On Tuesday, the Department of Commerce expanded its list of sectoral tariffs, which had previously focused mainly on metals and autos. The new 50% tariffs now cover another 407 categories of imported goods, including fire extinguishers, construction materials, and chemicals containing aluminum or steel. Economists warn the move could add to inflationary pressures, since the impact could extend to imports worth at least $320 billion — up from the earlier $190 billion estimate. That may reduce the likelihood of the Federal Reserve easing monetary policy anytime soon. Later today, at 20:00 (GMT+2), the Fed will release minutes from its July meeting, where rates were left unchanged. Markets expect the document to shed light on the debate between members pushing for patience and those leaning toward a dovish approach.

Eurozone

The euro is gaining against both the pound and the dollar but trading mixed versus the yen.

Investors are digesting July inflation figures: headline CPI fell from 0.3% to 0.0% month-on-month and held steady at 2.0% year-on-year. Core CPI slipped from 0.4% to –0.2% m/m and remained at 2.3% y/y, broadly in line with forecasts. In Germany, inflation slowed from 0.1% to –0.1% m/m and from –1.3% to –1.5% y/y. The data points to stability, giving the ECB room to maintain a dovish stance if needed. Most analysts still think rates will remain unchanged until December. ECB President Christine Lagarde also praised the new trade agreement with Washington, noting that average tariffs for EU goods heading to the U.S. will run between 12% and 16%, below the ECB’s “worst-case” assumption of 20%. The central bank now projects eurozone growth at 1.1% next year, up from 0.7%, though officials admit the deal will still act as a drag on the recovery.

United Kingdom

The pound is weaker versus the euro and yen, while trading mixed against the dollar.

Fresh July inflation data surprised to the upside: CPI rose 0.1% m/m (vs. –0.1% expected) and ticked up from 3.6% to 3.7% y/y. Core CPI climbed 0.2% m/m and 3.8% y/y, reaching an 18-month high. The numbers reduce the chances of the Bank of England cutting rates before year-end. Traders now see a 57% probability of rates staying unchanged for a prolonged period. At the same time, the data is consistent with the BoE’s own forecast that inflation would peak around 4% this quarter before starting to ease.

Japan

The yen is firming against both the dollar and pound, while showing mixed performance against the euro.

July trade data disappointed: imports fell 7.5% y/y (better than –10.4% expected), while exports contracted 2.6% y/y, the sharpest drop in four years, versus –2.1% previously. The trade balance posted a deficit of ¥117.5 billion. Analysts note that despite the decline, volumes remain solid and producers have so far avoided steep price increases. Still, the outlook could worsen, reducing pressure on the Bank of Japan to tighten policy. Meanwhile, machinery orders rose 0.3% m/m (vs. 0.4% expected) and 7.5% y/y, ahead of the 5% forecast.

Australia

The Australian dollar is under pressure across the board — weaker against the U.S. dollar, yen, euro, and pound.

Markets await Thursday’s preliminary August PMI data (01:00 GMT+2). Forecasts call for a modest pickup: manufacturing PMI at 51.5 (from 51.3), services PMI at 54.4 (from 54.1), and the composite index at 54.0 (from 53.8). The numbers, if confirmed, would signal ongoing recovery momentum in Australia’s economy and lend some support to the currency.

Oil

Crude prices are back on the rise after API data showed U.S. inventories fell by 2.4 million barrels last week — double the expected 1.2 million draw. Later today, the EIA will release its own weekly report, with markets expecting a 0.8 million-barrel decline.

At the same time, hopes for a quick resolution to the Russia–Ukraine conflict are fading, as negotiators warn that reaching agreement on all key issues could take much longer than initially anticipated.