Macro, Rates & FX news from the last 24 hours, AI-curated by PiQ Markets

The U.S. dollar neared a one-week high amid Middle East tensions and assurances from UK Prime Minister Andy Burnham to President Trump regarding the Strait of Hormuz. In the UK, Burnham's premiership faces early challenges as job postings declined by 7,000 between April and June. Meanwhile, borrowing costs are rising due to comments on 'fiscal flexibility,' potentially impacting the FTSE 100. Wage growth held steady at 3.4% in the three months to May, a figure closely watched by the Bank of England.

South Korea's central bank is advancing its digital currency initiative by launching Phase 2 of its wholesale CBDC pilot in September. This expanded trial will involve nine commercial banks and aims to test live transactions for deposit tokens, potentially involving up to 500,000 users. The pilot will also explore new functionalities such as biometric payments and the disbursement of government subsidies.

Oil and gas prices are surging, driven by escalating conflict in the Middle East. This price increase is reigniting inflation concerns and causing bond yields to rise. Investors are closely watching the market for further volatility as they await key technology earnings reports. The situation highlights the interconnectedness of geopolitical events, energy markets, and broader economic stability.

Contrary to common assumptions, the most indebted households in the European Union are situated in northern and western European nations, rather than southern ones. While household debt has decreased across the EU and euro area since 2020, countries such as the Netherlands, Denmark, and Sweden exhibit notably higher debt-to-GDP ratios. This finding challenges the prevailing stereotype that high household debt is primarily a characteristic of southern European economies.

US inflation eased in June, with the Consumer Price Index showing a 3.5% annual increase. Prices saw their largest monthly drop since 2020, driven by declining gas prices and a U.S.-Iran agreement reached in mid-June. Despite this cooling trend, a recent surge in oil prices could impede further inflation reduction.

Prime Minister Sanae Takaichi's new economic blueprint faces headwinds from rising Japanese bond yields. These increases signal market apprehension regarding potential government interference in monetary policy and concerns about escalating government spending. The blueprint, designed to stimulate investment, is now overshadowed by these financial market anxieties.

New Zealand's annual inflation rate accelerated to 4.1% in the second quarter, surpassing analyst expectations and remaining above the Reserve Bank of New Zealand's target range of 1% to 3%. The consumer price index saw a quarterly increase of 1.5%. This persistent inflation suggests that interest rates may remain elevated as the central bank aims to bring price stability.

Morgan Stanley Investment Management is adjusting its Chinese renminbi foreign exchange options strategy. The firm is lowering strike prices closer to the current spot rate and reducing premiums. This strategic shift involves rebuilding its USD/CNH call book, which is set to reach $15.7 billion.