Daily Macro Brief
Inflation stays sticky, growth holds, Hormuz gets only a framework
U.S. inflation remains high and real spending stalled without a collapse in domestic demand; the Hormuz corridor is still only a framework, while the 30-year Treasury yield remains above 5%.
This report is based on intraday data as of 11:40 AM ET and does not reflect closing prices. Markets may have moved since publication.
Revisiting yesterday’s view
Yesterday’s data pointed to cooling U.S. demand, but today’s hard data offered a less tidy answer. Real spending did stall, yet private domestic final sales were revised higher and GDPNow raised its estimate for this quarter. The 30-year Treasury yield also moved from 5.17% in yesterday’s intraday report to 5.18%. Growth concerns remain, but the bond market is not treating them as a recession signal.
Today’s core view
The U.S. economy is developing a more difficult split. Household spending has lost momentum in real terms, while incomes and corporate profits still provide support, and inflation remains above a comfortable level. Hormuz has a diplomatic framework, but neither physical traffic nor the inventory buffer has recovered. As long as the 30-year yield stays above 5%, markets cannot treat resilient growth as an unqualified positive because stronger nominal activity can also prolong the high discount-rate environment.
The news that matters today
U.S. inflation stayed high as real spending barely grew
The BEA’s July report showed nominal income and disposable income accelerating, but price increases absorbed most of the gain and real consumption barely moved. The second estimate of second-quarter GDP held the headline rate unchanged, revised private domestic final sales higher, and reported a large increase in corporate profits for the first time. Durable-goods orders grew, while core capital-goods orders were nearly flat.
That mix changes yesterday’s relatively one-way slowdown story. Household demand is soft in real terms, but business activity and broader domestic demand have not weakened in step, denying the Federal Reserve a clean reason to ease. The next test is whether income growth turns into real consumption and whether stronger profits produce more equipment spending instead of remaining a nominal-accounting gain.
Hormuz has a temporary corridor framework, not an operating reopening agreement
Iran and Oman issued a joint statement proposing a temporary corridor and a joint mine-clearing project. Technical talks will continue over a permanent route, traffic management, and security services. Iranian officials separately said military vessels would be excluded, while the IRGC said the United States still stood in the way of an agreement. Those statements do not add up to a complete arrangement that is already in force.
The diplomatic language is more concrete than it was a few days ago, but shipping improvement still trails the text. Kpler’s Tuesday traffic estimate recovered only slightly and remained far below both its recent average and prewar norms. The cumulative loss in Qatari LNG exports also shows that alternative routes cannot quickly fill the gap. This framework becomes a supply improvement only when the temporary route starts operating, insurance terms improve, and traffic rises for several consecutive days.
Washington is discussing further measures against Canada
Bloomberg reported that the Trump administration is considering additional penalties after Canada announced its matching retaliation plan. There is no new presidential announcement, Section 338 rate revision, or final Canadian tariff schedule, so this remains a policy discussion rather than an effective measure.
The complication is timing. Companies preparing for Canada’s September implementation window now face another layer of uncertainty over the U.S. response. Additional product coverage could carry costs through steel, aluminum, machinery, consumer goods, and cross-border components. If talks resume before Canada’s measures take effect, the report may prove to be leverage rather than policy. Formal documents and customs enforcement remain the factual threshold.
Australian and Japanese data show that sticky inflation is not only a U.S. problem
Australian inflation came in above most expectations in July, while the trimmed mean failed to cool further. Japan’s service producer inflation also accelerated from a year earlier, showing that service costs are still moving through the corporate sector.
Neither release determines the direction of Treasuries, but together they leave less room for the major central banks to ease in sync. Housing and food drove much of Australia’s result, while Japan has its own service-cost dynamics. Their common feature is an uneven disinflation process. If core readings and wages cool together in the next releases, today’s data may prove noisy. If service inflation stays sticky, global long-term yields will lack a common reason to decline.
Another Russian refinery was hit, but the capacity loss is unknown
Ukraine’s General Staff said it struck Lukoil’s NORSI refinery and caused a fire. A Russian regional official confirmed damage at an unnamed industrial facility but did not identify the refinery. Damage is still being assessed, and the available evidence does not establish how much capacity, if any, is offline.
Such attacks add uncertainty to Russian refined-product supply and repair timelines, yet oil prices showed little response today. The market may expect limited damage, or it may be assigning more weight to softer demand and other supply buffers. A confirmed outage, lower exports, or further refinery damage would force a reassessment of today’s calm pricing.
The strongest counterevidence to today’s core view is the upward revision to private domestic final sales, the higher GDPNow estimate, and the absence of a sharp rise in long yields after the inflation data. If real consumption resumes growing, core inflation keeps easing, and Hormuz traffic stabilizes, inflation and supply friction will recede into the background. The opposite path matters too. If consumption and capital spending weaken together and the 30-year yield quickly falls below 5%, the market will have moved from mixed pressure to an outright growth scare.
Bond market read
The 30-year Treasury yield remains above 5%, and the two-year JGB’s RSI has reached 87.18, so today’s threshold rules call for a table. The comparison is between the 11:40 AM ET data snapshot and yesterday’s intraday report:
| Market | Maturity | 11:40 AM ET reading | Since yesterday’s snapshot |
|---|---|---|---|
| U.S. Treasury | 2-year | 4.24% | about 0bp |
| U.S. Treasury | 10-year | 4.65% | about +1bp |
| U.S. Treasury | 30-year | 5.18% | about +1bp |
| Japan government bond | 2-year | 1.684% | about -0.1bp |
| Japan government bond | 10-year | 2.897% | about +1.0bp |
| Japan government bond | 30-year | 4.040% | about +0.4bp |
The U.S. curve barely moved. Sticky July PCE inflation, flat real consumption, and a stronger revision to underlying domestic demand could have pulled rates in different directions, and instead they largely canceled out. Tuesday’s $69 billion two-year auction cleared at a 4.204% high yield with a 2.60 bid-to-cover ratio, showing orderly front-end demand. The 30-year yield at 5.18% shows that a smooth auction and growth concerns are still insufficient to remove the term premium. This afternoon’s five-year auction will test whether demand in the belly of the curve is equally stable.
Japan’s curve also moved only slightly, but the two-year RSI remains extreme while 10-year and 30-year yields edged higher. Faster Japanese service inflation and the upside Australian inflation result both weaken the case for a synchronized decline in global rates. The policy pressure is different at the long end of the U.S. curve and the front end in Japan, but the result is similar: capital remains expensive, and fiscal and inflation risk have not left the price.
Sector and price response
The cross-asset tape is cautious without becoming a broad Risk-Off move. VOO, QQQ, and SMH were all down about 0.1% intraday, the dollar index gained 0.3%, and VIX rose only 0.6% to 15.55. TLT fell 0.3%, copper lost 1.5%, and crude oil was roughly flat. Markets appear to be waiting for NVIDIA’s results after the bell and the Jackson Hole keynote on Friday instead of committing to one interpretation of the morning data.
Energy and shipping
Crude oil was at $82.39 intraday, almost unchanged for the day, down 4.0% over five days, and down 7.7% over one month. XOM fell 0.35%, CVX gained 0.57%, and OXY gained 0.15%, leaving traditional energy names without a common direction. EIA reported only a small increase in commercial crude, but gasoline and distillate stocks fell again and the SPR posted a large draw. At the same time, Hormuz traffic remains far below normal and the extent of Russian refinery damage is unknown. Oil’s lack of response shows that the market is still assigning more weight to weak demand or alternative supply. That calm will become harder to sustain if product stocks keep falling and shipping volumes fail to recover.
AI semiconductors and infrastructure
SMH fell 0.1% intraday, was down 1.0% over five days, and remained down 1.1% for the month, with no consistent direction ahead of results. NVDA lost 0.93% and AVGO fell 1.37%, pushing AVGO’s RSI down to 15.1. ARM’s RSI was also low at 20.5. Elsewhere, DELL rose 3.32%, VRT gained 2.28%, and MU added 1.09%, leaving infrastructure and memory names relatively stronger. No new operating guidance explains the split, so the pockets of strength do not establish a renewed acceleration in AI demand. NVIDIA’s comments tonight on data-center demand, product supply, and customer capital expenditure will provide the next real test for the hardware chain.
Digital assets
BTC fell 0.7% intraday to about $78,002, while remaining up 12.6% over five days and 19.4% for the month. Its RSI reached 85.97. MSTR and COIN dropped 3.48% and 3.02%, respectively, underperforming the underlying asset. U.S. spot BTC ETFs drew a net $314.3 million on August 25, while ETH ETFs drew $179.8 million, so demand still has a verifiable flow behind it. Once momentum becomes this extended, fresh inflows failing to prevent weakness in the listed proxies look more like rising crowding than a sudden deterioration in the underlying case. Continued ETF inflows with sideways price consolidation would improve the quality of the move. A simultaneous reversal in flows and momentum would make liquidity the more convincing explanation for the recent gain.
Power and uranium
VST, CEG, and NRG rose 1.06%, 1.13%, and 1.70% intraday, outperforming a flat broad market. VST and NRG were still down 14.0% and 17.78% over one month. TLT weakened today while the power names rose, so rates do not explain their relative strength. The uranium spot proxy SRUUF fell 0.3%, but remained up 6.7% over five days and 10.7% for the month, with an RSI of 70.27. Its recent trend remains stronger than traditional power names. There was no new industry disclosure connecting the two moves, making continued differentiation between capital-intensive power assets and fuel-scarcity exposure the more reasonable reading. If long yields stabilize and power names keep recovering, their recent weakness may have been mostly valuation digestion. If uranium momentum also fades, the wider power-supply theme will face a tougher test.
Agriculture
CF fell 1.93% intraday, ending its rebound from the previous few days. NTR was nearly flat and MOS slipped 0.25%. Their five-day changes were still 4.86%, 3.39%, and 8.91%, respectively, so today’s action looks more like divergence after a rally than a sector reversal. Discussion of further U.S. measures against Canada increases policy sensitivity across agricultural supply chains, but there is no formal product list or company disclosure that explains today’s prices. Flat oil also offered no new direction for nitrogen-fertilizer costs. Tariff documents, natural-gas prices, or operating data would need to move together before this divergence becomes a fundamental signal.
SPR drawdown tracker
EIA data for the week ended August 21 showed the SPR falling by 3.7 million barrels to 289.726 million. Commercial crude rose by just 95,000 barrels to 428.910 million. Gasoline fell by 2.536 million barrels to 206.842 million, while distillate fell by 2.228 million to 103.391 million. Refinery utilization increased to 97.4%. Gasoline inventories were about 6% below the five-year seasonal average, and distillate was about 14% below it.
This is not evidence of a shortage in commercial crude. It does show that the policy reserve is still supplementing the market while product buffers remain thin. EIA’s highlights text reversed the direction of the distillate move, but both its table and CSV show a decline, so the tabular data take precedence. If Hormuz traffic stays depressed, the next questions are the pace of SPR draws, whether refineries can sustain high utilization, and when product stocks stop falling.
What to watch next
August 26 at 1:00 PM ET, the five-year Treasury auction: watch the gap between the final yield and the pre-auction level, indirect bidder demand, and primary-dealer take-up. Stable demand would show that the morning’s inflation data did not disrupt financing in the belly of the curve. A weak tail would reinforce pressure from the term premium.
August 26 after the U.S. close, NVIDIA results: watch data-center growth, next-generation product supply, and capital expenditure by large customers. Strong guidance would give the relative strength in infrastructure and memory a demand-based explanation. Weaker comments on supply or customer spending would turn the pre-report divergence into a cyclical warning.
August 27 through 29, Jackson Hole, with the keynote on August 28: watch how the Federal Reserve explains sticky inflation, stalled real consumption, and stronger underlying domestic demand. Continued emphasis on price risk would make it difficult for the 30-year yield to leave the range above 5%. A clear turn toward growth risk would give the long end a better chance of confirming a sustained decline.
September 1 at about 4:30 PM ET, the API report, and September 2 at 10:30 AM ET, the EIA report: watch whether the SPR keeps falling quickly and whether gasoline, distillate, and Cushing tighten together. Stable commercial crude alongside falling product stocks would make the energy buffer look more fragile than the headline total suggests.
September 6, the OPEC+ meeting: watch whether the seven participating countries continue with the planned production adjustment. Additional supply would give weak oil prices a clearer supply-side explanation. Sticking to the plan would leave demand, inventories, and Hormuz traffic as the main variables.
September 8, Canada’s planned retaliation takes effect: watch the final product list, exemptions, customs details, and whether Washington announces further measures. A verifiable agreement before implementation would narrow the North American cost shock. If both sides proceed, business pricing and employment decisions will face a longer period of uncertainty.
Disclaimer
This article is public market commentary and personal research notes. It does not constitute investment advice.
