Overview
- Asian markets rose on Friday and looked set for a weekly gain after investors reacted to softer U.S. data by reducing bets on an imminent Fed hike, with tech and AI-linked shares leading gains.
- July readings showed CPI up 0.1% month-on-month and about 3.4% year-on-year, PPI was flat, and payrolls fell by roughly 23,000, a sequence that drove CME FedWatch odds for a September hike down to the mid-30s–40% range.
- U.S. Treasuries rallied on the shift in Fed expectations, but a weak 30-year bond auction tempered the move and left some pressure on longer-term yields.
- Geopolitical risks kept oil prices elevated in the mid-$80s per barrel because of restricted shipping through the Strait of Hormuz and U.S. threats to Iran, and the yen trading near 159–160 raised fresh prospects of Tokyo currency intervention.
- Policy uncertainty remains because some Fed officials, including Cleveland Fed chief Beth Hammack, still argue for higher rates, so investors will watch August inflation prints, Middle East developments, and Treasury auctions for clues to the next market swing.