Published on
Two pieces of data collided in Tokyo within hours of each other.
Bond investors pushed the 10-year Japanese government bond yield to a three-decade high before the government reported that growth had come in at barely half the pace economists had forecast, a pairing that says a great deal about what is really driving Japan’s markets right now.
The economy expanded at an annualised rate of 1.1% in the second quarter, Cabinet Office data showed, well below the 2.0% forecast and down from a downwardly revised 1.9% pace in the first quarter.
Quarter on quarter, GDP rose just 0.3% against a forecast of 0.5%, marking a third consecutive expansion. Private consumption was flat, and capital expenditure fell 1.2%, while net exports, helped by the weak yen, added 0.5 percentage points to growth.
The 10-year JGB yield touched 2.93% earlier in the day, its highest level since September 1996, before easing slightly once the GDP figures landed.
The gap between weak growth and rising bond yields helps explain what is moving Japanese bonds now: not growth, but inflation and the currency.
The GDP deflator rose 2.6% year on year, and traders are increasingly betting that the Bank of Japan will raise its policy rate, currently at 1% and already a three-decade high, as soon as September to contain inflation and support the yen.
The yen slid to 163.73 per US dollar in late July, its weakest level in roughly four decades, prompting Japan and the US to carry out their first joint currency intervention since 2011.
Japan deployed an estimated $85 billion (€73.3bn) in the first two days alone, while the US intervention was much smaller, according to Goldman Sachs.
The operation pushed the yen back to around 159 per US dollar.
There is currently a wide gap between Japanese and US interest rates, with the Federal Reserve’s benchmark rate still at 3.50% to 3.75%. The Bank of Japan’s September meeting is being watched as the next test of whether the currency’s recovery can hold.
Japan’s bond market matters well beyond Tokyo because of the yen carry trade, in which investors borrow cheaply in yen to fund purchases of higher-yielding assets abroad, from US Treasuries to emerging-market debt.
Rising Japanese yields erode that trade’s profitability and can force rapid unwinding, as it happened in August 2024, when a Bank of Japan rate rise combined with weak US jobs data sent the Nikkei down more than 12% in a single session and knocked roughly 3% off the S&P 500.
With JGB yields at three-decade highs and further tightening still expected, analysts say the conditions for a similar shock have not disappeared.
Published on
Crude and US Treasury yields rose together as traders judged that the exchange of compensation demands between the US and Iran has pushed any potential deal further out of reach.
The US president said on Monday he had told his negotiators to seek payment from Iran for Americans killed and wounded in attacks he attributes to Tehran going back decades, including the bombing of the USS Cole in the year 2000 and for Iranians killed in protest crackdowns.
In a follow-up post on Truth Social he expanded on the demand, saying Iran should also pay for “the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza”.
Tehran, whose representatives had sought compensation for five months of US and Israeli bombardment, says the Strait of Hormuz will stay shut until Washington lifts its naval blockade, ends sanctions and releases frozen Iranian assets.
The front month contract on Brent traded at around $89.8 a barrel on Tuesday and West Texas Intermediate at about $84.2, both up roughly 2.5%.
The US bond market read it the same way, with yields rising across the US curve in a modest global sell-off, the two-year over 4.25%, the ten-year above 4.7% and the thirty-year higher than 5.27%. The yields for all durations are trading at the highs of this year.
Since yields move inversely to prices, the rise means investors are selling government debt as they expect that costlier oil will feed into inflation and strengthen the case for higher interest rates.
Money markets now put roughly even odds on a Federal Reserve rate hike in September, with July inflation data due on Wednesday.
The current stalling of US-Iran negotiations is deliberate as US President Donald Trump appears to have been favouring a slower approach as of late.
The US president told Axios in an interview published on Sunday that the US is “low-keying it,” meaning Washington was only semi-negotiating and content to watch Iran’s inflation and empty coffers do the work, a signal he is prepared to let economic pressure mount rather than order a fresh military campaign.
In the Oval Office on Monday, he struck a triumphant note, claiming the US controls “100%” of the Strait of Hormuz, that only the US Navy holds sway in the region, that American forces have swept it clear of Iranian mines and that the blockade of Iranian ports is impenetrable.
However, shipping data tells another story.
Confirmed crossings have run at 6 to 11 vessels a day recently, against the 130 to 140 daily before the war, according to Kpler data, leaving traffic at a fraction of normal levels throughout the five-month conflict.
Sandi Smolker/iStock Editorial via Getty Images
The Major League Baseball draft is filled with unfamiliar names. Even the most knowledgeable fans have difficulty knowing much about the mostly anonymous high school and college players taken by the 30 teams through 20 rounds.
Every year, however, a handful of names ring a bell. This year’s draft, held the last two days in Philadelphia ahead of Tuesday’s All-Star Game, was no exception.
Bonds. Thome. Pettitte. Sabathia.
The accomplishments of the fathers or uncles of those draftees loom large. Other high picks hope to eclipse the accomplishments of relatives who had brief MLB or long minor league careers: No. 1 overall pick Roch Cholowsky out of UCLA is a prime example.
And draft picks whose relatives have ties to the Dodgers or Angels draw interest: Salmon, Ebel, Gasparino, Willits and Bard qualify.
No player wants to be branded as a “nepo pick” — taken as a favor to a relative. But even those can turn out to be brilliant. The Dodgers took Mike Piazza in the 62nd round of the 1988 draft largely because his father, Vince Piazza, was a childhood friend of manager Tommy Lasorda. Piazza, of course, became a Hall of Fame catcher with the Dodgers and New York Mets.
A brisk walk through this year’s picks with intriguing bloodlines:
— Roch Cholowsky, SS, UCLA. First overall pick by the Chicago White Sox.
His father, Dan Cholowsky, was the 39th pick in 1991 by the St. Louis Cardinals and played eight minor league seasons. He’s now a scout for the Cincinnati Reds. To focus on baseball, Roch gave up a scholarship offer to play quarterback at Notre Dame. He is the Bruins’ first No. 1 pick since Gerrit Cole in 2011.
— Jacob Lombard, SS, Gulliver Prep (Fla.). No. 14 pick by the Miami Marlins
His father, George Lombard, played parts of six seasons with four MLB teams from 1998 to 2006 and is the Detroit Tigers’ bench coach. Jacob’s brother, George Lombard Jr., was the 26th pick in the 2023 draft. Jacob was one of 11 shortstops taken in the first 40 picks this year.
— Trey Ebel, SS, Corona High. No. 25 pick by the Milwaukee Brewers
Milwaukee made his brother, Brady, the No. 32 pick a year ago. Their father, Dino Ebel, has been the Dodgers’ third base coach since 2019 and spent the previous 13 years as a coach for the Angels. Strength and conditioning training with MW Athletix’s Keith Coury helped lift Trey into the first round.
Landon Thome, the 34th pick in the MLB draft, and his father, Hall of Famer Jim Thome.
(Nam Y. Huh/AP Photo/Nam Y. Huh)
— Landon Thome, 2B/3B, Nazareth Academy (Ill.). No. 34 pick by the White Sox.
His father, Jim Thome, ranks eighth on the career home run list with 612 and was a first-ballot Hall of Famer in 2018. Like his dad, Landon is a left-handed hitter with a sweet swing. He also has something his dad lacked: speed. Landon stole 54 bases this spring.
— Gavin Grahovac, 1B, Texas A&M. No. 81 pick by the Angels.
His cousin Garrett Mitchell was the No. 20 pick out of UCLA in 2020 and is in his fifth MLB season with the Brewers. His father, Mike Grahovac, was a fourth-round pick in 1989 but topped out in class A. Scouts project Gavin as having the potential to hit 30 homers a year.
— Peyton Bonds, OF, Rutgers. No. 90 pick by the San Francisco Giants.
His uncle, Barry Bonds, is a seven-time MVP who holds the MLB record with 762 home runs. His grandfather Bobby Bonds hit 332 homers during a 14-year career that ended in 1981. And his father, Bobby Bonds Jr., played 11 seasons in the minor leagues. Peyton is a 6-foot-5, 230-pound center fielder with speed and improving power.
— Rylan Lujo, OF, Georgia. No. 109 pick by the Angels.
His grandfather is Rennie Stennett, a versatile player whose nine seasons with the Pittsburgh Pirates were bracketed by World Series titles in his 1971 rookie season and 1979 finale. Lujo converted from the infield to center field at Georgia and has plus speed.
— Jaxon Willits, SS, Oklahoma. No. 141 pick by the Angels.
His brother Eli was the first pick in last year’s draft, going to the Washington Nationals. Their father, Reggie, played parts of six seasons with the Angels and is now a coach at Oklahoma. Jaxon, 21, is older than Eli, who was the youngest player to go No. 1 overall at 17 years 216 days. Both are switch-hitters.
— Will Gasparino, OF, UCLA and Harvard-Westlake High. No. 161 overall to the Phillies.
His father, Billy Gasparino, has been a Dodgers executive for 11 years. He is the vice president of baseball operations after being promoted in 2024 from vice president of amateur scouting. Will, a 6-6 right-handed power hitter, transferred from Texas to UCLA before the 2026 season.
— Luke Pettitte, RHP/DH, Dallas Baptist. No. 248 to the New York Yankees.
His father, Andy Pettitte, won five World Series pitching for the Yankees. While Andy remains on the Hall of Fame ballot the next two years, his son will be working through the minor leagues, perhaps as a two-way player. Luke had Tommy John surgery after two years pitching for Dallas Baptist, then batted .337 with 16 home runs as a designated hitter last spring.
— Jack Salmon, OF, Nevada Las Vegas and Corona del Mar High. No. 559 by the Angels.
His uncle Tim Salmon is an Angels legend, a key component of their 2002 World Series championship team who played his entire 14-year career in Anaheim. His father, Mike, had a short stint in the NFL with the San Francisco 49ers and played football at USC.
— Luke Bard, C, Houston Christian. No. 583 by the Dodgers.
His father, Josh Bard, spent 10 seasons in the majors with five teams and is the Dodgers’ bullpen coach. Luke batted .345 last season at Houston Christian.
— Carsten Sabathia III, 1B, Houston. No. 611 by the Brewers.
His father, CC Sabathia, was a first-ballot Hall of Famer last year who finished his 19-year career with 251 wins and 3,093 strikeouts. He spent one memorable half-season with the Brewers, going 11-2 with a 1.65 ERA to help them to the playoffs in 2008. Carsten played two years at Georgia Tech before transferring to Houston. He was the third-to-last pick in the draft.
Sacramento — New spending on school construction tends to be reliably popular when proposed in California ballot measures.
According to the League of California Cities, voters approve about 80% of bond measures for local school districts — even though state rules require 55% support on a measure for it to pass. The last four statewide school bond measures were approved by voters. And nearly 6 out of 10 likely voters back the idea of a new school bond on the ballot, according to an October poll by the Public Policy Institute of California.
Yet Proposition 51, the $9-billion school bond measure on next week’s ballot, is struggling, according to PPIC polls from the last two months. In both polls, Proposition 51 stood below majority support, and such numbers put the measure at risk of a rare failure, said Mark Baldassare, PPIC’s president and CEO.
“It’s not where we would expect it would be,” Baldassare said.
Beyond the general popularity of schools, Proposition 51 has many of the advantages that come alongside successful campaigns.
The state Democratic and Republican parties, business and labor groups and Lt. Gov. Gavin Newsom and other major politicians are part of a broad coalition in favor. Those supporters, primarily developers, contractors and others who regularly promote school facility construction, have raised $12 million for the campaign, compared with nothing for opponents.
And schools across the state need more money. Schools should be spending between $4 billion and $8 billion a year on building replacement and upgrades, according to the nonpartisan Legislative Analyst’s Office, and the state pot of money to pay for these fixes has run dry.
Still, there are plenty of explanations for Proposition 51’s troubles. Most notably, unlike the past, support isn’t universal among major interests. Lawmakers put the four previous statewide school bonds on the ballot themselves. This time, after negotiations with Gov. Jerry Brown and legislators failed, backers gathered signatures for an initiative. Brown hasn’t spent much time campaigning against Proposition 51, but when asked, he’s criticized it as too large and inefficient.
“This has been a funding area that has had very strong bipartisan support for decades,” said Jeff Vincent, deputy director of UC Berkeley’s Center for Cities + Schools. “We are now at a place in California where that is not the case.”
Brown and others have questioned how state school bond money gets spent. They argue that the program unfairly benefits larger, more affluent districts. The cash is available to local districts that already have funding to match the state dollars and is distributed on a first-come, first-served basis.
Last month, outgoing state Sen. Loni Hancock (D-Berkeley) urged her Facebook followers to vote against Proposition 51, saying that voters should hold out for a better measure sponsored by the Legislature in coming years. Hancock served on the board that hands out the bond money and, in an interview, described the spending process as overly complex and cumbersome. She said she had to fight those rules to get a school in her district funds for earthquake safety.
“I think we can do a better bond with more money going in a simple, direct way for our schools,” Hancock said.
PPIC’s polls show similar drops across voters of all income and education levels and ethnicities when asked about Proposition 51 compared with the generic school bond measure. Proposition 51’s official summary, which appears on voters’ ballots, states that the measure will raise $9 billion and cost $17.6 billion to pay off over 35 years. Those big numbers could be keeping Proposition 51’s polling low, Baldassare said.
“I would have to think it has something to do with the size of the bond and the impact on the budget,” he said.
Erin Shaw, spokeswoman for the Yes on 51 campaign, said aspects of the PPIC polls look good for her side. The October poll has the measure leading — 46% to 41% — and there are plenty of undecided voters.
Shaw said the campaign expects the results could track with previous state school bond measures, the lowest of which passed with just 50.9% of the vote in 2004.
“We have had a strong campaign in which we have been able to garner a significant amount of broad and bipartisan support for the measure,” Shaw said.
She noted that local districts have bond measures of their own on ballots — 184 of them that aim to raise $25 billion statewide — and believed voters ultimately will link their desire to repair their local schools with money from the state.
Follow me at @dillonliam on Twitter
ALSO
What you need to know about the $9-billion school bond on the ballot
Gov. Jerry Brown opposes $9-billion school bond measure
School bonds used to be as controversial as mom and apple pie. Not anymore under Gov. Jerry Brown
Published on
SpaceX shares closed at $154.63 on Monday, down around 16% on the day. That leaves them within touching distance of the $150 at which the shares first changed hands when public trading opened, the level set once underwriters finished building the order book, though still some way above the $135 price at which the IPO itself was struck.
The slide has erased more than $600 billion (€524.2bn) in market value over three trading days, dragging the company down from a peak that had lifted it past Amazon and, fleetingly, Microsoft, in terms of market capitalisation.
Its valuation now sits just above $2 trillion (€1.74tn), below Taiwan Semiconductor Manufacturing Company (TSMC), making it the seventh most valuable company in the world.
The retreat unwinds a remarkable opening run.
After the open at around $150 on 12 June, shares climbed to almost $226 by 16 June, a gain of roughly two-thirds before the company had published a single set of results as a public firm.
Currently, SpaceX is trading over 30% lower than the intraday high of around $226 and only 3% higher than the opening price.
That rally always rested on a thin pool of freely traded shares and lofty expectations for its AI ambitions, leaving it exposed to a sharp reversal once sentiment turned.
The latest leg down on Monday coincided with SpaceX’s first move into the corporate debt market.
The company announced an inaugural offering of senior unsecured notes, with people familiar with the plans reportedly putting the target at around $20 billion (€17.4bn).
The proceeds are earmarked chiefly to repay a bridge loan taken on during its merger with Elon Musk’s AI venture xAI earlier this year, with the remainder going to general corporate purposes.
The debut bond sale follows the investment-grade credit ratings awarded last Friday by all three major agencies, Moody’s at Baa1, Fitch at BBB+ and S&P Global at BBB, which open the door to cheaper borrowing and a wider pool of institutional lenders.
In documents tied to the offering, SpaceX also disclosed a cash position of roughly $100.8 billion (€88bn) as of 19 June, much of it raised in the IPO, alongside $29.1 billion (€25.4bn) of long-term debt.
That mix of vast cash reserves and fresh borrowing so soon after a record flotation has unsettled some investors, who see the rapid fundraising as a sign of heavy spending ahead as SpaceX scales its AI and data centre plans.
Opting for debt rather than new shares does, however, spare existing shareholders further dilution, preserving their economic stake while the company funds its expansion.
Published on
The world’s most valuable company, the chipmaker Nvidia, priced a $25 billion (€21.5bn) bond offering on Monday, marking its first issuance since 2021 and one of the largest by a technology company this year.
The deal was originally pencilled in at around $20 billion (€17.2bn) but was enlarged after demand ran more than three times the size of the bond, according to a person familiar with the matter cited by Bloomberg.
Investor appetite was the headline of the sale.
Orders reached as high as $85 billion (€73.2bn), allowing Nvidia to upsize the transaction and tighten its borrowing costs in the process.
The timing was also favourable.
The announcement of a US-Iran framework deal to end the conflict in the Middle East steadied credit markets, pushing investment-grade spreads to their narrowest levels since early February, before the Iran war began.
That backdrop helped Nvidia lock in relatively cheap long-term financing.
According to Bloomberg Intelligence analyst Robert Schiffman, inexpensive long-dated debt lowers Nvidia’s weighted average cost of capital and helps bankroll its AI investments without threatening its AA credit rating.
A company spokesperson stated that the proceeds would be used for general corporate purposes, including repaying and refinancing existing notes.
Nvidia last tapped the investment-grade market in June 2021, when it sold $5 billion (€4.3bn) of notes across four maturities, according to a regulatory filing.
The contrast in scale underscores how quickly its financing needs have grown alongside the data centre build-out and increased demand from hyperscalers.
Nvidia joins a queue of technology giants raising vast sums to fund AI infrastructure.
Meta and Oracle have each issued $25 billion (€21.5bn) in bonds this year, while Amazon completed a single $37 billion (€31.8bn) deal, the largest US investment-grade offering of this year before Nvidia’s issuance on Monday.
For Nvidia, the raise also keeps share dilution off the table, giving it greater flexibility as capital commitments mount. The firm has invested $5 billion (€4.3bn) in Intel, pledged up to $10 billion (€8.6bn) to Anthropic and contributed $30 billion (€25.8bn) to OpenAI’s latest funding round.
Nvidia shares closed up 3.5% at $212.45 after the deal, valuing the company at about $5.14 trillion (€4.42tn).
On the other hand, Alphabet, Google’s parent company, opted for equity instead, pricing an upsized $84.75 billion (€73bn) capital raise earlier this month, after originally seeking around $80 billion (€68.9bn), according to a company filing.
The transaction, which includes a $10 billion (€8.6bn) private placement from Berkshire Hathaway, ranks as the largest equity capital raise on record and is intended to fund the group’s AI compute expansion.
Management has guided 2026 capital expenditure to between $180 billion (€155.1bn) and $190 billion (€163.7bn).
However, the equity move came on top of an already heavy borrowing run. According to its own filing, Alphabet raised more than $85 billion (€73.2bn) of debt across six major currencies and markets in the first quarter of 2026, taking its total debt balance above $100 billion (€86.1bn).
That included a US dollar bond round early in the year, leaving Google relying on both debt and equity financing to bankroll its AI ambitions.