Federal Reserve & Markets

Fed Rate Expectations: Wall Street short-term yields rose (2-year yield up 12 bps to 4.35%) following Fed Chair Warsh's Jackson Hole speech promising to bring underlying inflation back to target, pushing market odds of a September rate hike above 50%. Stocks reversed gains while the dollar rose and gold fell.
Institutional Sentiment: IMF Managing Director Georgieva praised Fed Chair Warsh’s clear articulation of policy. Meanwhile, JPMorgan’s Manoukian expressed a bullish outlook on semiconductors, noting that peak AI earnings concerns are already priced in following a recent 20%+ correction.

Middle East & Geopolitics

Strait of Hormuz: IRGC statements declared the Strait of Hormuz closed to ships operating without Iranian coordination, calling US statements of open transit a lie. Iranian President Pezeshkian noted internal agreement on a Hormuz transit route conditional on four commitments, including fuel and petrochemical sanctions relief, fund releases, and resumed investment.
US-UK Relations: Reports indicate the US may reconsider its stance on Britain's claim to the Falkland Islands if the UK does not increase its defense spending.

US-Venezuela Negotiations: The Pentagon's Office of Strategic Capital is in talks regarding a potential massive oil deal involving up to 17 Venezuelan oil fields.
Iranian Oil: President Pezeshkian reported that Iran sold approximately 90 million barrels of oil under an interim deal, while noting that US sanctions and conflict have reduced imports/exports by up to 35% and exacerbated domestic fuel shortages.

CFTC Position Data: Weekly data shows speculators increased net short positions in S&P 500 CME futures, while trimming net short positions across 2-year, 5-year, and 10-year Treasury futures. Foreign currency net short positions remained active across the Euro, Japanese Yen, British Pound, and Swiss Franc.