Monthly inflation in January was higher than forecast, mainly driven by rising housing costs, reinforcing the case for continued monetary tightening. Data show core inflation reached 3.4% and has remained above the Reserve Bank of Australia’s 2 to 3% target range for a seventh consecutive month. Following the release, traders increased expectations of another rate hike in the coming months, and some institutions, including Goldman Sachs, have even raised the possibility of continued increases.

Donald Trump claimed in his speech that Iran is reviving its nuclear program alongside negotiations with Washington and warned that if talks fail, the option of military action will be considered. Iranian officials rejected the claim, and Abbas Araghchi stressed that Iran’s nuclear program is purely peaceful and that Tehran will never seek nuclear weapons. At the same time as the negotiations, the United States has increased its military presence in the Middle East. Inspectors from the International Atomic Energy Agency have not been able to verify the status of Iran’s near weapons grade uranium stockpiles for more than eight months. The uncertainty surrounding the true state of Iran’s nuclear activities and the continuation of negotiations has preserved an atmosphere of tension and uncertainty.

Haruhiko Kuroda, the former governor of the Bank of Japan, said the country’s economy is in a strong position but needs tighter monetary and fiscal policies to contain inflation risks. Kuroda suggested the central bank could raise interest rates twice per year in 2026 to 2027, bringing them to around 1.5 to 1.75%. He warned that government spending and tax cuts under Sanae Takaichi could intensify inflationary pressures and push bond yields higher. Kuroda also described the yen’s depreciation to around 167 per dollar as excessively weak and a factor that could further fuel inflation.

The third round of Iran US negotiations was held in Oman. According to reports, the Americans entered with strict conditions and the Islamic Republic’s proposal is inconsistent with US demands. Reports say that today Oman’s foreign minister will meet with Vance in Washington. J.D. Vance said in an interview with The Washington Post that the United States will not enter a long term war with Iran. Meanwhile, the idea of a Trump strike on Iran without congressional authorization has been raised and has faced criticism from Democrats. Oil, which had risen last night on disappointment over the talks, fell again after a tweet by Oman’s foreign minister signaled progress in negotiations.