Diesel Fuel Prices Hit Record Highs, Raising Inflation Concerns

The Asian markets have had a patchy start to the week, with tech leading shares higher. The Nikkei rose by around 2% thanks in part to semiconductor makers' stocks, while South Korea's Kospi climbed between 3% and 6%. Some traders pointed out that Goldman Sachs has been predicting a further 75% rise in the Kospi to 12,000, although this is not new. Tech stocks have been given a boost due to the US public holiday on Monday.

The AI craze has also helped distract from tensions in the Gulf, where Tehran said it will announce a restricted zone outside the Strait of Hormuz soon. This move comes after recent incidents involving US forces and Iranian tankers. The price of Brent is up 0.6% at $96.85 per barrel, while US crude firmed to $92.10.

This rise in fuel prices is particularly concerning as it affects transport, shipping, farming, and manufacturing - industries that heavily rely on diesel. A high inflation reading in the August US CPI report could put pressure on the Federal Reserve to hike rates this month. Fed funds futures are currently around 57% for a September move, 70% for October, and fully priced for December.