Escalation of the Middle East situation boosts oil prices, as expectations of Fed rate hikes intensify; the market is focused on the U.S. CPI data this Tuesday.

BlockBeats message: After the United States launched a new round of military actions against Iran on July 13, international oil prices rose and US Treasury yields climbed, further intensifying uncertainty in the situation in the Strait of Hormuz and driving increased market volatility. Driven by expectations for inflation rising on the back of higher oil prices, the market increased its bets on the Federal Reserve raising rates again, while gold and US stock index futures fell.

The market will next focus on the US June CPI data to be released at 20:30 Beijing time on Tuesday (July 14), as well as the Congressional testimony by Federal Reserve Chair Kevin Warsh and the start of the US stock earnings season. The CPI data will be one of the most important macro events this week, and could further affect market expectations for the Fed’s subsequent monetary policy path.