Borrowed time
Markets, South Africa, the US, Israel, Palestine, India, Pakistan, and Brazil.
The five things you need to know today:
FINANCIAL MARKETS. Rising yields cause a wave of worry.
SOUTH AFRICA. UNITED STATES. Pretoria shrugs off humiliation. Others won’t.
ISRAEL. PALESTINE. Hell hath no fury like an ally scorned.
INDIA. PAKISTAN. Islamabad blames Delhi for a terrorist attack.
BRAZIL. The world’s biggest poultry exporter catches a cold.
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FINANCIAL MARKETS. Curve ball
Rising yields cause a wave of worry.
US 30-year yields stayed above 5% Thursday after a soft Treasury auction and as the House advanced a record spending bill in an overnight session. Japanese 30-year yields hit a two-decade high. Gold and Bitcoin rose against the US dollar.
INTELLIGENCE. Bond markets are sending a signal beyond worries about the US budget or Japanese debt. These signals, in turn, could cause other worries if investors, who had previously treated such assets as essentially risk-free, get caught short. Following Wednesday’s G7 finance and central bank meeting, some have speculated that a "Banff Accord" (like the mooted "Mar-a-Lago Accord", an update to the 1985 Plaza Accord) may be in the works.
FOR BUSINESS. Scott Bessent and his Japanese counterpart have denied plans to adjust dollar-yen rates, adding that the current level "reflects fundamentals" (the South Korean won may be a different matter). This puts the last 24 hours’ tremors back in the category of bond vigilantism. Markets aren’t just worried about trade policy but fiscal policy, which is in many ways a bigger issue. It’s also an issue that could have ramifications for financial stability.
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SOUTH AFRICA. UNITED STATES. Another day at the Oval Office
Pretoria shrugs off humiliation. Others won’t.
Donald Trump aired a video alleging atrocities against white South Africans to confront Cyril Ramaphosa during a White House press briefing. The mostly white Democratic Alliance said it could support Ramaphosa's third attempted budget.
INTELLIGENCE. Trump's claims come as white South Africans hold more political power than at any time since the