• A US inflation report for July that was mostly good has made investors think that the Federal Reserve will cut interest rates. With swaps traders now pricing in a 90% chance of a September cut, and some speculating about a bigger reduction, the report has given validation to those who have been betting on low inflation allowing the Fed to lower borrowing costs.

• The Bank of Japan, on the other hand, is under pressure to communicate in a more cautious way and to be clearer about future rate hikes. Some people on the board are saying that the bank’s way of measuring inflation is wrong. They think that second-round price effects are making the bank change its plans for future rate hikes, even though the BOJ is being careful.

• At the same time, India and China are trying to improve their economic relationship, which was damaged by a border clash in 2020 that resulted in many deaths. This improvement in relations, which includes the return of direct flights as early as next month, comes after U.S. President Donald Trump imposed a 50% tariff on India. Prime Minister Narendra Modi is expected to meet with Chinese leader Xi Jinping at the Shanghai Cooperation Organisation summit. This could mean that India’s foreign policy towards the BRICS countries is about to change because of the U.S. tariffs.