Macron Says US Iran Hormuz Deal Unlikely in Short Term
- French President Emmanuel Macron said an agreement between the US and Iran to reopen the Strait of Hormuz appears unlikely in the near term.
- Macron said fuel prices have reached historic highs in France, hurting household purchasing power, while gas prices and the broader energy situation remain worrying.
- France will push the European Commission for measures to ease energy price pressures and accelerate gas storage efforts.
- Macron also said France will convene a G7 meeting in the coming weeks to discuss energy cooperation, strategic reserves and securing supplies.
🔴 Breaking
Trump Signs Russia Sanctions Bill Into Law
- US President Donald Trump has signed the Lindsey O. Graham Sanctioning Russia and Iran Act of 2026 into law, expanding sanctions on Russia and its energy sector.
- The House passed the bill 262 159 after the Senate approved it last month.
- The law gives Trump authority to impose tariffs of up to 100% on countries buying Russian oil and gas, including major buyers such as India and China.
- The tariffs are not automatic. Trump has discretion over which countries are targeted and the rates imposed.
Moody’s Raises India FY27 GDP Growth Forecast to 7%
- Moody’s has raised India’s FY27 real GDP growth forecast to 7% from 6%, citing stronger economic activity and resilience amid the Middle East conflict. India is expected to remain the fastest growing G20 economy.
- India’s real GDP grew 8.2% year on year in the first half of 2026, supported by consumption, investment and services growth.
- However, Moody’s warned that crude oil above $100 a barrel and El Niño related food inflation could push FY27 inflation above its 4.8% projection.
- The agency also flagged higher energy and fertiliser import costs as risks to India’s current account and growth momentum.
🔴 Breaking
Aramco Suspends Next Month’s Crude Allocations to European Customers
- Saudi Aramco has told at least two European refiners they will receive no Saudi crude allocations next month after a drone attack forced the closure of its key East West pipeline.
- Partial pipeline flows could resume within days, while full restoration may take up to six weeks, according to market sources.
- European refiners typically receive Saudi crude through Egypt’s Sidi Kerir terminal via the Red Sea route. The disruption has triggered a scramble for replacement supplies.
- Poland’s Orlen has issued more than 10 tenders since Friday to secure alternative crude supplies.
US Expected to Delay New Tariffs Until After Trump Xi Summit
- The Trump administration is expected to postpone announcing new tariffs targeting trading partners’ excess manufacturing capacity until after the September 24 Trump Xi summit, according to Bloomberg.
- The administration had planned a trade report recommending a 7.5% tariff on Chinese goods. If imposed at that level, it would take Trump’s second term duties on China to around 20%, although the final rate remains uncertain.
- The delay comes as US and Chinese officials prepare for negotiations ahead of the summit, with trade among the key issues. Iran and AI are also expected to feature in the discussions.
JPMorgan Says RBI Could Deliver First 25 Bps Hike This Year
- JPMorgan co head of economic research Jahangir Aziz said the RBI could deliver its first 25 bps rate hike this year, partly because policymakers have strongly signaled such a move.
- Aziz warned India’s economy may be experiencing a stimulus driven “sugar high” that could fade, while markets may already be pricing too many rate hikes.
- Financial markets currently imply roughly 100 bps of RBI tightening this year.
- Aziz urged caution, saying policymakers should assess the impact of initial rate hikes on financial conditions and real economic activity before declaring a broader hiking cycle.
Canada records biggest ever monthly sale of US equities
- Canadian investors net sold CAD 31.0 billion of US equities in July, the largest monthly net sale on record, with selling concentrated in large cap US technology stocks, according to Statistics Canada.
- Canadian residents also net sold CAD 5.1 billion of US government bonds in July, marking the sixth consecutive month of disposals.
- Cumulative net sales of US government bonds since January have now reached CAD 37.3 billion.
- The data highlights a sharp reduction in Canadian holdings of US financial assets, led by record equity selling and continued Treasury disposals.
Global diesel market faces severe supply squeeze as inventories hit historic lows
- S&P Global raised its diesel crack spread forecast by $31 per barrel, with the spread now expected to average $84 per barrel through year end.
- Global refinery runs are down more than 6 million barrels per day year on year, tightening diesel supply just as demand enters its peak season.
- US retail diesel has crossed a record $6 per gallon, while distillate inventories are at their lowest level on record for this time of year, according to the EIA.
- Harvest demand, winter heating needs and Saudi pipeline disruptions are leaving almost no buffer against further supply shocks.
SBI could capture 25% of new UPI MDR revenue pool
- Bernstein estimates SBI could capture 25% of the issuer revenue pool from UPI merchant discount rate charges starting 15 October.
- The new MDR is 0.4% on merchant transactions above ₹2,000, capped at ₹300 per transaction.
- The research firm estimates the new MDR could create a ₹27,000 crore annual revenue pool by FY28, while ecosystem profits could reach ₹20,000 crore, with banks retaining 60%.
- Axis Bank and Yes Bank could also benefit due to their large roles as UPI payment service providers, according to Bernstein.
US Iran War Cost Arab Economies $150 Billion in First Month
- UN ESCWA Executive Secretary Rania al Mashat said the US Iran war cost Arab economies roughly $150 billion in its first month, equivalent to about 4% of regional GDP.
- She warned disruptions to navigation through the Strait of Hormuz and Bab al Mandeb are hitting trade, economic stability and access to essential goods.
- Around 25% of global seaborne oil trade and 19% of LNG trade pass through Hormuz. Gulf states are also major exporters of ammonia, fertilizer, sulfur and aluminum.
- Al Mashat warned the conflict could delay investment and economic diversification across the Arab world and called for protecting freedom of navigation and preparing for further supply disruptions.
🔴 Breaking
BOJ Raises Rates 25 Bps to 1.25%, Highest in 31 Years
- The Bank of Japan raised its policy rate by 25 bps to 1.25% from 1.00%, the highest level in 31 years. The decision was in line with market expectations and passed 7 to 2.
- BOJ said inflation expectations have risen modestly and wholesale inflation remains elevated due to oil prices, FX moves and AI driven demand.
- The central bank said it will continue raising rates based on economic and price developments and financial conditions.
- BOJ will closely assess the impact of the Middle East situation, yen movements and AI demand on the economy and prices. Financial conditions remain accommodative.
- The BOJ maintained its view that Japan’s economy has moderately recovered despite some soft signs, while recent CPI remains in the 1.5% to 2% range.
Petrol Pump Dealers Seek Exemption From ₹5 UPI MDR
- Petrol dealers’ associations across India have approached the Finance and Petroleum Ministries seeking an exemption from the proposed flat ₹5 MDR on fuel related UPI transactions above ₹2,000.
- The new UPI framework is scheduled to take effect next month, with the charge to be paid by merchants rather than consumers.
- Dealers say their already thin margins may make it difficult to absorb the additional cost and have warned that some pumps could stop accepting UPI payments above ₹2,000.
- The associations are seeking government intervention before the new framework takes effect.
India Approves ₹30 Billion Plus Loans for Four Data Centers
- India’s largest state owned infrastructure finance institution has approved loans of more than ₹30 billion ($313 million) each for at least four data centers to support the country’s AI infrastructure buildout.
- Managing Director Rajkiran Rai G. said the loans carry a five year moratorium, followed by repayment over the next 10 years.
- The financing highlights rising corporate capex on large data center projects as demand for AI computing capacity accelerates in India.
- Global investors including EQT AB, Blackstone and Alphabet, along with domestic groups such as Adani Group, have pledged billions of dollars toward building AI compute capacity in India.
Nvidia CEO Jensen Huang Expects Chip Sales to Double in 2027
- Nvidia CEO Jensen Huang said the company expects to sell twice as many chips in 2027, sending Nvidia shares higher in pre market trading.
- Huang made the forecast at an AI safety summit hosted by King Charles at Dumfries House in Scotland, alongside leaders from OpenAI, Anthropic and Google DeepMind.
- The gathering was the first major AI summit since growing calls for a slowdown in AI development, with industry leaders discussing safeguards against AI risks.
- King Charles warned of AI’s “existential dangers”, while Huang emphasised responsible development and reiterated his view that the industry does not need new legislation.
WTO Warns AI Trade Boom Is Masking Global Commerce Damage
- WTO Director General Ngozi Okonjo Iweala warned that surging AI related goods trade is obscuring the damage tariffs and geopolitical disruptions are causing to global commerce.
- AI related goods trade grew 42% in early 2026, while non AI trade rose just 7%, according to WTO data cited by the Financial Times.
- The WTO’s 2026 World Trade Report found that abandoning multilateral cooperation could reduce global exports by more than 25% and cut global GDP by nearly 7%.
- At the WTO Public Forum in Geneva, experts called for reform of trade rules rather than fragmentation into geopolitical blocs, describing the current period as the gravest crisis facing the system in 80 years.
RBI launches aggressive liquidity tightening as surplus cash tops ₹7 lakh crore
- RBI conducted its first OMO bond sale in nine years, selling ₹50,000 crore of government securities while absorbing another ₹2.40 lakh crore through VRRR auctions on Thursday.
- Banking system liquidity remained in a surplus of roughly ₹7.38 lakh crore as of 16 September, driven by heavy FCNR(B) deposit mobilisation and government spending.
- Indian bond yields rose after the Fed raised rates, adding pressure to domestic bonds and raising expectations of tighter RBI policy.
- Citi and Deutsche Bank now expect an RBI rate hike as early as October, according to Reuters, as the central bank moves to drain excess liquidity.
HSBC, ICICI Lead $52.8 Billion GIFT City RBI Swap Programme
- HSBC disbursed $10.9 billion and ICICI Bank $8.4 billion, leading 20 lenders that issued a combined $52.8 billion under the RBI’s GIFT City swap programme, according to Bloomberg.
- The two banks alone disbursed $19.3 billion through the RBI’s concessional forex swap facility for diaspora deposits between June and August.
- India attracted a record $127 billion through overseas national special deposit schemes, strengthening foreign exchange reserves and supporting efforts to manage external pressures on the rupee.
- IFSCA Chairperson K. Rajaraman said banking assets in GIFT City are expected to exceed $150 billion by end September, with depositors up nearly 50% since March.
🔴 Breaking
ING Sees Little Evidence AI Is Replacing India’s Outsourcing Sector
- ING economist Deepali Bhargava said India’s outsourcing industry shows little sign of being displaced by generative AI as companies move toward harder to automate, higher value services.
- Software services exports rose from 3.3% of GDP before the pandemic to around 5.2%, while business services including finance, accounting, engineering, research and analytics more than doubled to 3.3% of GDP.
- India accounts for more than half of the global outsourcing market, generating roughly $205 billion annually from software services exports and supporting around 5.8 million workers.
- Software and business services exports together account for about 8.5% of GDP and remain a major source of foreign exchange, challenging concerns that generative AI could hollow out the sector.
India’s US Treasury Purchases Jump to Record $15.2 Billion
- India’s net US Treasury purchases surged to $15.2 billion in July from $3.39 billion in June, lifting holdings to a 10 month high, according to US Treasury data.
- The jump followed the RBI’s special window announced in June, offering preferential swaps for funds raised through non resident deposits and offshore borrowings.
- The facility attracted $40.8 billion of inflows by end July, helping boost India’s foreign exchange reserves by $44.9 billion in the latest week.
- India’s forex reserves reached a record $785.71 billion, as strong capital inflows increased demand for US Treasury assets.
18% GST to Apply on UPI MDR From October 15
- Select UPI person to merchant transactions above ₹2,000 will attract 0.4% MDR from October 15, paid by merchants and capped at ₹300 for transactions of ₹75,000 or more.
- An 18% GST will be charged on the MDR, not on the underlying UPI payment. For a ₹10,000 transaction, MDR will be ₹40 and GST will be ₹7.20, taking the total to ₹47.20 before eligible ITC.
- GST registered merchants meeting the conditions can claim the ₹7.20 GST component as input tax credit.
- Person to person payments and most everyday merchant UPI transactions will remain free. Railways, telecom, fuel and insurance will attract a flat ₹5 fee per eligible transaction above ₹2,000.
UPI MDR: NPCI Sets 0.4% Fee on Payments Above ₹2,000
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