2025-08-12 13:09

NEW YORK, Aug 12 (Reuters) - U.S. consumer prices increased moderately in July, largely in line with expectations, though rising costs for goods because of import tariffs led to a measure of underlying inflation posting its largest gain in six months. The consumer price index rose 0.2% last month after gaining 0.3% in June, data showed. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year. Sign up here. Excluding the volatile food and energy components, the CPI rose 0.3%, the biggest gain since January, after climbing 0.2% in June. The so-called core CPI increased 3.1% year-on-year in July after advancing 2.9% in June. MARKET REACTION: STOCKS: U.S. stock index futures rose after the CPI data. The S&P 500 E-minis were slightly up on the day. BONDS: The yield on benchmark U.S. 10-year notes was flat at 4.277% FOREX: The dollar index slipped 0.1% to 98.406, while the euro rose 0.1% to $1.1622. COMMENTS: TOM PORCELLI, CHIEF US ECONOMIST, PGIM, NEW JERSEY: "This is one of these better-than-feared outcomes. People are probably going to use this as a sign that the Fed could cut rates in September. And I don't doubt for a second that that's exactly how the market is going to react. The only thing I would caution, though is, it's going to take time for these tariffs to really show up in earnest." "I think people that anyone waiting for this to show up in sort of one big move higher in any given month, that's not how it's going to be. It's going to sort of trickle in. The real peak inflation is not today. Peak inflation on the back of tariffs is actually months from now. And inventories in particular have really allowed companies to sort of mitigate some of the initial tariff thrust. So yes, we believe that the Fed is supposed to cut in September. It's been our long-standing call." ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK: "Inflation is moving closer to the Fed's target of 2% and that is a bullish thing because the lower inflation gets, the greater the chances are the Fed will cut rates. If you look at the data, the jobs report was weaker than expected and inflation was weaker than expected. That increases the odds the Fed will cut rates.' "The economy is in a good place because inflation's coming down and that's exactly what both Trump and the Fed want...By the end of the year, I'd expect 50 basis points cut. If they cut more, that means the data would have to continue to weaken. If we get more weaker than expected jobs reports, then the Fed's going to cut more aggressively. But if the economy stays as is and inflation continues to come down, then that'll open the door for the Fed to cut." GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY MONTGOMERY SCOTT, PHILADELPHIA: "The July CPI was roughly in line with expectations and did not include very much tariff pass-through to consumer prices and is certainly good enough to lock in the odds of a September rate cut. There's more road between here and the 17th of next month, but at least as far as inflation data goes, this is pretty unconcerning." "One thing that's notable is that the categories within the CPI that would normally be associated with tariffs were by and large pretty tame. So new vehicles, and we've heard a lot about how cross-border flows of vehicle parts are increasing prices there, they were unchanged month over month. Apparel, a huge portion of which is imported to the U.S., was up only a tenth month over month. And recreational goods, your baseball bats and other similar objects, also heavily imported, they were a little bit a little bit heavier, up four tenths, but still not very concerning. And you can go into some more detailed categories that show a similar picture." "You can read this in one of two ways as an independent, unbiased economist type, which is that inflation will increase in the future because the tariffs haven't hit yet. Or you can read it as firms are eating the tariffs, so it's not going to hit consumer inflation. But I think either way is enough cover for the Fed for a September rate cut, assuming we don't get a big acceleration from next month's data." SEEMA SHAH, CHIEF GLOBAL STRATEGIST, PRINCIPAL ASSET MANAGEMENT, LONDON: "Although core annual inflation is back to its highest level since February, today’s CPI print is not hot enough to derail the Fed from cutting rates in September. There is some sign of tariff pass through to consumer prices but, at this stage, it is not significant enough to ring alarm bells." "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts. Markets like today"s inflation print as it means the Fed can lower rates unheeded next month – rate cut decisions in October, December and beyond may well be more complicated." KARL SCHAMOTTA, CHIEF MARKET STRATEGIST, CORPAY, TORONTO" "Underlying inflation remains subdued, giving policymakers room for maneuver as they respond to signs of incipient weakness in labor markets. Chair Powell should put a September cut on the table when he speaks at Jackson Hole on the 21st." "But the American economy's turn toward isolationism and autarky is still underway, and price pressures might begin to build in the coming months as tariffs hit tradeable goods and immigration controls begin pushing services costs higher. The prevailing market narrative could shift directions several times over the coming months." ALEXANDRA WILSON-ELIZONDO, GLOBAL CO-CIO OF MULTI-ASSET SOLUTIONS, GOLDMAN SACHS ASSET MANAGEMENT, NEW YORK: (VIA EMAIL) "July's CPI figure came in in-line with expectations, with core inflation at 3.1% year over year. The Fed is getting the data support that the tariff effect on price level will mostly be transitory. Tariffs have yet to drive substantial price increases, as companies continue to offset cost pressures by drawing down inventories and adjusting prices cautiously due to perceived consumer price sensitivity. The Fed's policy stance is highly data-dependent, and with inflation contained and labor market softness increasingly evident in revised payroll data, the emphasis will now be skewed toward employment. In essence, this inflation print supports the narrative of an insurance rate cut in September, which will be a key driving force for the markets." BEN LAIDLER, HEAD OF EQUITY STRATEGY, BRADESCO BBI, LONDON: "The market is taking a lot of comfort from the headline number, which came in a little bit lower than expected. On the face of it, it's validating this overwhelming consensus for a Fed rate cut in September, however we:re a bit cautious on that." "When you look at the core number, it's maybe not as much as a slam dunk as the market may think. We don't think this report is quite as good as the market maybe initially taking it out. We're going to get a lot more information at the Jackson Hole Symposium where we're going to get some guidance from Powell as to what's going to happen in September." "The market is going to continue to overwhelmingly price this September cut. The odds are not quite as firmly stacked as the market would think. When you scratch the surface, the core inflation number, which the feds focus is not as good a reading as the headline number. That said, the Fed is going to come under an awful lot of pressure to give some guidance at Jackson Hole and the market will be very disappointed if you don't get a September cut." JUAN PEREZ, DIRECTOR OF TRADING, MONEX USA, WASHINGTON: "Thus far it looks like the U.S. dollar is down as a result of CPI coming in basically just as expected. Markets seem eager to price in more than just one interest rate reduction for the year, but these numbers suggest inflation remains growing though at a slow pace." BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, BROOKFIELD, WISCONSIN: (VIA EMAIL) "The core message in core inflation is that any tariff-induced inflation is likely to be a process, not an event. Eventually, tariffs can show up in varying degrees in consumer prices, but these one-off price increases don’t happen all at once. That will confound the Fed and economic commentators for months to come. As long as breakeven inflation rates and other market based measures of inflation expectations stay contained, the Fed should feel comfortable enough to recommence cutting in September." https://www.reuters.com/business/view-us-inflation-rises-july-line-with-expectations-2025-08-12/

2025-08-12 12:47

Heatwaves and alerts declared around Europe Almost 1,000 military personnel back Spanish firefighters Balkan residents mourn loss of homes and possessions Increasingly hot dry summers raise wildfire risks MADRID/LISBON, Aug 12 (Reuters) - Firefighters across Spain, Portugal, Greece, Turkey and the Balkans were battling wildfires on Tuesday with another heatwave pushing temperatures over 40 degrees Celsius (104 degrees Fahrenheit) across parts of Europe. Global warming is giving the Mediterranean region hotter, drier summers, scientists say, with wildfires surging each year and sometimes whipping up into "whirls". Sign up here. "We are being cooked alive, this cannot continue," said a mayor in Portugal, Alexandre Favaios, as three fires burned. On the outskirts of the Spanish capital Madrid, a fire killed a man working at a horse stable and reached some houses and farms but was contained by Tuesday, regional authorities said. To the south in Tarifa, on Spain's coast close to Morocco, beachgoers and celebrity chef Jose Andres filmed flames and black smoke on the hills above elegant whitewashed villas. More than 2,000 people were evacuated from Tarifa as the fire - believed to have started in eucalyptus and pine forests - spread, officials said. Helicopters doused the blaze with seawater. In Albania and Montenegro, authorities issued a heatwave warning as temperatures reached 100F (38-39C). Germany issued heat warnings for much of the country on Monday, with temperatures above 86F (30C) expected until Friday. In Italy, red heat alerts were issued for 16 cities while in France, authorities declared red or orange weather alerts for much of the country. In Spain, temperatures were set to reach 111.2F (44C) in some regions, according to meteorology service AEMET. Minimal rainfall and windy conditions were expected to exacerbate the risk. SPANISH MILITARY HELPS Spain's Interior Ministry declared a "pre-emergency", putting national services on standby to support firefighting. Almost 1,000 members of the armed forces are already helping. Spain's largest region, Castile and Leon, had 32 wildfires raging on Tuesday with more than 1,200 firefighters involved. Five of the fires were categorised as a direct threat to nearby populations. In Leon province, around 3,780 residents were evacuated, while over 600 residents of seven towns in Zamora were also ordered to leave their homes. In north Portugal, more than 1,300 firefighters backed by 14 aircraft were battling three large fires. One of them, in the Vila Real area, has been burning for 10 days. Local mayor Favaios pleaded for more government help. "It's been 10 days of extremely hard fight against the flames, 10 days that our population is in panic, without knowing when the fire will knock on their door," he told broadcaster RTP. With two Portuguese waterbombing planes in need of repair, authorities on Monday requested help from Morocco, which sent two replacement planes. A heatwave that brought temperatures of around 40C to north Portugal in the past week showed signs of abating on Tuesday, with rain and thunderstorms expected, according to the weather service IPMA. Across the region in Albania, swathes of forest and farmland have been burnt by wildfires in the past week. Helicopters from the Czech Republic, Slovakia and the United Arab Emirates assisted the Balkan state to contain 19 separate wildfires stoked by strong winds on Tuesday. In neighbouring Montenegro, authorities backed by helicopters from Serbia and Croatia contained a wildfire near the capital Podgorica on Tuesday, with the city covered by smoke. Resident Dragana Vukovic told Reuters against the backdrop of her home's smouldering rafters: "Everything that can be paid for and bought will be compensated, but the memories that burned in these four rooms and the attic cannot be compensated." 'OUT OF CONTROL' In Greece at Europe's southernmost tip, wildfires in some cases fanned by gale-force winds forced the evacuation of several villages and a hotel on the tourist islands of Zakynthos and Cephalonia in the Ionian Sea along with four other parts of the mainland. "Winds are strong and the wildfire is out of control," Zakynthos mayor Yiorgos Stasinopoulos told Greek public broadcaster ERT. Another 85 firefighters and 10 aircraft fought to stop a fire reaching houses near the western Greek town of Vonitsa. The picture was similar in Turkey where a large blaze in the northwestern province of Canakkale burned for a second day after hundreds of residents were evacuated in precaution. Wildfires in Canakkale's Ezine and Ayvacik districts, which saw Canakkale airport and the Dardanelles Strait closed on Monday, were largely brought under control by Tuesday. But blazes in the city centre in the southern part of the strait were still burning, Agriculture and Forestry Minister Ibrahim Yumakli said in a post on X. https://www.reuters.com/sustainability/climate-energy/cooked-alive-europes-wildfires-hit-tourism-spots-forests-2025-08-12/

2025-08-12 12:43

LONDON, Aug 12 (Reuters) - OPEC on Tuesday raised its forecast for global oil demand next year and trimmed its forecast for growth in supply from the United States and other producers outside the wider OPEC+ group, pointing to a tighter market outlook. The outlook for higher demand and a drop in supply growth from outside OPEC+, which groups OPEC with Russia and other allies, would make it easier for OPEC+ to proceed with its plan to pump more barrels to regain market share after years of cuts aimed at supporting the market. Sign up here. World oil demand will rise by 1.38 million barrels per day in 2026, the Organization of the Petroleum Exporting Countries said in a monthly report, up 100,000 bpd from the previous forecast. This year's expectation was left unchanged. In the report, OPEC also increased its forecast for world economic growth slightly this year to 3.0% as U.S. President Donald Trump's administration signs some trade deals and the economies of India, China and Brazil outperform expectations. "Economic data at the start of the second half of 2025 further confirm the resilience of global growth, despite persistent uncertainties related to U.S.-centred trade tensions and broader geopolitical risks," OPEC said in the report. Oil supply from countries outside the Declaration of Cooperation - the formal name for OPEC+ - will rise by about 630,000 bpd in 2026, OPEC said, down from last month's forecast of 730,000 bpd. Rapid growth from U.S. shale and other countries has weighed on oil prices in recent years, and OPEC+ sources have told Reuters that the group's policy shift this year to raise output was driven partly to take on U.S. shale production. OPEC's report said it now expects U.S. output of tight oil, another term for shale, to decline by 100,000 bpd in 2026, versus last month's outlook for flat output year on year. "The 2026 forecast assumes sustained capital discipline, additional drilling and completion efficiency gains, weaker momentum in drilling activities and increased associated gas production in key shale oil regions," OPEC said. OPEC's report also showed that in July, OPEC+ raised crude output by 335,000 bpd, a further increase reflecting its decisions this year to increase output quotas. https://www.reuters.com/business/energy/opec-lifts-2026-oil-demand-view-trims-supply-growth-rivals-2025-08-12/

2025-08-12 12:40

NEW YORK, Aug 12 (Reuters) - The U.S. dollar slipped against the euro on Tuesday, after data showed U.S. consumer prices increased moderately in July. The consumer price index rose 0.2% last month after gaining 0.3% in June, the Labor Department's Bureau of Labor Statistics said on Tuesday. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year. Sign up here. The euro rose 0.1% versus the dollar to $1.1625, while the greenback pared gains against the yen to trade 0.1% higher at 148.29 yen . https://www.reuters.com/world/middle-east/dollar-slips-after-us-inflation-data-2025-08-12/

2025-08-12 12:39

PRAIA, Aug 12 (Reuters) - At least eight people were killed after flooding on Cape Verde's Sao Vicente island overwhelmed emergency services and cut key roads, a regional civil protection councillor said on Tuesday. On Monday morning torrential rains lashed the northern island in the Atlantic archipelago located off West Africa, swamping roads and sweeping away vehicles and people. Sign up here. Municipal councillor Jose Carlos da Luz told a state broadcaster seven people had died in floods and one person was electrocuted, adding that three others were still missing. In a report on Monday, the International Federation of Red Cross and Red Crescent Societies put the death toll at nine and said 1,500 people had been displaced on Sao Vicente. Sao Vicente usually records 116 mm of rain in a year, according to Cape Verde's meteorology institute. But early on Monday 193 mm fell in just five hours, according to Ester Brito, an executive at the institute. "It is a rare situation because what was recorded is above our 30-year climatological average," she told Reuters, adding that in just two hours more rain fell than the island typically receives annually. The U.S. National Hurricane Center said on Monday that Tropical Storm Erin was located about 280 miles (455 km) west-northwest of Cape Verde and packing maximum sustained winds of 45 miles per hour (75 kph). Interior Minister Paulo Rocha said on Monday that floodwaters disrupted transport across Sao Vicente and severed the main road to Cesaria Evora International Airport, though the facility remained operational. Rockfalls also blocked traffic. "It was a difficult night marked by panic and despair," Rocha told public radio, adding that first responders were inundated with distress calls. Rescue and cleanup operations were ongoing, but Rocha said authorities were mobilising resources that would allow the island to quickly return to normal life. (This story has been refiled to fix the spelling of the interior minister's first name to Paulo from Palo, in paragraph 8) https://www.reuters.com/sustainability/climate-energy/cape-verde-floods-kill-least-eight-people-2025-08-12/

2025-08-12 12:38

BAGHDAD, Aug 12 (Reuters) - Power has been restored in Iraq, a government official said on Tuesday, after electricity outages hit large parts of the country on Monday. Electricity ministry sources had told Reuters a sudden shutdown at the Hamidiya power plant in the western province of Anbar led to a fault in the electricity transmission network that caused a power outage in the central and southern regions of the country. Sign up here. The temperature in the capital Baghdad reached a high of 48 degrees Celsius (118.4 degrees Fahrenheit) on Tuesday. "The defect was brought under control and fixed in record time, and the power system is now stable," Adel Karim, an adviser to the Iraqi prime minister, told Reuters on Tuesday. Many Iraqis have relied for years on privately operated generators for power as government-provided electricity was only intermittently available. Others have turned to solar power to help meet their electricity needs. A member of the Organization of the Petroleum Exporting Countries, and one of the world's leading oil producers, Iraq has struggled to provide its citizens with energy since the 2003 U.S.-led invasion that toppled Saddam Hussein. In the ensuing turmoil, under-investment and mismanagement left the national grid unable to cope with demand. In March, U.S. President Donald Trump's administration rescinded a waiver that had allowed Iraq to pay Iran for electricity, as part of Trump's "maximum pressure" campaign against Tehran. Iraq is heavily dependent on Iranian natural gas imports to generate power. https://www.reuters.com/world/middle-east/iraq-restores-power-after-blackouts-hit-country-2025-08-12/