The Open Bell — Ep. 025 — 27 Jul 2026

Today on The Open Bell: Oil just had its worst day in months, and the reason is genuinely good news: Iran and the US have agreed to stop hitting each other, at least for now, and the relief in energy markets was immediate and dramatic. The European Central Bank held rates steady at 2.25% last week, but the message underneath the pause was clear enough that anybody with a mortgage or a business loan in Europe should probably pay attention to September. Japan's inflation ticked up for the first time since March, and the story buried inside that number points straight back to the Persian Gulf, which tells you just how connected all of this really is. If this helped you join the dots today, a quick rating in your podcast app helps the next listener find the show. Hosted by Alex Monroe. New episodes every weekday morning at theopenbell.co Not investment advice. For informational purposes only. --- Chapters: 00:00 Introduction 00:13 Brent Crude Tumbles 7%+ as US and Iran Suspend Strikes 03:03 ECB Holds at 2.25% with Hawkish Tone; September Hike on Tabl 05:21 Japan Core CPI Rises to 1.6% in June, First Uptick Since Mar 07:18 Closing thoughts

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Good morning. It's Monday, 27 July, 2026, and this is the Open Bell. I'm Alex Monroe. Crude oil just had its worst single day in months. Here's why that happened, what it means, and why you shouldn't assume it's over. Oil is down sharply this morning. And for once, the reason is good news rather than a bad number. Iran signaled overnight per Reuters that it would suspend retaliatory strikes provided the United States held its own fire. That's the first genuine de-escalation in nearly two weeks of nightly exchanges, and markets responded immediately. Brent crude, the global benchmark price for oil, fell more than 7% in the first hour of Asian trading, briefly dipping below $90 a barrel before steadying at around 91. West Texas Intermediate, the American equivalent, dropped just over 5% to around $85. For anyone driving to work, heating a home, or running a business with fuel costs, this is directionally the right news. Petrol prices won't fall tomorrow morning. The supply chain doesn't work that fast, but lower crude is the first upstream condition that eventually reaches the pump. After months of watching the bill go one way, this is the first morning in a while where the pressure is pointing the other direction. But here's the thing a 7% drop sounds dramatic until you remember what happened before it. Brent is still roughly 30% above where it was a year ago. The Strait of Hormuz, the narrow waterway through which around a fifth of the world's seaborne oil normally flows, remains effectively closed to tanker traffic. And the Houthi rebels in Yemen, operating entirely independently of Tehran's diplomatic signal, claimed fresh attacks on Saudi oil facilities along the Red Sea overnight. So the risk premium in oil hasn't disappeared. It's just it's just eased. There's also a historical caution worth naming directly. We've seen ceasefire signals before in this conflict, and each time markets called a turning point, hostilities resumed within weeks and prices climbed back through everything they'd given up. Barclays, for its part, forecasts Brent averaging around $100 a barrel for 2026 if Hormuz navigation is properly restored by the end of this month, but pushes that forecast to 110 if the delay stretches to August. So what is this morning exactly? It's a ceasefire, not a resolution. The underlying architecture of the conflict, the US strikes, the Iranian retaliation capability, the Houthi wildcards, the closed shipping lane, none of that has changed yet. What's changed is that two parties who are hitting each other every night have agreed conditionally to stop. That's meaningful. It's just not the all-clear. The futures market is treating it as a relief bounce rather than a structural shift. SP 500 futures are up about half a percent, the dollar has softened, gold has gained. A proper deescalation would look more emphatic than that. For now, markets are breathing out, not standing down. Oil just had its biggest single session fall since this conflict began. And if you told someone in February that the price would drop this sharply and still be 30% above year ago levels, they'd have had a hard time believing you. The ECB's most recent rate decision fits directly into that same energy story, just viewed from Brussels instead of Hormuz. And it's worth covering because the next move is live and imminent. The European Central Bank, the equivalent of the Bank of England or the Federal Reserve, but for the 19 countries that use the Euro, voted on July 23rd to hold its key interest rate at 2.25%. That part was widely expected. What landed more firmly than anticipated was the tone around it. The message from ECB President Christine Lagarde was effectively this. Don't mistake a pause for a pivot. The September meeting is live. What she meant by live is that a rate rise of a quarter of a percentage point, 25 basis points, in the shorthand, central bankers' use is genuinely on the table at the next decision on September 10th. And the reason comes straight back to oil. With Brent above $95 at the time of the decision, the ECB's concern is that energy costs will keep feeding into everything else food, transport, manufacturing, and keep inflation higher for longer than their models would prefer. Here's what makes this uncomfortable for the Eurozone. The Euro area's economy is not in great shape. Germany, its largest member, is stalling. There was already a contraction in the first quarter. Raising rates into that backdrop risks tipping the region into a technical recession. Two consecutive quarters of negative growth. But not that raising risks, letting inflation reaccelerate at a moment when households are already squeezed by energy bills. There's no clean answer. Bond markets, where governments and companies borrow money price roughly a 60 to 70% chance of a September hike in the hours after Lagarde's press conference. That probability is likely to move this week when the latest Eurozone inflation figure is published on Thursday, with forecasters expecting it to come in at around 3% year on year. If it does, September becomes very hard to avoid. For European mortgage holders on variable rates, and there are tens of millions of them across Germany, Spain, and the Netherlands, another quarter point hike would be the latest in a long series of borrowing cost increases that have already reshaped household finances across the continent. The ECB paused, but it paused the way someone pauses at the top of a staircase, still clearly going somewhere. Japan's inflation data, published this past Friday the 25th, adds a third angle to what is essentially the same underlying story playing out across three continents. Japan's core consumer price index, the measure that strips out fresh food prices which swing too wildly to be useful, rose 1.6% year on year in June. That's the first increase since March, in line with what economists had expected. And it matters because Japan imports almost all of its crude oil. When the Strait of Hormuz closes or restricts tanker flows, Japan feels it through higher energy import costs faster than almost any other major economy. That's showing up in the headline inflation number, which climbed to 1.7% from 1.5 in May. 1.6% might sound modest compared to what Europe or the United States have been dealing with. In Japan's context, it's not trivial. The Bank of Japan, the country's central bank, meets on Thursday, and the question is whether this inflation uptick is enough to push it toward another rate rise or whether it treats the energy component as temporary and holds firm. Most economists expect to hold. Japan's last sustained inflationary episode in 2002 and 2023 saw core prices peak above 4% before the Bank of Japan was eventually forced into one of the most significant policy shifts in decades. 1.6% is nowhere near that. But the direction of travel matters, and it's moving the wrong way relative to where the BOJ would prefer to be heading into the second half of the year. South Korea's market told its own story last week. The Cosby, Seoul's main stock index, fell nearly 6% across the week to around 6,700, with chip giants Samsung and SK Heinex each falling more than 4% as energy cost pressures and tightening financial conditions hit sentiment across the region. Japan hasn't seen inflation tick up like this since March, and it's almost entirely because of what's happening several thousand miles away in the Strait of Hormuz. Three stories, one week, and the same pressure running through all of them. An energy shock that started in a shipping lane and is now showing up in central bank minutes, inflation forecasts, and mortgage statements from Tokyo to Madrid. This week, the Bank of Japan decides on Thursday, Eurozone inflation prints on the same day, and the Federal Reserve wraps up its own meeting on Wednesday. That's three of the world's four major central banks making or signaling decisions in the same 72 hours. If this morning ceasefire holds and oil keeps retreating, the calculus shifts for all of them. If it doesn't hold, and we've seen that movie before, the pressure goes straight back on. If you'd rather have today's figures in writing, the newsletter covers every story with all the numbers, it's free, and the link is in the show notes. That's the open bell. I'm Alex Monroe. Have a sharp morning.