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

Inflation rates showed mixed signals globally in June and Q2. Canada's annual inflation cooled to 2.8%, below forecasts, driven by lower fuel costs, with core measures also easing. In contrast, New Zealand's Q2 inflation accelerated to 4.1%, surpassing expectations and remaining above the central bank's target. Meanwhile, US inflation slowed in June, with the CPI rising 3.5% annually and monthly prices falling due to cheaper gas and a U.S.-Iran deal, though a recent oil price rebound poses a risk. Euro zone firms surveyed by the ECB expect moderating wage and price growth, suggesting the energy-driven surge may not persist. UK wage growth held steady at 3.4% in the three months to May, indicating ongoing wage pressures.

UK borrowing costs and sterling declined following Prime Minister Andy Burnham's remarks on fiscal flexibility, signaling increased government borrowing. The FTSE 100 is expected to open lower due to rising borrowing costs. Amidst global market volatility driven by Middle East tensions, Burnham assured President Trump of the UK's commitment to securing the Strait of Hormuz. The new premiership also faces immediate pressure as UK job vacancies fell by 7,000 between April and June, with particular declines in science and professional sectors.

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.

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.

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.

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.

Americans applied for new credit at the highest rate in nearly five years as of June, according to the Federal Reserve Bank of New York's Survey of Consumer Expectations. The survey also indicated an increased likelihood of consumers needing to borrow $2,000 for unexpected expenses. This suggests a growing demand for credit, potentially driven by rising costs or a perceived increase in financial emergencies.

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.