TL;DR

Trump fires Fed Governor; Powell signals September rate cut; global trade and French political risks rise.

Highlights

• Trump fires Fed Governor Lisa Cook, triggering a legal challenge over Fed independence; dollar weakens, U.S. yields steepen, equity futures dip as rate cut odds rise 1.
• Powell signals readiness to cut rates if labor market softens; markets price >80% chance of September Fed cut 2.
• Trump threatens new tariffs and visa sanctions over EU digital rules; also warns of 200% tariffs on Chinese rare-earth magnets 35.
• China sends top trade negotiator to Washington for renewed talks focused on tariffs, rare earths, and tech access 4.
• Brent crude rises above $68 after Ukraine drone strikes on Russian refineries; supply concerns persist 6.
• French stocks and bonds fall as PM Bayrou calls confidence vote, widening French-German yield spreads and raising political risk 11.
• Germany and Canada agree to deepen cooperation on critical minerals to reduce dependence on China 13.
• Norway’s $2T oil fund divests from Caterpillar and five Israeli banks over human rights concerns in conflict zones 12.
• Bitcoin drops below $110,000 after $900M in liquidations; broad crypto sell-off follows 18.
• World Federation of Exchanges urges tighter regulation of tokenised stocks; regulatory scrutiny intensifies 17.
• Korean Air places record $50B order for Boeing jets and GE engines, supporting U.S. aerospace exports 15.
• Temu resumes China-U.S. direct shipping after tariff truce; cost pressures to rise as de minimis exemptions end Aug. 29 20.

Commentary

Traders face a busy macro landscape as U.S. central bank independence comes under rare legal scrutiny: President Trump’s dismissal of Fed Governor Lisa Cook has unsettled markets, weakening the dollar and steepening the Treasury curve as traders boost bets on a September rate cut 1. Powell’s dovish tone at Jackson Hole reinforces expectations for policy easing, but the legal standoff over the Fed’s leadership adds a new layer of uncertainty for rates and risk assets ahead of key U.S. data releases 21.

Trade policy risk is again in focus. Trump’s threats of new tariffs and sanctions against both the EU and China—particularly on rare-earth magnets—raise the potential for renewed disruptions in tech and manufacturing supply chains 35. China’s decision to send its top negotiator to Washington signals a willingness to engage, but the agenda remains unsettled 4. Meanwhile, Germany and Canada’s move to deepen critical minerals cooperation highlights the global push to diversify away from Chinese supply dominance 13.

Energy markets are responding to geopolitical shocks: Brent crude climbed on news of Ukrainian drone attacks on Russian refineries, amplifying supply concerns despite subdued hedge fund positioning and OPEC+ output caps 6. In Europe, French assets are under pressure as a government confidence vote looms, widening spreads over German Bunds and raising the risk of further volatility in eurozone markets 11.

Digital assets remain volatile, with Bitcoin ’s sharp drop and $900M in liquidations reflecting both shifting Fed expectations and broader risk-off sentiment 18. Regulatory scrutiny is intensifying, with calls for tighter oversight of tokenised stocks and new ETF filings (such as Bitwise’s Chainlink product) signaling ongoing institutional interest but also headline risk 1719.

Traders should monitor U.S. legal developments around the Fed, upcoming payroll and inflation data, and the September FOMC for monetary direction 12. Stay alert to trade and supply chain headlines, French political risk, and regulatory moves in both traditional and digital assets.