Asian Stocks Steady as Iran War Keeps Oil Prices and Inflation Risks Elevated 
Oil Prices Rise as Iran-U.S. Tensions Threaten Strait of Hormuz Supply 
S&P 500 Retreats From Record High as AI Stocks Slide, Retail Sales Disappoint 
Gold Prices Hold Near $4,400 as Fed Rate Hike Bets Fade 
US Stock Futures Mixed as Fed Rate Hike Bets Fade, AI Deals in Focus 
US Dollar Slips as Weak Retail Sales Reduce Fed Rate Hike Bets 
Strait of Hormuz Shipping Near Standstill After New Vessel Attacks 
Dollar Slides as Soft U.S. Data Cuts Fed Rate Hike Bets 
Morgan Stanley Sees Fed Holding Rates as U.S. Inflation Cools 
Canada Faces 50% U.S. Tariffs as Trade Tensions Threaten USMCA Talks 
US Eyes Refinery Boost as Trump Seeks Relief From High Gas Prices 
Trump Imposes New Tariffs on Drone Imports Over US Security Concerns 
Japan Economy Grows 1.1% in Q2 as Consumer Spending Stalls 
Wall Street Falls as Oil Prices Rise, Fed Minutes and Retail Earnings in Focus 
Australian Consumer Sentiment Jumps 6% in August as Rate Outlook Improves 
Citadel Warns High Treasury Yields Pose Broader Market Risks 
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The U.S. dollar remained near multi-month lows against major currencies on Tuesday as softer economic data reduced expectations for an imminent Federal Reserve interest rate hike. However, escalating Middle East tensions and rising oil prices continued to cloud the global market outlook.
The euro traded around $1.1581 during early Asian trading, staying close to Monday’s two-month high of $1.1614. The British pound stood at $1.3548, just below the three-month peak reached in the previous session.
Recent U.S. economic data has weakened the case for tighter monetary policy. Retail sales declined in July for the first time in nine months, while unexpected job losses and relatively mild inflation readings added to signs of slowing economic momentum. Traders now price in a 35% probability of a Fed rate hike in September, down from 52.2% a week earlier, according to CME FedWatch.
Inflation risks remain a key concern, particularly as the Strait of Hormuz remains effectively closed amid the ongoing U.S.-Iran conflict. Iran has reportedly shifted toward a “fully offensive” military posture after negotiations over a permanent end to hostilities stalled.
Higher energy prices are adding pressure to global bond markets. Brent crude futures rose 0.3% to $91.14 per barrel after reaching their highest level since July 30 on Monday. Long-term government bond yields have also climbed, with the U.S. 30-year Treasury yield hovering near a two-decade high and Japan’s 10-year government bond yield reaching its highest level since September 1996.
Investors are also scrutinizing U.S. Treasury auctions as concerns grow over government borrowing and fiscal discipline, prompting demands for higher long-term yields.
Meanwhile, the Japanese yen traded at 159.46 per dollar, keeping attention on the Bank of Japan’s upcoming policy meeting and expectations for further rate increases. The Australian dollar strengthened 0.11% to $0.71119, near its strongest level since early June, while the New Zealand dollar traded around $0.5902.
