Global Markets Digest: Iran Sanctions, Trade Tensions Drive Volatility
25 August 2026 · Morning
The US Treasury announced expanded "economic D-Day" sanctions against Iran, yet WTI crude fell 2.35% to $85.01 per barrel, reflecting hopes for de-escalation rather than supply disruption.
Funds flowed into safe havens, with gold rising 1.07% to a record $4,651.75 per ounce, US 10-year yields dropping 3.6 basis points to 4.700%, and the VIX climbing 4.62% to 15.84.
Trade tensions escalated as US-Canada talks failed, prompting President Trump to threaten 50% tariffs on Canadian auto, parts, and steel from 2027, which saw the Canadian dollar weaken and the Dollar Index rebound 0.15% to 98.99.
Asian markets, particularly Korea, experienced a significant -3.12% drop in KOSPI, largely disconnected from overnight US news but reflecting deepening decoupling from Chinese equities.
Geopolitical risks escalated with Houthi attacks in the Red Sea and Iran's threats to halt oil exports, causing market jitters.
Global Markets
Detail
S&P 500
Closed lower amid Iran sanctions and AI earnings anticipation.
-0.28%
Nasdaq
Tech-heavy index declined, weighed by geopolitical and earnings news.
-0.76%
STOXX 600
European benchmark's latest closing data not provided.
-
Nikkei 225
Japanese market fell, tracking global cautious sentiment.
-0.74%
CSI 300
Chinese blue-chip index saw a decline on market concerns.
-1.21%
KOSPI
South Korean index plunged, reflecting decoupling from China.
-3.12%
Hang Seng
Hong Kong market experienced a notable drop.
-1.89%
Dollar Index (DXY)
Dollar Index rebounded from a three-month low.
+0.15%
USD/JPY
Yen showed slight strength against the dollar.
-0.03%
EUR/USD
Euro saw a marginal dip against the dollar.
-0.01%
USD/KRW
Korean Won strengthened to an 11-month high.
-0.23%
USD/CNY
Yuan weakened slightly against the dollar.
+0.01%
US 10-year yield
Treasury yields fell as safe-haven demand increased.
President Trump continued to threaten additional tariffs on Canadian auto, parts, and steel, following the breakdown of trade negotiations.
Canadian Prime Minister Carney remained calm, indicating Canada would return to the negotiating table if the US adopted a fair stance towards its industry.
Korea
Bank of Korea to decide on benchmark rate on Aug 28: Potential hike impacts KRW strengthHIGH
The Bank of Korea is set to announce its benchmark interest rate decision this Thursday.
The Korean Won maintained its strength at 1,376.5 against the USD, reaching an 11-month high, with market expectations for a potential rate hike.
Asia
India faces weakest monsoon in 22 years: Concerns over food supplyHIGH
Indian meteorological officials predict rainfall 15% below average, marking the weakest monsoon since 2009.
This forecast raises concerns about reduced yields for summer crops like cotton, soybean, and pulses, potentially leading to higher food prices.
Indian banks' dollar bond sales exceed $10 billion via RBI discount windowHIGH
Indian banks have issued over $10 billion in dollar bonds since the RBI opened its discount window.
ICICI Bank (ICICIBANK) notably issued $1 billion in 5-year bonds at a 5.41% coupon, its fourth such issuance in a month.
India to launch first tokenized bond issue in SeptemberHIGH
India plans to issue its first tokenized bond in September, utilizing blockchain technology for issuance, trading, and settlement.
This initiative aims to modernize India's bond market infrastructure, aligning with similar advancements in Europe and Hong Kong.
Latin America
Braskem (BRKM5) seeks debt restructuring for over $10 billionHIGH
Brazilian petrochemical company Braskem is seeking to restructure over $10 billion in debt.
The company faces cash depletion due to low oil prices and losses from its US and European subsidiaries.
Central Bank considers macroprudential measures to control rising household debtHIGH
Brazil's central bank is reviewing macroprudential measures to manage the rapid increase in household debt.
The bank acknowledges that debt accumulation is a byproduct of expanding financial inclusion.
Brazil Central Bank SurveyGDP +1.95%
Central bank survey slightly revised 2026 GDP growth forecast down to 1.95%.
Inflation for 2026 and 2027 remained largely unchanged at 5.02% and 4.25% respectively.
Year-end policy rate (SELIC) forecasts for 2026 (13.75%) and 2027 (12.00%) saw no change.
Lula's Potential Policy on Independent ContractorsSocial Security
Lula's campaign is considering mandatory social security contributions for independent contractors if re-elected.
This aims to reduce the pension deficit and strengthen social security for workers.
The proposal targets companies where over 80% of workers are employed as independent contractors.
Brazilian Election PollsLula 46%
A recent poll shows Lula (46%) and right-wing candidate Flavio (45%) tied within the margin of error in a potential second-round scenario.
This narrows the gap from the August 17 survey (47% vs 44%).
In the first-round scenario, Lula leads with 41%, followed by Flavio at 37% and Caiado at 5%.
Braskem (BRKM5) Debt RestructuringOut-of-Court
Brazil's Braskem (BRKM5) filed for out-of-court debt restructuring.
The filing was made in Brazil, according to sources and company documents.
Mexico Q2 GDP GrowthQ2 +1.4% QoQ
Mexico's Q2 GDP grew 1.4% quarter-on-quarter, recovering from a 0.3% contraction in Q1.
This marks the fastest quarterly growth since 2022.
Annually, the economy expanded 2.1%, led by agriculture, fishing, and mining at 2.4%.
Mexico August InflationAug +3.26%
Mexico's early August inflation rose to 3.26%, up from 3.10% in July.
This remains within the Banxico target range of 3% ± 1%.
Monthly prices increased by 0.10%, reflecting persistent core inflation.
Mexican President on US Trade TalksTrade Talks
Mexican President Sheinbaum expressed optimism about concluding trade negotiations with the US.
Her comments were based on statements from President Trump, though specific details and timelines were not disclosed.
LatAm Stocks & CurrenciesStocks +0.3%
Latin American stock indices rose 0.3%, and currencies gained 0.1%.
Investors are evaluating the potential ripple effects of US sanctions on Iran in emerging markets.
Mexican President Sheinbaum on TradeTrade Hopes
Incoming Mexican President Claudia Sheinbaum stated her hope to reach a trade agreement with the United States.
She referenced former President Trump's past comments on trade, indicating a willingness to engage in discussions.
Mexico Q2 GDP Growth+1.4% QoQ
Mexico's economy expanded by 1.4% in the second quarter compared to the previous quarter.
This growth figure suggests continued economic activity despite some monthly fluctuations.
Mexico Inflation AcceleratesInflation Up
Inflation in Mexico accelerated in early August, indicating rising price pressures.
This trend could influence future monetary policy decisions by the central bank.
Mexico June Economic Activity-0.1% MoM, +2.8% YoY
Mexico's economy contracted by 0.1% in June compared to May, showing a monthly slowdown.
However, economic activity for June grew by 2.8% year-over-year, indicating overall annual expansion.
Emerging Markets
Turkey Central Bank Rate CutOvernight -300bp
Turkey's central bank cut overnight interest rates by 300 basis points, resuming repo auctions.
The benchmark rate was lowered from 40% to 37%, with actual overnight rates falling to 36.94%.
This signals a shift in monetary policy, with the first repo auction for 1 billion lira ($21 million) at 37%.
Hungary's 2026 Budget TighteningDeficit 7.5% GDP
Hungary's government targets a 7.5% of GDP budget deficit for 2026.
This involves 70 billion forints (approx. $22.5 million) in savings, with a net fiscal improvement of 20 billion forints by year-end.
The debt-to-GDP ratio is expected to remain at 77.5% this year, declining thereafter.
Poland M3 Money Supply SlowdownM3 +11.3% YoY
Poland's M3 broad money supply grew 11.3% year-on-year in July, below the Reuters poll forecast of 11.6%.
The total volume reached 2,900.49 billion zlotys, signaling a slowdown in monetary expansion.
Czech Republic Minimum Wage Hike+11.2%
The Czech government, employers, and unions agreed to raise the minimum wage to 24,900 CZK/month by 2027.
This represents an 11.2% increase from 2026 levels.
Pakistan Sovereign Rating UpgradeCaa1 to B3
Moody's upgraded Pakistan's sovereign rating from Caa1 to B3, citing macroeconomic stabilization.
The upgrade reflects reduced external vulnerability risks and improved governance, with a stable outlook.
S&P also upgraded Pakistan last month due to strengthened institutional stability and effective IMF program implementation.
Sri Lanka T-Bill Yields Drop91-day 9.06%
Sri Lanka's short-term government bond yields uniformly declined.
The 91-day T-bill yield dropped 16 basis points to 9.06%, and the 182-day yield fell to 9.44%.
Morocco Resumes Wheat ImportsImports Resume
Morocco will resume soft wheat imports from mid-September, lifting a previous halt due to improved domestic harvests.
Import subsidies will be provided from September 16 to December 31, with a reference price of approximately $291.52 per ton.
Middle East
Geopolitical Tensions EscalatingRed Sea Attack
Houthi forces attacked a ship owned by Saudi national shipping company Bahri in the Red Sea, west of Yanbu.
All crew members were confirmed safe after the incident.
Iran threatened to halt all oil exports from the Gulf in response to "toughest-ever" US sanctions.
Europe
Eurozone Bond Yields Near Multi-Year HighsGermany 10Y 3.258%
German 10-year bond yields reached 3.258%, a 15-year high, while 30-year yields hit 3.79%, highest since 2011.
German Finance Minister Klingbeil attributed the surge to global uncertainty related to US-Iran policy.
Markets are pricing in a near-certain interest rate hike by the European Central Bank in September.
European Stocks FlatSTOXX 600 Flat
The STOXX 600 index remained flat as markets awaited details on Iran sanctions.
Investors are also watching for key economic data releases this week to reassess the ECB's policy path.
French Presidential Election PolarizationMelenchon vs Le Pen
A poll suggests far-left leader Melenchon could reach the second round of the 2027 French presidential election in multiple scenarios.
This highlights increasing polarization, with a potential Melenchon vs. Le Pen matchup.
Centrist candidates are weakening as President Macron's term approaches its end.
France Budget Talks Face HeadwindsRising Borrowing Costs
French government spokesperson Brejon warned that rising borrowing costs necessitate "serious" budget negotiations in parliament.
The government reaffirmed its commitment to no tax increases, prioritizing deficit reduction.
Volkswagen Plant Closure Risk5 Plants at Risk
Lower Saxony Governor Olaf Lies urged stakeholders to cooperate to protect the automotive industry.
Several of Volkswagen's five plants are reportedly at risk of closure.
Hong Kong's Goldpac Group (0331.HK) reported an 8.6% drop in H1 revenue and a net loss of RMB 14.6 million.
PDD Holdings (PDD) Q2 revenue missed estimates at RMB 112.36 billion, with net profit down 12% YoY to RMB 27.2 billion.
Both companies were impacted by shrinking consumer credit, intense price competition, US tariffs, and new EU parcel fees.
Government Activates Policy Financing ToolRMB 800B
China launched an RMB 800 billion policy financing tool to boost fixed-asset investment.
This initiative follows a 6.7% decline in fixed-asset investment from January to July.
Financial industry analysts suggest the late implementation may limit its economic impact this year.
State-Owned Firms & JD.com Invest in HK ProjectHK$16.8B
A consortium of six companies, including three state-owned property firms and JD.com (JD), formed a joint venture.
They will invest HK$16.8 billion in a pilot development zone in Hong Kong's Northern Metropolis, near the border.
Xi Jinping to Visit India for BRICS SummitBRICS Summit
President Xi Jinping is expected to visit India for the BRICS summit in September, his first visit in seven years.
He will be accompanied by a delegation of 400 people for the summit on September 12-13 in New Delhi.
This visit is seen as a subtle sign of improving relations between China and India.
China Urges De-escalation in Middle EastDialogue Urged
Foreign Minister Wang Yi expressed concern over the volatile situation in the Middle East and Gulf region.
He urged a return to dialogue and negotiation during a meeting with Kuwait's foreign minister.
Wang emphasized the need to avoid repeating past cycles of conflict.
Japan
Tax Breaks for Non-Core Business SalesGovernance Reform
Japan is considering tax breaks on gains from non-core business sales as part of corporate governance reforms.
Profits from such sales would be exempt from corporate tax if reinvested in new acquisitions.
This aims to improve capital allocation and promote industry consolidation by freeing up inefficient assets.
Top Gainers
Detail
Expedia Group (EXPE)
C
+5.44%
Dollar Tree (DLTR)
C
+4.01%
Church & Dwight (CHD)
C
+3.78%
Altria Group (MO)
C
+3.60%
GoDaddy (GDDY)
I
+3.55%
Gartner (IT)
I
+3.51%
Carvana (CVNA)
C
+3.46%
BXP (BXP)
R
+3.43%
American Water Works (AWK)
U
+3.34%
Edison International (EIX)
U
+3.32%
Companies
Nvidia (NVDA)+97.2% Rev. Growth
Q3 earnings are due tomorrow, with consensus EPS at $2.10 and revenue growth of 97.2% to $92.179B.
The market is watching this as a key indicator for AI funding health and chip demand trends.
Nvidia is also reportedly discussing an investment and tech licensing deal with AI search startup Perplexity at a valuation over $30B.
Palo Alto Networks (PANW)TP +17.6%
Benchmark and Piper Sandler both raised their target prices to $400 from $340.
This represents a $60 increase, reflecting strong confidence in the cybersecurity firm.
Marvell Technology (MRVL)TP +29%
Wells Fargo increased its target price to $310 from $240.
This significant upgrade reflects a positive outlook for the company.
Circle Internet Group (CRCL)TP Upgrades
Needham raised its target price to $130 from $127.
Susquehanna also increased its target price to $92 from $69, a substantial $23 jump.
Tesla (TSLA)China Recall
Tesla initiated a recall of 2.98 million vehicles in China due to a door handle design flaw, the largest in China's automotive history.
This poses significant cost burdens and potential brand image damage for the company.
Separately, Tesla halted sales of its premium solar roof tiles, launched in 2016, after nearly 10 years due to unmet installation targets and commercialization difficulties.
Amazon (AMZN)AWS Price -30%
AWS launched Glue version 6.0, its data integration service, with a 30% price reduction.
The new version also boasts improved processing speed and cost efficiency, enhancing AWS's competitiveness in cloud customer acquisition.
ExxonMobil (XOM)Production Halted
Operations at the Liza Unity floating production facility in Guyana, which processes 270,000 barrels per day, were halted due to a fire.
The Guyanese government has launched an investigation into the incident, though all personnel were confirmed safe.
ExxonMobil also plans to automate half of its drilling rigs in the Permian Basin by 2028 to enhance safety and efficiency.
Chevron (CVX)Libya Deal
Chevron signed a production sharing agreement with Libya's National Oil Corporation (NOC).
This secures new exploration and production opportunities, following an allocation of exploration blocks earlier this year.
ConocoPhillips (COP)TP +18%
Raymond James raised its target price to $168 from $142.
This represents an 18.3% increase in the target price.
Alphabet (GOOGL)Verizon AI Deal
Google Cloud partnered with Verizon to integrate its generative AI platform, Gemini Enterprise, for workflow automation and network anomaly prediction.
The companies are also developing an autonomous intelligent network system to proactively detect and resolve network issues.
Eli Lilly (LLY)FDA Approval
Eli Lilly's Alzheimer's blood test, developed with Roche, received FDA approval, opening a new revenue stream for its diagnostics business.
The Elecsys pTau217 test can detect Alzheimer's-related brain changes in individuals over 55 with cognitive impairment.
On the same day, Eli Lilly launched its oral obesity drug Foundayo in the UK at a price lower than competitor Mounjaro, and is seeking NHS coverage.
Walmart (WMT)TP -20%
Jefferies lowered its target price to $120 from $150.
This represents a significant 20% reduction in the target price.
Procter & Gamble (PG)TP +$1
Bernstein slightly raised its target price to $149 from $148.
This indicates a minor positive adjustment in outlook.
GE Vernova (GEV)New MV-UPS
GE Vernova launched a new medium-voltage uninterruptible power supply (MV-UPS) for AI data centers and energy-intensive industries.
Shipments are set to begin mid-2027, with the first project aiming for operation by the end of 2027.
JPMorgan (JPM)India Probe
JPMorgan's internal legal team is reportedly taking the stance that regulatory violations in India were technical in nature.
This comes amid an investigation by Indian financial authorities.