Morning Note: A Round-up of Global Financial Market News.
Market News
The yield on the 10-year US Treasury note eased below 4.7%, retreating from recent highs as investors awaited the minutes of the Federal Reserve’s July meeting for fresh insights into the monetary policy outlook. The Fed left interest rates unchanged last month, though three officials dissented in favour of a hike, a split that traders will scrutinise for further details. Earlier this week, Treasury yields surged (and prices fell), with the 30-year US Treasury yield reaching a 19-year high, as rising debt issuance and concerns about persistent inflation fueled a sell-off in longer-dated bonds. Gold is trading at around $4,350 an ounce after dropping nearly 2% in the previous session.
Brent crude has climbed toward $92 a barrel, extending gains for a fourth consecutive session as the US and Iran showed little indication of reaching an agreement to end the conflict and reopen the Strait of Hormuz, keeping supply concerns elevated. President Donald Trump said there were no ongoing negotiations with Tehran while confirming that the US naval blockade remains in effect.
A global sell-off in semiconductor stocks deepened as investors retreated from one of the year’s hottest trades. Equities fell in the US last night – S&P 500 (-0.2%); Nasdaq (-0.7%) – and in Asia this morning: Nikkei 225 (-3.0%); Shanghai Composite (-2.4%); Kospi (-5.9%). China is expanding the use of a $1.6 trillion fund to boost housing-related spending, including renovations, under revised regulations taking effect next month.
The FTSE 100 is currently little changed at 10,738. UK inflation accelerated to 2.9% in July after energy bills surged, up from a 15-month low in June and matching the median forecast of economists. Sterling trades at $1.3 and €1.1, while the 10-year Gilt yields 5.05%.
The Canadian dollar ticked higher as the Trump administration agreed to delay 50% tariffs on billions of dollars in Canadian products for three days following high-stakes negotiations in Washington. Mexico is weighing further restrictions on some products from China and raising existing import taxes on others, people familiar said. The measures would deepen alignment with Washington.
Source: Bloomberg
