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Brent erased its wartime gains as flows through the Strait of Hormuz accelerated. But tensions remained as Donald Trump warned that tolls in the waterway are a red line issue in negotiations with Iran. BBG

Iraq will consider all available options if its OPEC quota is ‌not significantly increased and has weighed leaving the producer group, sources with knowledge of Iraqi oil policy told Reuters. The prospect of OPEC's second-largest producer considering an exit would be a further blow to the group after the departure this year of the United Arab Emirates. Iraq is one of the five founding members of OPEC, which was formed in the Iraqi capital. RTRS

China started marketing up to €5 billion of sovereign bonds in what would become its largest-ever such deal in euros.

The BOJ needs to raise interest rates every few months toward a neutral level of around 2%, board member Naoki Tamura said. BBG

Japan’s 20-year bond auction drew the weakest demand since the market upheaval just over a year ago as worries about inflation and fiscal policy came back to the fore. BBG

The EU’s trade deal with the US is set to go into effect after the bloc gave its final sign-off ahead of Trump’s deadline. BBG

Colombian electoral authorities confirmed conservative Abelardo de la Espriella as the winner of the presidential election. He’ll take office on Aug. 7. BBG

Meta is racing to replace human moderation with generative artificial intelligence, as it undergoes a broader cost-cutting drive to offset chief executive Mark Zuckerberg’s vast spending on AI. FT

Qualcomm shares jumped premarket (QCOM +12% premkt) after forecasting more than $15 billion in annual AI chip sales by fiscal 2029. BBG

Fed said 32 large banks are well positioned to weather a severe recession and continue lending under the latest stress test, while the banks tested absorbed more than $700bln in hypothetical losses and saw capital decline only 1.6%, to remain above minimum requirements. Furthermore, the Fed reaffirmed its plan to maintain capital levels steady as it adjusts the testing process and will set new stress capital buffers following the 2027 test. The banks promptly revealed plans to return hundreds of billions in capital to investors through dividends and buybacks.

https://x.com/zerohedge/status/2070116644643340638

Iza Kaminska's Overnight Summary

DDL: Oops, there goes the 'debasement' trade

And it's not just the price of precious metals falling, it's the majority of the commodity complex.

Strait of Hormuz traffic has remained active even as IRGC influence is perceived to be throttling flows; yet insurance premiums for vessels have fallen by more than half in six days, freight rates have spiked selectively, and Brent crude has nevertheless slid below $76 to its lowest level since early March. This price collapse, extending to sub-$72 prints and prompting Trump statements on gouging, occurs against a backdrop of US crude inventories (including SPR) reaching their lowest since 1984, Russian exports hitting yearly highs despite drone strikes on Gazprom facilities in Orenburg and a fuel depot fire in Krasnodar, and Qatar’s swift return of LNG vessels promising relief on the gas side. The connective tissue is demand—specifically China’s weaker-than-expected appetite—which has also driven JPMorgan to cut its oil outlook, tin futures down sharply, and precious metals into retreat, with spot gold slipping below $4,000 and silver under $60 for the first time since late 2025.

These commodity moves sit inside a larger financial tableau that refuses simple narratives of dedollarisation or imminent US asset dumps. Private capital inflows have hit $1.3 trillion, foreign holdings of US equities have jumped to a record $23.2 trillion, and the New York Fed’s high-yield distress indicator has reached a record low. At the same time leveraged ETF assets have climbed to an all-time high of $198 billion, Bitcoin has fallen more than 53% from its October peak, the total crypto market has shed $2.3 trillion in eight months, and MicroStrategy has collapsed 83% from its highs. Treasury Secretary Scott Bessent’s remarks that Iran talks include potential re-entry into the dollar-based oil invoicing system sit alongside reports of Tehran having moved $3.84 billion through CoinEx to evade sanctions and China expanding yuan settlement for sanctioned trade. Beijing’s own behaviour remains ambivalent: it has set the yuan at its weakest level since May, imposed new capital outflow controls, yet continues to be viewed by some as a structural source of global disinflation through manufacturing overcapacity. A forthcoming BRICS gold-backed settlement token adds another layer to the slow reconfiguration of cross-border rails.

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https://mindtheblindspot.substack.com/p … debasement