With Iran-related fighting and the Russia-Ukraine war depleting U.S. munitions stocks, the Pentagon has pledged nearly $100bn to defense contractors to accelerate production of Patriot and THAAD interceptors and has ordered 14 nuclear submarines under a $76.6bn contract. Sources on the 29th said the Pentagon has restructured a Patriot purchase signed in April — a one-year $4.7bn contract — into a draft seven-year deal worth $58.6bn, and has preliminarily agreed a seven-year THAAD interceptor con

Huatai Macro says the July FOMC hold has, to some extent, damaged Fed credibility—market inflation expectations rose and long-end yields moved higher. By contrast, June’s unexpectedly hawkish FOMC had tightened financial conditions, lowered inflation expectations and boosted Fed credibility. With energy prices rebounding, July’s pause may have led markets to view Waller’s zero-tolerance inflation rhetoric as bluff; post-meeting inflation expectations and long-term yields rose, signaling a partial loss of credibility. Huatai still assigns a relatively high probability of a September rate hike and keeps a baseline of 1–2 hikes this year and two more before mid-next year. Key risks: (1) Waller’s hawkish stance could be bluster; (2) an abrupt end to the AI-driven rally could tighten financial conditions and make further hikes unnecessary. Watch July–August jobs and inflation prints and Waller’s Jackson Hole speech on Aug. 27.

Market sources said Russia's oil exports via western ports in July are expected to fall about 4% m/m from June after Ukrainian attacks reduced Black Sea loadings.