News

Macro Wrap

The softer-than-expected US June PPI reinforced, expectations that the Fed has room to hold rates steady. US Treasury yields declined across the curve, led by the front-end. US producer prices fell 0.3% month-on-month in June 2026 (vs 0% expected), after a revised 0.6% rise in May—the first decline since August 2025. Goods prices dropped 1.4%, led by a 12% fall in gasoline, while services rose 0.2%. Year-on-year, PPI increased 5.5% (vs 6.2% expected), and core PPI rose 0.2% on the month, with the annual core rate at 4.7%. sentimentally positive for Gold.

The US launched two waves of airstrikes on Wednesday targeting Iranian missile storage and launch sites on Greater Tunb Island in the Persian Gulf. President Trump pledged to intensify the campaign until Tehran agrees to reopen the waterway. Iran's Islamic Revolutionary Guard Corps warned that “other export routes for oil and gas that serve the interests of America and its allies” could also be closed, broadening the threat beyond Hormuz. Iran also stepped-up attacks on US Gulf allies, with Kuwait suffering its heaviest strikes in weeks, injuring four naval personnel. Sentimentally positive for Crude oil and negative for Inr.

The New York Fed’s Empire State Manufacturing Index rose 10 points to 15.6 in July 2026, indicating stronger activity. New orders, shipments, employment, and the workweek increased, supply availability worsened, and price pressures remained elevated but eased slightly. Firms remained optimistic about the outlook.

The DJIA, the S&P500 and Nasdaq Composite rose 0.3%, 0.4% and 0.6% respectively. The Eurostoxx 50 fell 0.2%. The Dollar Index fell 0.4% to 100.49. EUR-USD rose 40 pips to 1.1460. The US 2Y yield fell 6bp to 4.14% and the 10Y fell 4bp to 4.55%. The German 10Y yield was nearly flat at 3.12% and the UK 10Y yield fell 4bp to 4.94%. Brent crude was slightly firmer by 0.3% to USD84.95, rising for a fourth consecutive session. Gold gained 0.2% to USD4,061.

Data watch: US Jun retail sales and weekly jobless claims for fresh insights into the strength of US consumer spending and labour market condition.