US Inflation Data Surprises
U.S. consumer prices rose 3.5% year-over-year in June, with core CPI at 2.6%, marking the first monthly decline since 2020. The softer reading pushed the probability of a Federal Reserve rate hike in July down to just 17%, though nearly half of traders still expect a move in September.
Asia Markets Mixed
Asian equities showed mixed performance as Japan's Nikkei gained 0.9% and Australia's ASX edged up 0.2%, while Hong Kong's Hang Seng rose 1.6%. South Korea's Kospi surged 7.1% on a semiconductor rally. Shanghai dipped 0.4% after China reported second-quarter GDP growth slowed to 4.3% year-over-year, missing expectations.
Currency and Commodity Moves
The euro remained under pressure near one-year lows around $1.139, as ECB rate hike expectations rose amid an oil price spike driven by Middle East tensions. Brent crude traded near $85.8 per barrel and WTI around $80.1, supported by fresh U.S. strikes on Iran and a naval blockade in the Strait of Hormuz. Gold held near $4,050 per ounce on safe-haven demand.
Earnings and Geopolitical Risk
U.S. futures firmed after the CPI release, despite IBM's 25% plunge on weak guidance. Traders are watching earnings from Morgan Stanley, Johnson & Johnson and BlackRock. Volatility remains elevated due to Middle East headlines and Fed commentary, with the September rate hike probability easing to 63% after the inflation data.