Disinflation Meets Supply Shock: Weekly Macro Review

Did disinflation regain control, or did the supply shock merely interrupt it?

Developments during 9–15 August 2026 PHT did not support a single, clear macro direction. Softer US producer inflation, weaker retail sales and lower consumer sentiment reduced the case for additional Federal Reserve tightening. At the same time, disruption around the Strait of Hormuz, higher energy costs and a harder US tariff stance kept an inflationary supply shock in view.

That tension matters more than any isolated headline. Softer demand may support an easier policy path, but an energy shock may delay it while also weakening growth. The result is a market environment in which policy expectations, yields and risk sentiment can move in different directions.

The US dollar: weaker demand, but no simple easing signal

US developments became more growth-sensitive late in the week. Retail sales fell 0.6% month on month, sales excluding gasoline and autos fell 0.2%, and Michigan consumer sentiment was reported at 51. Those releases may weaken the dollar’s policy advantage if they encourage expectations of earlier Federal Reserve easing.

Inflation signals were less uniform. July consumer inflation was described as broadly moderating but remained 3.4% higher than a year earlier, with energy costs elevated. A separate seasonally adjusted CPI reading was stronger than expected. Producer prices were unchanged on the month, supporting expectations that the Fed would leave rates unchanged in September.

Oil disruption, proposed tariffs and the closure of a tariff exemption could nevertheless keep costs firm. Existing-home sales were reported at 4.06 million and were stronger than expected. The dollar’s weekly signals were therefore mixed: softer demand and producer prices pointed toward easing, while energy and trade policy argued for caution.

Europe: indirect pressure dominated the week

Euro

Direct euro-area policy evidence was limited. A wider German trade deficit with China, possible US-EU trade friction and higher imported energy costs may weaken growth while complicating disinflation. That combination does not establish a clear euro direction. It leaves the European Central Bank balancing softer activity against supply-driven inflation.

British pound

UK GDP rose 0.3% month on month, which was stronger than expected and may reduce the urgency for aggressive Bank of England easing.

The goods trade balance, however, was reported at -23.01 billion and was weaker than expected, pointing to a fragile external position. Sterling’s signals were therefore mixed: better activity supported a cautious easing path, while trade weakness and energy exposure limited confidence.

Swiss franc

There was insufficient direct Swiss policy evidence to support a firm domestic monetary-policy conclusion. The franc’s main role during the week was defensive. Escalation in the Gulf and wider geopolitical stress could support safe-haven demand, while a durable reduction in those risks could remove that support.

Asia-Pacific currencies: policy divergence meets China risk

Japanese yen

Japan recorded its first current-account deficit in roughly a year and a half, weakening a structural source of yen support.

Wholesale inflation was reported at 7.2% and below expectations. Other developments nevertheless raised expectations of a possible September Bank of Japan move. Japan’s substantial intervention capacity and warnings of faster rate increases may limit yen weakness, but neither confirms a monetary-policy shift.

Australian dollar

The Reserve Bank of Australia held its policy rate at 4.35% and retained its concern about inflation and energy costs, leaving further tightening as a possibility. That relative policy stance may support the Australian dollar.

Against it, NAB business confidence was reported at -6, while weak Chinese producer prices and domestic demand created a softer export and commodity-demand backdrop. AUD therefore faced a split between domestic policy firmness and external growth risk.

New Zealand dollar

No comparable New Zealand domestic data release provided a strong independent policy signal during the week. NZD exposure came mainly through Chinese demand, global risk sentiment and a diplomatic dispute involving allegations of Chinese state-linked activity in New Zealand.

Weak Chinese domestic demand and technology tensions may pressure NZD through trade and risk channels. Improved Chinese activity or geopolitical de-escalation could weaken that interpretation.

Canadian dollar

Canada’s oil exposure created a two-sided result. Supply disruption may improve the commodity-income channel, but an extended shock may also damage global growth and delay disinflation.

The possibility of a US-Canada trade agreement before the 19 August deadline reduced one source of tariff uncertainty. CAD support would be more credible if trade risk eased without a deeper global demand shock.

Nasdaq 100, gold and Bitcoin

Nasdaq 100

Tame producer inflation and fading expectations of a September Fed rate increase supported the lower-yield, risk-on channel for technology shares. Strong results from AI-infrastructure companies reinforced that support.

Competing developments included concern about expensive AI valuations, Asian technology outflows, rising yields and geopolitical pressure. The Nasdaq 100 outlook was therefore conditional on whether softer inflation or higher energy and financing costs became dominant.

Gold

Gold recorded a strong prior week, advanced for three sessions and moved above a two-month high. These developments were associated with safe-haven demand, geopolitical risk and changing Fed expectations.

Rising oil prices could also keep interest rates and real yields higher, creating a potential headwind. Gold may therefore receive support from risk aversion while facing pressure from the monetary-policy response to inflation.

Bitcoin

Bitcoin-specific developments were more regulatory than price-based. A US regulator conditionally approved a bank charter connected to expanded stablecoin operations, while a broader cryptocurrency bill was delayed until September.

Bitcoin miners also continued diversifying into AI infrastructure, although that shift did not establish a clear direction for Bitcoin itself. Macro liquidity remained the stronger near-term channel: easier policy expectations may help, while higher yields and geopolitical stress may weigh.

What to watch from 16–22 August 2026 PHT

Hormuz: inflation shock or growth shock?

If shipping restrictions, attacks or sanctions intensify, energy inflation may keep yields firmer and delay monetary easing. That could support the dollar and provide conditional support to CAD, pressure energy-importing economies, and challenge the Nasdaq 100 and Bitcoin.

Gold may benefit from safe-haven demand but face resistance from higher real yields. Sustained reopening would weaken this scenario, while durable normalisation would invalidate its most severe form.

Fed expectations: demand weakness versus cost pressure

Persistent softness in retail sales, consumer sentiment and producer prices may encourage expectations of an easier Fed path, reducing dollar yield support and improving the liquidity environment for risk assets.

If energy and tariff costs become dominant, easing expectations may instead be delayed. Consistent weakness across demand and inflation would confirm the first interpretation. Renewed acceleration in both would invalidate it.

China and the commodity currencies

China’s coming loan prime rate announcement has two possible interpretations. Additional easing could support future demand expectations, but it could also confirm that current economic activity remains weak.

Stronger activity would support AUD, NZD and CAD through improved demand expectations. Continued domestic weakness would reinforce the more cautious interpretation.

The 19 August US-Canada trade deadline

An agreement could reduce a specific Canadian growth risk and support CAD resilience. Failure to reach one could revive tariff uncertainty.

Confirmation requires a material change in trade conditions rather than another extension of negotiations.

Research support, not a trading instruction.

This article is educational and informational, not personalized advice or a trade instruction. Outcomes are uncertain. Confidence assesses the strength and consistency of the evidence, not the probability of profit or a guarantee. Readers should verify the information and make their own decisions.