Forex News

The Bank of England (BoE) will keep interest rates unchanged for the rest of the year, according to a Reuters poll conducted between August 13 and 18.

Nearly 90% of economists, or 56 of 64, expect the BoE to leave rates unchanged at 3.75% through the end of 2026, up from 83% last month. All respondents forecast no change at the central bank’s next meeting in September.

Economists largely agree that the BoE can stay patient as the inflationary impact of higher Oil prices remains modest despite inflation staying above the 2% target.

The poll also showed a narrow majority of economists expect at least one rate cut by mid-2027, even though inflation is forecast to stay above target until late next year.

Attention now turns to the UK inflation report for July, due on Wednesday. Headline Consumer Price Index (CPI) inflation is expected to rise to 2.9% YoY from 2.6%, while core inflation is forecast to ease to 2.5% from 2.6%.

• USD/JPY trades modestly higher, holding above the 159.60 area.
• The US Dollar keeps a mild safe-haven bid as Strait of Hormuz tensions simmer.
• Mixed US housing and production data do little to shift the picture.

USD/JPY holds modest gains near the 159.60s on Tuesday, edging higher on the day. The pair has clawed back ground after a recent sharp pullback and is grinding back toward the upper end of its recent range.

The US Dollar (USD) is keeping a mild bid as tensions around the Strait of Hormuz keep a safe-haven premium in the currency. That flow is favoring the Greenback over the Japanese Yen (JPY), keeping USD/JPY supported even as geopolitical risk runs through the headlines.

US President Donald Trump hardened the tone in a social media post, saying there are no talks or conversations scheduled with Iran and that the US naval blockade remains in full force. He also claimed the Strait of Hormuz is “open and operating” and that all water mines had been removed or detonated, comments that come as Tehran insists the waterway stays shut until Washington meets its conditions.

On the data front, the picture was mixed. US Building Permits for July jumped to 1.443 million, beating expectations, but Housing Starts slipped to 1.239 million, missing forecasts and falling from the prior month. Industrial Production rose 0.2%, just shy of the 0.3% consensus, while Pending Home Sales fell 2.3%, a smaller drop than the previous month but still in contraction.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 159.61, retaining a mild bullish bias as it holds above the 20-period Simple Moving Average (SMA) at 159.38 and a dense support band between 159.55 and 159.59. However, the advance is increasingly capped by the 100-period SMA at 159.69, with additional resistance aligned at 159.73, while the Relative Strength Index (RSI) at 59.46 suggests constructive but not overextended momentum.

On the topside, immediate resistance is seen at the 100-period SMA at 159.69, followed closely by the horizontal barrier at 159.73. On the downside, first support is clustered at 159.59 and 159.55, ahead of the horizontal floor at 159.43 and the 20-period SMA at 159.38, where buyers would be expected to defend the current short-term uptrend.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

UOB economist Enrico Tanuwidjaja reviews Indonesia’s 2027 State Budget, highlighting a calibrated balance between growth and fiscal discipline that matters for the Rupiah and local bonds. The budget assumes a Rupiah exchange rate of Rp17,500 per US$, a 6.0% GDP growth target and a 2.40% of GDP deficit, with financing via disciplined sovereign bond issuance.

Budget assumptions shape Rupiah outlook

"The budget targets economic growth of 6.0%, supported by strategic public investment and prudent fiscal management, with the fiscal deficit projected to narrow to 2.40% of GDP."

"Rupiah Exchange Rate Rp17,500/US$. Reflects ongoing global financial market volatility and continued strength of the U.S. dollar."

"10-Year Government Bond (SBN) Yield 6.90%. Assumes stable domestic liquidity conditions and manageable sovereign risk premiums."

"Prolonged high interest rates in advanced economies or sustained U.S. dollar strength could place additional pressure on the rupiah and increase government borrowing costs, necessitating close coordination between fiscal authorities and Bank Indonesia."

"Financing requirements will be met through a disciplined combination of domestic and international sovereign bond issuance, helping maintain market confidence and funding flexibility."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

• Treasury yields near 2007 highs, weighing on non-yielding Gold.
• US-Iran deadlock keeps Oil prices underpinned and inflation risks elevated.
• FOMC minutes could clarify Fed debate after softer US data.

Gold (XAU/USD) retreats on Tuesday as US Treasury yields keep their momentum, while energy prices rise further amid a lack of progress in talks between the US and Iran. XAU/USD trades at $4,364, down over 1.10%.

XAU/USD falls as high yields and Oil risks pressure bullion

The US Dollar Index (DXY), which tracks the performance of the buck’s value against a basket of six currencies, is flat at 99.60. The US 10-year Treasury yield has fallen by more than 1 basis point to 4.712%. Worth noting that US Treasury yields hit their highest levels since 2007, earlier in the session, a headwind for Gold, which bears no interest.

A de-escalation of the conflict seems far from happening after US President Donald Trump said that Iran is unlikely to accept Washington's terms to end hostilities. Meanwhile, Iran is adopting an offensive stance, adding that the Strait of Hormuz will remain closed if Washington doesn’t accept their terms.

Oil prices remained underpinned by uncertainty in the Middle East, which favors a Federal Reserve (Fed) interest rate hike. A weaker-than-expected jobs report and inflation data edging lower forced investors to price out rate hikes in 2026.

Data-wise, US Housing Starts in July fell 12.4% MoM, from June’s 1.415 million to 1.239 million, due to higher mortgage rates, which have spiked since the beginning of the Middle East conflict, and elevated home prices. At the same time, the Federal Reserve reported that Industrial Production for July dipped from the expected 0.3% to 0.2% MoM.

Investors are currently awaiting Wednesday's release of the Federal Reserve's policy meeting minutes for insights into the expected path of future interest rates.

XAU/USD technical analysis: Gold fell below 100-day SMA, eyes on $4,200

Gold prices are once more below the $4,400 mark and fell under the 100-day Simple Moving Average (SMA) of $4,384. Bullish momentum seems to be fading as the Relative Strength Index (RSI) dips lower, an indication that sellers are stepping in.

If XAU/USD dives beneath $4,350, expect a test of $4,300, followed by a drop to the July 6 high at $4,202, followed by the 50-day SMA at $4,146 and $4,100.

For a bullish resumption, the first resistance is the $4,400 mark. Up next lies the $4,450 psychological level, followed by the $4,500 milestone.

• Silver stays within a week-old range as buyers take a breather following the recent rally.
• Uncertainty around the Fed policy outlook keeps traders from chasing the metal higher.
• Technically, XAG/USD retains a mild bullish bias, but fading momentum points to consolidation.

Silver (XAG/USD) edges lower on Tuesday, remaining confined within a week-old trading range as bullish momentum softens following the recent rally. At the time of writing, XAG/USD trades around $63.96, down 2.77% on the day.

Buyers appear reluctant to chase the metal higher as uncertainty around the Federal Reserve’s (Fed) monetary policy path keeps sentiment cautious. Recent weak US economic data have reduced expectations of an imminent Fed rate hike and helped XAG/USD rebound from near $55 at the start of the month.

However, the energy shock caused by tensions in the Middle East keeps inflation risks alive and leaves the possibility of a rate increase later this year on the table. The prospect of higher interest rates weighs on Silver by increasing the opportunity cost of holding non-yielding assets.

Technical Analysis

On the daily chart, XAG/USD retains a mild bullish bias while holding above the 50-day Simple Moving Average (SMA) at $61.28 and several key Fibonacci support levels.

However, momentum indicators point to consolidation. The Relative Strength Index (RSI) near 55 is easing toward neutral, while the fading green bars on the Moving Average Convergence Divergence (MACD) histogram suggest weakening bullish momentum. The Average Directional Index (ADX) near 26 indicates moderate trend strength.

On the downside, initial support is seen at the 38.2% Fibonacci retracement at $62.89, followed by the 50% level at $61.68 converging with the 50-day SMA at $61.28 to form a key demand zone. Below there, the 61.8% retracement at $60.47 and the 78.6% level at $58.76 mark subsequent floors that would come into play on a deeper corrective pullback.

On the topside, a daily close above the 23.6% retracement at $64.38 would open the way toward the structural high at $66.80, with further advances likely to test the 100-day SMA at $68.66 before any challenge of the 200-day SMA at $71.81.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• DXY holds just above 99.50 inside a 17-pip session range.
• December Fed hike odds slip to 67%, from fully priced on August 10.
• Long ends at multi-decade highs in Tokyo, Berlin and Paris alike.

The highest long-dated US yields in nearly two decades have moved the US Dollar Index (DXY) by three hundredths of a point. Spot holds just above 99.50 on Tuesday after a session range of 17 pips, still beneath a flat 200-day Exponential Moving Average (EMA) near 99.75 that has capped every attempt for a fortnight.

The differential that never opened

A thirty-year Treasury yield around 5.3%, its highest since June 2007, would ordinarily be a Dollar story on its own. It is not one here, because the same move is happening everywhere. Japan's 10-year sits at a three-decade high, Germany's 30-year at its firmest since 2011 and France's 30-year at levels unseen since 2008, with the United Kingdom, Italy, Switzerland and Canada all higher.

Currency is a relative price and this is an absolute move. Yields lift a currency only when they rise faster than the other side of the pair, and a synchronised widening in term premium opens no gap for anyone. The index carries a 57.6% euro weight, so a German long end selling in step with the American one neutralises more than half the basket before the other five currencies are counted.

The Japanese leg is worse than neutral. At a 13.6% weight, a domestic bond yielding more than it has in thirty years gives the largest pool of overseas capital in the world a reason to bring money home rather than fund carry with it. Add the sterling and Canadian Dollar weights, both sitting on long ends of their own that are higher of late, and better than 80% of the basket is being repriced by the same force.

The one leg that moves the Dollar is going backwards

Policy expectations are the part of the curve that reliably prices a currency, and they are moving against the Dollar. Conditional meeting probabilities put a September 16 hold at 65.4% and an October 28 hold at 52.4%, with the December 9 hold cell at 33.0%. On August 10 a December increase was priced as a certainty.

Roughly a third of the terminal tightening has gone in eight days, and the below-band column stays empty at every 2026 meeting, printing nothing until well into 2027. This is not an easing cycle arriving. It is a hiking cycle being deferred, which strips the carry case from the Dollar without handing it a growth scare to shelter behind.

Tuesday's releases gave the deferral no argument. July housing starts printed 1.239 million against a 1.35 million consensus and 1.415 million prior, pending home sales fell 2.3% where a 0.3% gain was expected, and industrial production came in at 0.2% against 0.3%. Only Monday's August Empire State manufacturing index ran hot at 20.6 against 11, and survey optimism is not what a rate market discounts.

No haven bid either

Risk appetite deteriorated through Asian and European hours on the same headlines that lifted the long end, with Crude Oil pushing above the $85.00 handle after Washington confirmed no talks with Iran are underway or scheduled and that the naval blockade holds. On any of the past five years of correlations that is a Dollar-positive combination, and the basket did not move.

A 17-pip range under those conditions is not calm but a market with nothing left to express, having already sold the Dollar from a late-June peak near 101.75 into a fortnight of chop around the 200-day EMA. The daily Stochastic Relative Strength Index (Stoch RSI) reads near 14, pinned at the floor of its band for a second week without producing a bounce, which describes sellers who are patient rather than exhausted.

What is left this week

The Federal Open Market Committee (FOMC) minutes from the July 28-29 meeting land Wednesday at 18:00 GMT and carry the week's first red band. Three reserve bank presidents dissented for a quarter point at that meeting, and the market has spent the three weeks since deleting the increase they voted for, so the minutes read as a test of how isolated that bloc really was.

Thursday brings initial jobless claims against a 210K consensus and 209K prior, with a Philadelphia Fed manufacturing survey forecast to halve to 25 from 41.4. Friday's preliminary August Purchasing Managers Index (PMI) readings are the second red band and the only survey this week with the breadth to move September pricing, manufacturing seen at 53.8 from 53.9 and services at 54 from 54.6.

Dollar Index levels

Resistance: The 200-day EMA near 99.75 caps immediately, with the 100.00 handle above it and the declining 50-day EMA near 100.25 the line that would end this downtrend.

Support: 99.50 is the session floor in play, and a break there opens 99.25, with the late-May base near 98.75 the objective beneath.

Bias: Bearish. The Dollar is losing the only rate leg that pays it while the global long end reprices in lockstep, and a 17-pip range beneath a flat 200-day EMA is compression resolving lower rather than a base forming. Invalidation comes on a daily close above 100.25.

DXY daily chart

• DJIA trades near 53,400, about 2.5% beneath the August 5 record.
• December Fed hike odds down to 67%, from fully priced on August 10.
• Thirty-year Treasury yield near 5.3%, the highest since June 2007.

A quarter-point Federal Reserve (Fed) increase by December stopped being a certainty over the past eight days, and the Dow Jones Industrial Average is lower for it. Spot trades near 53,400 on Tuesday, down roughly 105 points on the session and about 2.5% beneath the record just short of 54,750 set on August 5. Nine sessions have now passed without a new high.

Relief the tape could not use

Conditional meeting probabilities put a hold at 65.4% for September 16 and 52.4% for October 28, with the December 9 hold cell at 33%. On August 10, that same December meeting priced an increase as a certainty, so roughly a third of the terminal tightening has come out of the curve in a week and a half.

An equity market that spent the summer complaining about a chair installed to cut and delivering holds has been handed the outcome it asked for. It has answered by grinding lower across the nine sessions since the record, which is the tape saying the front end is no longer the price that sets the discount rate.

What the long end is actually pricing

The thirty-year Treasury yield trades around 5.3%, its highest since June 2007, and it reached that level while the market was removing Fed tightening rather than adding it. Those two facts cannot both be a policy story. What is widening is the term premium, the compensation demanded for owning duration, and that is a price rather than a forecast.

The distinction is the whole argument for an index valued on long-dated cash flows. An increase that never arrives lowers the front of the curve and does nothing to the rate applied to earnings a decade out. Japan's 10-year at a three-decade high, Germany's 30-year at its firmest since 2011 and France's 30-year at levels unseen since 2008 confirm this is not an American accident.

Housing prices off the wrong end of the curve

July building permits ran at 1.443 million against a 1.37 million consensus, while housing starts printed 1.239 million against 1.35 million expected and 1.415 million prior. Permits are paperwork and starts are concrete, so a beat on one and a miss of more than 8% on the other reads as builders buying optionality they do not intend to exercise.

Pending home sales fell 2.3% in July where a 0.3% gain was expected, a second consecutive decline. A thirty-year mortgage prices off the long end and not off the funds rate, so the most rate-sensitive corner of the economy gets nothing at all from a Fed the market has just talked out of an increase.

Home Depot (HD) is up around 1% on a second-quarter earnings beat, and under price weighting that single advance is holding the session loss to a fifth of a percent. The index is being propped up by a housing retailer on the same afternoon the housing data broke.

The channel Washington threatened to bomb

Crude Oil trades above the $85.00 handle after a near 1% gain on Tuesday and a rise on Monday before it, and the diplomatic track meant to cap it is now formally shut. Trump said Tuesday that no talks with Iran are underway and none are scheduled, and that the naval blockade stands in full.

A day earlier he threatened to strike Oman if it obstructed American efforts, aimed squarely at the only channel still open between Washington and Tehran. An energy price nobody can forecast sitting on top of a shipping lane nobody can insure is exactly what a long-bond holder charges term premium to carry.

What is left this week

The Federal Open Market Committee (FOMC) minutes from the July 28-29 meeting land Wednesday at 18:00 GMT and carry the week's first red band. Three reserve bank presidents dissented for a quarter point at that meeting, and the market has spent the three weeks since deleting the increase they voted for.

Thursday brings initial jobless claims against a 210K consensus and 209K prior, alongside a Philadelphia Fed manufacturing survey forecast to halve to 25 from 41.4. Friday's preliminary August Purchasing Managers Index (PMI) readings close the week, with manufacturing seen at 53.8 from 53.9 and services at 54 from 54.6.

Dow Jones Industrial Average levels

Resistance: The 53,500 area caps first, with the 53,800 shelf that framed all of last week above it, then 54,000 and the record just short of 54,750.

Support: The 53,250 area is the immediate line, and losing it opens 53,000, with the rising 50-day Exponential Moving Average (EMA) just above 52,400 beneath that.

Bias: Bearish. Nine sessions without a new high, a daily Stochastic Relative Strength Index (Stoch RSI) near 75 that ran to the top of its band while price refused to confirm, and a long end still selling all point lower. Invalidation comes on a daily close back above 53,800.

Dow Jones daily chart

• AUD/USD gives back an early bid to trade just below its opening level, marginally lower on the day.
• The US Dollar firms a touch as fresh Strait of Hormuz tensions support safe-haven demand.
• Iran says the waterway stays shut until the US meets its conditions, and a vessel was struck on Tuesday.

AUD/USD trades just below 0.7100 on Tuesday, a touch lower for the day and sliding from the two-month highs reached on Monday. The pair opened with a firmer tone and pushed toward 0.7119 early on, but the bid faded through the session, and by the middle of the American trading session it sits just under its opening level.

The move owes little to Australian data and almost everything to geopolitics. The US Dollar (USD) has clawed back a little ground as tensions around the Strait of Hormuz flare again, keeping a modest safe-haven bid under the Greenback and weighing on risk-sensitive currencies like the Aussie.

Iran’s top negotiator and parliament speaker, Mohammad Bagher Qalibaf, said the Strait of Hormuz will stay closed until Washington meets the terms of an interim deal signed in June lifting its naval blockade of Iranian ports, removing oil sanctions, releasing frozen assets and halting military operations on all fronts. The memorandum of understanding expired on Monday, and US President Donald Trump said he is not seeking an extension.

A United Kingdom (UK) Maritime Trade Operations (UKMTO) agency reported early Tuesday that a vessel was struck by an “unknown projectile” while transiting the Strait, damaging its engine room and injuring a crew member. Trump, for his part, said there are no talks scheduled with Iran and that the US naval blockade remains in full force, and he reportedly told Fox News he would strike Oman if it gets in the way of his administration’s dealings with Tehran

Short-term technical analysis:

On the 4-hour chart, AUD/USD trades at 0.7095, holding a mildly bullish bias as it stays above both the 20-period Simple Moving Average (SMA) at 0.7092 and the 100-period SMA at 0.7038. The pair is consolidating just under a dense topside band, with momentum neutral-to-positive as the 14-period Relative Strength Index (RSI) hovers around 54, suggesting buyers retain control but lack a strong push so far.

On the topside, immediate resistance is seen at 0.7098, followed by 0.7102 and then 0.7111, before a higher cap emerges near 0.7120. On the downside, initial support is provided by the short-term 20-period SMA at 0.7092, with a more significant floor coming in at the 100-period SMA around 0.7038; a sustained break below this latter level would weaken the current constructive tone.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• The Euro eases back toward even, unable to hold onto earlier gains against the Pound.
• Soft UK jobs data and a strong German ZEW survey fail to lift the cross.
• UK CPI on Wednesday is the next test for the Pound.

EUR/GBP slips toward 0.8550 at the time of writing on Tuesday, with the Euro (EUR) unable to hold onto earlier gains against the Pound Sterling (GBP). The pullback comes even after a soft United Kingdom (UK) labor report and a stronger-than-expected German sentiment survey, a mix that would normally favor the single currency.

The German ZEW Economic Sentiment index rose to 34.2 in August, beating the 30.0 forecast and July’s 26.3 reading, while the Eurozone gauge also improved more than expected. The release drew little reaction in EUR/USD, and it has done little to keep EUR/GBP bid.

The Pound, for its part, had come under pressure earlier after the UK labor report for the three months to June. The ILO Unemployment Rate held at 4.9%, above the 4.8% forecast, while employment growth slowed. Analysts at ING said the figures were nothing earth-shattering but still point to a cooling jobs market with minimal wage pressure, leaving in their view “little impetus for the Bank of England (BoE) to hike rates this year.” Even so, Sterling has steadied through the European session, and the cross is drifting lower.

The next test comes on Wednesday with UK Consumer Price Index (CPI) data for July. Consensus is 2.9% YoY, up from 2.6% previously. A hot print would revive BoE hike bets and add to the pressure on EUR/GBP, while a soft one would leave the Pound exposed and could give the Euro room to recover.

Technical analysis:

In the 4-hour chart, EUR/GBP trades at 0.8551, keeping a capped tone as it holds just under a dense band of overhead levels. Price sits above the 20-period Simple Moving Average (SMA) at 0.8549, which offers immediate trend support but remains below the 100-period SMA at 0.8558 and nearby horizontal barriers at 0.8553 and 0.8559, limiting upside attempts. The Relative Strength Index (14) around 51 suggests neutral-to-slightly positive momentum, yet this is not strong enough to outweigh the prevailing resistance cluster overhead.

On the topside, initial resistance appears at the horizontal level of 0.8553, ahead of the 100-period SMA and accompanying resistance line at 0.8558, with a break higher exposing 0.8559 as the next hurdle.

On the downside, the immediate pivot is the horizontal support at 0.8551, with the 20-period SMA at 0.8549 following as the next layer of demand; a sustained move below this short-term average would open the door to a deeper pullback within the recent range.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

• NZD/USD declines 0.38% on Tuesday and trades around 0.5880 at the time of writing.
• Rising tensions between the United States and Iran fuel risk aversion and demand for the US Dollar.
• New Zealand rate hike expectations limit the Kiwi’s losses, while expectations of US monetary tightening fade.

NZD/USD retreats on Tuesday and trades around 0.5880 at the time of writing, down 0.38% on the day. The New Zealand Dollar (NZD) remains under pressure as mounting geopolitical tensions between the United States (US) and Iran fuel risk aversion and support demand for the US Dollar (USD).

US President Donald Trump says he is not interested in renewing the expiring agreement with Iran. He notably points to the naval blockade of Iranian ports as a means of leverage and reiterates his intention to place the strategic waterway under US control. These comments heighten concerns about a further escalation in tensions between Washington and Tehran.

The deterioration in market sentiment weighs on the New Zealand Dollar, which is generally sensitive to changes in risk appetite, while the Greenback benefits from safe-haven flows.

However, the US Dollar’s advance could remain limited by fading expectations of monetary tightening from the Federal Reserve (Fed). The unexpected weakness in July US Nonfarm Payrolls (NFP) and moderate consumer inflation figures weaken the case for an imminent interest rate hike.

According to the CME FedWatch tool, markets now price in a 35% chance of a rate hike at the Fed’s next meeting, down from 47% a month earlier. The decline in these expectations could curb demand for the US Dollar and limit downside pressure on NZD/USD.

Looking ahead, investors await the Federal Open Market Committee (FOMC) Minutes, due on Wednesday, which could provide further clues about the Fed’s monetary policy outlook and trigger volatility in the US Dollar.

On the New Zealand side, the Kiwi also draws support from expectations that the Reserve Bank of New Zealand (RBNZ) could raise its policy rate by 25 basis points at next month’s meeting. Repeated signals that monetary policy needs to become less accommodative reinforce this outlook and could provide a floor for the New Zealand Dollar in the near term.

NZD supported by foreign inflows as banks question scope for further RBNZ hikes

Analysts at BNY Mellon point to strong offshore demand for New Zealand government debt, noting that “foreign investors held 58.9% of government bonds in July 2026, up from 57.7% in June.” In nominal terms, “nonresident holdings rose to NZ$122.47bn from NZ$115.53bn, while non-resident repo holdings edged down to NZ$11.02bn from NZ$11.09bn.” BNY adds that “the NZD itself is now trading slightly above the rolling 12-month average,” but stresses that it “continue[s] to doubt the current market pricing of interest rates expectations, where two more Reserve Bank of New Zealand (RBNZ) hikes are expected by year end.” While “domestic activity remains robust,” the bank argues that “inflation expectations remain relatively well-anchored” and that “nontradables inflation is relatively stable,” so “if the RBNZ looks past headline price risks, the domestic case for tightening softens considerably.”

Commerzbank takes a similar view ahead of the next policy decision, observing that “in about two weeks, the Reserve Bank of New Zealand will hold its next monetary policy meeting, and based on the inflation indicators released this morning, it seems unlikely that it will raise interest rates for a second consecutive time following the July hike.” The bank highlights that, although “full inflation figures are released only once a quarter in New Zealand, Stats NZ publishes a Selected Price Index every month for about half of all prices, which typically reflects the trend in the full inflation figures very well.” This monthly gauge “fell to 3.5% year-over-year in July, down from 4.9% in June,” and “if we exclude the sharp rise in gasoline and diesel prices, the rate was actually only 2.2% in July, down from 2.8% in June.” Commerzbank notes that “global prices for oil and petroleum products were lower in July than in August,” and that “due to the collapse of the ceasefire and the renewed blockade in the Strait of Hormuz, a slight uptick in August is certainly to be expected,” but concludes that “the decline in the core rate in particular should be a source of satisfaction for the central bank.”

On activity, Commerzbank points to “positive figures for monthly aggregate credit and debit card sales” as “reason to be confident that the economy will not suffer too severe a setback.” After core card sales “had slowed sharply in June and were up only 0.4% year-over-year, they rose again by 3.5% in July,” with “the overall rate also improved again, rising from 1.3% in the previous month to 3.5%.” The bank cautions, however, that “these are nominal figures,” and that “when monthly inflation is factored in as an indicator, this shows that, in real terms, retail sales are still merely stagnating.”