Russian drone incursions into Poland jolted geopolitics but left markets largely unmoved, with only minor USD gains. Meanwhile, a U.S. court ruling kept Fed Governor Lisa Cook in place, and China slipped back into deflation.
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- Polish military confirms operation underway against Russian incursion, weapons deployed
- China August inflation data: CPI -0.4% y/y (expected -0.2%)
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- US member of Congress says Russia attacking Poland, an act of war
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- Reuters Tankan: Japan manufacturers at 3-year peak, services rebound to +27
- Oracle expects half a trillion dollars in booked cloud orders, stock rises 27% after hours
- Reports of Russian drone incursions into Poland (breach of NATO airspace).
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The main geopolitical jolt during the session was Russia’s drone incursions into Poland — and by extension NATO airspace. Initial reports suggested a handful of Iranian-made Shahed drones had strayed across the border, but estimates soon rose to more than ten, fuelling speculation of a deliberate move by Moscow. Warsaw shut both Modlin and Chopin airports to civilian traffic, while the U.S. scrambled F-35s to patrol Polish skies. A Polish MEP branded the incident an “act of war,” a phrase echoed by a U.S. congressman, as a quarter of Poland went into lockdown and a third of the population were told to shelter.
Financial markets barely stirred: the dollar added only a few ticks.
Elsewhere, a U.S. court granted Fed Governor Lisa Cook’s request for a temporary restraining order, ensuring she remains on the FOMC and will vote at the September meeting while her case against President Trump proceeds. The ruling clarified that “cause” for dismissal applies to conduct in office, not to prior actions. The dollar dipped slightly on the headlines.
From China, August inflation data showed CPI back in deflation at –0.4% y/y, the steepest drop in six months. PPI stayed negative at –2.9% y/y but the pace of decline eased to its smallest in four months.
In corporate news, Oracle shares surged more than 25% in after-hours trade on a wave of multibillion-dollar cloud deals.
Asia-Pac stocks:
- Japan (Nikkei 225) +0.65%
- Hong Kong (Hang Seng) +1%
- Shanghai Composite +0.16%
- Australia (S&P/ASX 200) +0.25%
