2026, day 263 Good morning from Asia - another 2026 day with rumours of yet more war and of rising far-left and -right populism. GEOPOLITICS: 🌍🔥 ‘Trump on Iran: ‘My question is, if and when do I blow the entire nation up?’’ (The Hill); ‘Iran claims US preparing to resume attacks, threatens bases, supporting regional countries’ (JPost); ‘CIA chief meets Egypt’s al-Sisi in Cairo’ (Al Arabiya); ‘What’s behind Iranian authorities’ push for a mass mobilisation campaign?’ (AJ); ‘Qatari Premier Says Gulf States Have to Act Together on Iran’ (BBG); ‘Qatar Energy Chief Says Bessent ‘Wrong’ About Hormuz Future’ (BBG) - “Bessent is “wrong” when he said that the strategic Strait of Hormuz will be worthless in two years”; ‘QatarEnergy says Hormuz crisis may delay some expansion projects’ (Reuters); ‘Houthis Push to Expand Territory as Tensions With Saudi Arabia Rise’ (NYT); ‘Trump says Yemen’s Iran-backed Houthis have agreed not to fight U.S.’ (Al Arabiya); ‘Pew poll finds majority of Israelis and Palestinian say two-state coexistence impossible’ (ToI); ‘Ukraine fires new ballistic missile at Moscow’ (Telegraph) - “Kyiv deploys domestically-produced weapon in largest attack on Russian capital since war began”; ‘Russia’s secret plan to supercharge kamikaze drone production’ (Politico); ‘Trump to meet with Zelensky as Russia-Ukraine attacks intensify’ (Axios); ‘European spy chiefs warn Moscow is planning more decisive action against NATO’ (Guardian); ‘Canada, France to co-operate on space launches as part of Carney’s pivot to EU’ (Globe & Mail); ‘Trump Ramps Up Bid to Dismantle International Criminal Court’ (WSJ) - “Administration prepares sweeping sanctions that would cut the court off from much of the global financial system”; ‘PM’s UN bet: Middle powers must step up as superpowers break the rules’ (AFR); GEOECONOMICS: 🌍 ✈️ ⛴️ 🚛 ‘Grassley urges Trump to place embargo on diesel exports amid high prices’ (The Hill); ‘Former WTO head Pascal Lamy on the EU’s China choice: get a rebalance, or go protectionist’ (SCMP); ‘US, China Begin Trade Talks in New York Ahead of Trump-Xi Summit’ (BBG); ‘China's trade limits continue to bite into Japan's imports of rare earths, other minerals’ (SCMP); ‘Time to lower our elbows and make a deal’ (National Post) - “The delaying tactic of refusing to renegotiate CUSMA until the current American tariffs are addressed has clearly failed”; ‘Trump’s Greenland Deal Eases Way for U.S. Business on Arctic Island’ (WSJ); ‘China's Path to Tech Self-Sufficiency Accelerating’ (BBG); ‘China’s CXMT touts new chip manufacturing platform as close to ‘world’s most advanced’’ (SCMP); POLITICS: 🗳️ ‘Far left wins in Berlin, far right in Germany’s northeast vote: Exit polls’ (AJ); ‘German chancellor Merz vows to stay on despite ‘disaster’ in regional elections’ (FT); ‘Germany’s AfD partners with radical Italian ‘sister party’’ (Telegraph) - “Senior figures join forces as part of a ‘European Right that extends beyond state borders’”; ‘Meloni announces ban on burqa and niqab in Italian schools, cap on foreign students’ (Euronews); ‘Trump says 250ft arch will be ‘military complex’ with drones and snipers’ (FT) - “President claims national security justification for controversial Washington monument”; MARKETS: 📈 ‘Sovereign wealth funds stay away from China due to lingering property woes’ (Nikkei Asia) - “US cements dominance as AI companies attract investment especially from Middle East”; ‘France's debt climbs to highest since 1978’ (Euractiv); ‘Wall Street expects US to issue about $1tn of short-term debt as borrowing costs climb’ (FT); ‘Why It’s So Hard to Work Out What the Bond Market Is Telling Us’ (WSJ) - “Did bond yields rise because the economy is strong or because America’s credibility is on the line?”; ‘Big Tech uses guarantees to keep $300bn of AI exposure off balance sheets’ (FT); ‘China slow-walks yuan appreciation as US, Europe demand trade rebalancing’ (Nikkei Asia)

Former WTO head Pascal Lamy still prefers negotiated rebalancing to protectionism, but he now acknowledges that if China will not rebalance, European governments may be forced to implement protectionist tariffs.

Corporate credit in Europe has stayed resilient, with little drama despite wider economic challenges. Daniel Lamy, Head of European Credit Strategy Research, spoke with @CNBC’s Squawk Box about the steady performance of European corporate credit this year, sharing his insights at our 10th annual European Leveraged Finance Conference.

🚨 Will Smith reportedly crashed out on Instagram Live after his son Jaden was spotted with fashion figure, Michèle Lamy: “I raised Jaden as a Christian, and I did everything I could to make sure he grew up with the right values. Now I’m seeing him associating with someone whose lifestyle I consider completely against everything I believe in all because of money? I cannot have that kind of influence around my family anymore. At this point, I’m cutting him off and disowning him, I cannot keep pretending I’m okay with this.”

Europe’s markets are holding firm, supported by strong demand and constrained supply even as macro uncertainty persists. At our 10th annual European Leveraged Finance Conference, Daniel Lamy, Head of European Credit Strategy Research, discussed how economic momentum is picking up across the region.