US CPI Softens, UK Economy Expands Amid Renewed AI Optimism

The US Consumer Price Index (CPI) showed few signs of accelerating in July, as the energy-price shock from the Iran war continued to fade. This development reinforces the case for the Federal Reserve to hold off on interest-rate hikes in the near term.

Economies in Europe continue to show resilience, with the UK expanding in June and France expected to maintain its momentum this quarter. In emerging markets, investors are favoring higher-yield assets, while South Korean stocks have entered a technical bull market on renewed AI optimism.

The US government sold 30-year bonds at the highest interest rate in a quarter of a century, with the yield coming in at 5.216%, the most since 2001. This was despite a drop in oil prices supporting US debt in secondary-market trading.