WTI Slides After Biggest Crude Build Since January

Oil prices are down this morning as signs of a large gain in US crude stockpiles undermined comments by the United Arab Emirates and Saudi Arabia about tight market conditions.

In the US, API reported overnight that crude inventories rose 7.1 million barrels last week. That would be the largest increase since January if confirmed by government data due later on Wednesday.

The expected inventory gain threw some cold water on UAE Energy Minister Suhail Al Mazrouei’s comments that a lack of major inventory buildups shows the market needs the production that OPEC+ is reviving, while Saudi Aramco sees healthy global demand despite trade challenges and tariffs.

API

• Crude +7.1mm

• Cushing +100k

• Gasoline -2.2mm

• Distillates -800k

DOE

• Crude +7.07mm - biggest build since Jan

• Cushing +464k

• Gasoline -2.66mm

• Distillates -825k

The official data confirmed API's big crude build while products saw inventories drawdown...

Source: Bloomberg

With the 238k addition to SPR, total crude stocks rose by the most since January last week...

Source: Bloomberg

US crude production remains just off record highs, even as the US rig count plunges...

Source: Bloomberg

WTI Crude is well off the highs of the day now...

Source: Bloomberg

“Current market conditions are reasonably tight,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S.

“But I’m still somewhat concerned a surplus will grow into the autumn months as demand slows.”

In another headwind, Israel foreign minister Gideon Sa’ar says a ceasefire in the nearly two-year conflict in Gaza, as well as a hostage deal, is “achievable,” according to the AFP.

Tyler Durden Wed, 07/09/2025 - 10:37

Futures Rise With Trump Tariff Updates, FOMC Minutes On Deck

US equity futures inch higher as the market tries to regain some losses a day after President Donald Trump escalated his trade rhetoric and threatened more charges on copper and pharmaceuticals. Trump also foreshadowed an update to the trade status, saying he "will be releasing a minimum of 7 Countries having to do with trade" on Wednesday morning and with an additional number of countries to be released in the afternoon as we reach the 90-day deadline to Liberation Day. As of 8:00am, S&P and Nasdaq futures are 0.2% higher, with Mag7 names trading higher premarket while semis are mixed; banks and industrials are boosting cyclicals. Europe is also trending higher (+80bps) for a third day, while Asia finished mostly lower (HSI -1%, with HS Tech -1.7%).  Goldman writes that heavy focus on recent momentum unwind (the Goldman High Beta Momentum Pair Basket -4.5% yesterday and now down 8.3% mtd). Recent catalysts for the Momo Reversal seem to be: the move in back-end Rates / positioning / ongoing re-shuffling to start the quarter / and the big reversal lower in Banks yesterday.  Elsewhere, some minor underperformance in haven assets suggests investors are not too concerned by what Trump may reveal later today. Spot gold loses $10 or so. Treasuries are steady with bond yields flat to up 1bp as the USD is indicated higher. Commodities are also higher in both Ags/Energy as metals are generally weaker post-copper tariff announcement. Trump's 50% copper tariffs would be “extremely inflationary,” according to UBS O’Connor Global Multi-Strategy Alpha CIO Bernie Ahkong, while Goldman Sachs expects inbound-US flows of the metal to accelerate as the incentive to “front-run” the tariff implementation has increased. Today’s macro data focus is on Fed Minutes, mtge applications, and inventories.

In premarket trading, Microsoft gains 0.8% after Oppenheimer raised the recommendation on the software company to outperform, citing potential upside as AI revenue grows quickly and “investors embrace Microsoft as one of the long-term AI winners in software.” Other Mag7 names are all higher (Tesla +0.5%, Amazon +0.3%, Meta +0.3%, Nvidia +0.2%, Alphabet +0.3%, Apple unch).

• Aehr Test Systems (AEHR) drops 20% after the maker of semiconductor equipment posted fiscal 4Q revenue that slipped from the year-ago period.
• AES Corp. (AES) is exploring options including a potential sale amid takeover interest, according to people familiar. Shares are up 14%.
• Bloom Energy (BE) gains 7% as JPMorgan upgraded its rating to overweight after fuel cells unexpectedly qualified for Clean Electricity Investment credits as part of the new tax bill.
• Doximity Inc. (DOCS) rises 3% after Evercore ISI upgraded the healthcare-software company to outperform, saying the fiscal 2026 guidance is conservative.
• Mobileye Global (MBLY) slips 1.2% after the maker of software and hardware technology for automobiles announced a secondary offering by Intel. It also reported preliminary second-quarter results that beat expectations. Intel shares are down 0.9% premarket.
• RxSight (RXST) tumbles 40% after the company cut its 2025 revenue forecast and reported preliminary second-quarter revenue that fell short of Wall Street’s expectations.
• Starbucks Corp. has received proposals from prospective investors in its China business, most of whom are eyeing a controlling stake in the operation, said people familiar with the matter. Shares are up 1.7%.
• Tandem Diabetes (TNDM) declines 4% after Citi downgraded the medical device maker to sell from neutral, citing a series of headwinds including competition pressures.
• T-Mobile (TMUS) drops 1.9% as KeyBanc Capital Markets cuts to underweight, saying the telecom company’s stock underperformance is set to continue and that its “premium valuation is just too high.”

In corporate news, there was another round of street actions moving stocks early (MSFT upgraded @ Oppenheimer / SMCI downgraded @ BofA / TMUS downgraded @ Keybanc). Elsewhere, Apple’s COO and company veteran Jeff Williams is stepping down this month before retiring later in the year. The firm is also said to be in talks to acquire the US rights to screen Formula 1 after the success of its hit movie, according to the FT. META is investing $3.5bn in a AI Glasses company;  BABA is trading -2.5% after JD.com announced a new food delivery company;  bloomberg is reporting that China wants to use 115,000 banned NVDA chips to fulfill its AI Ambitions; and SpaceX is said to be planning an offering valuing the company at $400bn (only 19 publicly traded companies in the S&P have a large mkt cap).  Intel is selling 45 million shares of Mobileye, in a move seen likely to support Intel’s near-term liquidity and cash needs as it funds foundry ambitions, according to Bloomberg Intelligence. 

Investors will seek clues for more insight on Fed’s policy path when the latest FOMC meeting minutes are released later today, amid increasing pressure on Powell from Trump. Kevin Hassett and Kevin Warsh are vying to be the next Fed chair, according to the WSJ. 

Earlier this week, traders had largely brushed off a batch of letters in which Trump effectively delayed his tariff deadline while outlining new rates targeting over a dozen countries. Sentiment shifted on Tuesday, when he signaled fresh resolve to move forward with steep levies on foreign imports.  He also signaled that updates to the trade status of at least seven nations would be released Wednesday morning, with more announcements later in the day.

“The market has already overreacted in the past on Trump’s trade announcements, so I think investors are being prudent and cautious,” said Stéphane Deo, senior portfolio manager at Eleva Capital in Paris. “That being said, tariffs will end up being much higher in the fall than they were at the beginning of the year, so that’s likely to fuel inflation.”

Investors will also parse minutes of the Federal Reserve’s June policy meeting later today for indications on whether officials are closer to lowering interest rates. Trump accused Fed Chair Jerome Powell of “whining like a baby about non-existent inflation” as he intensified his standoff over the pause in rate cuts. Swaps are almost fully pricing two quarter-point cuts until the end of the year, with a 65% chance of a first reduction in September.

Europe's Stoxx 600 is up 0.8% and set to rise for the third consecutive session, to the highest in almost a month, as investors look for signs of progress in trade negotiations with the US. Bank and energy names are leading gains while media shares provide a drag. Miners underperform after President Donald Trump indicated the US would implement a higher-than-expected 50% tariff on copper imports.  Here are the biggest movers Wednesday:

• EssilorLuxottica shares rise as much as 5.5%, the most in three months, after Facebook parent Meta acquired just under 3% of the Ray-Ban maker, according to people familiar with the matter
• British American Tobacco shares rise as much as 2.9%, the most in over a month, after Jefferies named the firm as its top pick as it reinstated coverage of the global tobacco sector
• Renk shares rise as much as 5.9%, the most since June, after Bloomberg reported the German gearbox maker is considering options for its civilian industrial business as it looks to focus on defense operations
• Indra Sistemas rises as much as 4% in Madrid as Goldman Sachs raises its recommendation to buy from neutral, noting the firm is a beneficiary of the “defense mega trend”
• Hunting shares rise as much as 15%, the most since May 2024, after the British engineering group announced an increase in targeted dividend distributions in its H1 trade results and proposed a $40m share buyback
• Santam shares rise as much as 4.3% in Johannesburg, to a record high, after JPMorgan increased its price target on the short-term insurer to a new Street high of 527.71 rand from 480 rand
• WPP shares drop as much as 16%, to the lowest since 2009, after the advertising agency reduced its organic growth guidance for the year, citing continued macro uncertainty that weighed on client spending
• Kongsberg falls as much as 7.6% as DNB Carnegie says soft second quarter results could bring down consensus estimates, even as company cites “substantial” demand for its defense systems
• FDJ United shares tumble as much as 5.2%, falling for a fifth consecutive session to their lowest level since April, after a unit of Credit Agricole sold its entire stake in the lottery and sports-betting firm at a discount
• Inwido falls as much as 6.2%, the most since April, after DNB Carnegie cut its recommendation on the Swedish window and door manufacturer to hold, saying the shares are fairly valued after a good run
• Close Brothers tumbles as much as 9.1%, pulling back after reaching an eight-month high, as the firm warned a revamp of its premium finance business will cause the unit’s loan book to decline
• Zigup shares fall as much as 8.2% after the UK-based rental firm reported lower profits on vehicle disposals in preliminary FY25 earnings. Panmure Liberum says this risks eroding the group’s profits in the future

Earlier in the session, Asian stocks fell as investor mood soured following US President Donald Trump’s latest vow to push forward with his aggressive tariff agenda. The MSCI Asia Pacific Index lost as much as 0.4%, with Alibaba, Tencent and Samsung Electronics among the biggest drags. Equities in Hong Kong were among the top losers in the region, partly weighed by declines in metals stocks. Copper names including Zijin Mining fell after Trump said he planned to implement a 50% tariff on imports of the commodity. Shares in Australia and New Zealand also fell after Trump’s tariff announcements from the White House. The Reserve Bank of New Zealand decided to leave interest rates unchanged, as expected. Malaysia’s stock benchmark index was down about 0.4% as the central bank cut its interest rate for the first time since 2020 amid trade tensions.

In FX, the dollar swung between gains and losses and stayed in tight ranges versus its major peers, while options pointed to demand for bullish exposure. The Canadian dollar underperforms slightly with a 0.2% fall.

• USD/JPY -0.1% to 146.73 (range 146.53 - 147.18)
• EUR/USD little changed at 1.1721 (range 1.1702 - 1.1729)
• GBP/USD little changed at 1.3599 (range 1.3565 - 1.3606)

In rates, treasuries drop, with US 10-year yields rising 2bps to 4.42% following a five-day run of losses which lifted the rate almost 20 basis points. The Treasury will sell $39 billion of 10-year notes later Wednesday followed by $22 billion of 30-year bonds Thursday. An offering of three-year securities on Tuesday was met with soft demand. Bunds edge higher with German 10-year borrowing costs down 1 bp at 2.68%. The Gilt curve flattens as short-end maturities underperform and lag gains at the longer-end.

“This week’s Treasury auctions are going to be important, at least in the short term, particularly where we are in terms of the tax cut extensions and the tariff negotiations,” said Justin Onuekwusi, chief investment officer at St James’s Place in London.

In commodities, oil prices advance, with WTI up 0.5% at $68.70 a barrel; spot gold falls $12 to around $3,290/oz. Bitcoin trades in a narrow range as we await further tariffs updates later in the session. At best, still just under 1k from the in-focus USD 110k mark.

Looking at today's calendar, the US economic data slate includes May wholesale inventories (10am) and minutes of the June FOMC meeting (2pm). Fed speaker slate is blank

Market Snapshot

• S&P 500 mini +0.2%
• Nasdaq 100 mini +0.2%
• Russell 2000 mini little changed
• Stoxx Europe 600 +0.7%
• DAX +1%
• CAC 40 +1.2%
• 10-year Treasury yield -1 basis point at 4.39%
• VIX -0.5 points at 16.33
• Bloomberg Dollar Index little changed at 1196.96
• euro -0.1% at $1.1712
• WTI crude +0.5% at $68.67/barrel

Top Overnight news

• President Donald Trump vowed to push forward with his aggressive tariff regime in the coming days, stressing he would not offer additional extensions on country-specific levies set to now hit in early August while indicating he could announce substantial new rates on imports of copper and pharmaceuticals.
• White House NEC Director Kevin Hassett has emerged as a contender for the next Fed Chair in a possible threat to early favourite Kevin Warsh and has met with President Trump at least twice in June regarding the job, according to WSJ.
• US Speaker Johnson, when asked on government funding state of play, said “We want to appropriate at lower levels. We just have to determine what those levels are exactly", via Punchbowl.
• Copper futures fell in London after President Donald Trump sowed chaos in metals markets by indicating the US would implement a higher-than-expected 50% tariff on imports of the commodity.
• Meta Platforms Inc. bought a minority stake in the world’s largest eyewear manufacturer, EssilorLuxottica SA, deepening the US tech giant’s commitment to the fast-growing smart glasses industry, according to people familiar with the matter.
• Active investment managers have no option but to adopt hedge fund strategies to counter the migration to low-cost passively run portfolios, according to an outperforming French asset manager.
• DoJ said to be investing UnitedHealth's (UNH) Medicare billing, according to WSJ sources.

Trade/Tariffs

• US President Trump delayed reciprocal tariffs as Treasury Secretary Bessent wanted more time on deals, according to WSJ.
• US President Trump posted they "will be releasing a minimum of 7 Countries having to do with trade" on Wednesday morning and with an additional number of countries to be released in the afternoon.
• EU negotiators are closing in on a trade deal with US President Trump that would leave the EU facing higher tariffs than the UK, with the EU not expecting to achieve the same access to the US market as British steel, cars and other products subject to sectoral duties. Furthermore, Brussels is ready to sign a temporary “framework” agreement that sets Trump's “reciprocal” tariff at 10% while talks continue, according to FT.
• China's Commerce Ministry placed eight Taiwanese companies on its export control list due to concerns regarding dual-use technologies.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the similar performance stateside where tariff updates remained in focus after the US flagged more tariff letters and President Trump suggested a 50% tariff on copper. ASX 200 marginally retreated with most sectors in the red although price action was confined within tight parameters. Nikkei 225 swung between gains and losses amid global trade uncertainty, while there were balanced comments from BoJ's Koeda who stated it is inappropriate to say the specific timing of the next rate hike now due to high uncertainty but added the BoJ must debate how much it should eventually shrink its expanded balance sheet and balance of JGB holdings. Hang Seng and Shanghai Comp conformed to the mixed overall picture in the region as property names dragged the Hong Kong benchmark lower, while the mainland remained afloat as participants reflected on mixed inflation data from China.

Top Asian News

• China's state planner chair said to expect the size of China's economy to exceed CNY 140tln this year and noted that foreign tech curbs can only strengthen China's tech innovation and resolve on self-reliance.
• BoJ's Koeda said recent rises in Japan's food and rice prices were stronger than expected at the time of BoJ's May policy meeting and they are watching the development carefully, while he added the BoJ's weighted median inflation is still below 2% and must scrutinise whether momentum for stable inflation is becoming embedded in Japan's economy. Koeda also commented that it is inappropriate to say the specific timing of the next rate hike now due to high uncertainty over the economic outlook and stated the BoJ must debate how much it should eventually shrink its expanded balance sheet and balance of JGB holdings.
• ex-BoJ policymaker Sakurai says BoJ will hold off rate hikes until March due to the US tariffs, according to Reuters.
• RBNZ kept the OCR at 3.25%, as expected, while it stated that if medium-term inflation pressures continue to ease as projected, the Committee expects to lower the OCR further and annual consumer price inflation will likely increase towards the top of the Monetary Policy Committee's 1-3% target band over mid-2025. RBNZ stated the economic outlook remains highly uncertain and further data on the speed of New Zealand's economic recovery, the persistence of inflation, and the impacts of tariffs will influence the future path of the OCR. The minutes from the meeting stated the Committee expects to lower the official cash rate further, broadly consistent with the projection outlined in May and the case for keeping the OCR on hold at this meeting highlighted the elevated level of uncertainty and the benefits of waiting until August in light of near-term inflation risks. Furthermore, the Committee discussed the options of cutting the OCR by 25bps or keeping the OCR on hold at this meeting and some members emphasised that further monetary easing in July would provide a guardrail to ensure the recovery of economic activity.
• China State Council issues notice on stepping up support for employment, via Xinhua; will support enterprises in stabilising jobs; will expand the scope of social insurance subsidies. To further enrich the policy toolkit in order to stabilise employment.

European bourses began the day with modest gains and have been grinding higher throughout the morning, Euro Stoxx 50 +1.1%; strength comes with the EU said to be nearing a deal with the US, with modest outperformance in the DAX 40 +1.2% amid associated auto strength. Amidst this, sectors began mixed but have been moving toward an overall positive bias. Banks lead with UniCredit (+3%) raising its stake in Commerzbank (+1%). Basic Resources weaker given pressure in non-US copper, hitting London-based minders, while Media lags after WPP's (-17%) profit warning.

Top European News

• BoE Financial Stability Report - July 2025; maintains CCyB at 2%. Uncertainty around the global risk outlook remains materially elevated compared to the time of the November FSR. Bank plans to engage with industry through an upcoming discussion paper, which will seek views on potential options to help mitigate gilt repo market vulnerabilities.
• BoE's Bailey (at the FSR) says risks and uncertainty still elevated. UK borrowers are resilient and can be supported by banks. Steepening in yield curves is not particularly UK-focused. Steepening in yield curves will need to be looked at carefully when it comes to the QT decision. QT is an open decision.
• Union confirms that UK Junior Doctors will go on strike between July 25-30th.

FX

• USD steady as markets digest Tuesday's trade updates and await another batch later today. DXY contained in a 97.49-72 band. Amidst this, G10 peers are slightly mixed vs the USD but are broadly contained thus far.
• GBP the marginal best performer, Cable to a 1.3608 peak at best but hasn't spent much time above the figure in 1.3565-1.3608 confines. No reaction to the FSR and as trade updates for the UK are expected to be light, the USD-side of the equation will likely do the heavy lifting for today.
• EUR marginally softer vs the USD, EUR/USD holding just above 1.17 in a 1.1702-29 confine, and well within yesterday's 1.1682-1.1765 parameter. Specifics light thus far as we await updates on trade, after Trump said a letter was two days away which means a deal. Ahead, a handful of ECB speakers.
• Antipodeans relatively contained, particularly when compared to the RBA-led outperformance in the AUD earlier in the week. AUD/USD currently holding around highs of 0.6544, but essentially flat. Overnight, the RBNZ was unchanged as expected but guided towards further cuts if data moves as projected, essentially taking a data-dependent approach; as such,Kiwi is flat at 0.6000 vs the USD.
• JPY softer. We continue to await updates on the US-Japanese trade front with rhetoric earlier in the week not indicative of a near-term breakthrough. That aside, the firmer risk tone this morning has potentially been exerting some modest pressure. However, despite the continued improvement in the risk tone, USD/JPY is off overnight highs above 147.00, closer to a 146.54 trough.
• PBoC set USD/CNY mid-point at 7.1541 vs exp. 7.1806 (Prev. 7.1534).

Fixed Income

• A modest upward bias for benchmarks after a few sessions of relatively marked pressure.
• Strength comes despite the constructive risk tone. But, the magnitude of today's move is limited in nature with Bunds for instance still lower by over 60 ticks WTD, and the move more a function of Bunds retracing some of Tuesday’s supply-induced pressure (primarily from EU debt) than a pronounced move higher.
• No move in EGBs to the day's dual-tranche Bund supply. Now awaiting ECB speak and potential comments from the German Chancellor in a Bundestag Q&A on the draft 2026 budget.
• USTs a similar story with specifics light into supply and FOMC Minutes. Thus far, confined to a 110-24 to 110-29+ band, within Tuesday’s slightly more expansive 110-21+ to 111-01+ parameters, and by extension shy of Monday’s 111-12+ WTD peak.
• Gilts in-fitting with USTs and EGBs. Firmer by a handful of ticks with newsflow light as the UK has already secured a trade deal. Off best, but still firmer, in a 91.63-83 band; as is the case for USTs and Bunds remains shy of peaks at 91.98 and 92.63 from the last two sessions.
• UK sells GBP 4.5bln 4.50% 2035 Gilt: b/c 2.89x (prev. 2.98x), average yield 4.635% (prev. 4.588%) & tail 0.2bps (prev. 0.3bps)
• Germany sells EUR 1.135bln vs exp. EUR 1.5bln 2.60% 2041 and EUR 0.794bln vs exp. EUR 1.0bln 2.50% 2044 Bund

Commodities

• Upward bias across the crude contracts with Brent front-month settling north of USD 70/bbl yesterday following the OPEC+ surprise over the weekend, in the form of a larger-than-expected supply increase for August.
• WTI resides in a USD 67.78-68.94/bbl range while its Brent counterpart trades in a USD 69.85-70.71/bbl range.
• Softer trade across precious metals despite a relatively stable Dollar. Weakness in the complex could be a function of optimism regarding trade deals. Spot gold continues yesterday's weakness and resides in a USD 3,282.66-3,308.15/oz range, with the next point the 30th June trough at USD 3,244.42/oz.
• Base metals are softer, in Europe, despite the commentary from Trump on copper tariffs lifting to 50%. Front-running of US copper ahead of the potential 50% tariff has widened the Comex-LME arbitrage to over USD 2,000/t and pushed Comex inventories above combined LME and SHFE levels, writes ING.
• US Private Inventory Data (bbls): Crude +7.1mln (exp. -2.1mln), Distillate -0.8mln (exp. -0.3mln), Gasoline -2.2mln (exp. -1.5mln), Cushing +0.1mln.
• Mexico's Economy Minister said he will have a call with US authorities to discuss copper tariffs and see what they apply to.
• UAE Energy Minister says not worried about oil supply overhang, not seen an increase in inventories. Adds, they are losing some of the world's spare oil capacity Y/Y as some nations cannot produce what they did last year or last month and nobody is talking about peak oil demand anymore, demand has surpassed predictions.
• Goldman Sachs maintains its December 2025 LME Copper price forecast at USD 9.7k. Changes the baseline view on US tariffs on copper imports to 50% (prev. exp. 25%).
• West African cocoa production is likely to see another 10% decline in the upcoming 2025/26 season, according to Reuters citing industry sources.

Geopolitics: Middle East

• US President Trump exerted strong pressure on Israeli PM Netanyahu during their meeting to end the war, according to Yedioth Ahronoth citing informed sources.
• Qatari delegation arrived on Tuesday for talks at the White House regarding the hostage deal and ceasefire in Gaza, according to Axios citing a source familiar.
• IDF presence in Gaza is understood to be the 'only issue' still to be resolved in the push for Israel-Hamas ceasefire and the two sides have bridged significant differences on several other issues, according to Sky News citing sources.
• Kann News citing Saudi royal family sources believes that the agreement being formulated between Israel, Syria and the United States could have a positive effect and prepare the ground for an agreement with the Saudis as well.
• US Envoy Witkoff said to have postponed travel to Doha for Israel-Hamas peace talks, according to Times of Israel.

Geopolitics: Ukraine

• White House considers giving Ukraine another Patriot air defence system, according to the Wall Street Journal.
• Ukrainian attack on a beach in the Russian city of Kursk killed three people, according to the regional governor.
• Russia launched a "record" 728 drones overnight and 13 missiles, according to Ukraine's Air Force.
• German Chancellor Merz says diplomatic means to resolve the Ukraine war have been exhausted.
• Russia's Kremlin says "we are calm" about US President Trump's criticism of Russian President Putin. Trump has a tough style in the phrases he uses. Will continue to try to fix the broken Russia-US relationship.
• Ukrainian President Zelensky is due to meet with US Special Envoy Kellogg during his visit to Rome, according to Ifax.

US Event Calendar

• 7:00 am: Jul 4 MBA Mortgage Applications, prior 2.7%
• 10:00 am: May F Wholesale Inventories MoM, est. -0.3%, prior -0.3%
• 2:00 pm: Jun 18 FOMC Meeting Minutes

DB's Jim Reid concludes the overnight wrap

Equity markets have been treading water over the last 24 hours, even with the latest tariff developments and some renewed jitters in global bond markets around fiscal sustainability. That meant yields rose in pretty much every major economy, with 10yr Treasury yields (+2.0bps) by no means the worst hit but still rising for a 5th consecutive session, before rising another +1.4bps this morning. Meanwhile, the S&P 500 (-0.07%) edged back for a second day as Trump said there’ll be no further tariff extensions beyond August 1st, with futures down another -0.12% overnight. And it was also a record day for US copper futures after Trump said copper would face 50% tariffs, with the biggest daily jump (+13.25%) in available data back to the late-1980s. 

In terms of how the day unfolded, that bond selloff initially began in Japan, where there was a big spike in long-end bond yields that pushed the 30yr yield up +9.0bps, and back above 3%. That’s coming ahead of the upper house election there on July 20, where the major parties are advocating further spending or tax cuts, so that’s adding to concerns at a time when the Bank of Japan are already scaling back their bond purchases. And as we just managed to sneak into yesterday’s edition, the Reserve Bank of Australia voted to keep rates on hold, even though a cut was widely expected, so that helped to push yields higher in Australia too. 

That momentum carried over into the European session, where yields moved up across the continent. UK gilts saw the biggest moves, with their 30yr yield (+6.3bps) back up to 5.45%, whilst the 10yr yield was up +4.7bps to 4.63%. So in both cases, that took yields above their close last Wednesday when Chancellor Reeves’ position looked under threat, and investors feared that the government might ease the fiscal rules. Coincidentally, the OBR fiscal watchdog published their “Fiscal risks and sustainability” report yesterday, which concluded that demographic pressures would help push debt-to-GDP above 270% of GDP by the early 2070s, at least on current policy. Admittedly, it’s a similar situation if you look at the CBO’s long-term reports for the US, but it demonstrates how this problem isn’t going away on the current trajectory.

These concerns were clear on both sides of the Atlantic, and 30yr Treasury yields earlier got close to 5% again, closing up +0.9bps at 4.92% after having reached 4.97% in early NY trading. Bear in mind we’ve got a 10yr Treasury auction today and a 30yr auction tomorrow, so those will be in the spotlight to see how much demand there is. Meanwhile in Europe, 10yr bund yields were up +4.4bps to 2.69%, whilst the 30yr yield (+5.4bps) hit 3.17%, which is just shy of its post-Euro crisis peak of 3.21% from late-2023. On the topic of German fiscal policy, DB are hosting a webinar today at 1pm London time on the latest developments and its impact. The details to register can be found here. 

Otherwise, trade and tariffs were the main focus yesterday, and the big development was Trump saying that “No extensions will be granted” to the August 1 deadline on the reciprocal tariffs. That’s a shift in tone from Trump’s own comments on Monday evening, as Trump had said that the August 1 date was “not 100% firm”, and investors had been hopeful that ongoing negotiations and trade deals could avoid that. So it’s a clear hardening up of the rhetoric. During a cabinet meeting yesterday, the President took a hard line against the BRICS countries again, saying the group was “set up to hurt us…I can play that game too so anybody that’s in BRICS is getting a 10%” tariff addition. This comes even though he had previously noted that he was close to a deal with India. In addition, the President took a more hawkish tone, indicating that some countries would be seeing a 60% or 70% tariff rate and that sectoral tariffs are coming. While pharma, autos, and steel have been well flagged, the President proposed a 50% rate on copper products and said that some drug levies could reach as high as 200%, although the President stated that the pharma tariffs would only come after a “year or year and half”. Copper first month futures on the NY exchange hit an all-time high in response, as prices rose 13.25% (17% intraday), which was the largest daily move since on record going back to 1988.

Amidst those headlines, there was some more constructive news as we heard that the Japan-US talks were continuing, and Japan’s Ministry of Foreign Affairs said that economic revitalisation minister Ryosei Akazawa had a 30 minute phone call with Treasury Secretary Bessent. In the statement, it said that Japan would “continue to explore ways for a mutually beneficial agreement”, and it was later reported by Bloomberg that Bessent would be in Japan next week for the 2025 World Expo. President Trump indicated that at least seven tariff letters would be coming out this morning, Washington time, with more expected as the week goes on. Ultimately, the “reciprocal” tariffs rates have been extended to August 1st given Monday’s executive order, so investors will continue to weigh how likely the administration is to go through with the higher rates over the next three weeks.

That backdrop meant equities struggled, with the S&P 500 (-0.07%) losing further ground after its decline on Monday. However, the decline wasn’t particularly broad-based, and the equal-weighted S&P 500 was actually up +0.25% on the day. At the sub-sector level, Energy outperformed (+2.7%) on the back of higher oil prices (Brent crude up 0.82% yesterday), while Autos (1.2%), Semiconductors (+1.0%) and Pharma (+0.9%) all outperformed despite the specific sectoral tariff threats. There was also a decent divergence between the megacaps in the Magnificent 7 (-0.07%), and the small-caps in the Russell 2000 (+0.66%). Meanwhile in Europe, the mood was generally more positive, with the STOXX 600 (+0.41%) paring back its earlier losses after the news came through about the US-Japan call.

Overnight in Asia, most equity indices have managed to post an advance, with gains for the Nikkei (+0.18%), the KOSPI (+0.65%), the CSI 300 (+0.32%) and the Shanghai Comp (+0.29%). Indeed, the Shanghai Comp is currently on track to close at its highest level since early 2022. However, there’s been weakness elsewhere, and the Hang Seng is down -0.74%, whilst Australia’s S&P/ASX 200 is down -0.41% after the RBA’s unexpected decision to remain on hold yesterday. Indeed, Australian government bond yields have seen a further jump this morning, with the 10yr yield up another +9.0bps to 4.35%. The Reserve Bank of New Zealand have also kept rates on hold this morning at 3.25%, although that decision was widely expected.

Otherwise, the latest inflation data from China has been released overnight, which showed producer prices were down -3.6% year-on-year (vs. -3.2% expected). That’s a 33rd consecutive month of declining prices, and the biggest rate of decline in 23 months. However, consumer prices unexpectedly rose +0.1% (vs. -0.1% expected), marking the first inflationary reading since January. 

There wasn’t much data yesterday, although the NFIB’s small business optimism index came out, which was exactly in line with consensus at 98.6. Otherwise, the New York Fed’s Survey of Consumer Expectations saw little change in inflation expectations. The 1yr measure was down to 3.0% in June, the lowest since January, but the 3yr measure was unchanged at 3.0%, and the 5yr was also unchanged at 2.6%.

To the day ahead now, and we’ll get the minutes from the FOMC’s June meeting, and hear from ECB Vice President de Guindos, and Bundesbank President Nagel. The Bank of England will also release their Financial Stability Report.

Tyler Durden Wed, 07/09/2025 - 08:32

Texas AG Issues Warning On Scammers Targeting Flood Victims

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Texas Attorney General Ken Paxton warned that scammers are targeting people by taking advantage of the flooding disaster in the central part of that state, which has left more than 100 people dead.

Flooding caused by a flash flood at the Guadalupe River in Kerrville, Texas, on July 5, 2025. Ronaldo Schemidt/AFP via Getty Images

“There are no words for how wrong it is that morally bankrupt people are trying to take advantage of Texans by using this tragedy to scam them,” he said in a consumer alert issued on Monday evening.

“The Office of the Attorney General would like to caution everyone in any area affected by storms and flooding to be extremely careful with people offering to help you rebuild or reconstruct,” Paxton’s office added.

Elaborating on the nature of the scams, Paxton’s office stated that in some instances, contractors are hired to perform work after a disaster but fail to do so.

“Flood victims are reminded to be wary of contractors from out of the area, don’t rush into signing a contract, ask for references, and check with the Better Business Bureau to ensure they’re working with a trustworthy business,” the consumer alert reads.

Kerrville City Manager Dalton Rice, whose city was hard-hit by the flooding late last week, told reporters on Monday that some victims’ families have been contacted by alleged scammers who have issued ransom threats.

They’ve been “saying that they have their kids, pay me money,” he said, referring to children who went missing during the floods. “It’s heartbreaking. It’s absolutely heartbreaking,” he added.

In Kerr County, home to youth camps in the Texas Hill Country, searchers have found the bodies of 84 people, including 28 children, Sheriff Larry Leitha said on Monday afternoon. Fatalities in nearby counties brought the total number of deaths as of Monday afternoon to at least 104.

Ten girls and a counselor were still unaccounted for at Camp Mystic, a Christian summer camp along the river.

Before the floods, the National Weather Service (NWS) issued a flash-flood warning at 1:14 a.m. on July 4 to mobile phones and weather radios, more than three hours before the first reports of flooding at low-water crossings in Kerr County at 4:35 a.m. The warning was updated at 4:03 a.m. to a flash-flood emergency.

The warning included Hunt, the small town that’s home to Camp Mystic. Girls who were rescued from the camp have said they were woken up after midnight by strong storms that knocked out power. Bright flashes from lightning strikes showed the river rising rapidly.

Gov. Greg Abbott said on Sunday that 41 people were confirmed to be unaccounted for across the state, and more could be missing.

Over the weekend, President Donald Trump signed a major disaster declaration for the area, while the administration authorized the Federal Emergency Management Agency to respond.

The Trump administration, meanwhile, has defended the NWS response to the storm after Sen. Chuck Schumer (D-N.Y.) said this week that he wants a probe of the agency and how it delivered warnings ahead of the floods.

In a post on social media platform X, White House deputy press secretary Abigail Jackson wrote that federal forecasters did their job before the floods.

But Schumer wrote a letter on Monday to the acting inspector general of the Department of Commerce, which oversees the National Weather Service (NWS), requesting an investigation into whether alleged staffing shortages at the local NWS office were a contributing factor.

The Associated Press contributed to this report.

Tyler Durden Wed, 07/09/2025 - 08:05

Vestas Wind Power CEO Urges EU To Sharpen Its "Fragmented" Energy Policy

Henrik Andersen, CEO of Danish wind turbine giant Vestas Wind Systems A/S, has issued a stark warning to European policymakers: without stronger and more cohesive industrial strategies, Europe may lose its edge in renewable energy manufacturing to the U.S. and other regions.

“Wind is largely a European creation — born in our universities, tested on our sites,” Andersen told Bloomberg News. “If we don’t protect and support what we’ve built, companies like ours will eventually move out of Europe. It’s that simple.”

Andersen’s remarks come amid growing concerns over Europe's competitiveness, weak economic growth, and its ability to meet carbon reduction goals. These challenges were spotlighted in a 2023 report by former Italian Prime Minister Mario Draghi. Geopolitical tensions — such as Iran's recent threat to block the Strait of Hormuz, and ongoing instability from the war in Ukraine — have also underscored the urgency of achieving energy independence.

“When you’re self-sufficient, energy prices fall. So if Europe wants any of this, then energy and industrial policy need to be very closely linked,” Andersen emphasized. “We need an industrial policy that allows European companies to be both global and big.”

Bloomberg writes that despite its leadership in wind technology, Europe’s fragmented regulatory landscape, high inflation, rising interest rates, and supply chain issues have created headwinds for companies like Vestas. Competition from Chinese turbine manufacturers — including recent deals in Germany — has added to the pressure, although some of these arrangements face scrutiny on national security grounds.

Andersen criticized the EU’s long-standing aversion to industrial consolidation, arguing it has left European companies at a disadvantage globally. “For decades, we’ve said no to mergers and consolidation in the name of competition,” he said. “Now it’s that very fragmentation that’s making Europe uncompetitive.”

He pointed to U.S. policy as a model for Europe, citing the American approach to energy independence and industrial scale. Even with political threats to renewable subsidies, Andersen acknowledged the U.S. has followed through on consistent long-term strategy.

“I’m going to be a little bold and say it: Europe should look at what the US has done,” he said. “Over the past decades, America has built a level of energy independence that now allows them to export energy to Europe. That didn’t happen overnight. It took two or three decades of consistent policy, but it shows that it can be done.”

Vestas, headquartered in Aarhus, Denmark, has installed over 56,000 turbines in 71 countries since its founding in 1979. Recently, the company has significantly expanded in the U.S., doubling its American workforce to over 5,000 in the past three years. Its U.S. factories are currently running at full capacity to meet demand.

“We’re not afraid to invest in the US,” Andersen said. “And we don’t expect any administration — current or future — to de-prioritize energy. In fact, we’re confident they’ll keep pushing forward.”

Tyler Durden Wed, 07/09/2025 - 02:45

BRICS' Condemnation Of The Pahalgam Terrorist Attack Proves That China Politicized The SCO

Authored by Andrew Korybko via Substack,

The Rio Declaration that followed the latest BRICS Summit in that coastal Brazilian city saw all members, including China, condemn late April’s Pahalgam terrorist attack in paragraph 34:

“We condemn in the strongest terms the terrorist attack in Jammu and Kashmir on 22 April 2025”.

This sharply contrasts with the draft SCO Defense Ministers’ joint statement in late June, which included no condemnation of that attack, hence why India’s Defense Minister refused to sign it.

That scandal was analyzed here at the time.

It was assessed that this was a deliberate provocation by this year’s Chinese chair.

The triple purpose was to do a favor for its Pakistani ally, craft the optics for lending false credence to the perception that India is the “weak link” in the SCO, and thus strengthen the influence of Russia’s pro-BRI policymaking faction. China was able to pull this off due to its chairmanship giving it extra influence over the group’s workings. No joint declaration was agreed to because China refused to amend the text to satisfy India.

China ironically found itself in the same position during the latest BRICS Summit as the one into which it had just placed India, however, except Beijing decided to condemn Pahalgam this time around in order to avoid the optics of a BRICS founder torpedoing this year’s declaration. Brazilian President Lula da Silva just hosted Indian Prime Minister Narendra Modi on a state visit, which was analyzed here to be part of his new balancing act, so he wasn’t going to disrespect him by not including Pahalgam in the declaration.

The aforesaid analysis also argues that it was this state visit and associated state dinner which influenced Xi’s unprecedented decision to decline participating in this year’s summit for the first time ever (implausibly citing scheduling conflicts) since he didn’t want to play second fiddle to Modi there. In light of the declaration condemning Pahalgam, which was predictable in retrospect given Lula’s hosting of Modi on a state visit, Xi couldn’t oppose it without discrediting himself personally and rupturing BRICS.

Another reason behind his unprecedented absence could have therefore been to “save face” after tasking his Prime Minister to agree to the declaration despite its condemnation of Pahalgam for the reasons explained above. Having his Defense Minister refuse to amend the joint statement from the SCO meeting that he just chaired two weeks ago so that it condemns Pahalgam to having his Prime Minister inexplicably agree to condemn Pahalgam in the Rio Declaration is a textbook example of flip-flopping.

Even worse, it tacitly draws attention to how China politicized the SCO during its last meeting as touched upon in the analysis that was cited at the end of the introduction, which goes against the spirit of the group. The favor that it did for Pakistan thus backfired since the optics have now been inadvertently crafted for lending credence to Indian suspicions that China has ulterior motives within the SCO and Russia’s pro-BRI policymaking faction might now be discredited by association.

In hindsight, China should have included a condemnation of Pahalgam in the draft SCO Defense Ministers’ joint statement during the group’s latest meeting that it chaired since it wasn’t realistically going to oppose this predictable inclusion in the then-upcoming BRICS Rio Declaration.

The fact that it didn’t do so suggests that it either clumsily overlooked this or took for granted that it could convince Brazil not to include it.

In any case, China’s reputation just took a hit, and it was entirely avoidable.

Tyler Durden Wed, 07/09/2025 - 02:00

Israel Defense Minister Unveils Plan For 'Concentration Camp' In Gaza

With Gaza ceasefire negotiations under way and President Trump raising hopes of a deal being reached by week's end, Defense Minister Israel Katz on Monday revealed that the IDF will create what it calls a "humanitarian city" in the wasteland that is Rafah, and then forcibly concentrate Gaza's entire population of nearly 2 million people inside it. 

Though the Israeli government and its advocates will likely to condemn already-widespread usage of the term "concentration camp" to describe this undertaking -- likely claiming it's somehow antisemitic given the parallels to Nazi Germany -- it's unambiguously applicable under the Merriam-Webster definition of the term: 

concentration camp (noun) a place where large numbers of people (such as prisoners of war, political prisoners, refugees, or the members of an ethnic or religious minority) are detained or confined under armed guard  

In the first phase, the IDF plans to round up 600,000 displaced Palestinians who are living in the coastal Mawasi area and move them to Rafah, a city in southernmost Gaza that borders Egypt and Israel. Eventually, every Gaza resident will be moved. After security screening, Palestinians will be ushered inside the camp, with IDF guards ensuring that none are able to leave, Katz said. 

Like the rest of Gaza, Rafah has been devastated with US-supplied weapons used by the IDF (AFP)

While the Israeli military will secure the perimeter, the Netanyahu government is looking for some type of international organization(s) to take charge of the interior, to include overseeing the distribution of aid, an enterprise currently managed by the shadowy Gaza Humanitarian Foundation with the IDF dishing out mass killings of Palestinians approaching the aid points; more than 600 are reported dead around the aid stations since late May. Whistleblowing soldiers have told reporters that lethal weapons are being used against unarmed people as brute-force crowd control.   

Katz's announcement contradicts what the IDF Chief of Staff's office told Israel's High Court on the very same day. In response to a petition filed by IDF reserve soldiers asking the court to determine if Israel was violating international law by forcibly displacing Palestinians with perhaps the ultimate goal of expelling them, the Chief of Staff's office said there was no plan to move masses of Gaza residents or to concentrate them somewhere in the territory. However, that assurance is itself seemingly contradicted by the operations order for "Gideon's Chariots," the IDF's latest operation launched in May, which says one objective is "managing and mobilizing the civilian population," Haaretz reports. 

On Monday, Katz also reiterated Israel's intention to subsequently facilitate Palestinians' departures to other countries, telling reporters that Israel will implement "the emigration plan, which will happen." Separately, however, an official told Haaretz that Israel's overtures to various countries have all been refused. While Israel's champions commonly claim such refusals prove that Palestinians are dangerously undesirable people, Middle East governments are intensely wary of being perceived by their own populations as facilitating ethnic cleansing by Israel, for fear of domestic backlash up to and including insurrections.

RAFAH, GAZA BEFORE & AFTER.

-TRT World pic.twitter.com/EusxcxEHdP

— International Defence Analysis (@Defence_IDA) July 3, 2025

For somewhat similar reasons, Israel is likely to struggle to find what Katz called "international partners" to run the interior of the Rafah concentration camp. Human-rights-oriented groups and foreign governments will recoil at an invitation to serve as a key component of a scheme that most objective observers would characterize as a war crime. Given that, we could see the Gaza Humanitarian Foundation fill the void, which would only compound the controversy.  

Meeting with President Trump at the White House on Monday evening, Prime Minister Benjamin Netanyahu struck an optimistic tone about the prospect of mass Palestinian emigration, and characterized the idea as voluntary in nature: 

"If people want to stay, they can stay, but if they want to leave, they should be able to leave. We're working with the United States very closely about finding countries that will seek to realize what they always say, that they wanted to give the Palestinians a better future. I think we're getting close to finding several countries."

Trump echoed Netanyahu's optimism, saying, "We've had great cooperation from ... surrounding countries, great cooperation from every single one of them. So something good will happen." 

"Citizens will be concentrated in the south...understanding there is no hope and nothing to look for in Gaza," Bezalel Smotrich said in May (Amir Levy - Getty via NYTimes)

Though the implementation phase is apparently now imminent, the idea of corralling all of Gaza's population into Rafah and then moving them out has been circulating since the very beginning of Israel's response to the Hamas invasion of Oct 7 2023. A Ministry of Intelligence policy paper dated Oct 10 2023 and obtained by +972 Magazine that same month recommended herding Gaza's entire 2.2 million residents south and then forcing them into Egypt's Sinai Peninsula.

More recently, as Dave DeCamp notes at Antiwar.com, Israeli Finance Minister Bezalel Smotrich outlined a forcible displacement scheme in candid and grim terms that belie Netanyahu's characterization of coming emigration as "voluntary." In May, he boasted to attendees of a West Bank settlement conference that Palestinians will have no choice but to abandon a land rendered uninhabitable by the IDF: 

“Within a few months...Gaza will be totally destroyed. The Gazan citizens will be concentrated in the south. They will be totally despairing, understanding that there is no hope and nothing to look for in Gaza, and will be looking for relocation to begin a new life in other places.”

Where, exactly, will those "other places" be?    

Tyler Durden Tue, 07/08/2025 - 23:50

Do They Deserve It? Mexico Is Collapsing As The US Deports Illegals Back Home

Authored by Brandon Smith via Alt-Market.us

Oh, the delicious irony. For many years I’ve been writing about the southern US border and the many ways in which Mexico has used it as a “steam valve” to get rid of people in perpetual poverty, as well as malcontents, violent criminals and political revolutionaries. Who could have foreseen a time when the conundrum would be reversed and Mexico would be crushed by an avalanche of its own unwanted citizens?

But weren’t we told that migrants are an “economic boon” to any country lucky enough to have them?

The argument among progressives and open border activists has always been that migrants are average law abiding people (just like us) who slip across the border simply to integrate into our society and live the American dream. They claim that Mexican leaders are not in control of the situation and that people are desperate to escape crime and social decline.

In reality, government officials have long encouraged migrant caravans to traverse their territories and they have allowed illegal immigration into the US as a means to divert their failures into the laps of American taxpayers. Migrants aren’t trying to escape problems in Mexico, they ARE the problem in Mexico. The more of these caravans the Mexican authorities can get rid of, the better their economic situation appears.

I wrote about this dynamic in detail in my recent article ‘Illegal Alien Economy: How Foreign Nations Exploit U.S. Borders For Profit’. Specifically, I examined threats made by Mexican President Claudia Sheinbaum over the possible taxation of remittances (US dollars) sent by migrants from the US into the coffers of Mexican banks and households.

She asserted that her government would “mobilize” against the US should conservative politicians continue their campaign to stop illegals from transferring money back home. Remittances are the single largest source of revenue Mexico receives from foreign countries. Their economy loses significantly without this cash flow.

Beyond the issue of easy money, though, is a singular reality which I have reiterated for a long time: Central and South American nations cannot survive the influx of returning migrants. They will be suffocated by the very same illegals they originally foisted upon the US.

The purging of millions of undesirables reduces Mexico’s poverty stats, homeless stats, unemployment stats and crime stats. I have to laugh every time I hear smug Europeans criticize the US for our violent crime rates – Only now are they beginning to understand what happens when you overwhelm a western nation with a third world demographic and a third world mentality. We certainly have our own home brewed fatigue-ers, but taking on millions of fatigue-ers from other nations does not help.

It’s difficult to keep crime low when other countries offload their problem children onto your front lawn.

Furthermore, labor data proves that illegals have been stealing American jobs and driving down American wages. It’s no coincidence that employment numbers for native born Americans have spiked in recent months as migrant jobs have decreased in tandem with deportations.

There’s a lot more proof in the pudding when we examine what is currently happening in Mexico, though.

Riots in Mexico city are breaking out and they are growing more violent by the day. Residents blame “gringo immigrants” and “digital nomads” for moving into the country and driving up food and housing costs. They also complain that white visitors are allowed to stay on their visas for far too long and that they refuse to “learn their language or respect Mexican culture”. Gee, that sure sounds familiar. Has Mexico gone MAGA?

The irony is, of course, that conservative Americans have been warning about the same issues caused by migrants from Mexico and we have been called “racists” and “fascists” for doing so.

There are approximately 700,000 US citizens residing in Mexico today, a tiny number compared to the tens of millions of Mexican migrants in the US illegally. But somehow, gringos are to blame for rising prices?

Realty experts in the Mexican market say that the cause of the shortages is a slowdown in housing development (Didn’t they tell us we needed illegals to help build more houses to counter the housing shortage in the US? Why don’t they put all these returning construction supermen to work in Mexico?). This explanation doesn’t account for inflation in other areas of the economy such as food and energy. So, are white tourists and ex-pats making things more expensive south of the border?

No, this is nonsense. Perhaps in a handful of resort towns the case might be made, but the truth is that Mexicans are being propagandized into thinking US migrants are the cause of their woes when it is actually the mass return of their OWN CITIZENS from the US.

Some of these people have been deported by force, but armies of them are self deporting and the Mexican economy simply can’t handle the strain. The surge started in 2024, even before Trump took office, with many illegals leaving the US because of inflation as well as the expectation of a conservative election win.

The riots, though, are probably starting now because of the mass deportations. Mexico City in particular has been inundated with migrants, many of them from other countries in Central and South America, as they look for a new place to settle outside the US.

I’ll say it again – I believe the Mexican population is being agitated into violence against American visitors by false claims that they are driving up prices when it is returning illegals that are the real cause. Mexican leaders are trying to distract their population from the bigger picture.

To be sure, there is obviously the NGO issue to consider. Central and South American leaders have not been acting unilaterally as they push for open US borders. Globalist organizations have been expediting matters by feeding cash into programs that guide illegals into the US. They do this to further their vision of a borderless multicultural world, but also to destabilize western societies and displace groups of people they see as likely threats in the future (namely white Christian conservatives).

However, globalist non-profits only smooth the way; its governments like the variety in Mexico that have been providing the human bodies for the NGOs to work with.

Now that Mexico is witnessing the pure Karma of their actions, what is likely to happen? First, the Mexican economy is going to go into a tailspin in a very short period of time. Prices will skyrocket due to crushing demand as illegals come home (just as they helped to trigger rising prices in the US during the Biden border bonanza).

Second, unemployment will rise exponentially along with a saturated labor market. High competition for limited jobs will force government intervention. But in Mexico the government has far less means at its disposal to adapt to the chaos of mass immigration. They will seek to establish social programs to gloss over the damage, but this will fail. Not only are they taking on millions of citizens that they tried to get rid of, they are losing access to the billions of US dollars those migrants were injecting into the Mexican economy. It’s a double whammy.

Third, Mexican officials will demonize the US for the deportations, as if it’s our fault they sent so many foreigners into our country without our permission. As we have seen, this is already leading to animosity across the border and Americans will remain at risk when they travel.

Fourth, if the current trend continues, Mexico will face economic collapse. They simply won’t be able to mitigate the instability caused by the sudden surge in inflation, housing shortages and the unemployed feeding on their social welfare programs.

What would this means for the US? Riots and violence in Mexico could bleed over into border states. Near zero infrastructure on the Mexican side of the border and even less restrictions on migrant movements, which means even tighter controls will be needed on the US side to keep illegals in check. Cartels may end up being the least of our worries when it comes to threats from Central America.

Keep in mind that a large contingent of Central Americans believe that the southern US belongs to them by historical right. The “La Raza” movement has long called for the retaking of large swaths of US territory in the name of “decolonization” (even though they are also descended from Spanish colonists). I believe they will once again assume that they can solve most of their problems of incompetent governance and economic decline by blaming the US and pressing citizens to invade.

They will double down on the same actions that got them in trouble in the first place. When Claudia Sheinbaum talks about “mobilizing” Mexico against the US, this is most likely what she means – A renewed march on the US border in the hopes that Mexico can reopen the steam valve and alleviate their economic troubles.

The result will not be peaceful as she seems to suppose; it could even mean war. It would be a disaster for the Mexicans, but they’ve been relying on the US for so long that they simply don’t understand any other way. That is to say, they are about to get what they deserve; a taste of their own medicine. The destabilization they tried to export to us is now on its way to blow up their own country.

 

Tyler Durden Tue, 07/08/2025 - 23:25