※ [Global Morning Briefing] summarizes global news reported by Seoul Economic Daily.
Trump Targets Pickaxe Mountain as Iran Warns Korea Over Hormuz
The armed clash between the United States and Iran in the Strait of Hormuz escalated over the weekend. After U.S. forces struck three Iranian crude oil tankers, Iran's Revolutionary Guard retaliated by attacking six vessels in total, including a U.S. aircraft carrier and a destroyer, leaving both sides locked in a cycle of reprisals.
The U.S. Central Command said on the 5th that Iran's Revolutionary Guard fired ballistic missiles at two U.S. warships on patrol, and that in response American forces disabled three Iranian tankers in waters near Kharg Island and Jask. The Revolutionary Guard issued a statement shortly afterward acknowledging that it had attacked a U.S. aircraft carrier and a destroyer, and said it had additionally struck three tankers traveling on unauthorized routes and three vessels linked to the United States. U.S. President Donald Trump warned that he would strike Pickaxe Mountain hard in the near future if the situation deteriorates.
Trump described the clash as "no big deal," drawing a line between a military confrontation and a war. Analysts read that stance as reflecting the burden of surging gasoline prices and an intent to avoid seeking congressional approval. As of the 4th, the national average U.S. gasoline price stood at $4.14 per gallon, a record high for the month of September. Ali Mohammadi, deputy commander of the Revolutionary Guard, meanwhile warned that Iran would mount a devastating response if U.S. hostilities continue.
Whether South Korea will send troops to the Strait of Hormuz has emerged as a new variable. Trump pressed Seoul by saying he was waiting for South Korea, a major importer of Middle Eastern crude, to commit resources to the region. Iran, for its part, warned that if South Korea decides to deploy troops it would treat that as participation in an act of aggression against Iran and would not stand idly by.
France Becomes a Time Bomb for the Euro Zone Ahead of ECB Rate Decision
With European bond markets swinging on the back of rising U.S. yields, French government bonds are emerging as a new flashpoint threatening the entire euro zone.
The yield spread between 10-year French government bonds and 10-year German bunds widened to 87 basis points, Bloomberg reported on the 5th. The gap stood at about 50 basis points early this year, and the widening indicates that the market now assesses the risk of holding French debt as that much higher. France's national debt topped 3.5 trillion euros (about 5,485 trillion won) in the first quarter of this year, climbing to 117.5% of gross domestic product, while economic growth came in at 0% in the second quarter. Even so, French politicians appear focused on pledges aimed at winning votes ahead of next year's presidential election rather than on fiscal discipline. Jean-Luc Mélenchon, leader of the left-wing La France Insoumise (LFI), stirred controversy by proposing that government bonds held by the Bank of France simply be written off, and on the same day the French government announced a 1 billion euro (1.56 trillion won) package to support farmers hit by a heat wave.
The ownership structure also makes French debt vulnerable: foreign investors hold 57.5% of it, and the European Central Bank holds about 20%. Japan, a core investor that could sell foreign government bonds to defend a weak yen, is another risk factor. With an additional increase in the benchmark rate widely expected at the ECB's monetary policy meeting on the 10th and a third hike this year also under discussion, concerns are growing that a crisis originating in France could spread to nearby euro zone countries with high debt ratios such as Italy, Spain and Belgium.
Cut Rates or Trade Stops: Trump's New Threat
U.S. President Donald Trump has again pressed the Federal Reserve to cut interest rates, citing stronger-than-expected August employment data, and this time he has pulled trade policy into service as a tool of pressure on monetary policy.
Trump argued on Truth Social on the 4th that U.S. credit had improved and that rates should therefore be cut to the lowest level in the world. He went on to warn that if rates are not lowered, the United States will halt trade with countries against which it runs a deficit. He stressed that this approach is better than tariffs. At the White House the same day, he raised his voice again, saying some countries have policy rates of 0.5% while the U.S. rate is as high as 4%, and that it should be brought down to 1% or 0.5%. No major economy currently has a policy rate of 0.5%, however, and the actual U.S. policy rate is 3.75%.
Trump named Canada, the European Union and Mexico as countries with which the United States runs trade deficits. He claimed that cutting off trade with Canada would save $90 billion, and that the United States is losing $200 billion a year with the EU and $195 billion a year with Mexico. The Washington Post reported that the countries against which the United States runs trade deficits number in the dozens, including South Korea, China and Vietnam.
Anthropic Misses September Listing Talk. Is November Next?
The initial public offering of Anthropic, the developer of the artificial intelligence model Claude, has been pushed back about a month from earlier expectations, raising the possibility that the listing will take place just before the U.S. midterm elections on Nov. 3.
Anthropic has delayed the release of its IPO prospectus, which had been scheduled for this week, until late September, Reuters reported on the 5th. Citing sources, Reuters said that if Anthropic begins IPO marketing in mid-October, the actual listing would come in late October or early November. Anthropic began the IPO process in June by filing confidentially with the U.S. Securities and Exchange Commission, and at the time the market expected a September listing. Reuters also noted that IPO timelines are frequently adjusted during preparations because of market conditions and regulatory review.
Ahead of the listing, Anthropic is also arranging a $15 billion (about 20.243 trillion won) revolving credit facility. A revolving credit facility refers to funds that a borrower can draw on as needed up to a set limit.
Anthropic's valuation after listing is expected to reach about $2 trillion. As of July, its annualized revenue topped $65 billion, surpassing rival OpenAI's $40 billion, and in the second quarter it posted its first profit since founding on an adjusted operating income basis.
