Toll time

Daily update

The Iranian Revolutionary Guard reported that Iran and Oman have agreed to share revenues from tolls on shipping passing through the Strait of Hormuz—once the strait reopens. The announcement stresses that Iran is likely to keep stricter control over the strait after the war, but investors expect that. The announcement does not, of itself, suggest an imminent reopening of the strait.
Yesterday’s US personal consumer expenditure deflator signaled the expected US inflation. This should allow US monetary policy to remain on hold. The reported inflation rate should decline in the near term as some conveniently timed changes to the calculation methods are implemented. This will only change the reported number, not US households’ lived inflation experience.
The Bank of Korea raised interest rates by a quarter point in a generally anticipated move. The world’s sudden enthusiasm for artificial intelligence has created genuine and broader-based growth for South Korea, as a key supplier of the required components—and that gave the central bank confidence to act.
US July trade data is due. This still has political relevance as the US administration pursues tariffs on US consumers of goods from Canada. It also highlights how much of the US investment in AI leaks out of the economy via imported components.