Daily Brief | August 12 2025

Top News

·     In the United States, July CPI inflation showed upticks in the core component.

·     President Donald Trump signed an executive order to extend the deadline for higher tariffs on China by 90 days until November 10.

·     Business confidence in Germany fell more than expected in August, according to the ZEW Economic Research Institute, citing concerns about the trade agreement between the US and the Eurozone, as well as poor economic data for Q2 2025.

·     The World Trade Organization revised its forecast for merchandise trade growth for 2025 upward, from a contraction of -0.2% to an increase of 0.9%, due to advance purchases to avoid tariffs.

Economic Outlook

In the United States, CPI inflation in July posted gains in the core component. The Bureau of Labor Statistics reported that consumer price inflation (CPI) for the seventh month of 2025 rose 0.2% month-on-month, after growing 0.3% in June, according to seasonally adjusted figures. The uptick came from an unexpected increase in housing prices and accounted for most of the month’s advance. In its annual variation, CPI inflation stood at 2.7% in July, below the market consensus expectation of 2.8% and unchanged from the previous month, according to seasonally unadjusted figures. Core inflation, which excludes energy and food, rose 0.3% m/m and 3.1% y/y, both for the seventh month of the year. Overall, consumer prices showed mixed results, as while the general category did not accelerate, the same cannot be said for the core category, which saw increases in most of its categories and exceeded consensus expectations in its year-on-year comparison. Despite this, the federal funds rate futures market continues to discount a 25 basis point cut at the next meeting in September.

Markets and Stocks

U.S. stock index futures point to a higher opening on Tuesday in reaction to July’s inflation data, which was lower than expected.

The consumer price index rose 2.7% annually in July, below the estimated 2.8%. The report reinforced bets that the Federal Reserve will cut interest rates more than once this year, with the market assigning a probability of nearly 91% for a cut in September, up from 85% prior to the data, with higher expectations for adjustments in October and December as well.

On the trade front, President Donald Trump announced a 90-day extension of the pause on higher tariffs on Chinese goods. In the corporate arena, Intel is up 4% after a shift in Trump’s stance toward its CEO.

Later in the week, markets will be watching the producer price index (PPI) on Thursday, as well as the Jackson Hole symposium in late August, ahead of the Fed’s September monetary policy meeting.

US Treasury bond yields fell on Tuesday after lower-than-expected inflation data. The 2-year yield fell about 2 basis points to 3.73%, while the 10-year bond fell 1 basis point to 4.26%.

Oil prices remained stable on Tuesday after the United States and China extended the pause in the application of higher tariffs, easing fears that a trade escalation would affect demand for crude oil. Meanwhile, gold posted slight gains after the sharp fall in the previous session, with investors digesting US inflation data.

Corporate News

– Circle Internet Group reported solid revenue growth in its first quarter as a public company, boosting its shares by more than 6%.

– Intel shares rose before the market opened after President Donald Trump called its CEO Lip-Bu Tan a “success,” days after asking for his resignation.

– Nvidia posted a slight decline after Trump said he would be willing to allow the sale to China of a scaled-down version of its most advanced artificial intelligence chip.

– Apple fell nearly 1% after Elon Musk threatened legal action over alleged antitrust violations in the ranking of the Grok AI app, owned by his firm xAI.