Inflation in the U.S. in June was significantly lower than expected, with the monthly headline rate falling 0.4% and the core rate coming in at 0.0% (vs. -0.1% and +0.2% expected, respectively), while the annual headline rate was 3.5% and the core rate was 2.6% (vs. 3.8% and 2.8%, respectively). As expected, global assets reacted positively, with the Nasdaq rising nearly 1% and the S&P 500 gaining 0.4% following modest gains in Europe and Asia. On the interest rate front, there was a sharp bull steepening of the Treasury yield curve, with short-term yields falling by up to 10 bps and long-term yields by 2 bps, widening the 2-year/30-year spread to 90 bps. In commodities, crude oil rose again, gaining 2% to $80 for WTI and $85 for Brent amid expectations of further U.S. attacks on Iran; metals rose by an average of 1%, while agricultural commodities fell by a similar amount. The dollar depreciated by 0.3% (DXY 100.9), and the VIX closed at 16.5.

Venezuelan bonds continue to benefit from the rise in oil prices, with sovereign bonds gaining up to 0.5 points and PDVSA bonds gaining 0.25 points, although trading volumes remain low.