The US struck Iranian military command centers and missile sites for a fifth straight day and hit a sanctioned oil tanker near the country’s main export terminal. Iran responded by firing on American bases in Kuwait, Jordan and Bahrain. Tehran remains defiant as President Trump threatens to escalate strikes to power pants and bridges unless Iran ceases interference of commercial shipping in the Strait of Hormuz. An IRGC spokesman countered, “As long as the United States does not accept the Iranian legal system, this strait will remain closed.”
Tariff watch: In the first outcome of 80 ongoing Section 301 investigations (potentially involving dozens of countries), the U.S. announced Wednesday 25% duties on most imports from Brazil, citing unfair trade practices on a range of issues from digital trade to illegal deforestation. Brazilian President Luiz Inacio Luola de Silva promptly declared the U.S action “unjustified” and said Brazil would immediately commence proceedings under the WTO’s “Reciprocity Law.”
In its Global Critical Minerals Outlook report, the International Energy Agency warned full implementation of China’s rare earth export restrictions announced Oct. ’25 (but delayed for one year) will put $6.5T of downstream production in global automotive, high tech, defense and energy sectors at risk due to supply disruptions. “Our latest analysis shows that vast amounts of economic value depend on relatively small volumes of critical minerals, whose supply chains remain highly concentrated and are therefore vulnerable.”
Trafigura has terminated its involvement in a proposed 2kMW transmission line to carry surplus hydropower from Angola to copper and cobalt mines in the DRC and Zambia. The initiative was one of 3 multiple-billion-dollar (privately backed) transmission projects aimed at supplying Angola’s surplus of stranded hydroelectric power to critical minerals operations facing power shortages in the DRC and Zambia.
In India’s latest efforts to reduce reliance on key imports and ease pressure on the Indian rupee, the Ministry of Commerce and Industry has prepared a list of more than 100 products (incl. electronics, chemicals, drugs, fertilizers, semiconductors, automobiles and machinery) for which the government is planning subsidies and other incentives to boost domestic production.
Liquidity watch: Goldman Sachs suggests massive AI bond issuance is fundamentally altering the beta relationship between equities and the bonds. Hyperscaler stress is emerging in the spread over Treasuries (highest since Goldman initiated a basket in Feb.). Cover in new bond issuance has fallen from 5x in Feb. to below 2x in July, suggesting wider spreads will be needed to absorb additional supply.