Ten Stories Moving the Market

Pakistan has delivered a Saudi warning to Iran to rein in its Yemeni Houthi allies after they stepped up attacks on the kingdom, ​in a coordinated effort to prevent the crisis from spiraling, according to Saudi, Pakistani and Iranian sources – Reuters. (Why you should care – Iran was warned Pakistan could become involved in the conflict due to a joint security agreement with the Saudis)

The Bank of Japan will continue to raise its benchmark interest rate to ensure that the price trend doesn’t exceed 2%, according to board member Kazuyuki Masu – Bloomberg. (Why you should care – Wall Street expects the BOJ to raise rates next week, likely supporting a continued yen rally)

Top White House advisers have raised privately with President Trump the prospect that the Iran war could drag on through the remainder of his term, according to U.S. officials; in the Oval Office and Situation Room, Vice President JD Vance, Secretary of State Marco Rubio, and others have discussed with the president that Tehran could continue to resist U.S. pressure under the blockade and other military tactics – WSJ. (Why you should care – a prolonged conflict with Iran could mean higher oil prices until more Middle Eastern countries figure out different export routes, hurting Iran’s leverage with the Strait of Hormuz)

The Port of Los Angeles just completed its busiest three-month run on record, as the early peak season stretched through August and importers navigated changing tariff policies – Bloomberg. (Why you should care – the data point to supply chains operating normally)

Alphabet's Google will invest at least €13 billion ($15.1 billion) in AI ‌infrastructure in Finland over the next two years, its biggest European investment, including a major deal for the supply of nuclear power - Reuters. (Why you should care – the deal will involve the development of three new data centers in the country’s northern region)

Chinese regulators have told bankers not to flood the IPO market with so-called low-quality companies and to keep pricing offerings cheaply amid Beijing’s campaign to boost retail investors’ faith in equities - FT. (Why you should care – the government in Beijing is likely worried about the fragile state of its economy)

Nvidia said it’s working with ​a ​group of Australian ⁠cloud ​and data ​center firms to expand infrastructure ​for ​artificial intelligence computing, ‌with ⁠projects that could support up ​to ​2 ⁠gigawatts of ​AI-related capacity ​by ⁠2027 – Reuters. (Why you should care – the buildout is likely to increase global demand for AI picks and shovels components like semiconductors and optical networking gear)

A single reading of consumer prices could determine whether the Federal Reserve raises interest rates next week; this week’s consumer-price index report will show whether recent improvement marks the turn most officials have been forecasting or another false start for an inflation rate that has run above target for five years – WSJ. (Why you should care – policymakers will decide on whether or not to raise interest rates before receiving PCE data for August)

Benchmark 10-year Treasury yields ​reached their highest levels since 2023 after the announcement of an enlarged Treasury buyback of longer-dated bonds disappointed some investors ‌who had wanted more – Reuters. (Why you should care – Wall Street had anticipated a larger buyback announcement)

The yield gap between Chinese and U.S. 10-year sovereign bonds widened to the most on record following a drop in Treasuries, underscoring the stark divergence between a global debt selloff and the stability of onshore yields - Bloomberg. (Why you should care – despite debt-to-GDP levels in excess of 300%, Chinese borrowing costs below 2% is likely due to the bonds being onshore. meaning they’re only issued in mainland China)

Economic Calendar:

Earnings: ADBE, CPRT, ORCL

Germany - CPI for August (Final) (2 a.m.)

Spain - Industrial Production for July (3 a.m.)

European Central Bank Monetary Policy Announcement (8:15 a.m.)

U.S. - Producer Price Index for August (8:30 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

ECB - Press Conference (8:45 a.m.)

U.S. - Existing Home Sales for August (10 a.m.)

U.S. - Wholesale Trade for July (10 a.m.)

U.S. - Energy Information Administration Crude Oil Inventory Data (12 p.m.)

Treasury Auctions $22 Billion in 30-Year Bonds (1 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)

Japan - PPI for August (7:50 p.m.)