US bond yields have eased slightly, but remain near multi-decade highs, as the Federal Reserve prepares to release the minutes of its July meeting. The meeting minutes could help resolve some of the uncertainty around the central bank's views on persistently elevated inflation. According to analysts, inflation concerns are only part of the problem, as long-term inflation expectations remain contained. Instead, they point to the 'term premium' on long bonds being demanded by investors to compensate for the uncertainties surrounding borrowing costs and debt sustainability over the horizon.
Market Outlook
Meanwhile, crude oil prices remain high due to the latest negative turn in the Iran conflict, and the 'crack spread' between crude futures and diesel futures has climbed to a record high. This suggests that households and businesses could face higher fuel costs moving into winter.
Global Developments
In China, the AI stock market frenzy has intensified, with humanoid robot maker Unitree surging about 600% on its market debut. Unitree, which competes with Hyundai Motor Group-owned Boston Dynamics and Tesla, has drawn global attention for its robots that can run, dance, and perform martial arts.
