Follow up – Kiwi dips as jobless rate climbs ahead of RBNZ’s September decisionGold climbs for third day as Hormuz deal hopes ease inflation fears, holds above $4,100US, Iran and Oman near interim deal to reopen Strait of HormuzChina Rating Dog PMI (July 2026) 50.4 (expected 53.7)More – BOJ minutes show board debated mounting price risks despite June hikeUS officials reviewing an air-traffic safety incident involving a military helicopter carrying TrumpNZ commodity prices post biggest monthly fall since 2022 on dairy slidePBOC sets USD/ CNY mid-point today at 6.7889 (vs. estimate at 6.7480)Japan services PMI: Growth slows in July as selling prices near record highRate hike watch – Fed’s Schmid says tighter policy needed as inflation stays too highSituational Awareness backers included Silicon Valley elite before AI bets souredBank of Japan June meeting minutes: 7-1 vote to raise rate to 1.0% amid inflation riskIran rejects US claim of open southern route through Strait of HormuzJapan real wages rise for sixth straight month, supporting BoJ rate hike (eventually) caseAustralia services PMI hits six-month high of 53.6 as new orders returnNew Zealand unemployment rate jumps to 5.6% vs. 5.4% expected and 5.3% priorICYMI – Bank of Korea to resume gold buying after 13 years, not large buying.Israeli official says Trump wants Iran deal ‘at any cost’, report saysUS Treasury Secretary Bessent waffling on about the yen and BoJOil update: Iran and Oman said to have agreed broad outlines of strait reopening dealOil recap – Oil settles around 5% lower as Iran talks raise hopes on Hormuz reopeningOil: Private inventory survey shows a headline crude oil build vs draw expectedStocks surge to records as Wall Street scrambles to explain the rally after the factS&P and NASDAQ indices close at new record levelsAMD beats on Q2 earnings and revenue, guides Q3 above estimatesSpaceX posts $7.8bn revenue in debut earnings, beats estimates on Starlink growthBooking Holdings shares jump after hours as Americans continue to travel
Key points:
Iran and Oman reported near agreement on Hormuz reopening mechanics, with Iran managing inbound traffic and Oman outbound plus a service fee, before later reports said no deal had been finalised yetIran also weighing a voluntary fund to charge European states for strait upkeepSenior Israeli official said Trump wants an Iran deal at any cost, per Al ArabiyaSaudi Arabia reportedly struck Yemen’s capital SanaaAxios later reported the US, Iran and Oman are nearing an interim deal targeting a Wednesday announcement, with a 60-day arrangement giving Iran greater control over strait traffic than before the war and no tolls initiallyTrump told Fox News talks with Iran are going well and the strait will open soon, adding the “heavy blow” has not yet comeOil eased and gold surged back above $4,130 as diminishing energy price risk trimmed inflation and Fed rate hike expectationsNZD fell as New Zealand’s unemployment rate hit an 11 year high, even as other details of the report were less downbeatANZ’s NZ World Commodity Price Index fell 3.9% in July, its largest monthly drop since November 2022, though still up 0.5% on the yearYen strengthened after a garbled Bessent message on the BoJ via NHK capped USD/JPY, alongside data showing Japan real wages rose for a sixth straight month and BoJ minutes supportive of further hikesChina’s RatingDog services PMI slumped to 50.4 in July from 54.1, well below the 53.7 expected, the weakest reading since September 2024Kansas City Fed’s Schmid said tighter policy is needed as inflation remains too high, and that AI investment is adding to price pressuresThe PBOC set the USD/CNY reference rate at a fresh 41 month high for the yuanSpaceX posted Q2 revenue of $7.8bn, up 92% year on year and above estimates, in its first results since June’s IPO, with the AI segment loss narrower than forecastAMD beat on Q2 EPS and revenue and guided Q3 revenue above consensus
Detail:
Diplomatic developments around the Strait of Hormuz dominated the session, with the narrative refining as the day progressed. Early reports suggested Iran and Oman had largely agreed on the mechanics of reopening the strait, with Iran set to manage inbound traffic and Oman handling outbound shipping alongside a proposed service fee, though later reports cautioned that a final agreement had not yet been reached. Iran was also said to be weighing a voluntary fund that would see European states contribute toward the cost of maintaining the strait. Adding a political dimension, a senior Israeli official told N12, as reported by Al Arabiya, that President Trump wants a deal with Iran at any cost, describing the gap between peace and war under the current administration as narrow as the distance between letters on a keyboard. Separately, Saudi Arabia was reported to have struck Yemen’s capital, Sanaa, a reminder that regional tensions remain far from fully resolved even as the Hormuz diplomacy advances.
The picture firmed up later in the session when Axios reported the US, Iran and Oman are nearing an interim deal to reopen the strait, targeting a Wednesday announcement that would restore the US-Iran ceasefire and pave the way for resumed nuclear talks. Under the reported terms, Trump has paused planned military strikes to allow diplomacy to continue, and the 60 day arrangement would grant Iran greater control over strait traffic than it held before the war began, with no tolls charged during the initial period. Trump himself later struck an optimistic tone in comments to Fox News, saying discussions with Iran are going very well and that the strait will open very soon, while noting that the “heavy blow” has not yet come and expressing hope it would not be needed.
The shifting but broadly positive tone on Hormuz weighed on oil, which eased modestly, while gold surged back above $4,130 an ounce as the diminishing risk of higher energy prices trimmed inflation expectations and, with them, the perceived odds of further Federal Reserve tightening. The move underscores how closely gold has been tracking the ebb and flow of the diplomatic process this week, even as central bank buying and Asian ETF inflows continue to provide a structural floor beneath prices.
Currency markets saw their own share of volatility. The New Zealand dollar fell after data showed the unemployment rate climbing to an 11 year high, even though other details within the report, including a modest beat on employment growth, were less discouraging. Separate data from ANZ showed New Zealand’s World Commodity Price Index fell 3.9% in July, the largest monthly drop since November 2022, though the index remains up 0.5% on the year. The yen, meanwhile, found support from a somewhat garbled Bessent message on the currency and the Bank of Japan via an NHK report, which was nonetheless enough to cap USD/JPY during the morning session. Additional support came from data showing Japanese real wages rose for a sixth consecutive month, along with Bank of Japan June meeting minutes that showed policymakers debating mounting price risks even as they delivered the June hike, reinforcing the sense that the pendulum is swinging toward a further rate increase in September.
China provided a more downbeat data point, with the RatingDog China Services PMI falling sharply to 50.4 in July from 54.1 in June, well below the 53.7 expected and the weakest reading since September 2024, pointing to a notable slowdown in domestic demand.
On the central bank front, Kansas City Fed President Jeff Schmid reiterated his hawkish stance, saying tighter monetary policy is needed to bring inflation, which he described as too high, back to the 2% target, and adding that artificial intelligence related investment is also contributing to price pressures. Separately, the People’s Bank of China set its daily USD/CNY reference rate at a fresh 41 month high for the yuan.
In earnings news, SpaceX delivered a strong debut as a public company, with second quarter revenue of $7.8 billion, up 92% year on year and comfortably ahead of the $6.81 billion estimate, while its AI segment posted a narrower than expected operating loss of $1.26 billion against a forecast $2.39 billion loss, and adjusted EBITDA reached $3.5 billion. AMD also topped expectations, with adjusted earnings per share of $1.66 versus $1.62 expected and revenue of $11.54 billion beating the $11.31 billion forecast, while holding its operating margin at 27.0% and guiding third quarter revenue to a range of $12.70 billion to $13.30 billion, above the $12.51 billion consensus.
This article was written by Eamonn Sheridan at investinglive.com.