The U.S. dollar opened the session lower against major currencies on August 12, with modest declines across the board. EURUSD rose 0.03%, GBPUSD gained 0.15%, and USDJPY slipped 0.12%.

The accompanying Kickstart video provides a technical analysis of EURUSD, USDJPY, and GBPUSD, focusing on three core elements for traders: identifying the market bias, understanding the risk levels, and setting price targets. The analysis examines where buyers and sellers hold control, what price levels would shift the bias, and where targets lie if trends develop.

The July U.S. CPI report, scheduled for release at 8:30 AM ET, is the key event of the session. The Federal Reserve has emphasized its data-dependent approach, making each inflation print a direct input into rate expectations. Inflation is expected to rebound modestly on a month-over-month basis while easing slightly year over year. Core readings remain the primary focus—core CPI excludes volatile food and energy components and is viewed by policymakers as a cleaner gauge of underlying price pressures—particularly given their implications for the Federal Reserve's September meeting.

Consensus expectations:

• Headline CPI: +0.1% m/m expected vs. -0.4% prior
• Headline CPI: +3.4% y/y expected vs. +3.5% prior
• Core CPI: +0.2% m/m expected vs. 0.0% prior
• Core CPI: +2.5% y/y expected vs. +2.6% prior

Lower energy prices are expected to help contain headline inflation, while core inflation is projected to remain somewhat sticky. Goldman Sachs forecasts come in slightly below consensus, calling for +0.19% on core and +0.05% on headline CPI. Bank of America aligns with consensus at +0.2% core and +0.1% headline.

From a market perspective, the risk/reward profile may be asymmetric. A hotter-than-expected report could raise expectations for a September Fed rate hike, though the August CPI release will also carry weight. Conversely, a softer reading could meaningfully reduce September hike probabilities, pressure the dollar and yields, and lend support to equities. The market currently prices a 46% probability of a September hike, down from approximately 50% the prior day.

In the Middle East, Iran has pushed back against reports of a potential ceasefire extension with the United States, stating that no agreement to extend exists. A senior Iranian source told Reuters that Washington violated the arrangement just 48 hours after it was reached and subsequently abandoned it altogether. Negotiations are now centered on whether the U.S. will return to the conditions outlined in the original memorandum of understanding, including a timetable for fulfilling its commitments. Iran reports no progress has been made. These remarks undercut earlier speculation about extending the agreement beyond August 17 and contributed to a recovery in oil prices from session lows.

Crude oil futures are trading at $83.55, up $0.34 on the day, having ranged between a low of $82.46 and a high of $84.35.

U.S. stock futures point to a higher open, with the Dow Jones Industrial Average up 61.15 points, the S&P 500 index up 11.05 points, and the Nasdaq 100 up 180 points.

U.S. Treasury yields are lower across the curve, with declines relatively evenly distributed from the front end through the long end. Shorter-dated yields, particularly the 2-year, are typically more sensitive to shifts in near-term Fed policy expectations:

• 2-year: 4.193%, -2.5 bps
• 5-year: 4.361%, -2.5 bps
• 10-year: 4.662%, -2.2 bps
• 30-year: 5.218%, -1.7 bps

The marginally larger declines at the front end have produced modest steepening in the yield curve, though the overall move remains relatively contained.