US Inflation Slows Down: Bond Yields Ease Amid Energy Tensions

Macro & Central Banks

• US Inflation Slowdown: The US Consumer Price Index (CPI) stood at 3.4% year-over-year in July (down from 3.5% in June), with a moderate monthly increase of 0.1%. Core CPI receded to 2.5% YoY (+0.2% MoM), dampening Federal Reserve rate hike expectations.
• Bond Yield Relief: The US 10-year Treasury yield dropped to 4.656% (-2.8 bps) while the 2-year yield fell to 4.172% (-4.6 bps). In Europe, the German 10-year Bund yield slipped 2 bps to 3.157%.
• US Budget Deficit: The cumulative US deficit reached $1,800 billion over the first ten months of the fiscal year, driven by a $432.3 billion deficit in July amid elevated public spending ($766.3 billion).

Energy & Geopolitics

• Strait of Hormuz Bottlenecks: Maritime traffic remains near a three-month low, averaging roughly 13 vessels per day—down 90% from pre-conflict levels. Donald Trump stated that the US exercises "total control" over the area.
• Crude Oil Sector: Brent crude stabilized at $88.90 per barrel. In Saudi Arabia, a supertanker was spotted loading at the Ju'aymah terminal for the first time in a month.
• US Electricity Demand: Power generation across the US rose 7.04% year-over-year during the week ending August 8, led by the New England region (+26.9%).

What to Watch Today

• Equity and Yield Curve Reaction: Continued order flow repositioning on US and European interest rate futures following the CPI report.
• Energy Developments: Tracking crude oil prices and their potential spillover effect on key stock index futures (NQ, ES, FDAX) amid Middle Eastern geopolitical developments.