A Dark Day

By Michael Every of Rabobank

The main news this morning is not that US PPI was -0.1% m-o-m vs. 0.3% consensus —PPI does not include tariffs, if that’s your focus— but that Trump ally and conservative influencer Charlie Kirk was assassinated at an event in Utah.

I hope I’m wrong.

But tonight feels like some sort of invisible line has been crossed that we didn’t even know was there. The last time I felt like this was 9/11 when it was clear, without knowing the how and the what, that the world was about to change forever.

Like the…

— Konstantin Kisin (@KonstantinKisin) September 10, 2025

Kirk’s mantra was always that peaceful public discussion was the best way to prevent political disagreements from spilling into violence. Regrettably, his death has already seen celebration from the extreme end of the opposite political camp, the inability to hold a minute’s silence in the House of Representatives, and claims ‘Israel did it’ from the further right. President Trump gave a televised Oval Office address saying a crackdown on “far left political violence” looms. Regardless of your politics, it’s a dark day for those hoping western societies can hold together through multiple conflating challenges via rational policy debate.

URGENT. FYI.

After Charlie Kirk, on the sky app there are people asking for the next person to be targeted. These include JK Rowling, Matt Walsh, Trump, Ben Shapiro, Libs of TikTok, Elon Musk, and Andy Ngo.

I took as many screenshots as I could. pic.twitter.com/CnZmmJAjvh

— Jennifer 🟥🔴🧙‍♀️🦉🐈‍⬛ 🦖 (@babybeginner) September 11, 2025

That’s as Nepal’s finance minister was attacked by an angry mob, barely escaping with his life; angry crowds started fires outside the French interior ministry; European Commission President von der Leyen’s State of the Union address yesterday was peppered with heckling; London Underground remains paralyzed by a week-long tube drivers’ strike as the UK sees spontaneous efforts to raise the Union Jack or national flags; and things remain tense in many other countries.

To say the agitated global public is not ready for a recession and unemployment is an understatement – as recession fears rise; nor are they ready to stomach austerity – as belt-tightening is flagged; and they won’t accept more inflation – as Aussie consumer inflation expectations jump back from 3.9% to 4.7% and we all wait for US CPI. If so, what does the economic policy toolkit tell our finance ministries and central banks to do – apart from increase their personal security? The ECB walk that razor’s edge today, the Fed next week.

It’s not a coincidence that gold continues to power to fresh all-time highs even if long bond yields are for now following the US lower post-PPI, especially as the international situation isn’t helping calm nerves.

The Israeli press accused Qatar of helping Hamas hide the results of its recent attack in Doha (which is what all neutral negotiators do?).

‘Poland ‘closer to military conflict than at any time since WW2’ as Nato allies weigh response to Russian drones’, says the Guardian. One view is that Russian drones recently entering Polish airspace were a probing tactic to test western readiness. Von der Leyen spoke of building a “drone wall” yesterday – but does Europe build drones?

Indeed, as @FRHoffmann1 notes: “Imagine being Europe’s uncontested missile prime with €4.9bn in revenue and a €37bn order backlog in 2024 and taking more than 3.5 years of war to present a “concept” (not a product) that replicates some basic lessons of Ukraine’s experience. If I sound snarky, it’s because I mean to”, as MBDA presents a “concept” of a new cruise missile called Crossbow.

Meanwhile, ‘Mistral is stirring up a storm in European tech’ says the FT, noting the ASML deal connects two EU tech companies but the capital available is still a fraction of that offered in the US. Then again, who says this is a Eurocentric action rather than one the US also wants to see? After all, a US geoeconomic trade bloc is very clearly forming, and Europe is in it.

For example, Mexico’s economy minister says the country is looking to apply tariffs as high as 50% on cars, auto parts, steel, and textiles from China and other countries. That’s the ‘Fortress USMCA’ with an external tariff set by the US we had predicted back in April. Logically, if the UK and Europe can sell to the US with only a 10% or 15% tariff respectively, they will also soon be pressured to adopt the same external tariff vs. China and others.

Of course, Europe is already there on EVs at least. However, might we soon see more action given ‘China eyes C919 jet breakthrough as Malaysian airline confirms talks to buy aircraft’ (SCMP), where “If the deal is struck, it would mark the first overseas order for the Chinese passenger jet.” Following the US and EU having transferred their aerospace know-how to China, if you think it isn’t capable of doing to Airbus and Boeing what it’s done to autos then you presumably think free trade is the solution to all problems and cannot understand why everything is falling apart everywhere all at once; or you think it isn’t because bond yields are slightly lower than a week ago.

Regardless, no aircraft and no autos are no basis for any kind of military industrial base. It’s also not a coincidence that NASA just blocked Chinese nationals with US visas from working on its space programs over national security concerns.

Of course, the US is using tariffs to try to ensure it does still make things, some of which the supreme court will soon rule on. There, the WSJ argues: “If the court sides with Trump, it could hand the president sweeping fiscal authority long the purview of Congress. It could enable the president, by simply invoking an emergency with some foreign element, to justify almost any revenue measure in response: not just tariffs, but other taxes, too.” That’s as Commerce Secretary Lutnick again said the US should take a chunk of universities’ patent revenue. The trend seems clear.

However, Europe is reportedly unlikely to hike tariffs on India and China to 100% to pressure Putin as the US has floated, showing that economic statecraft is toothless when you revert to think “because markets.” In which case there is only political statecraft (a deal Europe doesn’t want to make with Putin) or military statecraft (so more war).

On which note, the Russian ruble is slumping, but taken by some as a sign that despite lower oil prices Moscow is all-in on the war option: a cheaper ruble means more local FX per oil barrel to pay for arms. That’s not any kind of “concept”, just cold, hard logic.

Which our public debates are lacking. To try and fill a small part of that idea gap, please see here for our latest Global Strategy report on where US ‘Grand Macro Strategy’ now stands, and where we think it might head next. To say that markets aren’t ready for what that implies is also an understatement.