• Indian rupee intervention returns as USD/INR hovers near all-time high
• UKMTO report a vessel hit by a projectile while sailing out of the Strait of Hormuz.
• Analysts say that a surprise China LPR cut cannot be ruled out this week
• BHP CEO plays down Canada uranium talk, stays focused on four pillars
• Westpac says dollar’s structural headwinds outweigh recent resilience, see EUR/USD and GBP/USD higher
• ING says heavy tone in Treasuries has further to run as truce lapses
• ICYMI: ETF flows return to gold as Saxo flags 289-tonne central bank demand
• Australian consumer sentiment rises 6% to 88.9 but stays deep in pessimism
• PBOC sets USD/ CNY reference rate for today at 6.7905 (vs. estimate at 6.7452)
• Goldman calls September Fed hike very unlikely as inflation eases
• China unveils nine-department plan to boost county-level consumption
• PBOC seen shifting to overnight reverse repos as core liquidity tool
• ICYMI: Wells Fargo cuts 2026 gold target to $4,900-5,100, still bullish overall
• Gold nears $4,500 resistance as central bank buying meets fading Fed hike bets
• Joint US-Japan intervention loses grip as USD/JPY climbs back above 159
• Morgan Stanley targets EUR/AUD at 1.53, backs Aussie dollar carry trade
• UBS stays constructive on equities as Fed hike case weakens on soft data
• Jackson Hole hype outruns Warsh playbook of saying as little as possible
• Oil up, a packed 24 hours. Iran shifts to fully offensive posture as Trump threatens to bomb Oman over Hormuz.
• US stock indices closed lower on the day. Declines are led by the S&P/Dow
• investingLive Americas FX news wrap 17 Aug

Summary:

• UKMTO reported a vessel was struck while transiting the Strait of Hormuz, sustaining engine room damage and a crew casualty; further detail on the attack, including attribution and the extent of casualties, remains unconfirmed
• The US diesel crack, the premium of diesel futures over WTI, hit a record $102.20 a barrel, with agricultural and shipping demand adding to strain from Iran and Ukraine-linked supply disruptions
• The 10-year JGB yield rose to around 2.945%, its highest level since September 1996; the 5-year yield was also reported up, to 2.18% and its highest ever.
• Foreign holdings of US Treasuries fell to $9.299 trillion in June, led by declines from Japan, the UK and China
• The RBI is seen selling US dollars to support the rupee as USD/INR trades near record highs
• Asian equities were mixed, with Japan’s Nikkei and Topix under pressure and Chinese mainland indices reported lower into the midday break; South Korea’s KOSPI move needs confirmation given conflicting reports on direction

Oil markets found renewed support Monday after UKMTO reported a vessel was struck while transiting the Strait of Hormuz, sustaining damage to its engine room and a crew casualty. The incident adds to an already fragile picture in the strait following the lapse of the 60-day US-Iran memorandum of understanding, with the market continuing to price a lack of near-term de-escalation.

The US diesel crack, the premium of diesel futures over West Texas Intermediate crude, hit a record $102.20 a barrel, as global supply disruptions tied to the wars in Iran and Ukraine collided with peak agricultural consumption season. Refining margins at that level typically flow through to broader costs over time, with agriculture and shipping both reliant on diesel-powered equipment and heating oil demand set to add further pressure heading into winter. Higher refining costs are expected to filter through to consumers and businesses via transport and logistics costs in the coming weeks and months.

Elevated bond yields remained a global theme beyond the US. Japan’s 10-year government bond yield rose to around 2.95%, its highest level since September 1996, while the 5-year yield was also reported higher on the session, extending a recent run of multi-decade highs across the JGB curve. In the US, data released after regular trading hours showed foreign holdings of Treasuries fell to $9.299 trillion in June, led by declines from Japan, the UK and China. The data series is volatile month to month, but the latest reading adds to the case, at the margin, for continued upward pressure on yields.

Major currencies traded relatively steadily. NZD was heqavy, with wekaer China data yesterday cited. The Reserve Bank of India is seen selling US dollars to support the rupee, with USD/INR trading near record highs, extending a pattern of periodic intervention through 2026 amid persistent foreign equity outflows, elevated oil prices, and ongoing US tariff friction tied to India’s Russian oil purchases.

Asian equities were mixed. Japan’s Nikkei and Topix indices slid, while South Korea’s KOSPI showed early strength before a later pullback. Chinese mainland benchmarks were reported lower into the midday break, with the Shanghai Composite, Shenzhen Component and ChiNext all pointing to a weaker session.

This article was written by Eamonn Sheridan at investinglive.com.