Persistently High Oil Prices May Intensify Inflationary Pressure Worldwide

By the end of the day, the Dow Jones Index (US30) fell by 0.51%. The S&P500 Index (US500) declined by 0.52%. The Technology Index Nasdaq (US100) closed Monday in the red at 0.32%. On Monday, US stock indices ended the session lower, as investors feared that persistently high oil prices would intensify inflationary pressure, while hopes for an end to the conflict in the Middle East faded amid renewed fighting and escalating rhetoric. Amid concerns that inflation will force the Federal Reserve to raise rates before the end of the year, the yield on 30‑year Treasury bonds reached its highest level since 2007, reflecting investor anxiety about the sharp increase in government spending.

In July 2026, the overall inflation rate in Canada rose to 3.0% year‑over‑year compared to 2.8% in the previous month, slightly above market expectations of 2.9%, but still below the peak of 3.2% recorded two months earlier after the start of the war with Iran. The main driver of the acceleration was gasoline prices, whose inflation jumped to 25.7% versus 20.5% a month earlier amid conditions in the global oil market and renewed clashes between the US and Iran that led to tanker blockades.

In mid‑August, bitcoin (BTC/USD) traded around 63,500 dollars, holding within a narrow range since early July and declining by roughly 50% compared to the all‑time high recorded in October last year. The main restraining factors for buyers remain uncertainty surrounding the future trajectory of Federal Reserve interest rates and the deadlock in discussions over the US Market Clarity Act, the procedural vote on which the Senate postponed to September 15. Institutional demand also faced instability: in the week ending August 10, net outflows from spot bitcoin ETFs on US exchanges amounted to 389.7 million dollars.

On Monday, European stock indices closed with slight declines, as the persistent rise in energy prices intensified the region’s macroeconomic challenges. By the end of the day, Germany’s DAX (DE40) fell by 0.38%, France’s CAC 40 (FR40) closed down 0.66%, Spain’s IBEX 35 (ES35) declined by 0.87%, and the UK’s FTSE 100 (UK100) ended the trading session lower by 0.28%. The rally in the European natural gas market continued toward multi‑year highs due to the prolonged blockade of Middle Eastern LNG tankers and a shortage of renewable energy in Central Europe, where low river levels forced several nuclear power plants to shut down.

Crude oil prices (WTI) held near 82 dollars per barrel, as market participants weighed geopolitical risks against signs that more oil is flowing through the Strait of Hormuz than previously assumed. Gulf countries continue to maintain significant supply volumes despite the conflict, helping to ease fears of a sharp supply shock. Meanwhile, the diplomatic deadlock between Washington and Tehran persists: according to media reports, President Donald Trump threatened Oman with military action should it interfere with the US blockade of Iranian vessels, although this threat had almost no impact on oil prices.

In Asia, by the end of the day, Japan’s Nikkei 225 (JP225) rose by 0.74%, China’s FTSE China 50 closed higher by 1.54%, Hong Kong’s Hang Seng (HK50) gained 1.34%, and Australia’s ASX 200 (AU200) closed Monday lower by 0.46%.

The Australian dollar (AUD) held above the 0.71‑dollar mark, remaining near a ten‑week high, supported by broad US dollar weakness and improving domestic sentiment. Consumer confidence in Australia reached a nine‑month high in August, reinforcing expectations of economic resilience. Markets are now focused on Thursday’s employment report: employment is expected to increase by 15,000 in July after a significant rise of 76,300 in June, while the unemployment rate is expected to remain at 4.4%.

The New Zealand dollar (NZD) held near 0.590 US dollars, consolidating around the highest level in the past two and a half months amid ongoing pressure on the US currency. Additional support for the New Zealand currency comes from stable market expectations that the Reserve Bank of New Zealand (RBNZ) will continue its tightening cycle and raise the official cash rate (OCR) by another 25 basis points at the upcoming meeting, relying on previous signals from the regulator about the need to maintain monetary policy in less accommodative settings.

• S&P 500 (US500) 7,745.06 -40.70 (-0.52%)

• Dow Jones (US30) 53,459.78 -272.63 (-0.51%)

• DAX (DE40) 26,338.61 -101.70 (-0.38%)

• FTSE 100 (UK100) 10,720.30 -29.81 (-0.28%)

• USD Index 99.59 -0.08 (-0.08%)

News feed for: 2026.08.18

• UK Claimant Count Change (m/m) at 09:00 (GMT+3) – GBP (MED)

• UK Average Earnings Index (m/m) at 09:00 (GMT+3) – GBP (MED)

• UK Unemployment Rate (m/m) at 09:00 (GMT+3) – GBP (MED)

• Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3) – EUR (MED)

• US Building Permits (m/m) at 15:30 (GMT+3) – USD (LOW)

• US Industrial Production (m/m) at 16:15 (GMT+3) – USD (MED)