Inflation Expectations Ease as Middle East Keeps Oil Elevated

• Household price expectations cooled sharply in July, with the Melbourne Institute survey dropping to 4.7% from 5.5% the prior month – the most encouraging read since January, though still sitting comfortably  the RBA’s 2-3% target.
• The rates market continues to lean toward further RBA tightening, with around a one-in-four chance of a 25bp move priced for the August meeting, building to roughly 70% by year end.
• Escalating conflict in the Middle East kept a floor under energy prices, with Brent hovering near USD 84 a barrel and WTI close to USD 79 – both still more than 10% above levels seen just a week ago despite a modest pullback on the day.
• UK GDP edged up 0.1% month-on-month in May, reversing the 0.1% contraction in April and coming in ahead of a flat consensus, with the annual rate holding at 1.3%.