You Ain’t Seen Nothing Yet

August 14, 2026

Elias Haddad

Bessent vows to isolate Iran like never before. Crude prices little changed.

US retail sales and sentiment data take the spotlight today.

Peru keeps rates on hold and signals no urgency to hike.

The USD index (DXY) is trading near the lower end of this month’s tight 99.50-100.00 range. Cooling US CPI and PPI inflation in July trimmed the implied odds of a Fed rate hike in September to nearly 30%, the lowest since the June 17 FOMC decision. That is keeping USD in check and lifting risk appetite despite the ongoing US-Iran conflict.

Brent crude oil prices ticked up but are holding under $90 a barrel. Treasury Secretary Scott Bessent said next week the US will “apply measures [against Iran] like have never been seen in the history of economic isolation on a country.”

Today’s US data releases are unlikely to shift the dial on Fed fund futures pricing. FOMC participants are more divided over the durability of the inflation threat than on the US growth outlook.

July retail sales report (1:30pm London, 8:30am New York). Total retail sales are expected at 0.1% m/m vs. 0.2% in June. The policy relevant control-group sales - which exclude cars, gas, food services, and building materials – is seen rising 0.3% m/m vs. 0.5% in June. That would be consistent with resilient real consumer spending activity given that headline CPI rose 0.1% m/m in July.

August University of Michigan sentiment survey (3:00pm London, 10:00am New York). Long-term inflation expectations are expected to remain unchanged at 3.3% for a third straight month.

PERU

The tailwind to PEN from resilient copper prices continues to more than offset the drag from Peru’s negative real rates. As was widely expected, Peru’s central bank (BCRP) kept the policy rate unchanged at 4.25% for an 11th consecutive meeting. BCRP remains relaxed about inflation overshooting its 1% to 3% target range, suggesting no urgency to begin tightening.

According to BCRP, this deviation from the inflation target range mainly reflects higher fuel prices and their indirect effects on transportation costs in March and April. Excluding the transportation component, core inflation was up 1.7% y/y in July vs. 1.6% in June and has remained below 2% since April of last year.

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