Global Business Highlights – September 26, 2026

Saudi Aramco hires Evercore to build gas unit

Saudi Aramco has hired Evercore to advise on a restructuring that would spin its gas operations into a standalone division, potentially setting the stage for an initial public offering or a minority stake sale with a unit value of more than $100 billion, Bloomberg News reported on Saturday.

The move, part of an internal initiative called Project Gamma, builds on earlier advisory work by Boston Consulting Group, which recommended separating the value from the underlying assets within what is currently the world's largest energy company. The plans are under discussion and could still change, according to people familiar with the matter.

unlocking value from gas

The restructuring will give Aramco's gas business its own leadership, financial goals and reporting structure, making it easier for outside investors to evaluate and finance the unit independently of the company's oil-heavy core. Aramco has planned investments of more than $100 billion for the Jafurah gas field and other projects, expects to increase gas production by about 80% by 2030, and aims to generate $15 billion of additional operating cash flow from gas by the end of the decade.

The deal could allow Aramco to sell a minority stake without giving up control over its main oil operations. Over time, this could evolve into an IPO or minority listing on the public markets.

A pattern across the bay

The strategy fits into a broader trend among Gulf state energy giants: offering slices of adjacent businesses to outside investors to raise capital while maintaining operational control and protecting core oil-producing divisions from outside ownership. Reuters reported earlier this week that Aramco was planning to restructure the gas division, and Saturday's Bloomberg report added details of Evercore's formal involvement and a potential valuation of more than $100 billion.

Funding the state's ambitions

Aramco is also exploring the sale of up to $35 billion of assets to help finance Saudi Arabia's diversification agenda, state projects and dividends amid growing fiscal pressures. The company is cutting costs and seeking efficiency gains as it balances shareholder returns with the state's broader economic transformation goals.

Neither party – Aramco, Evercore, or BCG – responded to requests for comment.

Bitgate Resumes Phased Withdrawals After $388 Million Hack

Crypto exchange Bitget has revised its total loss from Thursday's security breach to about $388 million, with CEO Gracie Chen pointing to North Korean hackers as the likely culprit in what has become the biggest cryptocurrency exchange hack of the year.

How did the attack happen?

Bitgate detected an unauthorized transfer from its hot wallet at 18:31 UTC on September 24, 2026, causing the exchange to block withdrawals while deposits and trading continued. According to Chen, the attackers did not steal private keys, but rather compromised the backend wallet system, tricking Bitgate's internal authorization process to fraudulently approve withdrawals and transfer data.

The breach involved 19 transfers to the hot and warm wallet infrastructure, affecting assets across multiple blockchain networks, including Ether, XRP, USDT, USDC, Avalanche, and BNB. Initial estimates put the loss at around $351.6 million, but Bitgate later revised this figure after identifying additional transactions on the TRON and Zcash blockchains.

Chen said during a livestream on X that investigators found IP addresses associated with VPN services previously used by the North Korean hacking group, making the connection "very probable." “Based on IP behavior patterns and on-chain analysis, the method of attack in this incident is highly consistent with known patterns of North Korean hacker organizations,” he wrote on Friday.

Recovery Attempts and Evacuation Timeline

Bitgate has partnered with Mandiant and blockchain security firm Slomist to investigate the breach and has launched a reward program of up to 5% for successfully deposited or recovered funds. The exchange said its User Protection Fund, which contains more than $464 million, is enough to cover losses if stolen funds cannot be recovered.

Withdrawals are scheduled to resume in phases starting on September 28, with Bitcoin first, followed by Ethereum-based assets on September 29, USDT on September 30, and all remaining tokens and fiat services by October 2.

Growing pattern of crypto breaches

Hackers linked to North Korea stole a record $2 billion in cryptocurrency in 2025, according to Chainalysis, and the Bitgate attack shows the pace is not slowing down. The breach adds to a turbulent year for crypto security, following a $120 million hardware wallet exploit in July and a $292 million cross-chain attack on KelpDAO in April. Reuters reported that Bitgate, which claims more than 120 million users, said the losses were covered with its own funds and that the halt on withdrawals was "a security precaution, not due to any deficiency".

Central banks of Kenya, India warn of inflation risk from rising oil prices

Central banks on two continents warned this week over the threat of inflation posed by rising crude prices, as the ongoing conflict in West Asia disrupts global energy markets.

CBK monitors rising oil prices

In its weekly bulletin published on Thursday, the Central Bank of Kenya reported that Murban crude oil prices rose to $97.36 a barrel on September 24, from $94.70 a barrel last week, "due to oil supply concerns due to the conflict in the Middle East." The CBK noted that inflation concerns persisted during the week, pointing to increased energy costs across the region. South Africa's headline inflation rose to 4.4 percent in August, and the South African Reserve Bank raised its policy rate by 25 basis points in response.

Kenya's own inflation trajectory has been steadily climbing. The country's 12-month inflation rate stood at 6.59 percent in August, up from 6.49 percent in July, putting it above the midpoint of the government's 2.5 to 7.5 percent target range. Most of the increase was due to higher energy prices and transportation costs, which the CBK had flagged in earlier bulletins as a direct result of rising global oil prices.

RBI highlights resilience amid external pressures

A day earlier, India's Reserve Bank of India published its September bulletin, saying "escalating conflicts in West Asia have led to a sharp rise in crude oil prices, rekindling concerns of further disruption to global supply chains and a build-up of inflationary pressures." Despite this, the Indian economy recorded a GDP growth of 7.8 percent in the first quarter of the financial year 2026-27.

India's headline CPI inflation rose to 4.8 per cent in August 2026, driven by rises in fuel and core components as well as the food and beverages group. Core inflation excluding precious metals also rose from what the RBI termed "ultra-low levels in recent months". The central bank said foreign exchange reserves reached an all-time high, while a moderate current account deficit and strong foreign direct investment flows supported the external sector.

broader global concerns

The warnings from Nairobi and New Delhi reflect a broader pattern. Oil prices have risen since early September, when renewed US-Iran hostilities raised fears over supplies through the Strait of Hormuz. The International Energy Agency's September oil market report said North Sea dated crude oil prices rose to $113.48 a barrel on September 9, and predicted that a full recovery in Middle East oil supply would not come before 2027. The Bank of England kept its rate at 3.75 percent in September but faced dissent from three members who voted to raise it, underscoring global tensions amid cooling economies and persistent price pressures.

For Kenya, which imports almost all of its petroleum, and India, which depends on foreign crude for more than 80 percent of its needs, the trajectory of oil prices remains a central risk. As stated in the RBI bulletin, "geopolitical tensions and climate uncertainties are acting as key downside risks."

IEA cuts oil forecast as diesel shortage deepens

The International Energy Agency has sharply revised downwards its global oil supply and demand forecasts, estimating world oil supply will average 100.7 million barrels per day in 2026 – down 1.3 million barrels per day from its previous report – as a growing diesel shortage caused by simultaneous disruptions in the Gulf and Russia continues to squeeze global markets.

Net diesel and gasoil exports from the Gulf and Russia fell 1.6 million barrels a day from pre-conflict levels in August, according to the IEA, a gap that is widening rather than narrowing. According to Reuters, the shortage is now expected to last until at least 2027, as storage tanks run out and market indicators show no relief in the near term.

Europe had to bear the brunt

European consumers and businesses are bearing the heaviest costs. According to model estimates based on data up to 14 September, higher diesel prices are adding an estimated €203 million per day to EU road-transport costs, with total additional road-transport fuel spending reaching €270 million. Drivers are paying around €30 more to fill a 50-litre diesel tank, while one German truck operator faces an estimated €236 in additional weekly fuel costs.

Record fuel prices have hit France, Germany and Italy in recent days. Germany plans to cut fuel taxes by 17 cents a liter from October 1 as part of a €2.5 billion relief package, which also includes negotiations on a fuel-price cap targeted for January 2027. European Commission President Ursula von der Leyen said on September 16, "Europe cannot remain an industrial powerhouse if energy prices are structurally too high."

Italy calls refiners to the table

Italy is taking a more direct approach. Industry Minister Adolfo Urso and Energy Minister Gilberto Pichetto Frattin will meet with representatives of Eni, Algeria's Sonatrach and several other refining companies on October 8 to discuss increasing domestic fuel production. Prime Minister Giorgia Meloni's government has already spent nearly €3 billion this year on a successive round of fuel tax and excise cuts. Average gasoline prices in Italy reached €2.14 per liter this week.

Double interference, shrinking buffers

The basic problem is structural. Ukrainian attacks on Russian refining infrastructure have virtually halted the country's refined product exports, while Gulf product exports are hampered by the ongoing conflict in the Middle East. Globally, oil inventories have fallen by more than 500 million barrels since the conflict began, leaving markets with little cushion against further shocks. A full recovery in supply from Middle East producers has been put off until 2027, according to the IEA.

Bank of France chief says ECB will not save country's debt

Bank of France Governor Emmanuel Moulin warned sternly on Friday that France cannot expect the European Central Bank to bail it out of its growing debt problems, urging the government to cut spending and reduce its deficit as borrowing costs hit levels not seen since the 2008 financial crisis.

Speaking on public Senate television, Moulin said it would be "flawed logic" to rely on the ECB to intervene if France is struggling to finance itself, adding that the tools to fix the deficit lie with national governments and parliament, "not necessarily in the hands of the ECB." He acknowledged that the ECB has crisis mechanisms for periods of severe market stress, but said these are only activated when a country takes action on its own.

Yield at highest level in 18 years

France's 10-year borrowing costs have risen to 4.7%, the highest since 2008, as investors demand rising premiums to hold French debt amid fiscal and political uncertainty. The spread between French 10-year OAT and German Bund yields has widened above 1.05 percentage points, a level not seen since the Eurozone sovereign debt crisis of 2010-2012.

Moulin said the financial sector today is "strong, well-capitalized" and the situation is not comparable to 2008, but he ruled out a sovereign debt crisis ahead of the two-round presidential election in April-May 2027. "Everything must be done to ensure that such a situation does not happen," he said. “So we need a budget – a budget with savings, that gets the deficit back down.”

Morningstar DBRS on Friday cut its outlook on France's AA rating to negative, saying the government has "failed to address the fiscal imbalance."

Budget fight looms

France's minority government is scheduled to send its 2027 budget bill to lawmakers on Thursday, Oct. 1, setting off weeks of wrangling over spending cuts in the deeply divided parliament. Prime Minister Sébastien Lecornu last week announced a 54 billion euro cut in public spending as part of a plan to bring the deficit to 5% of GDP, but analysts are skeptical it could come to pass.

Charlotte de Montpellier, senior economist at ING, said that "without a parliamentary majority, the government must either negotiate for substantial support or resort to Article 49.3 at the risk of a vote of no confidence." The market expressed skepticism over the plan, with OAT spreads rising after the announcement.

Moulin warned that while France currently has no problem tapping bond markets, rising debt-service costs risk causing a "gradual squeeze" on public finances. Analysts at ING project OAT-Bund spreads could rise to 125 basis points in the coming months, while Pictet Asset Management suggests they could reach 150 basis points before the presidential election if the economic backdrop remains weak.

AI deepfake scam costs Intesa Sanpaolo unit €95M

Fraudsters who used artificial intelligence to impersonate senior executives stole €95 million ($108 million) from Fideurum, the private banking arm of Italy's biggest lender, Intesa Sanpaolo, according to Reuters, citing two sources familiar with the matter. More than half the funds were later recovered, but approximately €36 million remains missing after being funneled through offshore accounts and converted into cryptocurrency.

The scheme, which was first reported by Italian newspaper Corriere Della Sera, began in February 2026 when then-Fideaurum president Paolo Molesini received a WhatsApp message from Intesa Sanpaolo CEO Carlo Messina requesting immediate help with an offshore transaction. The fraudsters made a phone call impersonating Paolo Nastasi, managing partner of A&O Shearman Italia, a senior partner at a major international law firm, who was completely uninvolved and unaware of the scam. According to sources, the callers used AI technology to replicate the voice of the lawyer.

How was the fraud exposed?

Believing the request to be genuine, Molesini instructed his finance department to arrange a series of transfers to foreign accounts, primarily in China and Hong Kong. Fideuram immediately detected irregularities in the transfers and alerted banks and authorities in several countries. About €53 million was recovered through cooperation between authorities in China, Portugal and Italy. The remaining funds have not been traced after passing through the network of overseas accounts.

Milan prosecutors have placed a foreign national living outside Europe under investigation on suspicion of computer fraud, according to a source. Neither Molesini, who resigned in March citing personal reasons, nor any other Fideuram official are under investigation. Intesa Sanpaolo and Fideuram declined to comment.

Growing pattern of AI-enabled financial crime

The Fidurum case is one of the largest known AI-assisted fraud incidents targeting a financial institution, but it follows a pattern of escalating attacks. In a widely reported 2024 case, engineering firm Arup lost $25.6 million after an employee was duped during a video conference in which each participant was an AI-generated clone of a company executive. Last year in Italy, fraudsters using AI to mimic the voice of an Italian minister persuaded businessman Massimo Moratti to transfer nearly €1 million to an overseas account, although the money was later recovered.

Security experts have warned that visual and sound-based identity verification can no longer be trusted. “Seeing and hearing from someone is no longer proof that they are real,” said Deepak Gupta, technology chief executive of GrackerAI. Government agencies including CISA, NSA, and the FBI now recommend that organizations adopt verbal passphrases and hardware security keys as standard security measures against deepfake-enabled fraud.

IMF study shows AI could increase labor productivity by 3.8%

According to a working paper published by the International Monetary Fund on September 25, Artificial Intelligence could increase total labor productivity by 3.8% in the long term. The finding comes amid a wave of research weighing AI's broader economic promise and its risks, including a separate study that estimated investment in U.S. AI infrastructure could exceed $10 trillion over the next several years.

Measuring the Productivity Punch of AI

The IMF paper, titled "Artificial Intelligence and Aggregate Labor Productivity: Evidence from Patent Data", examined patent and employment data in Organization for Economic Co-operation and Development countries between 2000 and 2017. The researchers found that the rapid expansion of AI-related innovation had already generated measurable benefits, estimating that AI patent activity during that period increased output per worker by between 0.8% and 1.2%. The study suggested that AI can generate strong economic returns when it complements the work of skilled workers rather than simply replacing existing tasks.

The 3.8% figure represents a long-term estimate of what continued AI innovation can deliver. In a separate speech earlier this year, IMF Managing Director Kristalina Georgieva said AI could boost global productivity by 0.8 percentage points per year with the right policies, while warning that about 40% of jobs globally would be affected by the technology.

$10 trillion infrastructure bill

Productivity estimates come alongside a growing focus on what it will cost to build the physical backbone of an AI economy. A paper by Columbia University professor Stijn Van Nieuwerberg, prepared for the Brookings Institution and presented this week, estimates that US investment in data center buildings, power systems, networks and AI semiconductors will total $10.3 trillion from 2025 to 2032 – an annual average of 3.63% of GDP. This would exceed every previous US infrastructure boom, including railroads at 2.2% of GDP in the late 1800s and the interstate highway system at about 1% starting in the 1950s.

Van Nieuwerberg warned that the financing structure supporting this construction is becoming increasingly complex. Spending originating from the cash reserves of companies like Amazon, Meta and Alphabet's Google has expanded into a web of joint ventures, private loans, securitizations and special purpose vehicles. He told Reuters that the opaqueness of these arrangements was "somewhat reminiscent of the subprime mortgage crisis," though he stopped short of describing a financial crisis as imminent.

Returns still unconfirmed

The scale of the stakes remains astonishing. Van Nieuwerberg estimated that the AI ​​industry would need to generate approximately $3.7 trillion in annual revenue by 2032 to justify the expected return on investment – ​​requiring approximately 80% revenue growth per year from current levels. The tension between the anticipated productivity benefits of AI and the financial risks inherent in building it is likely to shape the policy debate in the coming months.

Fed, ECB and BOE warn that energy shocks risk increasing inflation

Senior central bank officials from the United States, Europe and the United Kingdom warned on Friday about the danger that prolonged energy and supply shocks could entrench inflation in the economic structure, complicating the path to price stability.

Fed officials sounded the alarm

"The biggest risk I see with inflation right now is that an inflationary mentality could set in," Cleveland Fed President Beth Hammack said at a conference at her bank, noting that inflation has exceeded the Fed's 2% target for more than five years. “We now basically have a generation of people in the U.S. who have grown up without knowing inflation was on target for a sustained period of time,” he said, warning that such conditioning could reshape the behavior of businesses and households.

Hammack stressed that the Fed "needs to make sure policy remains on a restrictive stance to help get things back on target". The Fed raised rates earlier this month, raising its target range by a quarter point to between 3.75% and 4%, with officials planning at least one more increase before the end of the year.

Separately, New York Fed President John Williams told a panel at the University of Oxford that the central bank "cannot ignore persistent supply shocks," even though tariffs and energy price increases do not typically generate sustained inflation in themselves. Williams warned that repeated shocks are putting upward pressure on prices and the Fed must ensure they do not "freeze."

ECB and BOE echo concerns

At the same Cleveland Fed conference, ECB Vice President Boris Vujicic warned that diesel prices were likely to remain high due to reduced global refining capacity, threatening to fuel broader inflation across the euro zone. The ECB is tightening policy and according to its latest staff projections inflation will average 3.0% in 2026 and will not return to the 2% target until 2028.

Bank of England Governor Andrew Bailey, speaking at a monetary economics conference in Oxford, said that "as long as our energy prices remain high, it will become increasingly difficult to maintain that stance," signaling a growing openness to raising borrowing costs. The BoE kept rates at 3.75% in a 6-3 vote last week, but Bailey warned the central bank "cannot wait for full evidence" on how energy prices are outperforming expectations. The BoE now forecasts UK inflation to climb above 4% by early 2027.

a coordinated message

The comments coming within hours of each other on Friday reflect a tightening stance among major central banks as energy-driven price pressures prove more stubborn than anticipated. With the Fed already hiking, the ECB tightening, and the BoE moving toward action, policymakers are increasingly united on one point: waiting too long risks letting inflation take root. As Hammack said, "If it's creating more inflationary pressures, then we need to pay attention to that".

Bitgate hack loss rises to $387.5 million as industry booms

Binance co-founder Changpeng Zhao and co-CEO Richard Teng both publicly offered support to rival cryptocurrency exchange Bitgate on Friday after attackers withdrew millions of dollars from its wallet in what has become the biggest exchange hack of the year.

Industry rallies around Bitgate

Zhao posted on X that it was "a tough day for Bitgate," adding, "I hope and know that Binance, the BNB Chain ecosystem, and the community will do everything we can to help. Stay SAFU!" Gracie Chen, CEO of Bitgate, responded directly, writing, “Every second counts when tracking assets – we appreciate the support of the Binance ecosystem.”

Teng said Binance's security team has been working closely with Bitgate since the breach was first discovered, sharing intelligence, monitoring funds and assisting with recovery efforts. Other industry leaders, including Bybit CEO Ben Zhou, MEXC CEO Wugar Yusi, and CoinDCX co-founder Sumit Gupta also offered public support.

Deficit revised to $387.5 million

Bitgate initially confirmed an unauthorized transfer of $351.6 million from its hot and warm wallet on September 24, when attackers compromised the wallet backend and spoofed transaction data to trigger the exchange's authorization system. The exchange has revised its loss estimate to $387.5 million after discovering additional Zcash and TRON assets were part of the same breach.

Chen said the attack has been completely contained and no further unauthorized transfers are possible. He said early evidence points to North Korean hackers, citing IP and VPN patterns associated with the DPRK group. The breach bears similarities to Lazarus Group's strategy.

Recovery Attempts and Evacuation Timeline

Bitget has launched a 5% bounty program, which rewards participants who directly contribute to depositing or recovering stolen funds. The exchange said its User Protection Fund, which has more than $464 million, covers the full amount of confirmed losses.

Deposits and trading remained operational throughout the incident, but withdrawals were suspended. Chen said the exchange will announce its plans to resume withdrawals by 04:00 UTC on September 26.

Global bond selloff deepens as debt tops World War II levels

Global sovereign debt is set to reach $365 trillion in the first half of 2026, more than three times the size of global GDP, according to a new report from the Institute of International Finance released this week. The International Monetary Fund, in its annual report, described the world's fiscal picture as "extremely worrying", noting that debt levels had surpassed World War II-era records several years ahead of schedule.

A perfect storm of debt and rising yields

The IMF had estimated that global debt would reach World War II levels by 2028, but the Iran conflict accelerated that timeline. "The conflict is increasing fiscal pressures by increasing energy prices, tightening financial conditions and slowing growth, and it is unclear how long these pressures will last," the IMF said.

The stress has been reflected in bond markets. On Wednesday, the 10-year Treasury yield recorded its biggest single-day jump since President Trump announced sweeping tariffs through April 2025. By Thursday, the yield had risen to 5.223%, its highest level in 19 years, while the 30-year yield reached 5.501%, its highest since 2004. “This is a recession,” Subhadra Rajappa, head of US research at Societe Generale, told Bloomberg.

The OECD also issued a warning this week, with chief economist Stefano Scarpetta telling the Financial Times that rising bond yields were a "major concern" as debt service costs are rising at a time when the debt-to-GDP ratio is already elevated.

American debt crosses 40 trillion dollars

In the United States, the federal debt exceeded $40 trillion in August, a few months ahead of forecast, partly driven by the refunding of President Trump's tariffs. Interest expenditure on the national debt is now about $1.3 trillion in fiscal year 2026 – more than the country's defense expenditure. The Federal Reserve, led by new Chairman Kevin Wersh, announced its first interest rate increase in more than three years this month, with another hike expected before the end of the year.

IMF Managing Director Kristalina Georgieva warned that rising rates increase the debt burden. "When interest rates go up, interest payments also go up. And that hurts the government's ability to do anything, including helping people with high costs," he said. According to Freddie Mac, average 30-year fixed mortgage rates have climbed above 7%.

no easy way out

Treasury Secretary Scott Besant acknowledged the problem before the House Committee on Financial Services last week. "I believe the 10-year yield reflects many things, but the need to address the deficit is one of them," he said.

Maya McGuinness, chair of the Committee for a Responsible Federal Budget, said the first step should be no new borrowing when the national debt reaches $40 trillion. "No one knows how many more milestones like this America can achieve," he said.

Wall Street rallies as oil falls on US-Iran Hormuz talks

Oil prices fell sharply on Friday as markets reported US and Iranian negotiators were exploring the possibility of a phased deal to reopen the Strait of Hormuz, sending US equity indexes higher on inflation fears. U.S. crude oil posted a weekly decline of nearly 8%, the most in several months, while the Dow Jones Industrial Average closed 479 points higher at 51,828.59.

Both Brent crude and West Texas Intermediate fell about 3% on the day, according to Reuters, as sources close to the talks said negotiators in New York were discussing a framework under which Iran would reopen the strait and Washington lift its economic blockade. Iranian Foreign Minister Abbas Araghchi told reporters at the UN General Assembly that Tehran had proposed a seven-day plan to reopen the waterway "if certain conditions are met".

Diplomatic signals move markets

The Qatar-brokered talks took place on the sidelines of the UN General Assembly and moved beyond initial contacts in what Al Jazeera's Tehran bureau chief described as a "more constructive" technical phase. US Secretary of State Marco Rubio described the discussion as not successful but said the fact that the meeting took place was remarkable in itself.

According to CNBC, WTI ended the week 7.9% lower while Brent was nearly flat. The sharp weekly decline in U.S. crude reflected growing expectations that a deal could restore flows through the strait, which provided about 20% of global oil supply before the conflict began in February. Crude oil flows from Hormuz reached 33.7 million barrels in the week starting Sept. 20, moved by 19 tankers — a fraction of pre-war traffic, according to Kpler data cited by Reuters.

Wall Street rallies as yields ease

US stocks closed broadly with gains. The S&P 500 rose 0.51% to 7,743.51 and the Nasdaq Composite added 0.48%. After hitting their highest level since 2007 on Thursday, Treasury yields declined modestly, with the 10-year yield falling 4 basis points to 5.17%. In Europe, the FTSE 100 rose 0.14%, while the DAX rose 0.6%.

A meeting in Washington between President Donald Trump and Chinese President Xi Jinping also stirred emotions, although both sides only agreed to extend their trade truce by two months – much less than the two years sought by Beijing.

Supply risks remain

Despite diplomatic optimism, risks remain. Saudi Arabia intercepted six ballistic missiles fired by Yemen's Houthi fighters towards Taif and the Yanbu oil-export hub on the Red Sea. Analysts at BMO Capital Markets warned that Saudi crude oil supply concerns were "reemerging, as the reopening of the East-West Pipeline has not yet led to the resumption of Red Sea exports, while Houthi attacks continue to intensify". No final agreement has been reached between Washington and Tehran and Iran insists on maintaining control of the strait.

"Diplomatic expectations are essentially helping oil prices offset the latest military attacks in the Middle East," said Tim Waterer, chief analyst at KCM Trade.

Tesla shares fall on EU self-driving delays, robot crisis

Tesla shares fell Friday after the European Union withdrew a widely anticipated vote on the company's full self-driving software and a detailed report revealed new production hurdles for its Optimus humanoid robot, dampening investor enthusiasm a day after the company's semi truck launch event.

Europe bans FSD

The EU's Technical Committee on Motor Vehicles will not vote on Tesla's supervised full self-driving system at its Oct. 6 meeting, according to the agenda published on the EU website. Instead, the session allotted only 25 minutes for "the continuation of the discussion" on the Dutch request for bloc-wide authorization, Reuters reported. The next scheduled committee meeting is in December, which is the earliest opportunity for a formal decision.

Tesla had publicly pointed to October 6 as a possible vote date, and CEO Elon Musk responded to the delay on the X with one word: "Ah". Six EU member states – the Netherlands, Lithuania, Estonia, Belgium, Denmark and Slovenia – have individually approved the system, but the bloc-wide rollout requires a qualified majority of 15 of the 27 member states representing 65% of the population. Several countries, including Sweden, have expressed concern over exceeding the FSD speed limit.

Optimus Mount Production Challenges

Separately, The Information reported Friday that Tesla's effort to ramp up Optimus production is running into complications with robotic arms, automated equipment failures and supplier disruptions. Ars Technica, citing the same reporting, said that each Optimus hand and forearm consists of more than 100 small components that must be manually assembled by human workers. Tesla has increased production at its Fremont factory to several hundred robots per week — about ten times the pace of the second quarter — but well short of its goal of more than 1,000 units per week by the end of the year.

According to reporting by The Information, the Fremont plant stopped production of the Model S and Model

eclipsed at semi launch

The dual headwinds overshadowed Thursday's Semi truck launch event in Sparks, Nevada, where Tesla began deliveries to an initial group of customers including PepsiCo, DHL and US Foods. Nearly nine years after Musk first unveiled the electric Big Rig, the long-range version offers 500 miles of range on a single charge.

TSLA closed down 1.57% on the day at about $372, underperforming the S&P 500, which was up 0.51%. The stock is down more than 15% year to date. RBC Capital analyst Tom Narayan reiterated a buy rating with a $480 price target on Friday, estimating third-quarter vehicle deliveries of 464,000, versus a consensus of about 454,000. The broad analyst consensus sits at Moderate Buy with an average price target of $388.85.

BOJ inflation forecast reaches 2.6%, strengthening chances of December rate hike

The Bank of Japan's preferred measure of underlying inflation rose in August, raising the prospect of further rate hikes after the central bank raised its benchmark to the highest level since 1995 earlier this month.

Excluding fresh food and special factors — government subsidies for gasoline and utilities — consumer prices rose 2.6% in August from a year earlier, up from 2.3% in July, according to a report released by the BOJ on Friday. A narrow gauge that strips out non-fresh food, energy and special factors rose to 1.8% from 1.6%.

rate hike cycle takes shape

The data came a week after the BOJ voted 7-2 on Sept. 18 to raise its policy rate by 25 basis points to 1.25%, the highest in 31 years. Board members Toichiro Asada and Ayano Sato, both appointed this year by Prime Minister Sanae Takaichi, dissented. Governor Kazuo Ueda said at the press conference after his meeting that the policy phase has changed: the goal is no longer to raise inflation to 2%, but to keep it there and prevent overshoot.

Overnight index swaps have now put the probability of another rate hike by December above 90%. Daiwa Securities economist Kenji Yamamoto expects the BOJ to hike again in December and April 2027, with rates reaching near 2%. A Bloomberg survey taken before the September meeting found that 58% of economists expected the next step to be taken in January, while about 35% chose December. The BOJ's next policy announcement is due on October 30.

Goldman reverses yen call

Goldman Sachs abandoned its bearish yen stance the same day, cutting its 12-month USD/JPY forecast to 150 from 165, setting three-month and six-month targets at 158 ​​and 155. Strategist Karen Reichgott Fishman cited the BOJ's faster-than-expected tightening and the growing possibility that Japanese institutional capital held abroad will flow back into domestic assets. Bank of America also cut its year-end forecast to 149.

The yen nevertheless weakened after the September rate decision, a reaction analysts attributed to the divided vote and the U.S.A.'s lack of a clear timetable for further steps. Ray Attrill, head of FX strategy at National Australia Bank, told Reuters the BOJ was "clearly underwhelming expectations".

intervention question

Japanese authorities kept the rate in check after USD/JPY climbed above 158 following the decision, a move often seen as a precursor to direct currency intervention. Finance Minister Satsuki Katayama signaled Tokyo was ready to take action if needed, and the yen briefly strengthened to 158.28 after reports that President Donald Trump had raised concerns about the yen's weakness during his meeting with Prime Minister Takachi. With the next rate decision to come in the October outlook report, the BOJ's inflation forecasts could be upgraded if oil prices remain high – a move that would test Daiwa's December call.

Hedge funds increasingly bet on yen after BOJ withholds rate guidance

Hedge funds slashed their bullish yen positions by nearly 80% in a single week after the Bank of Japan declined to give concrete guidance on future rate hikes, according to CFTC data compiled by Bloomberg and released Friday.

Leveraged traders placed about ¥55.9 billion ($355 million) in bullish bets on the yen in the week ended Sept. 22, down from about ¥251 billion the previous week — when funds netted against the yen for the first time since mid-2025. The dramatic reversal reflects growing uneasiness that the BOJ's tightening cycle may proceed more slowly than markets anticipate.

A Hawkish Hike, a Dovish Reception

The BOJ raised its policy rate by 25 basis points to 1.25% on September 18, bringing borrowing costs to their highest level since 1995. But two board members disagreed on the decision, and Governor Kazuo Ueda declined to set a specific timeline for further increases. MUFG analysts noted that the yen sold off aggressively after the split vote, which investors read as weakening the conviction behind the move, pushing USD/JPY above 157.

The pair moved up to the 159-160 area in the days that followed, raising fresh concerns about official intervention. The yen edged closer to 158 per dollar on Friday after Japan's Finance Minister Satsuki Katayama revealed that President Donald Trump had raised concerns about the currency's weakness during his meeting with Prime Minister Sanae Takaichi in New York on Tuesday. Katayama said "the principles have been alive since the last joint intervention," referring to the July 31 operation in which Tokyo and Washington jointly bought the yen to counter disorderly moves.

Carry Trade Unwind Stall

The change in positions marks a sharp turnaround for hedge funds, which had piled into yen bets following the joint US-Japan intervention in late July and ahead of a widely anticipated September rate hike. Net long positions among leveraged funds increased by 20,069 contracts in the week to Sept. 15, according to Hedgeweek, citing CFTC data.

But with the BOJ offering little clarity on whether it would hike again in October or December, traders backed off. The broader carry trade – borrowing cheaply in yen to invest in higher yielding assets – shows signs of reasserting itself as US Treasury yields remain high.

There remains a risk of interference

Despite the deterioration in the bullish stance, analysts warned that the yen's levels are based on credible intervention threats. The Finance Ministry has indicated that it is "vigilant" and is in close contact with the US Treasury. The next test for markets will come with upcoming US inflation data, which could reshape expectations for both the Federal Reserve and the yield gap that has pressured the yen over the past two years.

EVs accounted for 29% of Europe's new car sales in August

Electric vehicles accounted for 29% of all new car sales in Europe in August, a sharp jump from 20.2% a year earlier, as the continent's drivers increasingly turn away from gasoline and diesel amid rising fuel costs due to the conflict in the Strait of Hormuz.

A record month for battery electric cars

Data published this week by both the International Council on Clean Transportation and the European Automobile Manufacturers Association shows that battery electric vehicles are reaching their highest monthly market shares in the EU, UK and EFTA countries. ICCT reported that the August figure alone represents a 5 percentage-point increase from July, with year-on-year sales from January to August up 41% compared to the same period in 2025. The average EV market share for the first eight months of 2026 is now 23%, up 6 percentage points year over year.

France and Germany, Europe's two largest car markets, drove most of the growth. According to ICCT, France reached a record 38% EV share in August, while Germany equaled its previous record of 33%. Reuters reported that total EU car registrations rose 5.3% in August to 832,637 vehicles, with battery electric, plug-in hybrid and hybrid registrations climbing 52.2%, 13.5% and 3.4% respectively – together accounting for more than 73% of all new cars sold.

Huge decline in combustion cars

The gains for EVs came directly at the expense of conventional powertrains. According to ACEA, registrations of petrol and diesel cars fell by more than 23% year on year in August. For the January to August period, the combined market share of combustion vehicles was about 28%, up from about 36% during the same period in 2025.

For the first time in history, Volkswagen has more orders for EVs than combustion cars in Germany, largely driven by the popularity of its new ID. Polo, and has had to cut gasoline vehicle production to free up capacity. BMW Group led European automakers with electric cars accounting for 30% of all cars sold from January to August, boosted by its new iX3 crossover.

Fuel prices as catalyst

The broader background is a global fuel crisis resulting from the war in Iran and disruption to shipping through the Strait of Hormuz, which has caused oil prices to rise sharply throughout 2026. The crisis has added an estimated $330 billion in additional costs to fossil fuel importers over six months, according to the Center for Research on Energy and Clean Air. Al Jazeera reported in early September that Brent crude reached near $97 a barrel, up 19% from the previous month.

Norway remains the leader with 98% of new cars registered this year being electric, followed by Denmark at 82% and Finland at 50%. At the other end of the spectrum, Croatia lags behind at just 4%.

$157 million in stolen XRP frozen after Bitgate hack

Cryptocurrency exchange Bitgate lost $351.6 million in a breach on September 24, when attackers infiltrated its backend wallet system and obfuscated transaction data to eliminate hot and warm wallets across multiple blockchains. The largest piece of the theft – 102.97 million XRP worth approximately $157 million – is now in five newly created wallets that no single entity can freeze, highlighting a structural gap in the design of the XRP ledger.

Bitgate CEO Gracie Chen said the attackers breached "a critical backend system" and started the exchange's own authorization-signing process without obtaining the private keys. The fake transfer moved assets to at least five chains, including Ethereum, USDT, USDC, Avalanche, and BNB.

xrp problem

On-chain data shows that the stolen By September 25, only about 400,000

While Bitgate has coordinated with token issuers to freeze some of the stolen stablecoins, native XRP tokens cannot be frozen or reversed on the XRP ledger. The network's freeze tools only apply to issued tokens, not the underlying assets. This leaves exchanges and bridges as the only blockchain points where funds can be held.

Doubt on North Korea

Chen said investigators identified IP addresses and VPN usage patterns consistent with North Korea's Lazarus Group, calling the connection "very probable." On-chain analyst Specter posted a flow graph connecting Ethereum income from stolen XRP to wallets tagged with the Trader Traitor cluster, which is linked to the $24 million hack of the AFX platform in July. Security firm Blockade has attributed nearly $609 million of crypto losses in the first half of 2026 to that cluster.

Coverage and outcome

Chen said Bitgate's User Protection Fund, which holds more than $464 million including 5,500 bitcoins, will cover customers' losses after the assessment. Withdrawals will remain suspended until the exchange's security team repairs affected systems, though Chen said the pause "shouldn't take weeks." Bybit CEO Ben Zhou offered assistance and said his team was updating its Lazarus bounty tracing platform to help track the funds.

According to the Financial Times, citing data from TRM Labs, before the Bitgate breach, $1.73 billion had been stolen in 333 incidents at crypto firms so far in 2026.

USIBC urges India, US to finalize trade deal by year-end

The US-India Business Council has called on Washington and New Delhi to conclude a bilateral trade deal before the end of 2026, increasing pressure from the business community as Commerce Minister Piyush Goyal prepares to visit the United States next week for talks with his US counterpart.

Business Council pushes for year-end deadline

Citing the milestone of two decades in US-India relations, USIBC Chairman Atul Keshap in a statement on Thursday said finalizing the reciprocal agreement on trade would be "their biggest achievement yet". “We call on both governments to use this opportunity to conclude an agreement that lowers trade barriers and reduces tariffs,” Keshap said. He argued that unlocking mutual trade would create record investment in 2026, boost manufacturing, open consumer markets and strengthen cooperation in artificial intelligence.

The statement comes ahead of Goyal's scheduled visit to the G20 Trade Ministerial in Milwaukee, Wisconsin from September 30 to October 1, where he is also expected to hold a bilateral meeting with US Trade Representative Jameson Greer to discuss the progress of the trade deal.

Goyal says deal 'almost complete'

In a separate development, Goyal on Thursday said the trade deal with the United States is "almost complete" but indicated that India is looking for a competitive advantage over rival exporters in the US market before finalizing it. Speaking at the 13th Annual Forum 2026 India 3.0, Goyal said, "We have to find the right comparable competitive advantage over our competitors so that we can execute the agreement quickly."

India and the US announced the framework for the first phase of a bilateral trade agreement in February. However, the tariff landscape has changed significantly since then, complicating negotiations.

obstacles remain

Many obstacles stand in the way of quick conclusions. The US has imposed a 10 percent forced labor duty on India, and a possible Section 301 investigation into what Washington describes as structural “excess industrial capacity” and subsidies is looming over the talks. The recent passage of the Russia Sanctions Act by the US Congress adds another layer of complexity.

Despite these challenges, US exports to India are growing, with Indian goods shipments to the US rising to $42.79 billion in the April-August period from $40.39 billion a year earlier. Keshap laid out the stake in broader terms, describing the partnership as "between the world's largest economy and its fastest-growing major economy."

ECB's Wojcik warns diesel prices will remain high, leading to inflation in the euro zone

European Central Bank Vice President Boris Vujicic warned on Friday that energy prices, especially diesel, will remain high for a long time due to the ongoing conflict in the Middle East and declining global refining capacity, threatening to push inflation higher in the broader euro zone.

Diesel pressure increases

Speaking at an event at the Federal Reserve Bank of Cleveland, Vujicic said drone strikes on Russian refineries have curbed supply, while the war between the United States and Iran is disrupting traffic through the Strait of Hormuz and Chinese refiners are prioritizing domestic demand over exports. "Energy prices, especially diesel, will probably remain high for a long time and that will drive inflation because diesel is really in so many products," he said.

The diesel market, already stressed by supply disruptions linked to conflicts in Ukraine and the Middle East, was dealt a blow again this week when President Donald Trump expressed support for a possible ban on U.S. diesel exports, though the administration later tried to downplay that possibility. The impact of such a ban in Europe is notable – according to Oxford Economics, US imports now account for about 10% of total EU diesel imports, including intra-EU trade.

Rate Hikes and Inflation Outlook

The warning comes days after the ECB raised its benchmark rate by a quarter percentage point to 2.50%, its second increase since the start of the Iran war. The central bank estimates inflation will remain above its 2% target until at least 2028, setting the stage for further tightening. Analysts now expect two additional rate hikes this winter, a view reinforced by September's flash PMI data, which showed input and output prices rising at a faster pace as businesses pass on higher energy costs to customers.

Wujcic said markets share the ECB's assessment, pointing to a recalibration of rate curves as evidence. “The main risk to long-term energy prices remains high,” he said.

A comprehensive central bank overhaul

The ECB is not alone in confronting energy-driven inflation. The Federal Reserve raised its benchmark rate to 4% last week, with Chairman Christopher Wersch declaring that "inflation is too high and has been for too long." The Bank of England struck a sharp tone, keeping rates steady, with Governor Andrew Bailey warning that action would be likely due to prolonged energy instability. Even the Bank of Japan raised short-term rates to a 31-year high amid the same global energy shock.

For the euro zone, the immediate concern remains the interplay between resilient economic activity – the composite PMI hit a three-year high in September – and accelerating price pressures that could force the ECB into a more aggressive tightening cycle than markets currently expect.

Global stocks record best week since August as oil falls

Global stock markets rose on Friday, September 25, capped their strongest weekly performance since early August, as falling oil prices and hopes for a US-Iran ceasefire eased some of the inflation concerns that have dogged markets for several weeks. The gains came even as punitive bond selling pushed U.S. Treasury yields to their highest in two decades.

European and UK markets are continuously falling

The pan-European STOXX 600 rose 0.6% on Friday, putting it on track for a weekly gain of about 1% and snapping a three-week losing streak during which the index had lost about 3%. Germany's DAX rose 0.65%, France's CAC 40 rose 0.5%, and Italy's FTSE MIB climbed 1%.

In London, the FTSE 100 rose 0.41% to 10,723.98 points, while the midcap FTSE 250 climbed 0.71%, with both indices on track for a second consecutive weekly gain led by banks and mining shares. MSCI's world stock index was set for its best weekly performance since the beginning of August.

Oil-price-sensitive airline stocks were among the session's winners, with Ryanair and Lufthansa each gaining more than 2%. UBS rose 3% after a report it said the bank had resumed discussions for an exit from Switzerland, and after upgrading Glencore to "buy".

Oil eases ceasefire hopes, but risks remain

Oil prices fell on Friday as negotiators looked for a phased exit from the Middle East conflict that would include Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, sources close to the talks told Reuters. Brent crude eased but remained above $100 a barrel, maintaining inflation concerns.

"Even though it seems like the conflict in the Middle East is potentially reaching a positive phase of dialogue and agreement, there's still a lot of uncertainty because we've been here before," said Daniela Hathorn, a senior markets analyst at Capital.com.

Chinese President Xi Jinping was in Washington for talks with President Donald Trump, although markets saw little evidence of a breakthrough on trade, AI or the Iran conflict.

Bond selloff looms over rally

Equity gains came against the backdrop of a rise in government bond yields. Benchmark 10-year US Treasury yields hit a 19-year peak after rising 20 basis points in just two days – the biggest two-day move since the April 2025 Liberation Day tariffs. Japan's 10-year bond yield reached 3.115%, the highest since 1996. The US 30-year yield reached its highest level since 2004, pushing mortgage rates to 7%.

"The world's bond markets are screaming and ignoring it could prove too costly," said Nigel Green, CEO of Deavere Group. “Once risk-free rates rise above 5% in the world's largest economy, every asset on the planet will have to justify its price against that.”

Five of the Group of 10 central banks raised rates in September, with Norway raising rates on Thursday and Sweden's Riksbank indicating it was likely to do so by the end of the year. Fed funds futures gave a 73% chance of another rate hike next month.

Jan von Gerich, chief market strategist at Nordea, cautioned that weekend risks could curb enthusiasm: "There are no quick solutions and the weekend is approaching so we may see some caution".

EU warns of worst winter for energy since 2022 as diesel prices hit record levels

The EU's energy chief warned on Friday that the bloc faces an energy "price crisis" due to the fallout from the Iran war, urging member states to consider measures to curb demand as diesel prices hit new records and gas storage levels dangerously lag behind seasonal norms.

In a letter to national energy ministers seen by Reuters, EU Energy Commissioner Dan Jorgensen said the crisis could lead to Europe's "worst winter" for energy prices since 2022, when Russia's invasion of Ukraine caused costs to rise. The letter called on governments to consider "voluntary demand savings measures... with a particular focus on the transportation sector," Politico reported.

Record prices, rising costs

The average price of diesel across the EU rose this week to a record €2.23 per liter - about $9.63 per gallon - up from €2.16 last week, according to an AFP analysis of European Commission data. Diesel has crossed $10 a gallon in France, Germany, the Netherlands, Belgium, Finland and Denmark. EU drivers are now spending an extra €203 million a day on diesel, according to advocacy group Transport and Environment.

The rise in prices has been caused by widespread supply disruptions: The closure of the Strait of Hormuz, Ukrainian drone attacks on Russian refineries, and the Houthi naval blockade on Saudi tankers in the Bab al-Mandeb Strait have collectively removed about 10 million barrels per day from global oil flows. EU gas storage stands at around 69%, well below the normal 85% for this time of year.

Governments are scrambling to respond

According to the Bruegel think tank, European governments have committed more than €11.8 billion in fiscal measures to cushion the shock. Germany's parliament on Friday approved a renewed fuel tax cut of €0.17 per liter until the end of the year at a cost of €2.5 billion. France announced a €450 million aid package for travelers and fuel-intensive industries, while President Emmanuel Macron said France would deploy troops and air defense systems to Saudi Arabia to protect energy infrastructure from Houthi attacks.

Spain has extended fuel tax breaks as part of a €5 billion package, and EU countries have agreed to release 400 million barrels from strategic reserves under the International Energy Agency framework.

Transatlantic tensions increase uncertainty

The crisis has brought the EU-U.S. Has also been put under stress. relations. Reports that President Donald Trump is considering a 90-day ban on diesel exports to reduce domestic prices ahead of the November midterm elections have worried Brussels, as the EU now gets about half its diesel from US refineries. "We believe this is a bad idea," European Commission spokesman Olof Gill said Thursday. “Any disruption would risk having a negative impact on both sides”.

As winter approaches, Commission President Ursula von der Leyen has urged a move towards “affordable, domestic, clean energy” to reduce Europe’s exposure to imported fossil fuels – a goal that, for now, is far from reality at the pump.

SoftBank shares fall after record $11.1B junk bond sale

SoftBank Group has completed the largest high-yield corporate bond sale in history, raising $11.1 billion in dollar and euro-denominated debt to finance its deep commitment to OpenAI. The deal, which priced on Thursday, Sept. 24, overtook French telecom firm Numericable Group's $10.9 billion issuance in 2014 as the largest junk bond transaction on record, according to LSEG data cited by Reuters.

The proceeds will cover SoftBank's final payment of $10 billion on a $30 billion follow-on investment in OpenAI, which is expected to close on October 1. Once completed, SoftBank's cumulative investment in the ChatGate maker will reach approximately $64.6 billion for a 13% stake.

heavy borrowing costs

The bond sale includes $10 billion dollar-denominated senior notes in three maturities and €1 billion euro-denominated notes in two tranches, according to a filing cited by Reuters. Dollar notes have interest rates of 8.625%, 9.25% and 9.75%, while Euro notes have interest rates of 7.125% and 8%. These rates represent a sharp increase from SoftBank's $7.3 billion bond issuance in June 2021, which had yields between 2.125% and 5.25%.

SoftBank has a BB+ rating from both S&P and Fitch – the top tier of speculative grade. Its five-year credit default swap spread widened to more than 400 basis points during the week, up from 280 basis points in June, according to Reuters.

growing pile of debt

The bond sale is just one layer of SoftBank's expanded financing structure. The company recently increased margin lending backed by its Arm Holdings stake to $25 billion, as first reported by Bloomberg. Separately, Apollo Global Management increased the net-asset-value loan secured by Vision Fund 2 assets to $9.2 billion, with JPMorgan, Goldman Sachs and Barclays among the banks participating.

SoftBank's total debt, including bank facilities, bond obligations and convertible instruments, now exceeds $100 billion. S&P downgraded SoftBank's credit outlook to negative, citing concentration risk as OpenAI now represents about 30% of the company's investment assets.

market reaction

SoftBank shares fell 3.18% to ¥6,150 on the Tokyo Stock Exchange on Friday, sending the stock down more than 32% from its 52-week high. Satoru Aoyama, senior director at Fitch Ratings, told Reuters he was "positively surprised by the market's appetite" for the bonds. But CreditSights analyst Mark Chapman wrote in a more cautious tone that "the risks to SoftBank Credit are material and have increased due to increased concentration as well as severe strain on cash flows".

SoftBank's ability to repay its debt largely depends on exit opportunities, particularly through the potential public listings of OpenAI and its data center subsidiary SB Energy – both of which have recently delayed IPO plans.

RBI Bulletin: Foreign exchange reserves reach record $765.9b

India's economy grew at a strong 7.8 per cent in the first quarter of 2026-27, while foreign exchange reserves reached an all-time high of $765.9 billion, the Reserve Bank of India said in its September bulletin released on Friday. The assessment paints a picture of domestic strength amid a deteriorating global backdrop, with escalating conflicts in West Asia and rising bond yields in advanced economies posing new challenges.

Strong fundamentals, record buffers

The bulletin highlighted several pillars of resilience. Net foreign direct investment rose to its highest monthly level in five years in July, while the current account deficit remained moderate in the first quarter of 2026-27, supported by strong services exports and remittance inflows. Liquidity in the system remained in surplus through August and early September as banks availed of the RBI's FCNR(B) swap facility, later declining towards the end of the month due to tax-related outflows.

Credit growth maintained its pace, while deposit growth accelerated, with money supply growth accelerating in August due to a faster increase in total deposits. According to a separate article in the bulletin, private corporate investment has also shown signs of strength, with the project pipeline suggesting that private sector capex could reach ₹3.2 lakh crore in 2026-27.

Tensions in West Asia and food prices dominate the outlook

The RBI flagged the re-escalation of the West Asia conflict as a source of concern in September, noting that a sharp rise in crude oil prices had rekindled concerns about supply-chain disruptions and inflationary pressures. Indian equity markets remained soft in August and September, with foreign portfolio investors becoming net sellers after recording inflows the previous month.

Headline inflation rose to 4.8 percent in August due to increases in food and beverages as well as fuel and core components. High-frequency data till September 21 showed a broad-based sequential rise in food prices, with onion prices rising sharply, rice and wheat continuing to rise, and pulses and edible oils also hitting higher levels.

Flexibility with warnings

The bulletin struck a cautiously optimistic tone, describing an economy that still rests on strong domestic fundamentals even as external shocks intensify. RBI noted that the views expressed in the bulletin articles are those of the authors and do not represent the official position of the central bank.

Global diesel crisis deepens due to supply shortage from two fronts due to war

Diesel prices have hit record levels in major economies due to the wars in the Middle East and Ukraine, reducing supplies from the world's two largest producing regions and raising the possibility of further disruption to global food and energy supply chains.

European diesel futures have more than doubled since the start of 2026, while U.S. retail diesel rose above $6.50 a gallon this week for the first time on record, Reuters reports. In the UK, the national average reached 197.31p per liter on September 23 – just 1.78p less than the all-time high of 199.09p set in June 2022, according to RAC data. Middle Eastern diesel shipments fell by nearly half between March and August compared with a year earlier, while Russia imposed its export ban following Ukrainian drone attacks on refineries.

The US export ban debate has created a stir in the market

The crisis has created a political stir in Washington ahead of the midterm elections in November. Politico reported on September 22 that the Trump administration was planning a 90-day ban on diesel exports, although the White House denied this and Energy Secretary Chris Wright told Reuters the measure would not work and could increase gasoline and jet fuel prices.

However, President Trump has publicly supported the idea. According to Reuters, Wright has contacted executives at several major US refineries to seek support for voluntary export restraint as an alternative.

Markets are already pricing in the potential. West Texas Intermediate crude futures were trading at $12.02 a barrel against Brent on Thursday, their biggest discount since May, according to LSEG data. Wood Mackenzie analysts estimate the ban would redirect about 700,000 barrels of diesel per day into domestic storage, filling Gulf Coast stockpiles to capacity within a month and forcing US refiners to cut more than 2 million barrels of crude per day – a 12% reduction. The U.S. is the world's largest diesel exporter, shipping about 1.2 million barrels per day, Morgan Stanley said.

Pressure on supply from two fronts

The underlying shortage stems from simultaneous disruptions in the world's two largest diesel-exporting regions. The Iran-Israel-US conflict, now nearly seven months old, has largely closed the Strait of Hormuz and disrupted Middle Eastern refining and shipping. At the same time, Ukrainian drone attacks on Russian refineries damaged capacity, leading Moscow to ban diesel exports in July.

European buyers are struggling for alternatives, importing heavily from India, China and the US, while Switzerland released strategic diesel reserves twice in September to prevent local shortages. In the UK, where around 70% of imported diesel comes from the US, the Netherlands and Belgium, the RAC warned that a breach of the £2-per-litre limit now appears inevitable.

macroeconomic outcome

Diesel shock is directly affecting food prices. The FAO food price index rose to 133.3 points in August, with international wheat prices climbing 15% above a year earlier as disruptions to Black Sea exports led to energy shortages. Diesel powers agricultural machinery, irrigation, processing and transportation – meaning every stage of the food supply chain is impacted by higher fuel costs. The World Food Program has warned that disruptions at three maritime chokepoints – the Strait of Hormuz, the Black Sea and the Red Sea – are increasing the cost of delivering humanitarian aid at the worst possible time.

European gas prices fall as Iran proposes plan to reopen Strait of Hormuz

European natural gas prices fell sharply this week as diplomatic developments around the Strait of Hormuz boosted hopes that disrupted LNG flows from the Persian Gulf could finally resume, easing supply fears that have plagued the market for months.

Europe's main gas pricing reference, the Dutch TTF benchmark, fell to about €70 per megawatt-hour on Friday, more than 6% less than the previous session alone, according to Trading Economics. The decline capped a volatile week that saw prices fluctuate due to changes in geopolitical signals. In the United States, natural gas futures also fell about 4.6% on Friday due to lower demand forecasts and hopes that the pipeline issue in West Virginia would soon be resolved.

Hormuz diplomacy advances markets

Iran's Foreign Minister Abbas Araghchi told reporters at the UN General Assembly this week that Tehran has presented a seven-day plan to reopen the Strait of Hormuz, the vital waterway through which about a fifth of the world's seaborne LNG passes. "The moment they accept this plan, from the next day, this timetable can start, and after seven days, the strait will be open," Araghchi said.

The strait has been effectively closed to commercial shipping since the US-Iran military conflict escalated in early 2026. Qatar's energy minister said last weekend that the country could restore normal operations within weeks of reopening parts of its LNG facilities, though he cautioned that damage from Iranian attacks would limit production for years, according to The Wall Street Journal.

Winter supply concerns persist

Despite the week's price decline, European gas markets remain under winter pressure. According to Gas Infrastructure Europe data cited by Industrial Info Resources, gas storage levels across the EU are at around 65% – the lowest for this time of year in 15 years. The European Commission's Gas Coordination Group met on September 24 and concluded that supply remained stable, citing increased LNG import capacity and diversified sources as supporting factors. ENTSOG's winter preparedness report is due October 8.

US market is in decline

Across the Atlantic, U.S. natural gas futures for October delivery on the New York Mercantile Exchange fell 15.1 cents to $3.146 per million British thermal units, retreating after a 9% rise on Thursday due to an unexpected incident at TC Energy's Mountaineer Express pipeline in West Virginia. The company said Friday that employees are "working diligently to resolve the situation quickly." US gas production fell to a nearly eight-month low of 106.9 billion cubic feet per day on Friday due to declines in West Virginia and Texas.

Besant calls stronger yen 'desirable' after talks with Japan's Finance Minister

US Treasury Secretary Scott Besant said on Friday that a stronger yen reflecting Japan's economic fundamentals is desirable, after Japanese Finance Minister Satsuki Katayama revealed that President Donald Trump had raised concerns about a weaker yen during a summit with Prime Minister Sanae Takachi earlier in the week.

The comments came as the global bond selloff pushed Japan's benchmark 10-year government bond yield to 3.115%, its highest level since 1996, and the U.S. 30-year Treasury yields climbed to levels not seen since 2004.

A coordinated message on the yen

Besant posted on Twitter that she had a "meaningful conversation" with Katayama on Friday, adding that the conversation was "based on President Trump's discussion with Prime Minister Takachi earlier this week". He said the two discussed "the importance of maintaining close communication regarding the foreign exchange market."

Katayama had earlier offered an unusually detailed account of the Trump-Takaichi meeting held on the sidelines of the United Nations General Assembly in New York on September 22. "President Trump expressed concern about the yen's weakness," Katayama told reporters. She said she was disclosing the exchange for the first time after consulting the Prime Minister's Office. Takaichi confirmed Trump's comments, saying the US side told him the weak yen was "creating difficulties for their business".

The yen strengthened after the flurry of statements and rose from 158.60 per dollar to near 157.20, according to Reuters.

The pressure in the bond market is looking great

The diplomatic pressure on the yen is coming against a backdrop of rising global bond yields. US 10-year Treasury yields hit 5.20% on Thursday and 30-year yields reached 5.48%, while Japan's 10-year JGB yield rose 8 basis points to 3.055% - a 30-year high - before climbing further on Friday.

The selloff has raised concerns in Washington that Tokyo could sell U.S. Treasuries to raise dollars for pro-yen intervention, a scenario Besant has worked to avoid. Reuters reported that he has taken several steps, including coordinating directly with Japan on intervention and expanding buybacks of long-term debt.

Echoes of a massive campaign

Friday's call was the latest in a series of bullish signals from Besant on the yen. Earlier this month, he told an audience at Southern Methodist University, "I'm home now," daring traders to bet against coordinated U.S.-Japan currency action. In late July, the two countries carried out a joint currency intervention, which briefly pushed the yen from around 164 per dollar to 155, but the effect faded as the dollar gained momentum on strong US economic data and rising yields.

Japan's Economy Minister Minoru Kiuchi marked a change in tone on Friday, declaring that the era of Abenomics-style reflation policies is over - a comment that appeared to address Besant's recent suggestions that Tokyo should prioritize fighting inflation rather than stimulating growth.

ECB's Wojcik announces tightening cycle has begun

Euro-zone consumer prices are forecast to rise 3.7% year-on-year in September, the highest reading since 2023, according to a Bloomberg survey of economists, as energy costs driven by Iran and the ongoing war between the US and Israel continue to rise across the bloc's economy.

The expected uptick from August's 3.3% reading – the highest since September 2024 – underlines the persistent inflationary pressures facing the European Central Bank, just weeks after raising its deposit rate to 2.5% on September 10.

A tightening circle takes shape

ECB Governing Council member Boris Vujicic announced on Friday that the bank had "started the cycle of tightening", one of the clearest acknowledgments yet that further rate rises are on the way. Wujcik warned that diesel prices were likely to remain high due to reduced refining capacity and would fuel broader inflation, which would cause the cost of refined products to diverge from crude oil, which he said was more likely to decline.

The hawkish tone comes after ECB President Christine Lagarde described the September rate hike as "thoughtless" and similar signals from other council members that more stringency may be needed. The market currently sees around a 75% chance of another rate hike at the ECB's October 29 meeting and a similar chance on December 17.

Goldman Sachs expects a hike in December but doubts rates will exceed 3%

Goldman Sachs Research expects the ECB to raise rates again in December, taking deposit rates to 2.75%, but is "doubtful" that rates will rise above 3% given the current market price. Chief Europe economist Jari Stein said that while euro-zone GDP grew at an annual rate of 1.2% in the first half of 2026, the renewable energy spike means "a notable hit on household real disposable income" which should cause consumer spending to slow in the second half.

Bank of America also expects a hike in December and Deutsche Bank made a similar call earlier this month.

Energy shock drives outlook

Benchmark natural gas prices in Europe have nearly doubled since June and volumes of refined petroleum products have soared, according to Goldman Sachs Research. The company has raised its core inflation forecast and now expects it to reach 3.8% in the fourth quarter. Eurostat data from the August flash estimate showed energy prices rising 14.3% year-on-year, up from 10.3% in July.

Core inflation, which excludes energy and food, was 2.4% in August – unchanged from before the Middle East conflict escalated – suggesting so far limited second-round effects. Whether that firewall holds may determine how far the ECB's tightening cycle ultimately extends.

Vitol buys 25M barrels of Iraqi crude at deep discount

Vitol, the world's largest independent oil trader, has bought at least 25 million barrels of Iraqi crude for September loading, taking advantage of deep discounts as Baghdad struggles to move its exports through the war-locked Strait of Hormuz, according to Reuters.

The deal, which was first reported by Reuters on Wednesday, makes Vitol the second-biggest buyer of Iraqi crude after ADNOC, Abu Dhabi Energy Group which agreed to buy 40 million barrels this month after buying about 32 million barrels in August.

Increase in purchases due to heavy discounts

Iraq's State of Oil Marketing Organization, or SOMO, in September offered a discount of $15 to $20.80 a barrel off the official selling price of crude, according to a tender document reviewed by Reuters. Some cargo was sold at even steeper cuts, given the challenge Baghdad faces in finding buyers willing to navigate the Strait of Hormuz, where Iranian forces have targeted commercial shipping during the ongoing US-Iran conflict.

An Iraqi energy official told Reuters that Vitol's September allocation was about 25 million barrels, while an industry source familiar with Iraqi oil exports put the figure at between 25 million and 30 million barrels.

Export growth despite risks

Despite the threats, Iraq's southern oil exports have increased. Basem Abdul Karim, head of Basra Oil Co, said on Thursday that exports averaged 2.35 million barrels per day in August and have increased to about 2.6 million bpd so far in September. This represents a sharp improvement from July, when exports stood at about 1.35 million bpd amid tight Iranian restrictions on transit through the strait.

Last month, Iran allowed several tankers carrying Iraqi crude to transit the strait after Baghdad made repeated requests through multiple channels. Intermittent access combined with aggressive pricing has drawn major traders and national oil companies into the market.

broader market implications

The purchases of Vitol and ADNOC show how the US-Iran conflict has redefined global oil trade flows, with companies with large tanker fleets and logistics networks positioned to profit from Iraq's plight. Meanwhile, Saudi Arabia has begun rerouting its East-West pipeline to completely bypass the strait, and the Trump administration has banned US diesel exports as fuel prices remain high, with Brent crude hovering around $100 a barrel.

According to Reuters, US and Iranian officials have discussed a phased agreement to reopen the Strait of Hormuz, although progress has been limited.