In today’s briefing:
- UK: Ascending Inflation’s Twin Peak
- EA: Bouncing Back To Hike
- Oil futures: Crude firmer as MoU deadline ends without resolution
- ID: Rupiah First, Rates on Hold
- Iron Ore: Weak Steel Margins, CMRG Pressure and SLX Set Up a Tug-Of-War
- Oil futures: Crude extends gains as peace deal remains elusive
- Dry Bulk Freight Derivatives Chartbook (H1 2026 and Beyond)
- CX Daily: China’s AI Component Powerhouse Faces Geopolitical Reckoning
- Morning Market Notes: Crude Oil Trading Range Peak Remains $88.00 Per Barrel, Basis October NYMEX
UK: Ascending Inflation’s Twin Peak
- Inflation began to ascend to its twin peak in July, despite failing to attain the target in between. Energy utility prices belatedly increased, but only add ~8bps to the y-o-y.
- The gas futures curve is back around its peak. Premature hope for the supply shock’s end helps contain October’s rise, postponing the peak pressure to January.
- Delayed pass-through of energy costs, food prices, and airfares should drive this peak much higher than most economists assume, pushing the BoE to hike once begrudgingly.
EA: Bouncing Back To Hike
- EA inflation bounced back from the brief relief in June as energy price pressures intensified again through July, but it wasn’t quite enough to round up from 2.94%.
- Food prices remain incredibly benign, and underlying inflation measures are contained, despite a bounce back from levels that had been too low in May and June.
- A further rise is likely in August, and the ECB isn’t taking any chances. It seems set to hike again in September, reinforcing the target, unlike its dovish peers.
Oil futures: Crude firmer as MoU deadline ends without resolution
- Crude futures opened the week firmer as the standoff between the US and Iran continued without resolution, leaving just a handful of tankers passing through the critical chokepoint.
- Oct26 ICE Brent futures were 2.4% higher at $90.66/b (2030 BST), while Sep26 NYMEX WTI was at $84.40/b , also up 2.4% versus Friday’s settle.
- Tensions continued to simmer after the US threatened Iran with an “indefinite” blockade and further financial sanctions , a move which potentially extends the conflict and adds to supply worries.
ID: Rupiah First, Rates on Hold
- Bank Indonesia holds its policy rate at 5.75%, in line with consensus, prioritising Rupiah stability and a high real rate over near-term easing.
- Expanded FX hedging incentives and macroprudential liquidity tools aim to absorb shocks before rate moves, signalling a preference to hold rates at a high level.
- Future rate shifts hinge on Fed tightening, Rupiah resilience and inflation staying near the centre of the target despite global commodity and FX risks.
Iron Ore: Weak Steel Margins, CMRG Pressure and SLX Set Up a Tug-Of-War
- Chinese steel mill margins are deteriorating, raising the risk of August maintenance, lower hot-metal output and weaker iron ore demand.
- CMRG is tightening control over China’s iron ore procurement, with restrictions hitting Australian miners and contributing to weaker shipments.
- Across SLX’s top 10 holdings, 7/10 beat EPS estimates, while 8/10 carry positive average analyst price target upside.
Oil futures: Crude extends gains as peace deal remains elusive
- Crude futures extended the firm start to the week on Tuesday as fading prospects for peace talks kept markets on edge after Monday’s expiry of the US-Iran MoU.
- Oct26 ICE Brent futures were 0.1% higher at $90.95/b (2030 BST), while Sep26 NYMEX WTI was at $84.06/b , up 0.4% versus Monday’s settle, though both benchmarks had traded higher earlier in the day.
- On Monday, an unnamed senior Iranian official told Reuters that Tehran will shift to a “fully offensive” military position after stalled efforts to negotiate a permanent end to the war, with Washington ruling out extending a temporary ceasefire agreement.
Dry Bulk Freight Derivatives Chartbook (H1 2026 and Beyond)
- Capesize futures gained 87% in H1 2026, with June’s 35% reversal erased as Middle East tensions eased, before prices recovered in July.
- Chinese commodity demand remains a key support: YTD iron ore imports rose 6.4%, aluminium ores 18%, while longer Guinea- and Brazil-origin voyages tighten effective Capesize supply.
- Options positioning remains more bullish for Capesize: H1 put/call ratio was 0.38 versus 0.47 for Panamax, with August Capesize calls nearly three times puts and 40k a key upside strike
CX Daily: China’s AI Component Powerhouse Faces Geopolitical Reckoning
- In Depth: China’s AI Component Powerhouse Faces Geopolitical Reckoning
- In Depth: Millions Tied Up as Hong Kong IPO Fund Network Runs Into Trouble
- Head of Zheshang Bank’s Lucrative Bills Business Taken Away by Authorities
Morning Market Notes: Crude Oil Trading Range Peak Remains $88.00 Per Barrel, Basis October NYMEX
- Oil prices increased further yesterday, with the prompt NYMEX crude oil contract having closed in on our trading range peak of roughly $88.00 per barrel.
- At this juncture we see no reason to amend the upper end of our long-standing trading range where we would recommend selling small volumes of NYMEX crude with tight stops.
- However, with September going off the board today and October NYMEX crude oil trading at a roughly $4.00 per barrel discount to our peak, we will remain patient.
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