Daily Posts

Yesterday saw the beginning of the UN General Assembly, where the biggest news was that Tehran has offered to reopen the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade of Iranian ports. The US has said they are 'open to that', but there have been no formal talks and nothing has been scheduled. However, following on from yesterday, these are the first signs for a while of a willingness to reopen negotiations. We have been down this

Yesterday was very much a risk-on day, with oil falling and news from the Middle East. The UN General Assembly is due to take place in New York this week, where world leaders are due to meet. Trump was asked and responded to Fox News that he would 'probably' be open to sitting down with the Iranian President over the course of the week, which is the first sign of a potential resumption in peace talks for a long time. This adds on to the expected meeting between Gulf State lea

The weekend continued to bring escalation between the Houthis and the Saudis, as the Houthis claimed to have targeted 'sensitive' sites in Riyadh, with Saudi Arabia issuing air-raid alerts in the capital for the first time since April, as well as targeting an Aramco facility in Yanbu. US citizens are now also being advised to 'seriously reconsider' travel to the region. Separate from this, the Iranians have reasserted their stance that the Strait of Hormuz will not be reopene

The first full day after the Fed's rate hikes saw precious metals rally significantly, while we also saw rallies in the stock market for the tech sector. We saw two more central banks give their rate decisions, with the BoE holding and the BoJ raising rates as expected. Geopolitically, there were not large developments; there are still concerns surrounding the Middle East, and the US/Iran conflict still shows no sign of slowing down. However, we have begun to see oil fall as

Yesterday saw the main event, where the Fed raised interest rates by 0.25% as expected. The real market-moving news, however, was the forward guidance and the dot-plot that went with the decision. The decision to raise rates was unanimous, with 16 of the 18 participants also expecting at least one more rate hike this year. Four expected two rate hikes, whilst the majority expected only one. An interesting thing to note, however, and a point that has affected the precious meta

The big day is here, as later on we hear from the Fed with regards to this month's interest rate figures. Crucially, we will also see the updated dot-plot for future rate expectations. Considering we are at a 93% chance of a rate hike, the dot-plot and future guidance are likely to be the main market movers for the day. Whether we get a hawkish rate hike, with expectations of future hikes, or a dovish hike where this is a one-and-done move for now, will significantly affect m

As we head into the FOMC announcement tomorrow, there were two main stories yesterday of note that will likely have an effect on the decision tomorrow. First of all, we saw long-term US yields continue to rise despite the efforts of the US Treasury. The 10y yield rose significantly last week, and yesterday passed 5% for the first time since October 2023, when it touched this level intra-day. The yields have passed 5% again this morning; the last time we had a close above this

The weekend was a relatively quiet one from a geopolitical perspective, but we did have a few things to note with regards to the Middle East conflicts. A vessel was struck in the Strait of Hormuz on Sunday, causing a fire onboard, so we are still seeing attacks on shipping traffic in the area. We also heard a senior government official confirm that there are no current talks taking place between the US and Iran, firming up the market expectation that the war is not close to b

The main event today was the US CPI print, the final piece of data before the FOMC meets next week, and like yesterday's PPI it came in mixed with a hawkish element buried inside it. Core CPI m/m was the hot one at 0.3% against an expected 0.2%, it is worth noting that this is the figure the Fed watches most closely. Elsewhere it was steadier, with CPI m/m in line at 0.4%, CPI y/y in line and unchanged at 3.4%, and Core CPI y/y in line at 2.4%, which was actually down from 2.

There were two key news events today, the US PPI data release and the escalation in the Middle East. First off, we saw the hotly anticipated PPI print for the US, which came in mixed but slightly hawkish. PPI m/m was in line with expectations at 0.4%, Core PPI m/m was below at 0.2% against an expected 0.3%, PPI y/y was above at 5.4% against 5.3%, whilst Core PPI y/y was in line at 4.6%. The other key thing to note was that last month's PPI m/m & PPI y/y were both revised upwa

We have seen further escalation in the Middle East today as the US claimed to have destroyed 5 Iranian oil tankers, adding to renewed military exchanges across the region after yesterday's attacks on Saudi oil facilities. There are still no concrete signs of renewed talks despite Qatari efforts, which have caused oil to further rise and have seen Brent pass $100 per barrel, which it actually managed at the end of the US session yesterday before continuing north today. Brent i

The only news of note has been an escalation in the Middle East today, as Saudi Arabia's oil facilities were the target of Houthi attacks with both drones and missiles. Saudi officials noted they would respond to the escalation, adding a second front to the tit-for-tat strikes between the US and Iran. On top of this, we also saw reports that the number of ships transiting the Strait of Hormuz fell to its lowest levels since May of this year, adding to the supply-side pressure

In terms of geopolitics, the escalation has resumed and has done so in fairly direct fashion. Iran reportedly fired ballistic missiles towards two US Navy warships, whilst the US responded by striking three Iranian tankers. Brent rose to the high 90's and reached as high as $99.90 today, with renewed concerns around Hormuz supply and shipping disruption. There is no diplomatic process running at the moment, and with oil near $100, the inflation impulse that has driven so much

In terms of geopolitics, there is little new to report. Oil continued to rise yesterday with no sign of progress in the Middle East. Until we see something concrete, the inflation impulse driving this market is not going anywhere. What makes yesterday interesting is that for once the Middle East was not the story. The market spent the session trading off Tokyo instead. Brent Crude Oil - 1D The yen strengthened sharply, with USD/JPY falling 1.82% and dropping nearly three yen

In terms of geopolitics, the situation remains where it was, with the conflict ongoing and oil holding at elevated levels. Brent is sitting around $97 and US Oil near $89, so while we have not seen any further escalation this week, we also have not seen anything that would suggest a resolution is close. That elevated oil price continues to be the source of the inflation impulse that is driving everything else in this market at the moment, and until it comes down meaningfully,

Yesterday we saw a fresh round of US airstrikes on Iran following the weekend flare-up, along with further warnings from Trump. Oil extended its gains as a result, with the market now pricing in the possibility of sustained military exchanges rather than the isolated incidents we saw in August. Energy was the best performing S&P sector on the day, up 1.3%. It is worth remembering how quickly this has turned. Ten days ago we were discussing whether the war premium was coming o

The biggest news over the course of the UK bank holiday weekend was Kevin Warsh's speech at the Jackson Hole Summit, which surprised everyone with hawkish guidance for future rate decisions. He argued that inflation was running too high and that price stability would be the Fed's main focus, noting the Fed 'had work to do'. The markets reacted immediately, with September rate hike odds rising from just under 40% before to just under 60% after, then just over 60% as of yesterd

Yesterday saw the start of the Jackson Hole Symposium, with the main event being today when Fed Chair Warsh gives his speech (3 pm UK time). Yesterday lacked a major news event, so the markets were either reacting to the PCE/Nvidia news from Wednesday or were preparing themselves for the speech today. The only new piece of news was the weekly US unemployment claims, which were 5k below expected. Continuing claims were also below expected, backing up the low-hiring, low-firing

The two big news events yesterday were the PCE release and Nvidia earnings. PCE was mixed, with headline PCE y/y at 0.2% against an expected 0.1% and PCE m/m at 3.7% against an expected 3.6%. Core PCE by comparison was 0.2% m/m and 3.3% y/y, both in line with expectations. The monthly core that is most closely watched by the Fed stayed in line with expectations. We also saw US Prelim GDP q/q land as predicted at 1.5% as the US economy held steady. The mildly hot inflation pri

In terms of geopolitics, the most interesting development yesterday was the market's reaction to Operation Economic Outcast, which was not at all what you might have expected. Rather than pushing oil higher, the sanctions announcement has now sent Brent down almost 8% in the two sessions since it was made. There are two potential reasons for this. The first is that Pakistan's army chief concluded a one-day visit to Tehran, with reports suggesting he carried a proposal worked