US Treasury to Repurchase Up to $6 Billion in Long-Term Bonds
- The US Treasury will repurchase up to $6 billion of long-term Treasuries on Thursday, continuing efforts to support liquidity in the government bond market.
- The Treasury had previously indicated that individual long-term buybacks would be at least doubled to $4 billion through November 4.
- Meanwhile, JPMorgan strategists warned that the Treasury’s $39 billion 10-year note auction on Wednesday may need to offer price concessions to attract sufficient demand, citing weaker fundamental and near-term valuation support.
- Tradeweb data showed the 10-year US Treasury yield fell 1.2 basis points to 4.790% in Asian trading.
- Markets will closely watch the auction for signs of whether investor demand can absorb heavy US government debt issuance without pushing yields significantly higher.
EIA Sees Brent Averaging $90 in H2 2026 Before Falling to $74 in 2027
- The US EIA expects Middle East oil production to rise in coming months as flows through the Strait of Hormuz increase and alternative export routes are used.
- However, the agency expects regional export constraints to persist through year-end, keeping Middle East crude output below pre-conflict averages through Q1 2027.
- The EIA forecasts Brent crude to average around $90 per barrel in H2 2026, before falling to an average of $74 per barrel in 2027 as production rises and global inventories rebuild.
- Global oil prices averaged $91 per barrel in August, up $7 from July, mainly due to falling inventories. The EIA estimates global inventories have already declined by 400 million barrels year-to-date and expects them to keep falling through the end of 2026.
- Separately, US electricity sales are projected to hit record highs of 4.135 trillion kWh in 2026 and 4.211 trillion kWh in 2027, driven by booming data-centre construction and stronger commercial and industrial activity.
Saudi outlet Alhadath reported an oil tanker attack in the Strait of Hormuz. Iranian media Fars News reported hearing explosions in waters off southern Jask.
RBI Expands Retail Forex Platform With Five New Currency Pairs
- The Reserve Bank of India will add five new currency pairs to its retail forex platform, expanding individual access to foreign exchange.
- The new currencies include the euro, British pound, Swiss franc, Canadian dollar and UAE dirham.
- The RBI also plans to add the Japanese yen, Australian dollar, Singapore dollar, Hong Kong dollar and New Zealand dollar in a further expansion.
- The web-based platform, launched in 2019 to provide cheaper foreign exchange access than traditional bank channels, currently averages around $100 million in daily turnover.
- The move will significantly broaden currency options available to retail forex users in India.
🔴 Breaking
Iran Announces Restricted Zone in Strait of Hormuz, Warns Ships of Sanctions
- Iran’s Islamic Revolutionary Guard Corps said ships entering a restricted zone in the Strait of Hormuz will face sanctions, with the specific coordinates of the area to be released later.
- Iran’s Foreign Ministry also said attacks on Iranian commercial vessels represent a serious escalation and threaten regional and international peace and security.
- Separately, Iran said its attack on the US base in Jordan was part of its legitimate right of self-defense.
- Iranian state media also reported that IRGC spokesman Muhibbi claimed Iranian forces captured what he described as the US military’s most advanced unmanned submersible.
- He said the incident demonstrated Iran’s multi-layer surveillance and monitoring capability in the Strait of Hormuz, claiming no advanced technology could penetrate the system.
🔴 Breaking
Iran Signals Escalation as Merchant Ships Come Under Fire and US Casualties Reach 838
- Iran has signaled a willingness to escalate its confrontation with the United States following an initial attack on a US warship, with senior Iranian leaders issuing increasingly hardline warnings.
- Tehran faces mounting economic pressure as a US maritime blockade has severely restricted Iran’s oil exports, while concerns grow over its control of the Strait of Hormuz. Analysts warn Iran may intensify military pressure while attempting to avoid outright full-scale war, potentially seeking to push global oil prices higher or force a closure of the Strait.
- UKMTO reported an incident around 24 nautical miles northwest of Port Rashid, UAE, where a tanker said a vessel at anchor was listing and possibly taking on water after being struck by shelling.
- UKMTO also said multiple merchant vessels in the northern Gulf and Gulf of Oman were fired upon, leaving some vessels disabled. Casualties and environmental damage could not yet be confirmed.
- According to the Pentagon’s Defense Casualty Analysis System, US military casualties in the Iran conflict stood at 838 as of September 8, including 18 killed and 820 wounded.
- Since US operations resumed in Iran in July, casualties have included 4 killed and 403 wounded.
India Sees ₹84.7 Lakh Crore Investment Boom as Renewables and Data Centres Lead
- SBI’s Ecowrap report said investment announcements surged to ₹84.7 lakh crore in FY26, driven by a major shift towards renewable energy and data centres.
- These two sectors now account for around 31% of proposed investments, signalling the rise of India’s “New Age economy.”
- Gross Fixed Capital Formation reached ₹120.6 lakh crore, equivalent to around 35% of GDP, while private-sector investment has exceeded pre-pandemic averages.
- Separately, CareEdge Ratings estimates India’s energy storage requirements could rise nearly eightfold to 411 GWh by FY32, requiring investment of more than ₹4 lakh crore.
🔴 Breaking
Saudi Arabia Preparing Retaliatory Response After Major Houthi Attacks
- CNN Arabic cited a source saying Saudi Arabia is preparing a retaliatory response following large-scale Houthi attacks on Saudi territory and has notified its allies.
- Saudi diplomats reportedly told US lawmakers in August that political communication with the Houthis has broken down, with Riyadh warning that the group plans further escalation and seeking Washington’s support.
- The source said Saudi Arabia and US CENTCOM have agreed on next steps, while European partners have also been informed. The form and scale of any response remain unclear.
- Riyadh is reportedly urging other countries to join the effort, though some governments fear participation could be seen as entering the wider US-Iran conflict.
- Maritime coalition partnerships are also reportedly being used to deter further incidents and prepare for potential operations.
Houthi Attacks Hit Saudi Energy Sites, Oil Prices Surge
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🔴 Breaking
US Suspends Cognizant’s PERM Green Card Filings Amid Fraud Investigation
- The US Department of Labor has suspended Cognizant’s filings under the PERM programme, a key step for employers seeking employment-based green cards for foreign workers.
- Labor Department Inspector General Anthony D’Esposito said federal authorities are investigating alleged fraud and potential harm to American workers, with his office working alongside the White House anti-fraud task force.
- D’Esposito did not disclose the specific allegations, the number of applications affected or how long the suspension would remain in place.
- Cloudera’s PERM filings were also suspended. Neither Cognizant nor Cloudera has been named in any criminal charges.
- The move comes just one day after Cognizant announced plans to expand its US workforce, including hiring 1,500 American college graduates and expanding key roles to 15,000 people.
- Cognizant CEO Ravi Kumar and the company’s board members are reportedly under investigation by the U.S. Department of Labor and Department of Homeland Security, including ICE, over alleged immigration and financial fraud involving the U.S. government and American companies.
- The Department of Homeland Security, specifically ICE, has reportedly opened bids for private contractors to locate illegal immigrants and deported individuals with outstanding financial fines owed to the U.S. government.
US tech giants face a potential shift from cash-funded to debt-funded AI investment.
- The “Hyper 5” — Amazon, Alphabet, Microsoft, Meta and Oracle — spent $1.1 trillion on capital expenditure over the past five years.
- Their AI and data-centre spending is projected to surge by another $5.3 trillion through 2030, raising concerns about whether returns can justify the massive outlay.
- S&P Global Ratings expects all six major US hyperscalers to generate negative free operating cash flow in 2026 and 2027, with no recovery expected before 2029.
- Alphabet posted its first negative free cash flow quarter since its 2004 IPO, while Amazon’s trailing cash flow also swung sharply negative amid accelerating AI investment.
- S&P Global warns the companies could increasingly shift from cash-funded to debt-funded AI spending before investment returns materialise.
Japanese Retail Investors Build ¥3.61 Trillion Yen Short Position
- Japanese retail investors increased their net short positions against the yen to around ¥3.61 trillion ($23.5 billion) last week, rising from August levels.
- Short bets previously peaked at ¥4.41 trillion in July, the highest level since 2015, according to data from the Japan Financial Futures Association and Tokyo Financial Exchange.
- Retail traders have continued to sell the yen during strength and buy on weakness, even as overseas investors unwind yen carry trades and hedge funds increasingly bet on further yen gains.
- Some investors expect USD/JPY to fall below 150 by year-end.
- Mizuho Bank strategist Masayuki Nakajima warned that sustained yen appreciation could force retail traders to close USD-long positions, with stop-loss selling potentially accelerating a yen rally.
Bessent Challenges Yen Shorts, Says He Is Now the “Market Maker”
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Bessent Challenges Yen Shorts, Says He Is Now the “Market Maker”
- US Treasury Secretary Scott Bessent challenged traders betting against the Japanese yen, saying that when assessing markets, he effectively has access to asymmetric information about how policymakers may act.
- Bessent recalled the July 31 intervention, when he joined the Japanese government in buying yen. The currency initially rallied before partially retracing as traders questioned the US Treasury’s available funds for further FX purchases.
- He said he now effectively functions as the “market maker” and has a strong understanding of how the Japanese government, Bank of Japan and other policymakers could respond to future intervention.
- Bessent’s message to yen shorts: traders are free to try to go against him.
Iran’s Islamic Revolutionary Guard Corps said on September 9 that, in retaliation for US strikes on Iranian tankers in the Persian Gulf, it targeted two US warships and eight tankers, along with ten other vessels it said were violating regulations.
RBI Absorbs ₹4.17 Lakh Crore as Banking Liquidity Surplus Nears ₹11 Lakh Crore
- The RBI conducted a ₹5 lakh crore overnight VRRR auction on Tuesday, accepting ₹4.17 lakh crore at a weighted average rate of 5.24% to absorb surplus liquidity.
- India’s banking-system liquidity surplus has surged to around ₹11 lakh crore, driven largely by $136.4 billion in foreign-currency inflows through the RBI’s special swap facility, which closed on August 31.
- Banks parked more than ₹4.17 lakh crore with the RBI as overnight rates continue to trade below the 5.25% repo rate.
- Bond traders remain cautious as Brent crude stays above $97 per barrel, complicating the inflation outlook, while the RBI has yet to signal any permanent liquidity-tightening measures.
JPMorgan Says Chances of US-Iran Deal Are at Lowest Level Since War Began
- JPMorgan oil trading strategist Jake Pashelinsky said the probability of a US-Iran agreement has fallen to its lowest level since the war began, according to a September 7 report.
- The bank sees two major scenarios:
- 1. Prolonged Hormuz conflict: The Strait of Hormuz could remain a conflict zone, potentially extending beyond the US midterm elections, with Iran reducing transits to undermine the US blockade.
- 2. US withdrawal: The US could pull back, leaving Gulf states to decide transit fees, potentially giving Iran greater leverage over Strait flows, oil prices and significant revenue generation.
- JPMorgan believes the most likely outcome is the status quo, with the US maintaining its current approach as long as oil prices remain contained.
- The bank warns that continued US economic pressure on Iran is more likely to trigger further escalation than produce détente, while a further surge in oil prices could eventually force a strategic shift.
- Over the longer term, higher oil prices could cause demand destruction and reduce global dependence on regional supplies, eventually easing pressure on the market.
Global Fuel Oil Market Faces Record Shortfall as Wars Disrupt Supply
- Refiners are increasingly prioritising diesel and jet fuel production over fuel oil as conflicts in the Middle East and Ukraine damage processing capacity and disrupt tanker routes.
- Middle Eastern fuel oil exports have fallen 45% year-on-year, while Russia’s shipments hit a record low in August, according to Kpler data.
- Ship fuel prices in Singapore have surged 76% since the Iran war began, while global fuel oil inventories are roughly 30% below seasonal averages.
- Energy Aspects forecasts a 218,000 barrels-per-day fuel oil shortfall in Q3, the largest deficit since the firm began tracking the market.
RBI Swap Facility Draws Massive $136.38 Billion in Foreign Currency Inflows
- RBI’s special swap facility attracted $136.38 billion in foreign-currency inflows by August 31, with FCNR(B) deposits alone contributing $127.23 billion.
- The massive inflows pushed India’s banking-system liquidity surplus to around ₹11.6 lakh crore, forcing the RBI to absorb more than ₹6 lakh crore through reverse repos.
- Banks mobilised nearly $127 billion in NRI deposits, almost double initial estimates, raising questions about the potential cost of the RBI’s swap hedging operations.
- Finance Minister Nirmala Sitharaman has urged banks to continue NRI outreach, while the swap window for already-mobilised FCNR(B) deposits is set to close on September 11.
Russia now supplies 47% of India’s crude imports as West Asian supply routes face disruption.
- Russia’s share of India’s crude imports has surged to 47%, while Iraq’s share has collapsed from 18% to just 2% in six months as US-Iran hostilities and the Strait of Hormuz conflict reshape India’s oil supply map.
- India’s crude oil basket crossed $100 per barrel, reaching $101.07 per barrel on September 4, increasing pressure on the country’s import bill and current account deficit.
- Oil marketing companies are also facing under-recoveries on petrol and diesel, adding to concerns over the impact of higher crude prices on domestic fuel markets.
- India has expanded its crude supplier base to 31 countries, but dependence remains concentrated, with the import concentration index jumping 56% to 2,513.
Kuwait Strongly Condemns Houthi Attacks on Saudi Arabia and Red Sea Shipping
- Kuwait’s Foreign Ministry strongly condemned Houthi attacks on civilian and economic facilities across multiple Saudi cities, calling them a blatant violation of Saudi sovereignty and a serious escalation threatening regional security and stability.
- Kuwait said it fully supports Saudi Arabia’s measures to protect its sovereignty, security, stability, interests, citizens and residents.
- The ministry also condemned ongoing Houthi attacks on commercial vessels in the Red Sea, warning they pose a direct threat to maritime navigation, global energy supplies and international trade.
- Kuwait called for an end to the escalation, describing the attacks as a breach of international and humanitarian law.
Houthi Attacks Hit Saudi Energy Sites, Oil Prices Surge
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🔴 Breaking
Houthi Attacks Hit Saudi Energy Sites, Oil Prices Surge
- Saudi Arabia’s Energy Ministry said on September 8 that multiple energy and utility facilities were attacked by Yemen’s Houthi rebels, triggering fires and temporarily disrupting operations at some sites.
- The Saudi-led coalition said earlier that civilian and economic infrastructure in Abha, Khamis Mushait, Najran and Jizan was targeted, with 73 people injured.
- Saudi Arabia said it would not take attacks on its territory and resources lightly and vowed to respond under international law. It also demanded the Houthis halt escalation and actions threatening maritime navigation safety.
- Yahya Saree, spokesperson for Yemen’s Houthi rebels, said on September 8 that the group would soon announce “broad military operations” deep inside Saudi territory.
- Oil prices jumped following the attacks:
- WTI crude rose more than $2 intraday to $93.65 per barrel.
- Brent crude gained around $1 to $98 per barrel.