TMGM Daily Market Breakfast: 28 August 2026

Morning Snapshot

• Federal Reserve officials at the start of the Jackson Hole symposium said policy remains restrictive but inflation is still proving stubborn, with officials citing energy, tariffs and war-related price pressures as ongoing risks.
• U.S. weekly initial jobless claims fell to 203,000 for the week ended August 22, reinforcing the picture of a still-solid labour market alongside sticky inflation readings.
• The ECB’s July meeting account showed policymakers unanimously held rates steady but signalled that another rate increase is likely unless the inflation outlook improves materially.
• Bank of Japan Deputy Governor Ryozo Himino said the central bank will balance incoming economic data with the need to act in time on inflation risks, while also saying policymakers must pay more attention to upside inflation risks than before.
• China said it firmly opposes reported U.S. consideration of an additional 7.5% tariff on Chinese imports tied to a Section 301 overcapacity investigation and reserved the right to take necessary countermeasures.
• U.S. Treasury Secretary Scott Bessent is set to press G20 finance ministers to cut off economic flows that sustain Iran and the Islamic Revolutionary Guard Corps.
• Iran said it is preparing a list of conditions for reopening the Strait of Hormuz, including an end to the regional war, keeping energy supply risks in focus despite reports of improving Gulf crude flows.
• Australian inflation data continued to support Reserve Bank of Australia tightening expectations, with July headline CPI at 3.5% year-on-year and trimmed mean inflation at 3.6%.
• Nvidia’s earnings and guidance lifted U.S. equity futures, with S&P 500 futures up 0.48% and Nasdaq futures up 0.83% overnight, while Asian tech-linked equities also advanced.
• Charles Schwab said it plans to add spot trading in Solana, Avalanche and Chainlink to Schwab Crypto in the coming months, extending a platform that already offers Bitcoin and Ethereum.

Market Developments

Foreign Exchange

The U.S. Dollar Index rose as much as 0.3% to 99.165, its biggest daily gain in nearly four weeks, while EUR/USD dropped to 1.1650 after the U.S. PCE inflation reading. AUD/USD traded around 0.7200 after a four-day winning run, USD/JPY hovered around 159.30-159.50, and USD/KRW fell 0.3% to near 1,380 as the won revisited an 11-month high.

Energy & Commodities

WTI traded around $80.90 early in Europe before recovering to around $82.70 in Asian trading, while Brent held near $87 per barrel as markets weighed diplomatic signals on the Strait of Hormuz against renewed geopolitical tensions and tight U.S. fuel inventories. Gold edged 0.25% higher on Thursday and had earlier rebounded from the weekly low around $4,583.

Equities & Digital Assets

Nvidia rose 4.7% after hours after reporting a revenue beat and guiding current-quarter revenue to $108 billion versus estimates of $105.2 billion, helping lift S&P 500 futures 0.48%, Nasdaq futures 0.83% and Dow Jones futures 0.18%. In Asia, the Kospi rose 1.49%, the CSI 300 gained 0.50%, the Shanghai Composite added 0.60% and the Nikkei rose 0.18%, while Solana, Chainlink and Avalanche gained 13%, 6% and 4% respectively after Charles Schwab outlined plans to add spot trading in the three tokens.

Macroeconomics & Central Banks

Fed Officials Say Policy Must Stay Restrictive as Inflation Risks Persist

Federal Reserve officials used the opening of the Jackson Hole symposium to underline that inflation remains the central policy challenge even after the latest PCE report. Boston Fed President Susan Collins said the recent PCE reading does not change her view that policy is restrictive and should continue to deliver gradual disinflation.

Cleveland Fed President Beth Hammack said “now” is the time to tackle inflation and later added that the labour market is broadly in balance but policy still needs to remain restrictive. Kansas City Fed President Jeffrey Schmid said inflation remains stubborn and warned that the energy shock is leaking into the broader economy, while Chicago Fed President Austan Goolsbee said the economy remains broadly stable but cautioned that tariffs, war-related price increases and political interference with the Fed could complicate the inflation outlook.

The comments came after July U.S. inflation data showed headline PCE rising 0.2% month on month and 3.7% year on year, above the 3.6% consensus, while core PCE rose 0.2% on the month and held at 3.3% on the year. Real personal spending was unchanged in July, and U.S. initial jobless claims fell to 203,000 in the week ended August 22, adding to evidence that the labour market remains firm even as inflation stays above the Fed’s 2% target.

ECB Minutes Keep September Tightening in Play

The European Central Bank’s account of its July 22-23 meeting showed policymakers unanimously decided to leave rates unchanged but remained focused on upside inflation risks. The minutes indicated that another rate increase is likely unless the price outlook improves materially.

The account also showed officials believed pre-emptive action could be justified if inflation expectations became unanchored, underlying price pressures accelerated or companies moved to a faster pace of price adjustment. That left the ECB’s policy bias tilted toward further tightening even after a hold decision.

Separate commentary on the minutes reinforced that view, with expectations centred on a quarterly pace of 25-basis-point increases rather than a faster tightening cycle. One outlook cited hikes in September, December and March 2027, which would take the deposit rate to 3%, though it also noted risks were tilted toward fewer moves if inflation pressures ease.

BoJ Deputy Governor Himino Signals Greater Focus on Upside Inflation Risks

Bank of Japan Deputy Governor Ryozo Himino said the central bank will set interest rates by balancing the need to gather more information on the economy and financial conditions against the need to act in a timely way to avoid falling behind the curve on inflation. He also said the BoJ needs to pay more attention to upside inflation risks than before.

Himino said the BoJ does not need to wait for the full data needed to assess the impact of past rate increases before moving again, a remark that added to the impression of a more flexible and potentially faster tightening approach. Commentary around the speech said the BoJ has also increased its emphasis on the role of foreign exchange in the inflation outlook, aligning more closely with the Ministry of Finance’s concern over yen weakness.

Tokyo inflation data later strengthened the policy backdrop. USD/JPY was reported around 159.30 in early Asian trading as the yen firmed after Tokyo CPI figures bolstered the case for a September move, while separate reporting said market pricing for a September hike had risen to just under 80% from roughly 65% on August 7.

Australian Inflation Keeps RBA Tightening Expectations Elevated

Australian inflation data continued to support expectations that the Reserve Bank of Australia may need to tighten policy further. July headline CPI rose 3.5% year on year, above expectations of 3.3%, while trimmed mean inflation held at 3.6% instead of easing to 3.5%.

The inflation data followed hawkish August RBA minutes that said the board debated whether pre-emptive tightening might be necessary because of upside risks to its inflation forecasts. That repricing helped push AUD/USD to around 0.7200 in Asian trading on Friday after a four-session winning streak.

Research cited in the reporting said AUD/USD had risen 2.2% in August through August 26 after a 1.5% gain in July, leaving the Australian dollar near year-to-date highs and the best-performing G10 currency in 2026, up 7.6% for the year.

Bank of Korea Rate Hikes Lift Won to 11-Month High

The South Korean won strengthened after back-to-back Bank of Korea rate increases, with USD/KRW falling 0.3% to near 1,380 during Asian trading. The move took the pair back to an 11-month low, reflecting firmer support for the Korean currency after the BoK’s recent tightening steps.

Trade Policy & Geopolitics

China Pushes Back on Possible New U.S. Tariffs While Keeping Dialogue Open

China’s Commerce Ministry said it firmly opposes reported U.S. consideration of an additional 7.5% tariff on Chinese imports linked to a Section 301 investigation into alleged overcapacity across 16 economies, calling the move unilateral and protectionist.

Beijing said it will continue to closely monitor and comprehensively assess any follow-up U.S. measures and reserved the right to take all necessary steps in response. At the same time, China’s Foreign Ministry said Beijing and Washington remain in contact over arrangements for possible interaction between their leaders later this year.

The combination of a tariff warning and continued high-level communication pointed to a dual-track approach in which China resists additional trade pressure while trying to preserve broader diplomatic engagement ahead of a possible Trump-Xi summit.

U.S. Treasury to Press G20 on Cutting Iran Funding

U.S. Treasury Secretary Scott Bessent is set to ask finance ministers at the G20 meeting to help cut off economic flows that sustain the Iranian regime and the Islamic Revolutionary Guard Corps. The initiative places sanctions enforcement and financial pressure on Iran high on the G20 agenda at a time of wider regional tensions.

U.S.-Canada Tariff Fight Deepens

Trade tensions between Washington and Ottawa intensified after U.S. tariffs of 50% on a range of Canadian goods took effect following failed negotiations on a trade agreement. In response, Canadian Prime Minister Mark Carney announced tariffs of up to 50% on around $20 billion of U.S. imports.

The escalation added to concerns about the economic impact of the dispute on Canada, even as resilient oil prices provided some support to the Canadian dollar.

Energy, Commodities & Corporate Developments

Hormuz Reopening Conditions and Uneven Oil Flows Keep Supply Risks in Focus

Iran’s Security Chief Mohsen Rezaei said Tehran is preparing a list of conditions to reopen the Strait of Hormuz in response to a request by mediators, with those conditions including an end to the war in the region. The remarks kept attention on the waterway even as other reports pointed to a partial recovery in Gulf crude shipments.

Market reporting showed a sharp swing in oil prices across the session. WTI traded around $80.90 in early European dealing on Thursday as hopes for a reopening of the strait improved, then later held around $82.70 in Asian trading on Friday after two days of gains. Brent was reported near $87 per barrel, well below its late-April peak above $120.

Shipping and inventory data painted a mixed picture. Kuwaiti and Qatari crude shipments were reported to have recovered to around 70% of pre-conflict levels, lifting total Hormuz flows to roughly 7 million to 8 million barrels a day from about 4 million in mid-July. At the same time, commentary cited scepticism over claims that the strait had been fully cleared of mines and noted that U.S. Energy Information Administration data showed very large drawdowns in distillate and gasoline stocks, with distillate inventories at their lowest seasonal level on record.

Nvidia Earnings Lift Futures as Schwab Expands Crypto Offering

Technology shares got a fresh boost after Nvidia reported a moderate revenue beat and guided current-quarter revenue to $108 billion, ahead of estimates of $105.2 billion. Nvidia shares rose 4.7% after hours, helping lift S&P 500 futures by 0.48%, Nasdaq futures by 0.83% and Dow Jones futures by 0.18%.

The stronger tone extended into Asia, where the Kospi rose 1.49%, the CSI 300 gained 0.50%, the Shanghai Composite added 0.60% and the Nikkei rose 0.18%. Reporting also cited supportive after-hours moves in Salesforce and CrowdStrike, with CrowdStrike up nearly 10%.

In digital assets, Charles Schwab said it plans to add spot trading in Solana, Avalanche and Chainlink to Schwab Crypto in the coming months. The platform, launched in May 2026, already offers direct trading in Bitcoin and Ethereum. Following the announcement, Solana rose 13%, Chainlink gained 6% and Avalanche added 4%.

Upcoming Key Events

• Federal Reserve Chair Kevin Warsh Speech at Jackson Hole — Friday, time not specified: Warsh is due to speak at the Jackson Hole symposium, where markets will look for policy signals after the latest U.S. inflation data and Fed official comments.
• U.S. Nonfarm Payrolls Annual Revision and Final University of Michigan Consumer Sentiment — Friday, time not specified: The U.S. data calendar includes the annual revision to nonfarm payrolls and the final University of Michigan consumer sentiment reading.
• Germany Labour Market Report and Final Euro Area Consumer Confidence — Friday, time not specified: Germany’s labour market report and the final euro area consumer confidence reading are due, alongside a speech by ECB Executive Board member Isabel Schnabel.
• Japan Tokyo Inflation and Activity Data — 23:30 GMT: Japan’s schedule includes Tokyo inflation figures, the unemployment rate, consumer confidence, housing starts and construction orders.