Financial Focus
August 14, 2026 

      GOOD MORNING!     Soft oil prices and soft inflation gauges had the Treasury curve shifting lower and steeper.  The Producer Price Index (PPI) month-over-month was unchanged or flat versus an expected 0.2% increase.  The decelerated the year-over-year rate to 4.7% from 5.5% in June.  The markets sensed that inflation is on a moderating path.  Coupled with the weak employment report last Friday, futures traders whittled lower the bets on a September rate hike.  The 30-year T-bond auction went well but the yield was still the highest auction yield since 2001.  The cooldown in inflation and market rates pushed the S&P to a new all-time record high and had the tech-heavy NASDAQ Composite Index creeping up to near its record high.   
     

     The markets are choppy in early trading as more and new sanctions have been announced to put economic pressure on Iran.  The markets are monitoring the price of oil and currencies, most notably the dollar-yen exchange rate to see if another intervention is needed.  The record joint US-Japan intervention has only provided temporary relief.  Ahead today are July’s retail sales, the preliminary August University of Michigan Consumer Sentiment Index and positioning for the weekend.