Morning Note: A Round-up of Global Financial Market News.

Market News

Declines in consumer sentiment and retail sales have eased fears of an imminent rate hike, although the data hardly bodes well for the main engine of corporate America. The yield on the US 10-year Treasury is 4.68%, while gold is trading just above $4,400 an ounce.

However, market expectations for further monetary tightening are building around the world, spelling trouble for bonds. Two-thirds of the 32 swap markets tracked by Bloomberg are pricing in rate hikes, led by South Korea at more than 100 basis points.

Deadly Israeli strikes in Lebanon added pressure to stalled US-Iran talks, while Washington readied its plan for Tehran’s economic isolation. The ceasefire is set to expire today. The secretive Hormuz trade is running at full tilt, people familiar with the matter said, helping keep a lid on prices. Brent crude is currently $87 a barrel. Donald Trump told the Pentagon to “substantially reduce” military exercises with South Korea as the drills were about to start, suggesting frustration with the US ally’s lack of support on the war.

Although US equities closed lower on Friday, they notched up another weekly gain. Anthropic’s second-quarter revenue jumped at least 14-fold from a year earlier to over $11.5bn, documents show.

In Asia this morning, equity markets were firm: Nikkei 225 (+0.7%); Hang Seng (+1.7%); Shanghai Composite (+1.3%); Kospi (+2.4%). The Bloomberg Asia Dollar Index climbed to the strongest level since May. Japan’s economic growth unexpectedly slowed to an annualised 1.1% pace last quarter as capital spending slumped.

The FTSE 100 is currently 0.2% higher at 10,750. Sterling trades at $1.3560 and €1.1690, while the 10-year Gilt yields pushed back above 5%. Jamie Dimon warned UK Chancellor John Healey against raising taxes on banks, according to the FT.

Source: Bloomberg