times story, Platner raised more than $200,000 after the story came out, his best fundraising day since Gov. Janet Mills exited the race. After seeing Fifield's account get minimized because of her politics, Racicot was convinced she had to come forward.

In a video statement posted on social media, Platner denied the allegations but said he was taking time off to reflect on the path forward.

"I wanted to directly address the troubling, serious, and false allegations against me," Platner said. "Any accusation of non-consensual behavior is categorically false." He thanked supporters for building "the largest volunteer base in the history of Maine politics" before arriving at the sentence that counts. "So regardless of the inaccuracy of the reporting, but mindful of the political reality it will inflict, we are taking the time to reflect on the best path forward for the state that I love, the people that I love, the movement I belong to, and the goal of defeating Susan Collins," he said. He closed with a vow that "you never turned your back on me, and I will not turn my back on you now," and the sign-off, "As Maine goes, so goes the nation."

Maine law gives Democrats until July 14 for Platner to drop out of the race and still legally replace him with another candidate.

Tyler Durden Mon, 07/06/2026 - 18:29

SBA, USDA To Combat 'Regulatory Abuse' Lawfare Aimed At Farmers And Ranchers

Zero Hedge -

SBA, USDA To Combat 'Regulatory Abuse' Lawfare Aimed At Farmers And Ranchers

Authored by Naveen Athrappully via The Epoch Times,

The Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) have signed a memorandum to counter lawfare targeting rural communities, ranchers, farmers, and small businesses.

Ranchers work to evacuate cattle as the Gifford Fire burns nearby in Los Padres National Forest, Calif., on Aug. 4, 2025. AP Photo/Noah Berger

Lawfare refers to the strategic use of legal proceedings to hinder targets. The SBA's agreement with the USDA gives producers a "direct line to report the regulations and rules driving up costs and impacting productivity," the agency said in a July 2 statement.

It also enables the SBA and the USDA to "identify broader patterns of regulatory abuse to advance lasting deregulatory reform."

The USDA will run a centralized portal that will receive lawfare complaints involving federal agencies, which will be shared with the SBA's Office of the National Ombudsman. Any complaint involving the USDA will be handled by the department, while other complaints will be referred by the SBA to the appropriate agencies.

Under the agreement, the SBA is authorized to analyze complaint data to identify recurring lawfare practices, enforcement, or regulatory issues that are assessed as abusive or disproportionate. This is expected to provide insight that would guide deregulatory action for broader reforms.

In a July 2 X post, SBA Administrator Kelly Loeffler said the agreement between the USDA and the SBA lets "producers get back to what they do best: feeding, clothing, and fueling America."

"Family farms should not have to spend time and resources they don't have fighting crushing regulations or costly legal battles waged by radical anti-ag 'environmentalists,' whether they are inside or outside the government," she said.

In its statement, the SBA said the memorandum is in line with a January 2025 executive order signed by President Donald Trump, "Unleashing Prosperity Through Deregulation."

Trump said in the order that the "ever-expanding morass" of complicated federal regulations was creating "substantial restraint" on economic growth and hampering the country's global competitiveness.

For each new regulation issued by any agency, Trump ordered that at least 10 previous regulations be identified for elimination.

Commenting on the memorandum, Agriculture Secretary Brooke Rollins said: "This partnership with the SBA creates clear pathways for redress, ensures fairness in enforcement, and demonstrates that Washington stands with, not against, the hardworking Americans who sustain our country.

"Through the USDA Lawfare Portal and interagency collaboration, we are delivering real protection under the Farmer and Rancher Freedom Framework."

The Farmer and Rancher Freedom Framework is a plan aimed at protecting and preserving American agriculture while ending "onerous regulations" and the weaponization of government against ranchers and farmers, according to a Feb. 11 statement from the USDA.

The plan seeks to defend farmers and ranchers from politically motivated enforcement actions, protect agricultural lands from unnecessary federal projects, and remove burdensome rules that stifle productivity.

It also seeks to reform environmental laws to strike a balance between conservation and common sense.

Deregulatory Actions

The action against lawfare is one of the latest relief efforts aimed at farmers undertaken by the Trump administration.

On Feb. 2, the Environmental Protection Agency (EPA) issued guidance to manufacturers of farm equipment, clarifying that American farmers have the right to repair their own equipment.

The guidance said that manufacturers can no longer use the Clean Air Act to justify limiting farmers' access to repair tools or software.

"EPA is proud to set the record straight and protect farmers. For far too long, manufacturers have wrongly used the Clean Air Act to monopolize the repair markets, hurting our farmers," said EPA Administrator Lee Zeldin.

However, American manufacturers have opposed the right-to-repair rules. In a Sept. 22, 2025, statement, the Association of Equipment Manufacturers said that more than 50 companies met with lawmakers and congressional staff to push back against right-to-repair mandates.

They warned that legislation advancing such requirements stands to "hurt innovation, raise costs, and risk exposing sensitive trade secrets to competitors or foreign adversaries."

Meanwhile, on March 27, the EPA announced another rule aimed at benefiting farmers, removing the Diesel Exhaust Fluid (DEF) sensor system requirement for all diesel equipment. DEF is a solution injected into the exhaust systems of diesel vehicles to reduce nitrogen oxide emissions.

The EPA said there have been concerns among farmers and other diesel vehicle or equipment operators about DEF system failures.

Shutdowns and speed losses caused by such failures compromise the safety and productivity of operators, which are "unacceptable and problematic," the agency said, adding that removing the DEF sensor system requirement is expected to save farmers and truckers more than $13 billion annually.

Tyler Durden Mon, 07/06/2026 - 18:25

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