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What you need to know

Global bond markets shift as treasuries intervene

The U.S. Treasury’s $2 billion debt buyback, though modest in size, comes amid shifting debt-management strategies in other major economies.

In Britain, gilt (bond) markets are going through a serious crisis, the worst since the turmoil of 2022, when liability-driven investment strategies nearly triggered a pension-fund crisis. The Debt Management Office has leaned heavily on long-dated issuance to bolster confidence, while the Bank of England continues to unwind its pandemic-era gilt holdings. The British gilt market is a strong indicator of how investors view the strength of the British economy, and long-term borrowing costs are surging to their highest levels since 1998.

Japan’s bonds are also facing challenges, with rates increasing in order to entice investors (a problem Japan did not traditionally have). The Bank of Japan has only recently begun loosening its yield-curve control framework, allowing longer-dated government bond yields to climb after years of artificial suppression. Japan’s bond market is experiencing a notable repricing, particularly in long‑dated maturities.

In the Euro Zone, governments have resumed heavy borrowing as fiscal rules are relaxed, but the European Central Bank is shrinking its balance sheet and retreating from its role as buyer of last resort. Spreads have widened between the bonds of core economies such as Germany and more indebted states like Italy, where concerns about debt sustainability resurface whenever markets look with concern at Rome’s fiscal path.

Taken together, these shifts highlight a world in which governments are grappling with rising debt loads while central banks show less appetite for intervention.

Washington’s experiments with buybacks echo similar efforts in London and Brussels to steady markets, while Tokyo illustrates the difficulty of unwinding ultra-loose policy after a generation of dominance in its bond market.

The common theme is that fiscal authorities are taking a more visible role in managing debt just as monetary authorities (i.e. central banks) step back, a reversal of the division of labor that prevailed after 2008.

Birth pangs in the birth place of civilization

Israel presses Gaza assault as annexation plan alarms UAE

Israeli forces have pushed to the outskirts of Gaza City, stepping up their assault as Prime Minister Benjamin Netanyahu repeated that the only settlement he would accept with Hamas must involve the immediate release of all hostages, the complete dismantling of the group’s military capability, and the installation of a third-party authority to administer Gaza. This stance rejected a phased proposal floated in August by U.S. envoy Steve Witkoff (that had previously been approved by Netanyahu), which Hamas appeared ready to accept and which called for a partial hostage release in exchange for a temporary cease-fire.

At the same time, Israeli finance minister Bezalel Smotrich has presented plans for the annexation of most of the West Bank (some 82%) leaving only a handful of Palestinian cities with limited autonomy.

The proposal was framed as retaliation for recent declarations by France, Britain, Canada, Australia, Belgium, and Malta that they intend to recognize a Palestinian state at the United Nations General Assembly this month, albeit with political and security conditions attached.

The United Arab Emirates reacted with alarm. Senior officials, including special envoy Lana Nusseibeh in an interview with Times of Israel later reposted by Dr Anwar Gargash, the UAE Minister of State for Foreign Affairs, warned that annexation would cross a “red line” and threaten the Abraham Accords, the 2020 deal that normalized relations between Israel and the Gulf state.

Rival camps in Libya resume dialogue as UN backs roadmap amid brinksmanship

The deadline issued by the Prime Minister of the Tripoli-based Government of National Unity (GNU), Abdul Hamid Dbeibah, for the Radaa militia to give up control of key parts of the capital, including the main international airport, has expired, with the capital now sitting on the edge of major violence between armed factions and no clear offramp for the tensions between the GNU and its allies and Radaa.

Eastern Libyan de facto leader, General Khalifa Haftar, is reportedly preparing for a visit to Türkiye later this month, a move interpreted as a potential thaw in relations between Ankara and his camp. Türkiye is the main supporter of the GNU, which Haftar fought a civil war against in 2020.

The UN Security Council has endorsed the political roadmap put forward by Hanna Tetteh, the Secretary General’s Special Representative in Libya, urging Libyan stakeholders to engage without preconditions and calling for stronger international backing.

On 2 September Saddam Haftar, son of Khalifa Haftar, met in Rome with Ibrahim Dbeibah, nephew and close adviser to the prime minister of the UN-backed Government of National Unity, in what Italian media described as a rare in-person encounter between rival Libyan factions. The meeting, convened by Massad Boulos, the U.S. envoy appointed by President Donald Trump, addressed security, political and energy matters, as well as cooperation with the United Nations Support Mission in Libya on forming a unified government.

Boulos also held discussions with Antonio Tajani, Italy’s foreign minister, reaffirming support for the UN roadmap and highlighting regional security and migration concerns.

The Rome meeting should be seen as a tentative step toward dialogue, even as the situation in Tripoli remains extremely tense.

Renewed tension over Persian Gulf islands

The Gulf Cooperation Council (GCC) has renewed its backing of the United Arab Emirates’ claim over three disputed islands, Greater Tunb, Lesser Tunb, and Abu Musa, during a meeting of foreign ministers in Kuwait on 1 September 2025. The council declared that the islands “belong to the United Arab Emirates.”

The dispute dates back to November 1971, when Iran seized the islands just before the British withdrawal from the region and days before the UAE’s independence. The Emirates have asserted ownership ever since, supported by fellow GCC members Saudi Arabia, Kuwait, Bahrain, Qatar, and Oman.

The GCC’s latest declaration has reignited the quarrel. Tehran’s swift rejection has hardened positions, turning a simmering dispute into a more open confrontation.

The islands lie near the Strait of Hormuz, the world’s most critical oil chokepoint. Roughly one-third of global seaborne oil passes through this narrow channel. Any rise in political tension risks jolting energy markets and unsettling investors. The UAE seeks international arbitration, likely at the International Court of Justice, but Iran has refused, since accepting arbitration would imply that sovereignty is in question.

This row recurs periodically, often in the context of regional rivalries and U.S.–Iran friction. Gulf Arab states regard Iran’s hold on the islands as part of a broader pattern of Iranian assertiveness. For Tehran, the islands serve not only strategic military purposes but also as a symbol of national sovereignty, which makes compromise politically unpalatable.

This is a longstanding territorial dispute flaring anew at a sensitive chokepoint. The UAE, backed by the GCC, continues to push for arbitration, while Iran digs in. The risk is less an imminent conflict than a heightened rhetorical clash that could intensify Gulf–Iran tensions and unsettle global energy security.

It’s America vs China, everyone else needs to choose a side

U.S. reaffirms military foothold in Poland amid eastern tensions

During a White House meeting on Wednesday, President Donald Trump assured Polish President Karol Nawrocki that American troops will remain stationed in Poland, and even hinted at increasing their presence should Warsaw request it. The display of military camaraderie included a flyover of U.S. jets, symbolizing renewed commitment to Poland’s security.

Trump praised the strength of U.S.–Polish relations, dismissing notions of troop withdrawal and emphasizing alignment on defence matters. The troop presence (estimated between 8,200 to 10,000 personnel) serves as a deterrent to Russian aggression and reinforces the NATO alliance on the eastern front. Nawrocki welcomed the assurances, referring to the sustained U.S. military presence as a key element of Poland’s security architecture.

Google legal cases update

Judge Amit P. Mehta has delivered his long-awaited decision in the Department of Justice’s antitrust case against Google, issuing a mixed outcome that falls short of the structural remedies many had expected.

The court declined to order a breakup or force divestiture of Chrome and Android, but it barred Google from signing exclusive search agreements that make it the sole default provider on devices and browsers. Non-exclusive default placements remain permitted, meaning Google can still pay to be the default so long as rivals are not excluded.

The ruling also obliges Google to share parts of its search index and user-interaction data with competitors, though the access will be limited and structured. Critics have described the decision as a modest check rather than a fundamental shake-up.

Markets responded quickly, with parent company Alphabet’s shares rising by between 7% and 9% immediately after the verdict.

Judge Mehta noted that the rapid spread of generative AI tools, including OpenAI’s ChatGPT and Perplexity, could erode Google’s dominance in search over time.

The ruling will have impact on one of the major rivals to Google’s Chrome browser, Mozilla, the company behind the Firefox browser, and probably enhance Google’s dominance of the internet.

Mozilla admitted in court that the loss of this funding would eliminate most of its revenue and place Firefox’s future in jeopardy. The decision therefore highlights how heavily Mozilla depends on the very firm it is meant to challenge.

Meanwhile, France’s data protection authority, the Commission Nationale de l’Informatique et des Libertés (CNIL), has levied a record fine of €325 million ($381 million) on Google for breaching privacy rules. The penalty, announced on 1 September 2025, is split between Google LLC (€200 million, $234 million) and Google Ireland Limited (€125 million, $147 million). It stems from two violations: inserting advertisements between Gmail users’ private emails without consent and imposing an account-creation process that made rejecting advertising cookies much harder than accepting them.

CNIL launched its investigation after a 2022 complaint from the privacy group NOYB, concluding that Google’s practices undermined freely given and informed consent. The regulator has given the firm six months to comply or face further daily fines of €100,000 ($117,000). Google said it is reviewing the decision and pointed to recent improvements in user ad-control tools. This marks the third major sanction imposed by CNIL against Google, following penalties of €100 million ($117 million) in 2020 and €150 million ($176 million) in 2021, reflecting the regulator’s increasingly tough stance on digital privacy and its determination to curb the practices of global technology firms.

And a U.S. federal jury in San Francisco has ordered Google to pay about $425 million in damages after finding that the company collected data from smartphone apps even when users had switched off tracking settings.

The jury upheld two of the three privacy violation claims but declined to award punitive damages, concluding that Google had not acted with malice. The ruling affects roughly 98 million users across 174 million devices and is far less than the $31 billion sought by plaintiffs. Google has said it will appeal, arguing that the jury misunderstood how its privacy tools function. The verdict adds to mounting legal and regulatory scrutiny of the company’s data practices, following earlier settlements and concessions over its handling of user privacy.

Meanwhile, a wave of outages is currently affecting several of Google’s flagship services (including Google Search and YouTube) across multiple countries; the disturbance is not due to governmental filtering or nationwide internet shutdowns. Users began reporting outages on platforms such as Gmail, Google Maps, Google Meet, Google Drive and Google Cloud, as well as Search and YouTube, in the early hours of 4 September, according to Downdetector reports. Users noted the services remained accessible via VPNs.

This just further underlines the dominance of Google and the risk that dependence on one major platform presents to the internet as a whole.

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