GGMA Markets Briefing: Oil Falls as Hormuz Cracks Open, Canada Hits Back, and Nvidia Reports Tonight
Oil prices eased after Bloomberg reported that Iran and Oman discussed an interim framework to resume shipping through the Strait of Hormuz: a temporary joint maritime corridor with mine clearance, with talks of a permanent route within thirty to sixty days (BBG). The American president separately claimed the Navy has cleared the strait of mines, warning that any vessel laying new ones would be destroyed (BBG). Brent fell 1.73% to 87.05 and WTI 1.83% to 80.85, a third straight day of losses (BBG) (Reuters). The de-escalation is visible beyond the oil market too: Reuters reports Washington has started returning staff to its Middle East missions after the wartime evacuations (Reuters). The move helped ease the inflation strain that has kept central banks hawkish and led to a rally in bonds, with ten-year Treasury yields down six and a half basis points on Tuesday before steadying at 4.64% this morning (Reuters).
On the tariff front, Ottawa announced counter-tariffs of up to 50% on roughly twenty billion dollars of American goods from 8 September, more than seven hundred categories at rates of fifteen, twenty-five or fifty per cent, with existing steel and aluminium duties doubled to match Washington exactly, and dairy among the headline targets (SCMP) (BBG). The finance minister called it dollar for dollar, rate for rate (SCMP). The White House is already discussing the next step, with an official saying a response is expected and pointing to the President's promise to double car tariffs to 50% from January (BBG). The Canadian list is aimed with some precision: it hits hardest in Ohio, Illinois, Pennsylvania and Michigan, states that decide the midterms in November, and even Ontario's combative premier called for a truce while backing the retaliation (BBG). The Richmond Fed president said the dispute itself is less the issue than the broader question of where tariff rates finally land, on which he has received no signal yet (BBG).
In central banks, the day's sharpest repricing is Australian. July core inflation refused to ease, with the trimmed mean holding at 3.6% against a consensus of 3.5% and the monthly pace accelerating to 0.5% from 0.3%, while pricing for another hike by December jumped to about 95% from 67% before the release (BBG). Investment banks are busy revising their calls for the RBA, with Goldman Sachs now expecting a hike in November and one German bank switching its call to a September rate rise, arguing the print leaves the Reserve Bank little room to do anything but follow through on its hawkish posturing (BBG).
In Europe, ECB executive board member Schnabel told Bloomberg that further tightening will be necessary because inflation is unlikely to return to target at the current rate, pointing to gas storage as a particular concern (BBG), while Reuters sources say the Governing Council is ready to hike to 2.50% in September but has little appetite to signal anything beyond it (Reuters). In Japan, a Reuters poll found 57% of economists now expect a September move, from 5% a month ago, with the expected terminal rate shifting higher and two-thirds judging last month's coordinated intervention ineffective on its own (Reuters). Services prices among companies rose 3.6% in July, the fastest since May, with ocean freight up 67.4% on war rerouting, the largest gain in data back to 1986 (BBG). The governor is skipping Jackson Hole, sending the board's most hawkish member in his place, and the deputy governor speaks on Thursday (Reuters). The Bank of Korea decides overnight, with a slim majority of economists expecting a back-to-back hike to 3% and upgraded forecasts alongside (BBG).
Currently, STIR traders price 10 basis points of tightening for the September Fed meeting, a 39% probability of a rate rise, and 25 basis points cumulatively by December. For the ECB, they price 23 basis points for September, a 92% probability, and 40 basis points cumulatively by December. For the BoJ, they price 21 basis points for September, an 85% probability, and 42 basis points cumulatively by December.
For all the scepticism around the Treasury's buybacks, Bloomberg reports the intervention is showing up in market metrics: the thirty-year swap spread has narrowed to its smallest since February, options positioning has tilted towards calls on long bond futures, and rates volatility fell again, with traders reluctant to stand in front of a buyer with official resolve (BBG). Set against that, the Secretary's own mentor urged him in print to abandon the programme, writing that a thirty-year clearing at five and a half per cent is not a crisis but an invoice, and that every basis point of artificial suppression is a subsidy to procrastination (CNBC). One strategist argued the suppression simply fails without the Federal Reserve's balance sheet, and a fair-value camp notes the ten-year is trading almost exactly on its long-run average, suggesting nothing needs fixing at all (CNBC). The Richmond Fed president added that rising debt ends in a reckoning at some unknowable date, that July's hold was a close call, and that two more months of data arrive before the September meeting (BBG).
In stocks, Asia rose ahead of the chipmaker's results tonight, the regional gauge up with Korean chipmakers leading, the Kospi the world's second-best major index this year (BBG) (Reuters). SoftBank is considering a bond sale of up to twenty billion dollars to help fund its OpenAI financing commitment, per a Bloomberg report (Biztoc). The Nikkei added 0.53% to 66,290, Hong Kong 0.63% to 25,710 and the CSI 300 0.94% to 4,565, while the ASX fell 0.35% to 9,082 as the inflation print did its work (BBG) (Reuters). US futures were slightly lower, with the S&P 500 contract off 0.10% and the Nasdaq 0.15%, as analysts expected the bellwether Nvidia to guide third-quarter sales up more than eighty per cent and the options market implied a smaller post-earnings move than usual (Reuters). European shares were set for modest gains, the Euro Stoxx 50 up 0.12% at 6,481.
In currencies, the dollar index edged up 0.06% to 98.97 and is still down about 1% for August (Reuters). The Australian dollar was the day's mover, up 0.28% to 0.7183 near a three-month high on the inflation surprise (BBG). The yen firmed 0.11% to 159.01, and the euro softened slightly despite the hawkish board comments (BBG).
In commodities, copper rose 0.70% to 523.85, closing in on its record intraday high after its highest ever close, with spot material still commanding a large premium after last week's squeeze, metal continuing to ship to the United States ahead of an expected tariff decision, and mine setbacks in Indonesia, Congo and Chile having removed a substantial slice of first-half supply (BBG). Gold eased 0.41% to 4,638, consolidating just under its three-month high with fund inflows the strongest since January (BBG). Bitcoin held near its own three-month high at 79,045, up 1.08% (Reuters).
In other news, this article caught my eye: Australia's second-largest pension fund has built its biggest yen overweight in years, betting the market has priced in the energy drag but the Bank of Japan wrong (BBG). It sees fair value for the dollar-yen pair around 150, is simultaneously underweight Treasuries, and draws the week's sharpest distinction: Tokyo is buying time until higher rates can support its currency, while Washington is fighting fundamentals (BBG).
Data and the day ahead: Japan's services producer prices rose 3.6% in July, the fastest since May, and the prior months were revised higher (BBG).
Sweden's July PPI eased to 6.4% from 7.4%. Still to come: The day's main event is the July PCE report at 14:30 CET, where the Fed's preferred core gauge is seen unchanged at 3.3% on the year, alongside durable goods and the second GDP estimate (LS). The ECB's Cipollone speaks at 12:10 CET, the Richmond Fed's Barkin at 17:45, and the SNB's Martin at 18:15 (LS). The chipmaker reports after the US close, the Bank of Korea decides overnight, and the week still ends with the Federal Reserve chairman at Jackson Hole on Friday (BBG) (Reuters).
Time Stamp: 26-08-2026, 07:59 CET