Al-Watani: Global markets reprice inflation risks
According to the weekly money markets report issued by Kuwait Finance House, the Brent crude oil basket rose above the $100-per-barrel threshold before retreating at the close of last week’s trading, amid concerns over disruptions to major shipping routes. The surge in oil prices pushed global bond yields higher and reinforced expectations that central banks would pursue further monetary tightening.
In the United States, initial jobless claims fell by 22,000 to 187,000, marking the lowest level since 1969 and indicating continued resilience in the labor market. Meanwhile, U.S. tariffs ranging from 10% to 12.5% applied to approximately 60 economies could intensify inflationary pressures and raise business costs. The U.S. dollar strengthened alongside rising yields on U.S. Treasury bonds, closing last week’s trading at 101.468 (+0.70%) on the U.S. Dollar Index.
In Canada, the consumer price index slowed to 2.8% year-on-year from 3.2%, and fell 0.4% month-on-month. Core inflation averaged 1.85%, providing further evidence of easing underlying price pressures. The U.S. dollar closed last week against the Canadian dollar at 1.4096 (+0.52%).
In Europe, the European Central Bank kept its deposit facility rate unchanged at 2.25%, while signaling the possibility of further monetary tightening in September. Inflation in the euro area remained stable at 2.8% year-on-year, and the composite Purchasing Managers’ Index (PMI) rose to 51.9 points, indicating a return to private sector expansion. The euro closed last week against the U.S. dollar at 1.1370 (-0.60%).
In the United Kingdom, the consumer price index slowed to 2.6% year-on-year, while the composite PMI rose to 52.1 points. However, renewed energy price pressures may offset some of the recent progress in disinflation. The British pound closed last week against the U.S. dollar at 1.3325 (-0.94%).
In the Asia-Pacific region, China kept its benchmark loan prime rates for one-year and five-year terms unchanged at 3% and 3.5%, respectively. Meanwhile, total government fiscal spending fell 11.9% year-on-year in June. In Australia, employment rose by 76,300 jobs month-on-month, while inflation in New Zealand accelerated to 4.1% year-on-year, reinforcing expectations of further monetary tightening.
