A US official said they are optimistic about progress in Lebanon-Israel talks but acknowledged persistent difficulties. The US held separate talks with the Lebanese delegation on reconstruction; Lebanon and Israel discussed third-party demining operations. The official said Hezbollah continues to try to undermine the negotiations.

Commonwealth Bank of Australia expects the Reserve Bank of Australia to leave the cash rate unchanged for the rest of the year while keeping hawkish language. That hold-without-a-dovish-pivot limits the rate decision's near-term directional signal for the AUD; more market-relevant will be forecast revisions. CBA expects the RBA to raise its unemployment projection and lower both headline and core inflation forecasts — a material downward revision to inflation would be interpreted by markets as opening the door to later easing even if rhetoric stays hawkish. Escalation in the Middle East could add cost pass-through in Q3, an uncertainty that may force the RBA into a more hawkish stance than data alone imply.

On Iran talks, U.S. President Trump said Iran should be held responsible for the damage and deaths it has caused to the people of Lebanon, Syria, Yemen and Gaza.