Gold rose more than 1% to $4,295 per ounce and was on track for its strongest weekly performance since January, with gains of around 6% over the week. Lower oil prices and expectations of easing geopolitical tensions in the Middle East reduced inflation concerns, supporting demand for gold as investors reassessed the outlook for US interest rates. Markets are now focused on the upcoming US payrolls report, while traders currently assign a roughly 55% probability to a Federal Reserve rate hike in September.
Brazilian authorities stressed that lowering interest rates remains the country’s key economic challenge, despite four consecutive rate cuts that have reduced the benchmark rate to 14.0%. Real interest rates remain among the highest in the world, while concerns over rising public debt and fiscal discipline continue to weigh on financing costs. Since early 2023, gross government debt as a share of GDP has increased by more than 10 percentage points.
Oil prices rose sharply, with Brent crude gaining more than 5% to above $83.4 a barrel, after Iran reviewed potential restrictions on shipping through the Strait of Hormuz. Before the conflict, around 20% of global oil and LNG supplies passed through the route, meaning any new disruption could have significant implications for global energy prices and inflation. At the same time, attacks across the Middle East and lower export volumes from Gulf producers continue to heighten concerns over global energy supply.
The 6M Euribor is unchanged at 2.72% compared to previous business day. The 10Y Swap increased with 3 basis point to 3.18% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The European Central Bank (ECB) estimates that uncertainty linked to wars and trade frictions reduced euro area growth by 0.4% between the first quarters of 2025 and 2026, with further pressure expected this year. However, investment in intangible assets, particularly artificial intelligence (AI), has proved more resilient than spending on tangible assets. The ECB suggests that a continued shift towards intangibles could reduce investment sensitivity to uncertainty and help stabilise the investment cycle.
The UK services sector returned to growth in July, with the Services Purchasing Managers’ Index (PMI) rising to 52.1 from 48.8 in June, while the Composite PMI increased to 52.2 from 49.3. Growth was driven by stronger new orders, which expanded for the first time in four months. Business confidence rose to its highest level since February, supported by easing Middle East tensions and softer inflation. However, employment continued to decline for a 22nd consecutive month.
The U.S. Treasury raised its third-quarter borrowing estimate to $739 billion, $68 billion higher than projected in May, reflecting weaker-than-expected cash flows despite a larger starting cash balance. The Treasury expects to end September with a cash balance of $950 billion and forecasts fourth-quarter borrowing of $628 billion. Investors are closely watching upcoming refunding plans for any changes in debt issuance strategy, particularly as higher oil prices and inflation concerns have lifted long-term Treasury yields.
The 6M Euribor increased with 1 basis point to 2.72% compared to previous business day. The 10Y Swap increased with 1 basis point to 3.15% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Asian equities rallied as easing oil prices and strong earnings lifted risk appetite, with Japan up 3.0%, South Korea rising 4.1% and a regional benchmark gaining 2.4%. Hopes of progress in reopening the Strait of Hormuz pushed Brent crude down 1.4% to $78.27 a barrel, easing inflation concerns and supporting bonds. Markets also trimmed expectations of a September US rate increase, with the probability falling to 57% from 67%.
European government bonds are attracting investors as the eurozone is increasingly viewed as a more stable market than the US, UK and Japan. Fund managers have shifted allocations towards eurozone debt, citing lower inflation, modest growth and confidence in the region’s independent central bank. Demand is strongest for core markets, although political risks continue to influence country selection within the bloc.
Japan is advancing a temporary cut in food consumption tax from 8% to 1% for two years from 2027, betting stronger consumer spending and ¥370tn in investment will support growth. Critics warn the measure could weaken public finances, with government debt projected at 204% of GDP and tax revenues reduced by an estimated ¥4.4tn. Markets are focused on rising bond yields, which have climbed to around 2.85% amid concerns over inflation and future debt issuance.
The 6M Euribor is unchanged at 2.71% compared to previous business day. The 10Y Swap decreased with 4 basis points to 3.14% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
European Central Bank analysis shows that the Iran war caused a sharp drop in euro zone household consumption in April, driven largely by falling consumer confidence rather than income constraints. Nominal consumption growth slowed to around 2.5% year on year from an average of 3% to 4% since mid-2024. Higher-income households cut discretionary spending most, while concerns about inflation and future purchasing power led many consumers to postpone spending.
Eurozone manufacturing expanded further in July, with factory output rising at its fastest pace since March 2022. The S&P Global Eurozone Manufacturing Purchasing Managers’ Index increased to 51.9 from 51.4, while the output index climbed to 52.9. However, growth was driven mainly by firms working through existing order backlogs rather than strong new demand. Export orders declined, employment continued to fall, and manufacturers remained cautious despite stronger economic growth and improving business confidence.
India has proposed tax law changes aimed at encouraging foreign investment by providing greater tax certainty for offshore funds that use India-based fund managers. The draft bill would remove minimum fund size and investor diversification requirements currently needed to qualify for safe harbour protection from Indian taxation. Offshore funds would still need to meet safeguards, including limits on domestic investor exposure. Industry experts said the proposal could make it easier for offshore funds to appoint local managers and improve the investment climate.
The 6M Euribor increased with 3 basis points to 2.71% compared to previous business day. The 10Y Swap decreased with 6 basis points to 3.18% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The United States and Japan confirmed a rare coordinated yen-buying intervention on Friday, after the currency hit its weakest level in roughly four decades at 163.73 per dollar before recovering to 157.57. Both Tokyo and Washington signalled readiness to act again, with Treasury Secretary Scott Bessent stating the US would “not hesitate to participate in further joint intervention.” Reports that the US sold euros rather than dollars to fund the operation drew scepticism from analysts, who warned the unconventional approach could undermine confidence in the intervention’s effectiveness.
Blowout earnings from US energy majors underscored the windfall the Iran war delivered to oil investors, with ExxonMobil’s quarterly profit doubling to 14.5 billion dollars and Chevron’s net income rising close to 400%. Oil-related ETFs have been among the biggest beneficiaries, with the US Oil Fund returning 87% year-to-date as crude averaged over 92 dollars a barrel in the second quarter. Analysts caution that geopolitics-driven gains are difficult to sustain, with prices already falling more than 5% last week on ceasefire hopes, and recommend diversified energy exposure including natural gas and nuclear for long-term investors.
South Korean stocks led regional losses on Friday, with the Kospi tumbling 5.54% as semiconductor heavyweights Samsung Electronics and SK Hynix dropped 6.4% and 9.9% respectively, following a tech-driven sell-off on Wall Street overnight. The slump was triggered by Broadcom missing revenue estimates, sparking a broader rotation out of AI-linked chip stocks. Broader Asian markets also fell, though more modestly, with Japan’s Nikkei down 1.3% and Hong Kong’s Hang Seng losing 1.1%.
The 6M Euribor is unchanged at 2.68% compared to previous business day. The 10Y Swap increased with 6 basis points to 3.24% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Japan’s yen surged as much as 3% against the US dollar, briefly strengthening from around ¥163 to below ¥158 per dollar, prompting market speculation that authorities may have intervened to support the currency. The move reflects growing concerns about imported inflation, higher energy costs, and pressure on Japan’s bond market, where 10-year government bond yields have approached 3%, while investors remain alert to potential future Bank of Japan rate increases.
The Bank of England kept interest rates unchanged at 3.75% in a 6-3 vote, judging current borrowing costs sufficient to contain inflation for now. However, policymakers warned that renewed geopolitical tensions and higher energy prices could reignite inflationary pressures, with inflation projected to rise from 2.6% currently to 3.2% later this year before gradually moving back towards the 2% target.
Chinese technology-related stocks fell sharply as a global sell-off in AI-linked sectors spread across Asian markets, pushing the CSI 300 down 8.6% for the month, its worst performance since 2016. The decline highlights China’s continued exposure to global technology sentiment and concerns over the sustainability of AI-related investment growth, despite recent efforts to support domestic equity markets.
The 6M Euribor is unchanged at 2.68% compared to previous business day. The 10Y Swap decreased with 2 basis points to 3.18% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Federal Reserve held its benchmark interest rate steady at 3.50% to 3.75%, with three of twelve Federal Open Market Committee (FOMC) members dissenting in favor of a quarter point hike. Fed Chair Kevin Warsh said the central bank will not waver from its 2% inflation target, adding that over five years of above target inflation cannot be resolved quickly. Markets now expect a possible rate hike in September, depending on upcoming inflation and labor data.
Canadian Prime Minister Mark Carney rejected using export curbs on key resources like oil to retaliate against US tariffs, saying reliability as a supplier matters more. His comments come after President Trump threatened 50% tariffs on Canadian goods including autos, alcohol and dairy unless trade complaints are addressed by August 19. Canadian officials are currently in Washington seeking a comprehensive trade agreement, though Carney said all options remain open if new tariffs proceed.
Japan’s government lowered its economic growth forecast for the fiscal year ending March 2027 to 0.9%, down from 1.3%, as increasing oil prices tied to Middle East tensions weigh on households and businesses. Private consumption and capital expenditure forecasts were also cut, while consumer inflation is now projected at 2.2%. Growth is expected to rebound to 1.1% next fiscal year, with the primary budget balance projected to return to a 1.4 trillion yen surplus.
The 6M Euribor decreased with 3 basis points to 2.68% compared to previous business day. The 10Y Swap increased with 6 basis points to 3.20% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The Senate advanced a long-delayed sanctions bill targeting Russian oil sales, aiming to curb funding for Moscow’s war effort in Ukraine. The package also grants tariff authority against the top five buyers of Russian oil and enablers of sanctions evasion, alongside renewed measures against Iran’s energy and weapons sectors. The bipartisan deal, combining Russia and Iran sanctions, cleared the way for an initial vote as lawmakers honored the bill’s namesake, the late Sen. Lindsey Graham.
Asian equities extended a sharp selloff on Wednesday as AI valuation fears deepened, with South Korea’s KOSPI plunging over 11% and Taiwan and Japan also sliding sharply ahead of key tech earnings. SK Hynix shares fell 9% despite operating profit more than sextupling, as investors demanded more than strong results amid growing scrutiny of AI capex returns and circular financing concerns. Oil jumped over 3% after fresh Iran missile attacks, complicating the Federal Reserve’s rate decision, with markets now pricing a real chance of a hike under new Chair Kevin Warsh.
Apple briefly touched a $5 trillion market cap on Tuesday, a day after overtaking Nvidia as the world’s most valuable listed company, with shares up 25% this year. The stock hit a high of $342.89 before closing at $340.08, as investors rotate away from hyperscalers’ heavy AI capex toward Apple’s leaner spending model. The rally comes despite price hikes on MacBooks and iPads amid a global memory shortage, and precedes Thursday’s earnings, Tim Cook’s final call as CEO.
The 6M Euribor decreased with 1 basis point to 2.71% compared to previous business day. The 10Y Swap decreased with 2 basis points to 3.14% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
Hong Kong’s exports surged 53.4 %year on year in June, the largest increase since 1984, reaching a record value of 641.1 billion Hong Kong dollars. The growth followed a 40.8 % increase in May and was driven by strong demand for AI-related electronic products, including electrical machinery, data processing machines and telecommunications equipment. Almost all of Hong Kong’s trade consists of re-exports, positioning the city as a key conduit for high-tech goods linked to China’s AI trade.
Australia’s housing market is experiencing its worst slowdown since the pandemic, with prices in Sydney and Melbourne down nearly 5.0% this year. The Reserve Bank of Australia raised interest rates three times between February and May, while tax changes curbed negative gearing for investors. Mortgage inquiries decreased by 14.0% in June year on year. Bank shares dropped 12.0% since February, and New South Wales cut its stamp-duty forecast by 5.3 billion Australian dollars.
Falling crude oil prices hit agricultural markets on Monday. Soybean futures in Chicago decreased 3.6%, their steepest drop in over two months, while soybean oil decreased more than 3.0%. Palm oil in Kuala Lumpur declined 1.2% from its highest level since April. A temporary US-Iran ceasefire eased Middle East tensions, cutting oil prices by up to 11.0% intraday and reducing demand for these crops as biofuel alternatives. Wheat and corn prices also retreated after recent gains.
The 6M Euribor increased with 2 basis points to 2.72% compared to previous business day. The 10Y Swap decreased with 5 basis points to 3.16% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
The European Central Bank left interest rates unchanged but signalled that further tightening may be required, with financial markets expecting at least two additional rate hikes by March 2027. The institution views the current inflation episode as a medium-sized shock, with inflation at 3% expected to return to the 2% target within about a year. Policymakers are closely monitoring whether higher energy prices trigger broader wage and price pressures that could make inflation more persistent.
The United States is rebuilding a more durable tariff regime using established trade laws after courts struck down parts of earlier global tariffs. New Section 301 duties of 10% or 12.5% linked to forced-labour enforcement cover 99.4% of imports and largely replace expired temporary measures. Additional investigations into excess industrial capacity, intellectual property practices and strategic industries could result in further tariffs. Policymakers argue the measures support domestic production, while critics warn of higher costs and trade disruption.
India, South Africa and several other emerging economies are accelerating plans to build or expand strategic fuel reserves after disruptions linked to conflict around the Strait of Hormuz exposed vulnerabilities in energy security. South Africa proposes stocks equal to 60 days of imports, while India plans to add about 13mn barrels to existing reserves. Although these initiatives could help strengthen resilience, analysts note they remain small compared with potential supply disruptions affecting global oil markets.
The 6M Euribor increased with 1 basis point to 2.70% compared to previous business day. The 10Y Swap decreased with 2 basis points to 3.21% compared to previous business day.
In the attachment, today’s market data on money and capital market rates as well as other rates are presented.
