President Donald Trump on Tuesday announced a reversal of plans to charge a 20% toll on cargo going through the Strait of Hormuz, saying that Middle Eastern countries will instead make investment and trade deals with the U.S.

"Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States," Trump said on social media.

The president said the investments "will be MASSIVE," though it's unclear if these would be new commitments relative to what Trump announced after a visit last year to the Middle East.

(Continue Reading – PBS)

The renewed fighting in the Middle East will undoubtedly concern central bankers and raise inflation risks for the Canadian economy. For now, however, the Bank of Canada’s policy stance appears appropriate.

The Governing Council is widely expected to keep its overnight rate unchanged at 2.25%.

Alongside the decision, the BoC will publish its quarterly Monetary Policy Report (MPR), setting out its updated base-case projections for Canadian growth and inflation, alongside its assessment of the risks.

BMO’s Benjamin Reitzes noted that the bank has made clear that the hurdle for a policy shift in either direction is currently quite high. “There has been more concern about upside inflation risks in recent months due to the war-driven spike in energy prices. However, oil is now well off the highs, even with hostilities ramping up again this week.”

(Continue Reading – LiveSquawk)

Today's consumer price inflation report for June was considerably softer than expected. US headline prices fell -0.4% month-on-month versus consensus expectations of a -0.1% outcome, while core inflation (ex-food and energy) was flat on the month versus expectations of a 0.2% increase. To three decimal places, it was a negative print of -0.017% MoM. As a result, the annual headline inflation rate slows to 3.5% year-on-year from 4.2% while core inflation slows to 2.6% from 2.9%.

The details show gasoline prices fell 9.7% MoM, but there were also falls in education & communication of -0.8% MoM, used cars (-0.2%), apparel (-0.6%), medical care fell 0.1% while shelter, the largest component within CPI, rose just 0.1%. New vehicle prices were flat on the month while other goods and services rose just 0.1%. The only real source of strength was recreation (+0.5%), which may reflect the World Cup to a certain extent. The encouraging aspect of this report is the breadth of the softness – it wasn't steep falls in one or two components that offset robust price increases elsewhere. The chart below shows core inflation metrics with the black line representing 0.17% MoM, which is the run rate required to bring core inflation down to 2% YoY.

(Continue Reading – ING)

The first major piece of housing affordability legislation in three decades is now law, concluding an extended saga that included months of congressional negotiations and a last-minute decision by President Trump not to sign the bill.

The 21st Century ROAD to Housing Act aims to tackle the housing affordability crisis by encouraging more homebuilding and expanding financing options. The law's many provisions include grants for local governments that ease zoning restrictions and expand the housing supply, streamlined environmental review processes, reduced construction costs for manufactured homes, and restrictions on large corporate investors buying single-family homes.

(Continue Reading – Yahoo)