TMGM Daily Market Breakfast: 2026-08-27

Morning Snapshot

• China’s Commerce Ministry said it would continue to monitor US follow-up measures on overcapacity tariffs and reserved the right to take all necessary countermeasures.
• Bank of Japan Deputy Governor Ryozo Himino said the central bank would balance incoming economic and financial data with inflation risks when deciding rates and said it should persist in raising the policy rate while adjusting monetary support in line with economic, price and financial trends.
• UKMTO said an unknown projectile struck a tanker in the Strait of Hormuz, causing a fire that was later extinguished.
• The Islamic Revolutionary Guard Corps said Iran had reached a revenue-sharing agreement with Oman on the Strait of Hormuz, according to a Bloomberg report.
• Banxico raised its 2026 GDP forecast in its second-quarter quarterly report and pushed back the timing for inflation to return to target.
• A US inflation report cited in the supplied coverage showed prices remained elevated, with core PCE holding steady and keeping attention on Federal Reserve policy.
• BNY said Washington was considering further trade penalties against Canada after Ottawa announced dollar-for-dollar retaliation to new US tariffs, including plans to double counter-tariffs on US steel and aluminum and add duties on other goods.

Overview

Trade tensions and policy signals dominated the reporting window, with China warning it reserved the right to respond to US overcapacity tariffs and a separate North American dispute intensifying as Washington considered further penalties against Canada following Ottawa’s retaliatory tariff measures.

Central bank and macroeconomic developments also remained in focus. Bank of Japan Deputy Governor Ryozo Himino reiterated that policymakers would weigh incoming data against inflation risks while continuing to adjust policy support, Banxico revised its economic and inflation projections in its latest quarterly report, and supplied coverage of US inflation said core PCE held steady with prices still elevated.

Geopolitical developments in the Middle East added to the news flow, with UKMTO reporting that a tanker was hit by an unknown projectile in the Strait of Hormuz and a separate report saying Iran and Oman had agreed on a revenue-sharing arrangement linked to the strategic waterway.

Trade Policy & International Relations

China says it reserves the right to respond to US overcapacity tariffs

China’s Commerce Ministry said it would continue to closely monitor and comprehensively assess follow-up measures taken by the United States over overcapacity tariffs. In a statement carried on Thursday, a ministry spokesperson said China reserved the right to take all necessary countermeasures against the US.

US-Canada tariff dispute escalates as Washington weighs further penalties

Supplied coverage from BNY said Washington was considering further trade penalties against Canada after Ottawa announced dollar-for-dollar retaliation to new US tariffs. According to the report, Canada plans to double counter-tariffs on US steel and aluminum to 50% and impose new 50% duties on products including dairy, furniture, clothing and electronics, affecting around USD 20 billion of annual US exports. The report said the dispute followed the collapse of recent trade talks and that Washington had already threatened 50% auto tariffs on Canada from January.

Macroeconomics & Central Banks

BoJ’s Himino reiterates data-dependent approach while backing further rate increases

Bank of Japan Deputy Governor Ryozo Himino said the central bank would decide on interest rates by balancing the need to gather information on the economy and financial conditions with the need to act in a timely way to avoid falling behind the curve on inflation. In separate supplied remarks from the same reporting period, Himino also said the BoJ should persist in raising the policy rate and adjust monetary support based on economic, price and financial trends.

Banxico raises 2026 growth forecast and delays inflation target return

Banxico released its Quarterly Report for the second quarter of 2026 and revised its forecasts for economic growth and inflation. According to the supplied report, the central bank lifted its 2026 GDP forecast while delaying the point at which inflation is projected to return to target.

Supplied US inflation coverage says core PCE held steady and prices remained elevated

A supplied report on US inflation said prices remained elevated and that core PCE held steady. The same coverage said the data kept attention on Federal Reserve policy and was cited in the context of renewed discussion around the possibility of a later rate increase.

Geopolitical Developments

UKMTO reports tanker struck by unknown projectile in Strait of Hormuz

The United Kingdom Maritime Trade Operations said an unknown projectile hit a tanker in the Strait of Hormuz. According to the supplied report, the strike caused a fire that was subsequently put out.

Report says Iran and Oman reached Strait of Hormuz revenue-sharing deal

A Bloomberg report cited in the supplied coverage said the Islamic Revolutionary Guard Corps stated that Iran had reached a revenue-sharing agreement with Oman on the Strait of Hormuz. The report said the development came as Tehran and Washington remained in a standoff over control of the strategic waterway.

Closing Summary

The reporting window was led by trade-policy friction involving China, the United States and Canada, alongside central-bank and inflation updates from Japan, Mexico and the United States. In parallel, developments in and around the Strait of Hormuz kept geopolitical and energy-route security concerns in focus.