Quick recap on last week’s market developments. US consumer prices rose slightly less than expected in July (core CPI +0.17% m/m and 3.2% y/y). Also, US retail sales rose strongly, initial jobless claims were lower than expected and Walmart reported sales growth of 5% last quarter.

So we have less US inflation, but also robust growth figures and therefore no clear signal for a strong Fed rate cut in September. The implied probability of a 50 bps rate cut has fallen to 20% and the market is now pricing in 95 bps of US rate cuts by December, down from 121 bps last week.