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Real-time News
August 19th - Bond traders are once again adjusting their strategies. After a series of data suggested that the Federal Reserve is unlikely to raise interest rates for the remainder of the year, options market bets are attempting to hedge against the risk of the Fed turning to rate cuts in 2027. This dovish bet contradicts recent movements in the U.S. Treasury market: long-term bond yields have risen to multi-year highs because a Fed wait-and-see approach would allow inflation to remain above target for a longer period. Options traders, whose policy path is closely tied to the Feds, are turning their attention to signs of a weakening U.S. economy, believing this could trigger a market reversal. This move emerged after data released last week showed that inflation and consumer demand slowed in July, cooling market expectations for a rate hike at the Feds September meeting. Options market participants subsequently began adjusting their positions, reducing the magnitude of rate hikes priced in for the coming months in the swap market. Some options are even considering hedging against a potential rate cut by the middle of next year. "The fear of rate hikes has eased," said Jeff Shul, head of interest rates at Constitution Capital, noting that recent positions betting on this outcome are being liquidated.On August 19, French Foreign Minister Jean-Michel Barrow announced on social media that France would expel two Iranian diplomats in response to the detention and interrogation of two French diplomats by Iranian security services. Barrow had posted on social media on July 20 that Iranian security services had detained and interrogated two French embassy staff members for several hours the previous evening, violating their diplomatic immunity. Barrow also said he had told the Iranian Foreign Minister that this action was "extremely serious and unacceptable" and "will have consequences." The Iranian Foreign Ministry issued a statement on August 18, local time, saying that given the two French diplomats violation of the Vienna Convention on Diplomatic Relations, Iran had decided to declare them persona non grata and prohibit them from entering Iran.On August 19, Iranian Foreign Ministry spokesman Baghae refuted the UAEs accusation that Iran had fired missiles at it. He stated that such actions violated the principle of good neighborly relations and undermined efforts to strengthen trust among regional countries and prevent the escalation of insecurity. Baghae called on all parties to refrain from making unfounded accusations against Iran, given the complex situation caused by the continued malicious actions of the United States and Israel in regional peace and security, particularly the numerous false flag operations in recent years. Previously, the UAE announced the suspension of trade, commercial, and financial transactions with Iran.Iranian Foreign Ministry spokesman Bagaei called on all parties in the region to refrain from making baseless accusations against Iran and to be wary of the continued malicious actions by the US and Israel that undermine regional peace and their history of using false flags.The API reported that U.S. crude oil production increased by 238,000 barrels per day in the week ending August 14, compared with 34,000 barrels per day in the previous week.
