Morning Brew August 13 2026

Good morning.

The U.S. CPI came in broadly as expected, and for markets that was enough. The fact that inflation was not worse than feared helped take pressure off the Fed debate and pushed the implied probability of a September hike down to around 35%, from more than 60% last week. Core CPI eased to 2.5% year-on-year in July from 2.6% in June, giving risk assets a little more breathing room.

That said, the relief is not exactly clean. The U.S. national debt has crossed USD 40 trillion, or roughly USD 285,000 per taxpayer, and the latest 10-year auction cleared at the highest yield since the global financial crisis.

Wall Street closed mostly higher as the softer inflation narrative and continued AI momentum supported sentiment. The S&P 500 gained 0.3%, the Nasdaq Composite rose 0.5%, and the Dow was broadly flat. The Nasdaq 100 reached a one-month high, helped by megacap chipmakers, while the VIX fell to its lowest level since January. CoreWeave surged after reporting stronger-than-expected revenue and highlighting a very large sales backlog, while Lumentum also rallied after beating earnings expectations.

After the close, Cisco became the next AI-infrastructure read-through. The company forecast fiscal 2027 revenue above Wall Street expectations, signalling confidence that demand for AI networking gear can continue to support growth. The share reaction was less friendly, with the stock falling after an initial rise, which again tells us that expectations around anything AI-related remain extremely high.

Europe was more cautious. The Stoxx Europe 600 slipped 0.2%, ending a seven-day winning streak, as renewed Middle East tension offset the positive U.S. inflation backdrop. The DAX and FTSE 100 were slightly lower, the CAC 40 fell 0.5%, and the SMI lost 0.9%. SAP and Prosus were among the larger drags in Europe.

Geopolitics remain a source of headline risk. A major Ukrainian attack on Russia’s Black Sea port city of Novorossiysk hit warships at a naval base and forced two major grain terminals to halt operations. That keeps the Black Sea, grain flows and broader supply-chain risks on the radar.

The European drought is also becoming harder to ignore. Low water levels are a direct drag on transport, agriculture, energy production and industrial logistics. Switzerland is not immune: around 8% of Swiss imports usually come via the Rhine, so persistent disruption there matters for costs, supply chains and inflation.

In rates and FX, the setup is calm but not relaxed. U.S. 10-year yields are little changed around 4.68%, the USD Index is near 100, EUR/USD is around 1.1525, GBP/USD near 1.35, and USD/JPY around 159.25. The yen remains the most sensitive major currency pair, with intervention risk still very much alive if dollar-yen pushes higher again.

Precious metals continue to benefit from the softer inflation print and lower rate-hike fears. Gold settled 0.6% higher at USD 4,408.90 per ounce, its highest settlement since early June, before easing slightly this morning to around USD 4,383. Silver settled 1.2% higher at USD 65.555 per ounce and is trading slightly lower this morning around USD 65. The broader message remains the same: if yields and the dollar stay contained, gold and silver can keep testing the upside; if the bond market pushes back, the move may struggle.

Today’s focus shifts to U.S. PPI, jobless claims and UK GDP, with Applied Materials, Deere, Tapestry and Alibaba among the earnings names to watch. The market has received some inflation relief, but it still needs AI investment flows, resilient earnings and no major geopolitical shock to keep equities near their highs. Trade carefully.

Thursday, 13 August 2026
Macro: UK GDP; U.S. Producer Price Index for July; U.S. initial jobless claims; EIA natural gas inventories.
Central banks / speakers: Beth Hammack and Thomas Barkin speak; Fed balance sheet after the close.
Corporate earnings: Applied Materials, Tapestry, Deere, Alibaba and selected European companies.
Friday, 14 August 2026
Macro: France CPI; euro-area GDP; U.S. retail sales for July; U.S. business inventories; preliminary University of Michigan consumer sentiment; Baker Hughes rig count.
Central banks / speakers: No major central-bank decision scheduled.
Corporate earnings: No major global large-cap earnings focus.