Key facts
- Record diesel prices are a significant inflationary concern for the US.
- The upcoming US CPI report on Friday could pressure the Federal Reserve to hike rates if core inflation rises above 0.2%.
- The yen has surged to a seven-month high against the U.S. dollar.
- Iran threatened the United States with "economic warfare" and fired an advanced missile at U.S. warships.
- Brent crude prices are creeping closer to $100 a barrel.
Record diesel prices are a significant inflationary concern for the US, threatening to pressure the Federal Reserve ahead of the upcoming CPI report. Futures indicate a 57% probability of a September rate hike if core inflation rises above 0.2%. Meanwhile, the yen has surged to a seven-month high against the dollar, reaching 152.89, as markets anticipate further rate hikes from the Bank of Japan. This surge followed data showing Japan's economy grew faster than initially estimated in the second quarter. In Europe, the European Central Bank is widely expected to raise its key interest rate to 2.50% this week. Geopolitical tensions persist in the Middle East, with Iran threatening the US and pushing Brent crude prices closer to $100 a barrel.