Price gains strengthened across several key categories, most notably food (2.1% vs 1.8% in May), housing and utilities (0.3% vs 0.2%), and transport (7.5% vs 7.4%). Services inflation also edged higher, rising to 1.5% from 1.4%, driven largely by more expensive airfares and holiday-related spending.

On a monthly basis, consumer prices were flat in June after a 0.7% increase in May. Meanwhile, core inflation—which excludes accommodation and private transport costs—accelerated to 1.6% from 1.4%.

The Monetary Authority of Singapore (MAS) raised its 2026 core inflation forecast to a range of 1.5%–2.5%, up from 1%–2%, citing concerns that persistent price pressures could weigh on household spending and overall demand.

Supply has been further squeezed by smelter maintenance, typhoon-related stockpiling, and limited scrap availability in China, while traders have continued to move metal to the US ahead of a potential tariff on refined copper imports. Still, the upside has been constrained, as rising oil prices have reignited inflation concerns and reinforced expectations of higher interest rates, dampening the demand outlook for industrial metals.

Willingness to buy also strengthened, climbing to -19 from -22. This was supported by more favorable views of household finances and a better assessment of the timing for major purchases. The evaluation of households’ financial situation over the past year ticked up to -15 from -16, while expectations for the next 12 months improved more markedly, to -2 from -6. In addition, the perception of whether it is a good time for large purchases improved to -40 from -44.

Despite these gains, consumer confidence remains below its long-term average and far from the record high of +36 recorded in January 2000.

Sentiment was also shaped by a heavy earnings docket. IndusInd Bank was in focus after reporting a quarterly profit that beat expectations, though the stock still came under selling pressure. Dr. Reddy’s Laboratories weakened after issuing a supply warning and missing profit forecasts, while Hindustan Petroleum posted its first quarterly loss since 2022 as elevated crude prices compressed refining margins.

Investors are now awaiting results from Cipla, Infosys, and InterGlobe Aviation later in the day for additional signals on corporate performance and the broader market direction.

Among notable movers, IndusInd Bank (-5.6%), Adani Green (-4.6%), Data Patterns (-3.1%), Dr. Reddy’s Laboratories (-2.9%), and HFCL (-2.2%) traded lower.

Demand prospects in India, the world’s largest consumer, strengthened after industry officials projected higher edible oil imports between July and October, with tighter domestic supplies ahead of the festival season likely to boost palm oil purchases. Weather-related risks added further support after Malaysia’s meteorological agency warned that record-high temperatures could weigh on output next year. Export data from cargo surveyors for July 1–20 were mixed: AmSpec Agri Malaysia reported a 0.9% decline in shipments from June, while Intertek Testing Services estimated a 4.1% increase.

The bloc’s four largest markets all posted solid gains: Germany (+15.7%), France (+11.4%), Italy (+10.6%), and Spain (+7.8%). Over the first half of 2026, new EU car registrations increased by 5.7%. The robust June performance helped deliver a positive result for H1 overall, despite ongoing geopolitical headwinds that continue to cloud the outlook.

Battery-electric vehicles (BEVs) accounted for 20.7% of the EU market in H1 2026, up from 15.6% a year earlier, underscoring the sustained momentum behind electrification. Three of the four largest markets—together representing 63% of total BEV registrations—recorded particularly strong growth: France (+62.9%), Germany (+48.0%), and Denmark (+41.2%).

Still, sentiment found some support from expectations that the Reserve Bank of India would continue to step in if currency volatility intensifies. The central bank was a net seller of $6.1 billion in the foreign exchange market in May, following net sales of $8.9 billion in April. Further backing for the rupee came from stronger foreign inflows into Indian bonds and equities after the RBI introduced measures to attract overseas capital. In addition, India’s foreign exchange reserves remained robust, sufficient to cover roughly 10 months of imports.

Market participants turned more cautious ahead of the release of June inflation figures. Consensus forecasts point to headline inflation rising to 2.0%, its highest level since August 2024, while core inflation is expected to edge up to 1.6%, a three-month high. These projections have reinforced expectations of further monetary tightening, following Singapore’s first policy tightening since 2022, implemented in mid-April 2026.

Sector-wise, communications, electronic technology, and transportation names were the main drags on the index. Notable decliners included Sembcorp (-2.8%), OCBC (-1.9%), Jardine Cycle & Carriage (-1.9%), Jardine Matheson Holdings (-1.4%), and Venture Corp (-1.4%).

Prices were also supported by robust export demand, following a new wave of sizable US sales to China and other buyers reported this week. The USDA confirmed sales of 340,000 metric tons to China, 246,634 tons to Mexico, and 110,000 tons to an unknown destination, in addition to an earlier sale this week of 136,000 tons to China.

At the same time, crop conditions remained favorable. The USDA rated 66% of the US soybean crop as being in good-to-excellent condition, up one percentage point from the previous week and above market expectations.

Domestically, Bank Indonesia surprised markets by holding its benchmark interest rate at 5.75%, after a total of 100 basis points in hikes in May and June, and instead unveiled measures aimed at supporting the rupiah. These include cheaper foreign-exchange hedging facilities and efforts to expand the use of local currencies in trade. Governor Perry Warjiyo said the strategy is designed to attract more foreign capital inflows and stabilise the rupiah without increasing borrowing costs.

At the same time, the government signalled possible reductions in defence spending to strengthen fiscal sustainability. However, further gains in the rupiah were limited by worries over rising global oil prices, which could stoke inflation in Indonesia, a net oil importer. Bank Indonesia also cautioned that El Niño could add upward pressure on food prices, after annual inflation quickened to 3.34% in June.

The yen remained near its weakest level against the US dollar in roughly four decades, while climbing oil prices amid escalating US-Iran tensions added to inflation concerns and bolstered expectations that the BOJ will continue normalizing monetary policy. Policymakers have stayed vigilant about upside price risks stemming from a weaker currency and higher energy costs.

At the shorter end of the curve, Japan’s 2-year government bond yield climbed to a 31-year high of 1.49% as investors further recalibrated their outlook for the BOJ’s rate trajectory. Rising US Treasury yields also exerted additional pressure on Japanese government bonds.

The robust labor market figures underscored persistent tightness in labor conditions and led markets to raise the implied probability of another rate hike by year-end to 90%, up from 78% previously. Together with higher oil prices amid renewed conflict in the Middle East, the strong jobs report has heightened uncertainty around the inflation outlook and increased pressure on the Reserve Bank of Australia to maintain a restrictive policy stance.

Investors are now focused on next week’s release of second-quarter inflation data. Core inflation is expected to accelerate to 3.7% year-on-year from 3.5%, remaining well above the RBA’s 2%–3% target range.

Robust demand for yuan financing—supported by China’s relatively lower interest rates—has driven growth in offshore yuan lending, bond issuance, and hedging activity. Earlier this year, President Xi Jinping reaffirmed the internationalization of the yuan as a strategic priority, seeking to strengthen the currency’s global standing and reduce dependence on the US dollar.

Investors are now looking ahead to the upcoming Politburo meeting later this month for signals on Beijing’s policy agenda for the second half of the year, with any new stimulus measures likely to shape the yuan’s outlook.

The robust figures underscored persistent labor market tightness and pushed market-implied odds of another rate hike by year-end to 90%, up from 78%. Together with higher oil prices driven by renewed conflict in the Middle East, the strong jobs data have heightened uncertainty over the inflation outlook and increased pressure on the Reserve Bank of Australia to maintain a restrictive policy stance.

Investors are now focused on next week’s second-quarter inflation release, with core inflation expected to quicken to 3.7% year-on-year from 3.5%, remaining well above the central bank’s 2%–3% target range.

Sentiment was buoyed by Alphabet’s plans to ramp up capital expenditure, with the company expecting to invest as much as $205 billion this year, reinforcing optimism about demand prospects for regional chipmakers. At the same time, investors kept a close watch on tensions in the Middle East, where escalating conflict pushed oil prices to six-week highs, stoking concerns over potential supply disruptions and renewed inflationary pressures.

Sentiment was further buoyed by ongoing fundraising activity among Chinese technology firms in Hong Kong, underscoring robust investor appetite for AI and chipmakers despite recent market volatility. The broader market also found support in positive corporate developments, after Cathay Pacific forecast a substantially stronger first-half profit on the back of resilient passenger traffic and cargo demand.

Leading gainers included Tencent (up 1.8%), Lenovo (up 6.6%), Z.Ai Co (up 3.7%), Kingboard Laminates (up 6.0%) and AIA (up 1.4%).

These upward pressures were partially offset by signs of improving fuel availability in Russia, after Ukraine shifted its attacks away from major oil refineries and toward maritime targets. At the same time, EIA data showed that US gasoline inventories rose by 0.765 million barrels in the week ended July 17, rebounding from the prior week’s levels but still standing 7% below the five-year seasonal average.