Diesel Prices Hit Record Highs, Threatening US Inflation Doves
The global markets had a mixed start to the week, with tech stocks leading Asian shares higher. However, European and Wall Street futures barely budged.
The Kospi index in South Korea climbed around 3% to 6,900, driven by semiconductor makers' stocks. Some traders pointed to an uber-bullish outlook from Goldman Sachs predicting a further 75% rise in the Kospi to 12,000, though that has been a longstanding call.
The AI craze helped distract from geopolitical tensions in the Gulf region, where Tehran announced plans to establish a restricted zone outside the Strait of Hormuz. The move comes after US forces hit three Iranian tankers and Iran's Islamic Revolutionary Guard Corps launched ballistic missiles at two US Navy ships.
The price of crude oil rose 0.6% to $96.85 a barrel, while diesel prices hit record highs last week, which could be a spoiler for US inflation doves ahead of the August CPI report on Friday.
A high reading in core inflation above 0.2% would put pressure on the Federal Reserve to hike rates this month, with Fed funds futures indicating a 57% chance of a September move and 70% for October.