Truly Global.
A slow-motion car wreck.
“The first thing I read every morning is News Items.” — Philip Howard, founder of Common Good and author of numerous books, most recently ‘Saving Can Do’.
1. John Authers:
Across the developed markets, bond markets are staging a slow-motion car wreck. Even Japan is joining in now, and the phenomenon is truly global. Looking at the drastic moves in the US, Japan, the UK and France, Barclays’ Ajay Rajadhyaksha commented:
Each country has its own contributing political problems, but the uniformity of the shift out of long-term bonds with high duration makes clear that something broader is afoot. For Rajadhyaksha, it is “simple and uncomfortable.” The developed world “has too much debt, too little fiscal discipline, and no political appetite for fixing either.” If there’s a trigger, it has been the Iran war and the resulting shock to oil supply. The ongoing failure to come up with a political or military resolution to the blockades of the Strait of Hormuz has steadily raised inflationary pressure. (Source: bloomberg.com)
2. Global finance chiefs are coming to terms with the new economic reality that a consumer-price shock they had hopes of skirting is looking likely to endure. As the second day of Group of Seven discussions proceed in Paris, the aftermath of a bond-market readjustment factoring in more inflation has raised the burden of proof needed to keep borrowing costs unchanged. The prospect of higher interest rates is looming, with associated stress to growth and budget deficits. The talks with finance ministers and central bankers on Tuesday will now continue against a backdrop of 30-year Treasury yields hovering close to the highest since 2007. With the Iran war that caused the energy shock still unresolved, officials will survey the uneven topography of global prosperity and touch on monetary policy too, before turning to discuss terror financing. (Source: bloomberg.com)
3. Tehran’s latest peace proposal to the United States involves ending hostilities on all fronts including Lebanon, the exit of U.S. forces from areas close to Iran, and reparations for destruction caused by the U.S.-Israeli war, state media reported on Tuesday. In Tehran’s first comments on the proposal, Deputy Foreign Minister Kazem Gharibabadi said Tehran also sought the lifting of sanctions, the release of frozen funds and an end to the U.S. marine blockade on the country, according to IRNA news agency. The terms as described in the Iranian reports appeared little changed from Iran's previous offer, which President Trump rejected last week as "garbage". (Source: reuters.com)
4. President Trump said Monday that he’d planned to strike Iran “tomorrow” but was holding off to give negotiations another chance. He claimed he made the decision at the request of several Arab leaders. “I have been asked by the Emir of Qatar, the Crown Prince of Saudi Arabia and the President of the United Arab Emirates to hold off on our planned Military attack of the Islamic Republic of Iran, which was scheduled for tomorrow,” Trump wrote Monday on Truth Social. He added that the Arab leaders told him that “serious negotiations are now taking place, and that, in their opinion, as Great Leaders and Allies, a Deal will be made, which will be very acceptable to the United States of America, as well as all Countries in the Middle East, and beyond.” (Sources: axios.com, truthsocial.com)
5. Institute for the Study of War:
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