TMGM Daily Market Breakfast: 31 August 2026

Morning Snapshot

U.S.-Iran tensions escalated after U.S. strikes on Iranian launchers near the Strait of Hormuz and an Iranian retaliatory attack on U.S. targets in Jordan, keeping Middle East supply risks in sharp focus.
Oil prices moved higher as the latest Gulf tensions raised concerns over Strait of Hormuz shipments, with Brent briefly rising above $90 a barrel and WTI trading above $85.50.
Federal Reserve Chair Kevin Warsh’s Jackson Hole remarks revived expectations of a September rate increase, with fed funds futures pricing roughly a 58% to 60% chance of a 25 basis-point move.
U.S. Treasury yields rose across the curve after the Fed repricing, while the dollar regained support even as some currency pairs steadied in early Monday trading.
July U.S. personal income rose 0.4% and personal spending increased 0.2%, while headline PCE inflation held at 3.7% and core PCE remained at 3.3%.
Attention is turning to this week’s U.S. labour-market releases, with consensus for August nonfarm payrolls ranging from about 55,000 to 80,000 and the unemployment rate seen at 4.1%.
Eurozone inflation data are now central to the ECB outlook, with August flash CPI expected at 3.3% year-on-year and markets pricing a near-certain September rate increase.
German August HICP is expected at 3.1% year-on-year, with investors also watching whether underlying price pressures across Europe continue to ease.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Market Developments

Energy

Crude prices strengthened as Middle East tensions intensified, with ICE Brent briefly moving back above $90 per barrel in early Asia trading and WTI trading around $85.50, up more than 3% on the day at one stage.

Rates & FX

The dollar recovered after Kevin Warsh’s Jackson Hole speech and Treasury yields rose across the curve as markets restored meaningful odds of a September Fed rate increase; the DXY was later quoted near 99.58, down 0.1% in early Asian trading after Friday’s jump.

Precious Metals

Gold eased in early Monday trading, with spot prices drifting below $4,450 and trading near $4,445 as higher Fed hike expectations weighed on the metal.

Geopolitics & Energy

U.S.-Iran Exchange Raises Risks Around Hormuz Shipping

Tensions between the United States and Iran escalated again after U.S. Central Command struck Iranian rocket launchers that were said to be preparing to send mines into the Strait of Hormuz. The strikes marked the first direct military exchange between the two sides in about a month and renewed concerns over the security of one of the world’s most important oil transit routes.

Iran’s Islamic Revolutionary Guard Corps later said its aerospace forces had carried out retaliatory drone and ballistic missile strikes against U.S. targets at two air bases in Jordan, and warned it would respond decisively to any further hostile military aggression. The latest exchange added to fears that a broader confrontation could disrupt shipping through the Gulf and intensify pressure on global energy markets.

Oil Climbs as Gulf Supply Concerns Deepen

Oil prices opened the week stronger as the latest U.S.-Iran confrontation sharpened concerns about supply flows through the Persian Gulf. ICE Brent briefly moved back above $90 per barrel in early Asia trading, while WTI traded around $85.50 and was more than 3% higher on the day at one stage, after also being quoted near $84.40 and $83.60 earlier in the session.

The market reaction reflected concern that further escalation could leave shippers more hesitant to navigate the Strait of Hormuz. Reports cited in the market put flows through the strait at 6 million to 8 million barrels a day, although one estimate used an average of 5 million barrels a day. Additional supply stress came from Russia’s decision to extend its diesel export ban by another month until the end of September 2026, adding to pressure in an already tight diesel market.

Separate reports also pointed to claims involving a supertanker struck by mines in Hormuz, underscoring how quickly security concerns in the waterway have returned to the centre of energy-market pricing.

Macroeconomics & Central Banks

Warsh Revives September Fed Hike Debate

Federal Reserve Chair Kevin Warsh’s Jackson Hole speech prompted a sharp repricing of near-term U.S. monetary policy expectations. Warsh said the Fed still has “work to do” if underlying inflation is not moving toward the 2% objective clearly and with sufficient speed, reinforcing an inflation-first stance and easing doubts that he would resist tighter policy.

Fed funds futures moved to price roughly a 58% to 60% chance of a 25 basis-point rate increase at the September 15-16 FOMC meeting, up from about 35% before the speech. Markets also moved to imply around 60 basis points of tightening over the next 12 months. The repricing lifted the dollar and pushed Treasury yields higher across the curve.

The speech was also read alongside other hawkish Fed commentary. Beth Hammack, who voted for a rate increase at the last meeting, called for immediate action and said waiting risked creating further pain. She said inflation could end the year around 3% and that current financial conditions were not restrictive.

Warsh did not provide detailed forward guidance or a formal reaction function, leaving incoming data central to the September decision. This week’s U.S. ISM releases and labour-market data are now the main scheduled tests before the next inflation report on September 11.

U.S. Income and PCE Data Keep Inflation Focus Intact Ahead of Payrolls

Fresh U.S. data showed nominal personal income rose 0.4% in July, double the median forecast of 0.2%, while nominal personal spending increased 0.2%, led by a 0.6% gain in services. After adjusting for inflation, disposable income rose 0.4% and real spending was flat.

The inflation data did little to settle the Fed debate. Headline PCE inflation held at 3.7% year-on-year in July, unchanged from June and slightly above the 3.6% consensus, while core PCE was unchanged at 3.3%, matching expectations. On a monthly basis, both headline and core PCE rose 0.2%.

Attention is now shifting to the August labour-market report. One estimate put nonfarm payroll growth at about 80,000, while market consensus cited elsewhere was 55,000 after a 23,000 decline in July. The unemployment rate is widely seen holding at 4.1%, with labour-force participation expected by one estimate to edge up to 61.5%. Other labour indicators due this week include JOLTS on Tuesday and ADP private payrolls on Wednesday, with ADP seen at 47,000 after 44,000 in July.

Eurozone Inflation Data Take Centre Stage for ECB September Decision

Eurozone inflation releases this week have become the key test for European Central Bank rate expectations. August flash CPI is forecast at 3.3% year-on-year, up from 2.9% in July, largely on higher energy prices, while core inflation is expected to hold at 2.5% for a second straight month.

Markets have already moved to price a September ECB increase as close to certain. One estimate put the probability of a 25 basis-point move at 97%, while another said swaps had virtually fully priced a rise to 2.50% on September 10 and around 60 basis points of tightening over the coming 12 months. The ECB’s estimated neutral range was cited at 1.75% to 3.00%.

German inflation data are also in focus ahead of the euro-area release. German August HICP is expected at 3.1% year-on-year, up from 2.8%, while recent upside surprises in France and Spain have reinforced hawkish arguments inside the ECB debate. At the same time, services inflation has been described as easing across Europe and some policymakers have noted there is still no clear evidence of second-round wage effects.

The ECB’s pre-decision quiet period is approaching, leaving inflation and PMI releases as the main remaining scheduled signals before the September meeting.

Upcoming Key Events

U.S. JOLTS Job Openings — Tuesday: July JOLTS data are due this week and are being watched for evidence on the low-hire, low-fire labour-market backdrop.
U.S. ADP Private Payrolls — Wednesday: August ADP private payrolls are seen at 47,000 after 44,000 in July.
Eurozone Flash CPI — Tuesday: August flash inflation data are expected to show headline CPI at 3.3% year-on-year and core CPI at 2.5%, a key release for ECB September rate expectations.
U.S. Nonfarm Payrolls — Friday: August payrolls are expected to rebound after July’s decline, with estimates ranging from 55,000 to 80,000 and the unemployment rate seen at 4.1%.
U.S. CPI — 2026-09-11: August CPI data are due on September 11 and were cited as the decisive inflation test ahead of the September FOMC meeting.