🌍 Geopolitics still in the driver's seat. Brent is trading near $108/bbl as the Iran conflict intensifies around the Strait of Hormuz. Rising energy costs are amplifying inflation risk right as markets await today's US CPI release.
📈 Rates. The 10-year Treasury yield has climbed to 4.96% – the highest since 2023 and on the cusp of the psychologically key 5% level – after hot US PPI data and the ECB's hawkish rate hike Thursday. Equities are under pressure for a 4th straight session and the dollar remains broadly bid.
🥇 Gold under pressure. XAU/USD has slipped to a one-week low near $4,310/oz, giving back gains as surging yields and a firmer dollar outweigh safe-haven demand ahead of CPI.
🌏 Asian session (this morning). 🇯🇵 Nikkei 225 opened ≈1.5% lower – a firmer yen squeezed exporters, with a BoJ rate decision looming later this month. 🇭🇰 Hang Seng fell ≈1% (near 24,700) as the oil spike drove broad risk-off. 🇨🇳 Mainland Chinese indices also traded on the back foot.
💱 FX
🔸 EUR/USD – ~1.16, capped near 1.170 post-ECB
🔸 USD/JPY – 153–154 area
🔸 GBP/USD – above 1.350 on BoE rate-hike bets
🔑 Today's focus: US CPI & Core CPI (Aug) – core y/y forecast 2.4% – plus preliminary Michigan Consumer Sentiment. Expect sharp volatility around the release.
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