By Mike Dolan
Aug 13 (Reuters) -
What matters in U.S. and global markets today
By Mike Dolan, Editor-at-Large, Finance and Markets
There were no fireworks in the July consumer inflation report, offering marginal relief to markets wary of an upside surprise.
Annual headline and core rates ticked down as expected, although the monthly core price gain was a touch hotter than forecast.
I'll get into that and more below.
But first, check out my latest column, probing AI's impacts on inflation and jobs so far.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
BRIEF RELIEF
Interest rate markets exhaled a bit after the CPI print, knocking the chances of a Federal Reserve rate hike next month just below 50%.
Short-term Treasuries took some solace too, although that didn't prevent the government having to sell 10-year debt at the highest yield in almost 20 years in yesterday's auction. The yield curve from two to 30 years steepened slightly.
A game changer? Hardly. That's partly because the next instalment of the overall inflation picture is due today, with the producer price report containing important components of the Fed's favored PCE gauge, such as airfares.
And both core and headline PCE inflation are expected to have remained above 3% in July. What's more, the rebound in oil prices since July could aggravate August inflation readings, and the Fed will have that month's CPI report in hand before it meets in September.
On the energy front, Brent crude was still hovering under $90 per barrel on Thursday amid the ongoing impasse in the Gulf, albeit a tad down from the week's peaks.
Elsewhere, Japan's wholesale inflation picture looked angry too, with annual rates still running above 7% in July amid big energy price gains. Monthly rates were softer than expected, though, and the jury is out on how the data could impact the Bank of Japan's decision making.
Otherwise, world markets have slipped into the August doldrums, with major stock indexes little changed and Wall Street still near records after Wednesday's earnings-day surges in AI-related firms CoreWeave and Super Micro.
Chart of the day
Helped by a surprising jump in June GDP as the World Cup lifted spending, Britain's economy expanded at a brisk 0.4% in the second quarter of 2026.
That was a touch cooler than the first quarter, but the economy is clocking an annualized growth rate of 2.0% for the first half of the year, and it was the second quarter in a row that the UK was the fastest-growing G7 economy.
While the second half of the year tends to be slower, the first half challenges the narrative of a struggling UK economy, and will act as a tailwind for new Prime Minister Andy Burnham in his first government budget plan in October.
Today's events to watch
• U.S. July PPI (8:30 a.m. EDT), weekly jobless claims (8:30 a.m. EDT)
• U.S. 30-year bond auction (1 p.m. EDT)
• Cleveland Fed's Beth Hammack and Richmond Fed's Thomas Barkin speak
Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(By Mike Dolan; Editing by Hugh Lawson)
