Rex

• The Bureau of Economic Analysis is scheduled to release the personal consumption expenditures (PCE) price index report on Wednesday, August 26. • This report provides critical data on inflation, specifically through the Core PCE, which is the Federal Reserve's preferred metric for guiding monetary policy. • The release is a pivotal event for investors as it will likely influence the Federal Reserve's upcoming decisions regarding interest rate adjustments.

• The US released economic data for July focusing on the Personal Consumption Expenditures (PCE) deflators. • As the Federal Reserve's preferred gauge for inflation, the PCE is closely monitored despite being less timely than Consumer Price Index (CPI) indicators. • Current data suggests that inflationary pressures stemming from the conflict in Iran have not yet manifested in the PCE figures.

• Brent crude oil prices have declined for three consecutive days, dropping to approximately $86.7 per barrel, the lowest level seen in two weeks. • The downward trend began on Monday following details released by USTS Bessent regarding "Operation Economic Outcast." • This shift is significant as it signals a U.S. strategic preference for applying economic pressure over military re-escalation.

• US Treasury Secretary Bessent declined to announce secondary sanctions against Iran's trading partners and financial institutions during a recent press conference. • While Bessent unveiled new sanctions targeting specific individuals, entities, and vessels, he issued a final warning instead of the broader measures expected. • The decision falls significantly short of the "economic D-Day" that analysts and markets had anticipated prior to the announcement.

• Global markets began the trading week with a calm, "wait-and-see" approach as investors anticipate several high-risk events scheduled for later this week. • US Treasury yields saw slight declines, dropping between 1.5 basis points for the 2-year note and 4.2 basis points for the 30-year bond. • The 30-year yield currently holds at 5.23%, remaining close to its recent multi-year peak of 5.33%.

• European companies reported a strong 18% increase in earnings per share during the second quarter, marking a significant recovery after flat growth in 2024–2025. • Major financial institutions Goldman Sachs and JPMorgan are bullish on the STOXX Europe 600, forecasting a rally to 670–680, roughly 3% above current levels. • This potential shift in capital flow comes as the stock market closes the week in the red despite positive US economic data and anticipation surrounding NVIDIA.

• US Treasury yields rose between 2.3 and 4.7 basis points heading into the weekend, shifting the market from bear steepening to flattening and erasing previous drops from a Treasury buyback. • Brent crude climbed to $94.4, its highest level since mid-July, as markets react to escalating geopolitical tensions. • US Treasury Secretary Bessent issued a stern warning in the Financial Times against Iran's trading partners, threatening global isolation for nations serving as "financial arteries" for the regime.