Good morning. Here’s what matters today.

The Middle East energy situation has escalated sharply overnight. Oil has jumped to $98 a barrel after Houthi forces attacked two Saudi tankers — the Encelia and the Layla — using missiles and drones, the first such strikes since the group announced a maritime embargo against Saudi Arabia. This comes alongside continued US strikes on Iran and an attack on the Iran-Iraq border crossing. The FT is reporting separately that the US air campaign has yet to reassure shipowners that the Strait of Hormuz can be made safe, which is the more consequential question for sustained supply disruption. The US-Saudi nuclear energy pact signed this week — giving American firms preferential access to the Saudi programme — looks rather different in this context, though critics are already flagging the absence of enrichment safeguards.

On Japan: the FT has a substantive piece on what 1% interest rates actually mean after a generation of deflation. The framing is that markets have been slow to price the structural shift — pension flows, yen dynamics, domestic equity rerating. Worth reading in full if you have Japan exposure or are watching yen carry unwind risk.

The FT also has a scorecard piece on Trump’s tariff strategy, and separately The Economist is running analysis on the levies that keep getting revived. The consistent thread is that the tariffs are proving durable as political instruments even where the economic goals remain unmet. Worth tracking ahead of any further trade announcements from Washington.

On AI: Google reported record profits driven by cloud, with enterprise AI adoption cited as the primary growth engine. IBM’s CEO, meanwhile, told investors that weak mainframe sales reflect AI cannibalising corporate hardware budgets — his framing is that it’s temporary, but the stock move last week suggests the market isn’t fully convinced. Separately, the Treasury is threatening sanctions after the White House accused Chinese AI firm Moonshot of distilling Anthropic’s Fable model. That story is still developing but it’s sharpening the Washington debate over Chinese open-weight models in a way that could affect how US labs approach model releases.

Domestically, Andy Burnham has announced a 20% business rates cut for pubs, clubs and live music venues in England from next April, funded partly by reviewing reliefs for what he called businesses that don’t make a positive contribution to communities — vape shops are the cited example. The £100m package is modest in macro terms but it’s an early read on how Burnham intends to use fiscal levers at the margins of local economic policy.

Tesla reported Q2 2026 results: sales up, but costs and spending rose faster. Profitable, but barely. Worth watching for what it signals about EV margin pressure heading into H2.

US Q2 GDP is due tomorrow, Friday 24th July.

Sources

Al Jazeera, Guardian, FT, BBC News, TechCrunch, Ars Technica, Politico, The Economist — 2026-07-23