Markets Ignore Iran Deadline, Eye Upcoming US Macro Events
The US-Iran MOU deadline is largely irrelevant to markets at this point. Instead, investors are looking ahead to upcoming US macroeconomic events that will shape market sentiment. The Iran conflict remains a pressing issue, with President Trump threatening an indefinite naval blockade of the Strait of Hormuz and Treasury Secretary Bessent announcing 'never before seen' economic sanctions targeting Iran's shadow oil fleet, banking networks, and cryptocurrency exchanges.
Japan's GDP growth was weaker than expected in Q2, with inflation hurting private consumption and business spending. This has led to speculation about a possible BOJ rate hike in September and beyond. Meanwhile, JGB yields have risen across the curve, reaching 2.93% for benchmark 10-year bonds, their highest level in 30 years.
The US Federal Reserve's FOMC meeting minutes will be closely watched this week, followed by August flash PMIs from the US and globally. However, investors may already be looking past these events to next week's key releases, including the US July PCE price index report and Fed Chair Kevin Warsh's first Jackson Hole speech.