Summary:
Global shares rallied and the dollar eased on Tuesday after U.S. consumer price data showed inflation barely rose in May, increasing expectations the Fed will pause in June.
Global shares rallied and the dollar eased on Tuesday after U.S. consumer price data showed inflation barely rose in May, increasing expectations the Fed will pause in June.
Oil prices climbed over 3% on hopes for growing fuel demand after China's central bank lowered a short-term lending rate for the first time in 10 months.
The annual increase in the consumer price index was the smallest in more than two years but underlying price pressures are still strong.
Commodities
Brent's six-month backwardation fell to its lowest since March at around $1.10, indicating faltering confidence that demand will exceed supply over the year.
‘For market participants to start building up long positions again, they likely need to see larger inventory declines,’ said UBS strategist Giovanni Staunovo, adding he expected this to happen within weeks.
The OPEC kept its forecast for 2023 global oil demand growth steady for a fourth month on Tuesday, slightly increasing expectations of Chinese demand growth.
Forex
The dollar dropped to a three-week low on news of the smallest annual increase in inflation last month in more than two years.
Traders of futures tied to the Fed's policy rate now expect a roughly 93% chance the Fed will keep the benchmark rate at 5.00% to 5.25% this week.
Elsewhere, sterling jumped after employment data came in much stronger than expected, with wages rising sharply, adding to inflation concerns.
The pound hit a five-week high of $1.2625 against the dollar as traders bet the BoE would have to raise rates further than previously expected.
Despite the rebound in risk appetite, the Swiss franc has still risen by over 10%. Its close correlation with gold makes it a preferred safe-haven asset.
2025-08-14
PPI figures loom large, with the US dollar and Fed rate expectations set for a potential shift.
2025-08-14
Oil prices rose on Thursday, recovering from the previous session's losses, as the upcoming Trump-Putin meeting increased market risk premiums.
2025-08-14
