MARKET WRAPS

Watch For:

Germany CPI; trading updates for Vesatas Wind Systems, TUI, Hannover Re, E.ON, ABN Amro

Opening Call:

European stock futures were lower, after Asia stocks traded mixed. U.S. Treasury yields fell, the dollar strengthened. Gold and oil rose.

Equities:

European equity futures fell, as investors looked ahead to the U.S. July inflation report and what it might mean for interest rates.

Uncertainty over the Federal Reserve's next moves, the standoff between the U.S. and Iran and whether the AI build-out is oversold or overhyped have all clouded the outlook for stocks. Many investors are proceeding with caution.

"It's kind of like the 'Enter Sandman' market-sleep with one eye open, hold your pillow tight," said Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management.

Forex:

The U.S. dollar strengthened ahead of the release of crucial economic data.

The Federal Open Market Committee's focus has shifted more toward inflation figures than the labor market, said MUFG Bank's Michael Wan.

"While the weaker than expected nonfarm payrolls numbers last week help, the CPI numbers later today are arguably more important," said the senior currency analyst.

Bonds:

The yield on U.S. Treasurys were lower as it lost some overnight momentum while remaining elevated as rising oil prices rekindled inflation fears.

Higher oil prices prompt markets to increase bets on the Federal Reserve raising interest rates in September.

The U.S. inflation data could prove decisive for these expectations, said Empire FX analyst Crispus Nyaga.

"A firmer reading could extend the rise in yields and support the dollar, while a softer print could revive doubts over a September move and weigh on the currency, with volatility likely across currency and bond markets."

Energy:

Oil prices rose. Crude prices remained volatile as markets reacted to developments in the Middle East, said Infinox's Thadeu Dos Santos.

The U.S. military said its forces fired on a Panama-flagged ship that attempted to run the American blockade of Iranian ports early Tuesday, The Wall Street Journal reported.

Crude oil price volatility is likely to remain elevated without a concrete breakthough in diplomacy in the region, said the Infinox regional director.

Metals:

Gold prices were higher, as investors await U.S. inflation data for cues on the Federal Reserve's policy path.

A stronger print could reinforce a tighter policy and add further pressure to gold, said Tony Sage, CEO of Critical Metals.

On the other hand, a softer outcome could offer some relief, he added. Lower interest rates typically benefit non-interest-bearing bullion.

There's a risk of softer lithium-market conditions in 1H 2027 as concerns about oversupply re-emerge, said Macquarie.

That could be "potentially exacerbated by an accumulation of ESS [energy storage system] inventories across the value chain over the next six months," it said, adding that investors appear to have at least partially priced in this risk already.

Near-term conditions meanwhile "appear more constructive, underpinned by a tightening spot market and ongoing inventory drawdowns across the supply chain," Macquarie said.

TODAY'S TOP HEADLINES

Iran Is Defying U.S. Pressure by Becoming a 'Survival Economy'

DUBAI-President Trump is betting the pressure of sanctions and a naval blockade will force Iran to bend. But the country's rulers are taking time-tested steps to keep their chronically battered economy functioning just enough to resist a drawn-out campaign.

Tehran is rationing scarce goods, limiting access to foreign currency, slashing investment and shifting more of the burden onto households while preserving strategic imports and the essential machinery of the state, analysts say. The result will be a deepening economic malaise that leads to rising poverty and dysfunction, but also more room for Iran's leaders to stall talks with the U.S.

Why Wall Street and Nvidia Are Building an Exotic Money Pipeline for the AI Boom

Nvidia CEO Jensen Huang is running into a problem: Many of his customers can't afford to buy his company's coveted AI-powering chips.

That explains why Huang teamed up with an array of Wall Street firms on a $500 billion plan that will theoretically standardize chip financing, creating asset-backed pools of capital for AI companies-while leaving Nvidia partly on the hook if things go wrong.

Bezos Is Among Investors Nearing Deal for Stake in Liverpool Soccer Team

A consortium of investors that includes Jeff Bezos is closing in on a deal to buy a minority stake in Liverpool Football Club from Fenway Sports Group, the owner of the Boston Red Sox.

The deal would value Liverpool at around $8 billion, according to people familiar with the matter. The terms include provisions that would give the investors the option to acquire the rest of the team in future transactions, the people said.

CoreWeave Shares Jump as Revenue Doubles From Year Earlier

The cloud-computing company CoreWeave reported its fifth consecutive quarter of record revenue and a sales backlog of $104 billion, a reflection of the continued strength of demand for artificial-intelligence computing.

CoreWeave-which buys advanced AI chips known as graphics processing units from Nvidia, installs them in data centers and leases them to such companies as Microsoft and OpenAI-reported revenue of $2.58 billion for the quarter that ended in June. Analysts polled by FactSet had expected quarterly revenue of $2.55 billion.

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Expected Major Events for Wednesday 05:00/FIN: Jun Balance of Payments

06:00/ROM: Jul CPI

06:00/GER: Jul CPI

06:30/NOR: 3Q Consumer Confidence

07:00/SVK: Jun Employment and average monthly wage in selected branches

07:00/SVK: Jun Turnover in selected branches of economy, incl Industry & Construction

08:00/ITA: Jul CPI

08:00/EU: Jul Long term interest rates statistics

08:00/BUL: May Trade with EU Member States - preliminary data

08:00/BUL: Jun Trade with third countries - preliminary data

08:00/FRA: Aug IEA Oil Market Report

10:00/POR: Jul CPI

16:59/AUT: Aug OPEC Monthly Oil Market Report

16:59/GER: Jun Balance of Payments

23:01/UK: Jul RICS Residential Market Survey

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