TL;DR

Ukraine hits Russian energy, Fed signals rate cut, U.S. tariffs disrupt India/EU trade and coffee.

Highlights

• Ukrainian drone and missile strikes hit Russia’s Kursk nuclear plant and Novatek’s Ust-Luga terminal; Druzhba oil pipeline flows to Hungary and Slovakia halted for at least five days 12.
• Pentagon blocks Ukraine from using U.S.-made long-range missiles inside Russia, reversing late-2024 policy 5.
• U.S.–India trade tensions escalate: U.S. to double tariffs on Indian exports to 50% from 27 August; India Post halts most U.S.-bound parcels; economists warn of nearly 1% hit to Indian GDP 615.
• DHL and multiple European and Indian postal operators suspend U.S.-bound parcels ahead of new U.S. tariff rules eliminating the $800 de minimis exemption and imposing 15% duties on most EU imports 15.
• Germany’s economy contracted 0.3% in Q2, with capital investment down 1.4%; policymakers warn of stagnation through 2025 amid U.S. trade friction 17.
• Fed Chair Powell signals possible September rate cut, citing labor market risks and tariff-driven inflation; equities and risk assets rally, yields and dollar fall 18.
• Nvidia shares drop 3.5% as China restricts H20 AI chip sales and pushes for domestic chip self-sufficiency; Nvidia pauses H20 production 8.
• Country Garden, Vanke post multi-billion yuan losses; Evergrande faces delisting, deepening China property sector stress 9.
• North Korea fires new missiles and escalates rhetoric after DMZ incident, raising tensions ahead of Trump–Lee summit 3.
• Israel intensifies Gaza strikes, intercepts drones and missiles from Yemen; Iran’s Khamenei rules out direct U.S. talks 411.
• U.S. imposes 50% tariff on Brazilian coffee, pushing arabica futures near record highs and raising U.S. retail prices 12.
• Ethereum sets new all-time high above $4,900; Grayscale and 21Shares file for first U.S. XRP ETFs 1320.

Commentary

Energy and trade disruptions are front and center for global markets. Ukrainian strikes on Russian infrastructure have halted Druzhba pipeline flows to Hungary and Slovakia, underscoring the vulnerability of European energy supply chains and raising the risk of further volatility in regional oil and gas prices 12. The Pentagon’s decision to block Ukraine from using U.S. long-range missiles inside Russia signals a more cautious U.S. stance, which may limit escalation but could also constrain Ukraine’s ability to pressure Russian supply lines 5.

U.S. tariff actions are rippling through global trade. The doubling of U.S. tariffs on Indian exports and the suspension of most U.S.-bound parcels by India Post and major European postal operators, in response to new U.S. customs rules, are set to disrupt supply chains and raise costs for retailers and consumers 615. Germany’s Q2 contraction, driven by weak capital investment and softer U.S. demand, highlights the economic drag from these trade tensions 17. The risk is for further weakness in European equities and the euro , while emerging-market assets with U.S. trade exposure may also come under pressure.

Fed Chair Powell’s clear signal of a possible September rate cut has boosted risk appetite, with equities rallying and yields falling 18. However, persistent tariff-driven inflation and supply shocks—such as the U.S. tariff on Brazilian coffee sending arabica futures near record highs—could complicate the Fed’s path if price pressures persist 12. Watch for continued volatility in rates, FX, and commodities as markets weigh the Fed’s next move.

In Asia, China’s property sector remains under stress, with major developers posting large losses and Evergrande set for delisting 9. This continues to weigh on Chinese equities and EM credit sentiment. Nvidia ’s China-specific chip sales disruptions highlight ongoing U.S.–China tech decoupling risks, with possible spillovers to global tech supply chains 8.

Crypto markets are showing strong momentum, led by Ethereum ’s new all-time high and fresh ETF filings for XRP 1320. However, regulatory scrutiny remains a headwind, as seen with AUSTRAC’s audit order for Binance Australia 14.