Flagship

US bond yields spike after Bessent buybacks

US long-term bond yields spiked to three-year highs Wednesday after Treasury Secretary Scott Bessent’s bond buybacks failed to impress markets. Borrowing costs leapt higher in part because investors expected more firepower, a Deutsche Bank strategist told Bloomberg: “It’s like Treasury created this monster that it now has to keep feeding.” Bessent’s smaller-than-expected move suggests he’s accepted a “limited role” for buybacks, Evercore ISI analysts wrote, which aren’t likely to reverse yields without addressing the “direction of the debt and deficit,” a Société Générale researcher said. “Everything else is cosmetic.” Bessent is juggling multiple interventions, daring traders to take the opposite side of his yen purchases. “I have asymmetric information. I am the house now,” he said Tuesday.

Saudi oil exports fall, Houthi war escalates

Houthi rebels on Wednesday said Saudi Arabia launched airstrikes in Yemen, as hostilities between Riyadh and the Iran-backed militia escalate toward all-out war. Saudi had vowed to retaliate after the Houthis carried out their largest attack on the kingdom since a 2022 ceasefire, injuring 73 people and disrupting oil production. Riyadh is now contending with simultaneous disruptions to both of its primary shipping lanes, in the Red Sea’s Bab el-Mandeb Strait and the Strait of Hormuz, as the kingdom’s oil exports fell to 13-year lows. The Houthis see the current conflict as a “golden opportunity” to change the balance of power, a Middle East expert told The New York Times. “A reduction in hostilities any time soon seems unlikely,” ACLED wrote.

Netanyahu rejects new Oct. 7 reporting

Israeli Prime Minister Benjamin Netanyahu threatened to sue Haaretz over its report that he ignored the UAE president’s explicit warning about Hamas’ Oct. 7 attacks, revelations that caused uproar in Israel and widened Netanyahu’s rift with Abu Dhabi. The allegations, which Netanyahu denies, have energized his domestic opponents, some of whom are viewed more favorably in Abu Dhabi, ahead of critical Israeli elections next month; polls show the prime minister appears to be losing ground. Netanyahu is targeting a record seventh term but faces hawkish candidates who blame him for undermining national security. “Everyone in Israel shares a sense of historical crisis, and his name is all over it,” an Israeli analyst told Reuters.

Republicans gear up for “Trump-a-Palooza”

The Republican Party kicked off its first-ever midterm convention in Dallas Wednesday, nicknamed a “Trump-a-Palooza,” as party figures bet President Donald Trump’s center-stage performance can lift their fortunes despite his record-low approval ratings. Believed uniquely capable of energizing the party’s base, Trump will give two televised speeches at the two-day event. But if he is Republicans’ “biggest draw,” he’s also their “biggest liability,” a Bloomberg columnist argued, associated in voters’ minds with stubborn inflation, cost of living concerns, and a drawn-out Iran conflict. A Politico survey of 70 Republican candidates found fewer than half planned to attend. “Nationalizing an election does not make sense when the president is at 38% job approval,” a longtime Republican pollster told The Wall Street Journal.

US eyes CIA chief for Ukraine talks

CIA Director John Ratcliffe could take a greater hand in the US’ negotiations with Russia and Ukraine, the Financial Times reported Wednesday, as Washington weighs a reshuffle that would downsize the roles of envoys Jared Kushner and Steve Witkoff. The White House is hoping Ratcliffe, who secretly visited Moscow last month and maintains intelligence contacts in Russia and Ukraine, could deliver a breakthrough, as the warring countries resumed strikes following a short-lived pause during Kushner and Witkoff’s diplomatic trips. A plane carrying Ukraine’s president was almost hit by a drone on Wednesday, Norway’s prime minister said. Witkoff’s informal style has reportedly frustrated US and allied officials, as well as Russian and Ukrainian negotiators.

EU unveils guidelines to counter China

The European Commission rolled out new “Made in Europe” guidelines Wednesday to protect the continent’s manufacturers from Chinese competition, though some worried a lack of binding quotas would undermine their efficacy. Nine Chinese companies selling robotic lawnmowers are targeting the EU, given China’s lack of lawns, underlining the extent to which Europe’s markets have become a destination for Chinese overcapacity. Meanwhile, a separate proposal to boost European industry that would include quotas has divided France and Germany. “It seems unlikely that the EU will be able to muster focus and unity” to effectively counter Beijing, Brookings analysts wrote. “This is a circumstance that has advantaged China over the past 20 years and is likely to continue doing so.”

Anthropic skirts UK safety review

Anthropic declined to submit its latest model for testing to a top British AI safety institute, sparking fears in the UK that reviews of frontier AI would become the sole province of Washington. Concerns are also growing about the lack of transparency around the Trump administration’s AI security framework that it has declined to make public: Prominent organizations from both the left and right requested its release in a letter first shared with Semafor, writing, “A lack of accountability over the governance of a [critical] technology would… likely lead to a loss of public trust.” Anthropic on Wednesday said it would give “wide-ranging access” to an institute that conducted a review into cybersecurity incidents at OpenAI.

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Uber robotaxis hit London roads

Uber called for a slowdown in robotaxi deployment, while its own robotaxis hit London’s roads. The ridehailing firm sided with drivers’ unions arguing that slower deployment would ease the employment transition, the Financial Times reported. It’s in stark contrast with Uber’s history of attempting to disrupt existing taxi markets, and its president acknowledged the shift might “feel ironic.” This week, Uber’s collaboration with UK-based self-driving firm Wayve is available to London’s passengers for the first time, although safety drivers will be present during the testing period. Like Uber, its rival Lyft has insisted it will continue offering human drivers, alongside robots, though some of Lyft’s former drivers are now servicing Waymo’s driverless fleets in the US, WIRED reported.

Thailand introduces active shooter drills