Good morning, and welcome to our rolling coverage of the global economy, the <a href="https://bitcomme.com/michelin-makes-its-2026-first-half-financial-report-available-online/” title=”Michelin makes its 2026 first-half financial report available online”>financial markets, the eurozone and business.
Global government bonds are selling off again, pushing yields to new highs, as oil prices have risen above $91 a barrel, stoking inflation fears.
Renewed fighting in the Middle East pushed Brent to $91.08 a barrel, up 0.6% on the day.
The US and Iran exchanged fire for the first time in a month on Monday, with missiles and drones fired at Iranian rocket launchers on an island in the strait of Hormuz, prompting Iran to target US military bases in Jordan and the United Arab Emirates in response. Donald Trumpthreatened further action, telling Fox News: “We’re going to hit them hard.”
Japan’s 10-year benchmark government bond hit 3% for the first time in a generation, and is now up nearly 5 basis points at 2.99%. The US 10-year Treasury yield rose 2.6bps to 4.78%, the highest since early 2025. The equivalent UK gilt yield was up slightly at 5.14%.
Inflation fears have boosted expectations of interest rate hikes. Markets are pricing in a rate increase in New Zealand on Wednesday, while the European Central Bank is widely expected to raise its key interest rates by 0.25 percentage points at its next meeting on 10 September. Traders also see a better-than-even chance of rate hikes in the US and Japan this month.
Stock futures are pointing to a lower open when European markets open in about 15 minutes, with Wall Street also expected to fall later after modest declines on Monday.
In Asia, shares were mixed – Japan’s Nikkei was flat while Hong Kong’s Hang Seng lost 0.8% and South Korea’s Kospi eked out a 0.2% gain after earlier losses.
Shein shares tumbled 10% after the online fast fashion retailer’s stock market debut in Hong Kong.Its share price later recovered somewhat but still closed 4% below its offer price, at HK$46.62.
The company – once estimated to be worth nearly $100bn (£74bn) – went public with its shares priced at HK$48.56, valuing the business at just over $26bn.
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9am BST: Eurozone Manufacturing PMI
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9.30am BST: Bank of England data on mortgage approvals and consumer credit
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9.30am BST: UK Manufacturing PMI
