Crypto News: 5 things to start your day

Good morning. Putin's making a move on Wagner, fake parts on aircrafts and China's latest support measures. Here's what people are talking about.

Russian President Vladimir Putin is moving swiftly to take control of Wagner mercenary chief Yevgeny Prigozhin's sprawling operations in Africa and the Middle East, days after his renegade ex-protege died in a mysterious plane crash. All of Wagner's covert overseas network is due to fall under effective Russian military command, according to a person close to the Kremlin and another person close to the Defense Ministry, ending a setup that gave Putin a veil of deniability but allowed Prigozhin to build enough independence to lead an audacious mutiny in June.

Arm Holdings, one of the most anticipated stock listings of the year, is preparing to set a price range for its initial public offering before embarking on an investor roadshow next week, according to people familiar with the matter. The chip designer is considering pricing its shares on Sept. 13 and the stock will start trading the next day, said the people, who asked not to be identified because the deliberations are private. The roadshow to promote the offering is expected to come after the Labor Day holiday on Monday, but the plans are fluid and the timeline could move, the people said.

European aviation regulators have determined that an obscure London-based company supplied bogus parts for repairs of jet engines that power many older-generation Airbus SE A320 and Boeing Co. 737 planes. Manufacturing partners General Electric and Safran have been assisting in the probe of allegedly faked certification documents and unapproved parts for CFM56 engines that were distributed by London-based AOG Technics, according to the companies, public regulatory filings and letters to operators viewed by Bloomberg. It's unclear how many fake parts may have been installed or how many aircraft might be affected.

China intensified efforts to stimulate the economy and support its currency, as investor concerns over the growth outlook persist. The central bank will trim the amount of foreign currency deposits banks are required to hold as reserves for the first time this year, the People's Bank of China said Friday. The move came hours after authorities announced fresh stimulus for the beleaguered property sector and unveiled plans to expand tax breaks for child and parental care and education. The steps are the latest efforts to shore up confidence in the world's second-largest economy.

European stocks are on course to nudge higher after China unveiled more stimulus measures. The Ambrosetti Forum in Cernobbio on Lake Como, Italy, gathers influencers from politics, government and business. Traders await US jobs data that will give clues on the Fed's path ahead. Other expected data include Swiss CPI inflation and Italy's GDP. BioMerieux reports earnings results.

This is what's caught our eye over the past 24 hours.

Barclays sets aside balance sheet cash for private credit push.
Banks get tough on return-to-office laggards after summer break.
VIX fear gauge's only competitor set to vanish from the market.
Two million Britons are using buy-now-pay-later for essentials.
US providing up to $12 billion to retrofit auto plants for EVs.
Gazprom venture's claims against European banks top $1 billion.
Tesla unveils revamped Model 3 with more range, higher price.

Gold is typically one of the best performing assets in recessions. Its recent resilience in the face of rising real rates is another sign – along with deteriorating economic data – that recession risks are rising.

I'm always a bit skeptical of certain markets having a supposed sixth sense about what the future holds. Gold is often believed to have such clairvoyance when it comes to rising inflation or impending market dislocations. While no man, woman or metal has a crystal ball, it would nonetheless be remiss to dismiss out of hand what gold may be saying, especially if it is consistent with other data points.

Gold has had plenty of excuses to weaken in recent weeks as US real yields rose to global financial crisis highs, but instead it has been one of the strongest performing commodities over the last six months (silver even more so) and has also been rising over the last few weeks.

Looking at previous recessions, gold typically performs the best out of the major asset classes (stocks, bonds, corporate debt and commodities).

We can also see from the chart that stocks fare the worst out of the assets shown, rallying before the recession begins, before the penny drops and the market sells off.

There's a big but, though, as the next recession is likely to be accompanied by elevated inflation. The chart above fits probably what most people would expect to happen in a recession, i.e. stocks sell off and bonds rally.

However, in an inflationary recession, it's real returns that matter, not nominal ones. In such downturns stocks typically fare ok in nominal terms, but they suffer big losses in real terms. Similarly bonds rally in nominal terms, but in real terms they lose value. Commodities rally in both real and nominal terms.

Even if gold is not signaling a recession, one is still likely on the cards and as it's primed to be different from more recent downturns, it makes sense to know how and be ready for it.

Simon White is a macro strategist for Bloomberg News based in London.