The Trump administration on Monday announced a plan to isolate Iran’s economy by threatening to impose secondary sanctions on the “enablers” that allow the Islamic Republic to stay in business.

The plan dubbed “Operation Economic Outcast,” which President Donald Trump had hyped as Iran’s “Economic D-Day,” quickly drew questions about whether the U.S. would also go after China, Tehran’s top trading partner.

Washington and Beijing have maintained a fragile trade truce for months, following an escalatory trade war last year. Trump and President Xi Jinping met for a pageantry-laden summit in Beijing in May, and Xi is scheduled to meet with Trump in Washington in late September.

(Continue Reading – CNBC)

Increasingly intertwined conflicts are raising the specter of a single, global war, analysts suggested. Recent reports have pointed to Russia ferrying materiel to Iran and North Korea deploying drone operators in support of Moscow, while China and Taiwan are both learning lessons from the conflict in Ukraine.

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The ifo index is expected to extend its recovery, supported by defence and AI investment even as consumption and exports remain weak.

The latest consensus forecast expects the business climate index to rise to 87.2 in August from 86.6 in July. The current assessment index is forecast to edge up to 87.0 from 86.5, while the expectations index is seen climbing to 87.5 from 86.7.

Commenting on last month’s third consecutive improvement in the headline index, Carsten Brzeski, global head of macro at ING, observed that growing optimism among German businesses and increased hopes of an economic rebound in the second half of the year would ordinarily be cause for celebration.

“However, in this highly volatile geopolitical environment, even leading indicators have become rather outdated.

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The Treasury could use its near $1 trillion General Account to help fund its recently announced plans to increase purchases of government bonds, according to two senior Treasury officials.

Using the TGA would provide the Treasury with considerable firepower to influence long-term bond yields. The Treasury surprised markets last week with an announcement that it would be doubling the size of buybacks of off-the-run securities on the long end from $2 billion to at least $4 billion. Treasury Secretary Scott Bessent said on CNBC such operations could be even larger than the new higher minimum.

However, the Treasury made no mention of how it would fund the purchases. Most market participants assumed it would do so by selling short-term bills. The senior Treasury officials did not rule that out. Bessent in the CNBC interview called the operation a “Treasury Twist,” a reference to a government or Federal Reserve operation where long-term Treasurys are bought and paid for with short-term issuance. That also implied that short-term bonds would be sold.

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The investment-grade bond market faces a busy September, but demand for corporate debt suggests anxiety about heavy supply may be overblown, according to Kelsey Berro, a portfolio manager at JPMorgan Asset Management.

Issuance expectations are in a wide range of $175 billion to $250 billion, Berro said in an interview with Bloomberg Television on Monday. Credit portfolio managers have indicated that even $250 billion in supply “is not really an issue,” though uncertainty about the final figure is complicating preparation across the market, she added.

(Continue Reading – Bloomberg)