NEED TO KNOW
IR Deal still out of reach: A deal to reopen the Strait of Hormuz remains out of reach, despite Iran and Oman making progress toward an agreement on navigation routes. Tehran said Hormuz will not fully reopen until the US “corrects its behavior” and the reopening will still depend on Washington meeting conditions that largely reiterate Iran's longstanding demands, including an end to the war, sanctions relief, release of frozen assets and compensation for war damage, as well as control over the terms and potential fees for transit through the Strait. Iran also warned Gulf states that if they cooperate with or facilitate further US attacks, it would retaliate against their oil, power and water infrastructure, increasing pressure on them to push Washington toward a negotiated settlement.
RU Further escalations in the Russia-Ukraine war: Hostilities continued this week as a Ukrainian drone crashed onto a crowded Black Sea beach on Monday, killing seven people including three children and injuring around 40. Russia called it a deliberate attack on civilians, while some analysis suggested Russian air defenses may have brought the drone down. Ukraine pressed its long-range drone campaign against Wildberries warehouses across Russia, while it also struck two Russian oil refineries (one of them being one of Russia’s biggest, producing about 15 million tons of crude oil each year). Russia maintained heavy strikes on Ukrainian cities, causing civilian casualties, while President Zelensky announced that Ukraine has secured an agreement with the US for monthly deliveries of Patriot air defense missiles.
KSA Saudi, Pakistan, Turkey sign Mecca Joint Defense Agreement: Saudi Arabia, Turkey and Pakistan signed a joint defense agreement in Mecca on Friday, under which an armed attack on any one of the three countries would be regarded as an attack on all of them. The pact, signed by Saudi Crown Prince Mohammed bin Salman, Turkish President Erdogan and Pakistani Prime Minister Shehbaz Sharif, aims to strengthen collective deterrence and enhance defense cooperation among the three major Muslim nations. It comes amid heightened regional tensions, including the ongoing Iran conflict that has affected Gulf states and key shipping routes, though officials described the agreement as purely defensive.
US Reports indicate US missile stockpiles are depleted : Reuters reported this week that the US has heavily depleted key munitions stockpiles during its war with Iran, with “virtually all” of the Army’s long-range precision missiles (ATACMS and PrSM) used up. ABC News published a similar report also describing crucial missile inventories as “extremely low,” raising concerns about readiness for other potential conflicts, especially since many of these missiles cost several million dollars each and can take up to two years to produce. President Trump rejected the reports, adding that “the leakers of these treasonous statements are being hunted down” and vowing to seek long-term jail sentences for those responsible.
EU ECB blindsided by US-Japan currency intervention: The Financial Times reported that the ECB was blindsided in last week’s currency intervention when the US sold euros to buy yen in a joint operation with Japan to prop up the weakening Japanese currency. The US Treasury, acting through the New York Fed, only informed its counterparts in Frankfurt after the trade had already been executed on July 31, marking the first such coordinated yen-support effort between Washington and Tokyo in nearly 30 years. Officials at the ECB viewed the decision to use euros without prior consultation as an unusual breach of longstanding norms of cooperation among Western monetary authorities, while analysts noted was likely chosen to avoid any signal of dollar weakness.
US Another record high for US markets: The S&P 500 closed at a new record high on Friday to cap off its best week since April, as investors looked past a major downside jobs report surprise that revealed the US economy shed 23,000 nonfarm payrolls in July, far missing estimates for an 80,000 gain, alongside sharp negative revisions to prior months. The dismal labor data fueled a rally across major indexes as traders bet the weakness will force the Federal Reserve to hold interest rates steady at its September meeting instead of hiking. Market expectations for a rate hike at the next Fed meeting dropped to about 44%, down from 55% in the prior session and 67% a week ago.
EU Von der Leyen proposes increased support to Morocco: After last week’s chaotic influx of over 60,000 migrants into the Spanish enclave of Ceuta from Morocco, European Commission President von der Leyen wrote to Spanish Prime Minister Pedro Sánchez proposing that the EU further strengthen its borders and increase support for Morocco. In the letter seen by Reuters, von der Leyen stressed that the incident showed the need to do more at critical points through better monitoring and physical barriers, while outlining priorities such as enhanced cooperation with partner countries, early-warning systems, and dismantling smuggling networks. She described Morocco as an “important strategic partner” and suggested boosting technical and financial assistance to the country.
SP Border checks introduced for travelers from Italy: Spain introduced border controls yesterday on flights and ships from Italy lasting until September 7, requiring passport, nationality, and visa checks for Italian passengers and others arriving from Italy. The move is in retaliation for Italy’s refusal of Spain’s demand to lift its own border checks on arrivals from Spain, which Rome imposed after the mass influx of migrants into the Spanish enclave of Ceuta from Morocco on July 30. Italy said it would maintain its measures until at least August 15 and would not accept “ultimatums or impositions from abroad about national security and border control.”
US Wall Street targeted by cybercrime group: A cybercriminal group tracked by Google has been targeting Wall Street private-equity firms, hedge funds and other financial institutions, including Blackstone, Apollo, KKR, Bain, Bridgewater, Point72, Citadel and Two Sigma. The attackers called employees on their personal cell phones while impersonating the company’s IT help desk, claiming an urgent need to update passkeys or multi-factor authentication, and directing victims to fake login pages so they can steal credentials and MFA codes in real time. Some companies reportedly paid ransoms. While Google’s analysis centers on this social-engineering technique, other reports, including from Bloomberg, have described the same or related attacks as also involving AI voice cloning.
LI Hackers access registry of foundations and trusts : In an unrelated incident, hackers gained unauthorized access to Liechtenstein’s confidential “Register of Beneficial Owners” and copied data including the names and residencies of the beneficial owners of some 31,000 foundations and trusts. There is no evidence the data was altered, deleted, or that bank or customer accounts were compromised or that other systems had been affected. Authorities detected the intrusion the same day, took the system offline, and formed a crisis task force led by Prime Minister Brigitte Haas to investigate the still-unidentified perpetrators and notify those affected. No ransom demand has been reported and the data has not yet appeared publicly.
GOOD TO KNOW
"Swiss Export Shield" proposal
Swiss pruning shears maker Felco is pitching an insurance-style fund called the Swiss Export Shield to help exporters cope with the long-term strength of the Swiss franc. The company, which sells 95% of its products abroad (including to high-profile customers such as King Charles and Michelle Obama), proposed that firms pay into a pooled fund that would compensate them if the franc rises beyond an agreed range against major currencies like the euro or dollar. CEO Nabil Francis argues the scheme would act like an “airbag,” offering cheaper protection than traditional bank hedging products, like forwards and options.
The CHF has appreciated almost 3% a year against the euro over the past 20 years and by 2.2% against the USD, and this relative strength of the currency has long pressured Swiss manufacturers as it makes their goods more expensive overseas while most costs remain in francs. Goods exports are equivalent to about 60% of Switzerland’s GDP, and smaller firms, which make up 99% of all Swiss companies, are especially vulnerable since they have fewer options to shift production abroad or match foreign revenues with foreign costs.
Francis said the Swiss Export Shield would not involve direct government subsidies, but it would likely require government backing to keep borrowing costs low using Switzerland's AAA credit rating. The proposal has drawn mixed reactions: some lawmakers and industry figures see potential value in adding that layer of protection and fostering solidarity, while others worry about who ultimately bears the risk if many claims arise at once and caution against turning the state into an exchange-rate insurer for the export industry.
NICE TO KNOW
US Polls signal significant shifts ahead of November midterms: The Financial Times reported this week that Americans are rapidly souring on Israel, with polls showing 60% now view the country unfavorably, a dramatic near 20 point increase since 2022. Also, more Americans now sympathize with Palestinians than Israelis for the first time since Gallup began tracking the question in 2001, with criticism emerging from both the political left and right. Another poll, by Ipsos/Reuters, also released this week showed that just 28% of Americans said they approved of Trump's handling of Iran. Additionally, for the first time in a decade, American voters thought Democrats have a better approach to the US economy over Republicans, while the US President’s approval rating fell to 35% from 37% last month.
AI More than half of all cybercrime in Africa is linked to AI: Interpol’s African Cyberthreat Assessment Report revealed that artificial intelligence is linked to 55% of reported cybercrimes across the continent, making attacks faster, more scalable, and harder to detect as cybercrime shifts into an industrialized, borderless ecosystem. Online scams remain the most common form of cybercrime, with financial services, telecoms, and government institutions among the hardest-hit sectors, and related financial losses more than doubled since 2024 to USD 484 million. The report also notes that 72% of surveyed nations reported the presence of scam centers and that criminals are using AI-generated synthetic identities to bypass biometric checks.
CHI Lab monkey prices surge: Prices of laboratory monkeys in China have nearly doubled, with a state lab recently paying about 178,000 yuan (roughly $26,300) each for cynomolgus macaques needed for drug safety trials. Bloomberg reported that the surge is driven by soaring demand from China’s booming biotech sector and the rapid growth of biologics and next-generation therapies, as China now accounts for about a third of the world’s innovative drug pipeline and has become a top destination for clinical trials. This shortage is complicating and delaying new drug development trials, prompting greater reliance on primate imports from neighboring countries such as Cambodia.
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