Global Asset Price Performance - Global stock markets experienced a broad rally, with the S&P 500 and Dow Jones indices both rising by 1.6%, and the Nasdaq index increasing by 2% this week [2][3] - In the bond market, the 10-year U.S. Treasury yield continued to decline by 4 basis points [2] - Commodity prices saw a decrease in crude oil, with WTI and Brent crude oil prices falling by 1.7% and 0.9% respectively, while London gold prices rose by 1.6% [2] Major Central Bank Monetary Policies - Federal Reserve: A U.S. District Court judge temporarily blocked Trump's attempt to remove Federal Reserve Governor Lisa Cook, allowing her to potentially attend the upcoming FOMC meeting [5] - European Central Bank: The ECB maintained its deposit rate at 2%, marking the second consecutive pause in rate cuts, with little change in inflation outlook [5] U.S. Economic Dynamics - Inflation in the U.S. showed moderate growth, with the CPI year-on-year increase rising to 2.9%. Core CPI remained stable, but a slight increase of 0.05 percentage points was noted [9] - Initial jobless claims rose to 263,000, reaching the highest level in nearly four years, indicating a cooling labor market [9] - The NFIB small business confidence index reached 100.8, the highest since January 2025, driven by a significant increase in new orders [10] Other Regional Economic Dynamics - France: The government faced a crisis as Prime Minister Borne resigned after losing parliamentary confidence, with the new Prime Minister likely to struggle for majority support [21] - Germany: Industrial production showed a month-on-month increase of 1.3% and a year-on-year increase of 1.5%, indicating potential for recovery despite ongoing challenges [21]

Core Insights - Inflation has shown a moderate increase, with the August CPI year-on-year growth rising to 2.9%, and the core CPI remaining stable at 3.1% [4][15] - The increase in energy and food prices has been offset by a decrease in core services and an increase in core goods [4][15] Inflation Trends - The CPI for energy has rebounded, with a year-on-year growth of 0.2% in August, an increase of 1.8 percentage points from the previous month [5] - Gasoline prices have seen a reduced decline of -6.6% year-on-year, while electricity prices have increased by 6.2% [5] Core Goods Analysis - The year-on-year growth rate for core goods has risen to 1.5%, up 0.3 percentage points from the previous month [7] - Significant price increases have been observed in used cars, which saw a year-on-year growth of 6%, and new cars, which increased by 0.7% [7] Core Services Overview - The year-on-year growth rate for core services has remained stable at 3.6%, with a slight decrease in the month-on-month growth rate to 0.3% [9] - The owner’s equivalent rent has decreased to a growth rate of 4%, indicating a cooling trend in housing inflation [9] Long-term Inflation Expectations - Consumer inflation expectations for one year have risen to 4.8%, while five-year expectations have increased to 3.5% [12] Market Reactions - Following the inflation data release, U.S. stock indices rose, bond yields fell, and the dollar index decreased, leading to market expectations of an imminent interest rate cut [15]

Core Viewpoints - The implementation of Trump's "transshipment tariffs" and the resumption of postal package taxation will lead to a renewed wave of Chinese enterprises going abroad [2] - The current state of various industries in China going abroad and the differences from direct exports are examined, along with the impact on profit margins [2][3] - East Asian enterprises are driven to go abroad due to rising factor costs and tightening internal and external environments, leading to a restructuring of industrial chains [2][6] Industry Outbound Trends - The outbound journey of East Asian enterprises is primarily driven by rising costs and stricter internal and external environments, prompting a shift from labor-intensive to technology-intensive and service industries [6][10] - Different regions have unique triggers and paths for going abroad, with South Korea focusing on steel and automotive industries, while Taiwan has shifted from chemicals to services [7][12] - The automotive and light industries have led the way in outbound revenue, while electronics and electrical machinery are transitioning from exports to outbound production [3][34] Profit Margin Impact - Overall, there is a positive correlation between Chinese enterprises going abroad and profit margins, with significant industry differences [4][50] - Industries such as light industry, chemicals, pharmaceuticals, and non-ferrous metals see notable profit margin increases after going abroad, while electronics and textiles remain export-dependent [4][63] - The reasons for higher overseas profit margins include supply-demand gaps, brand premiums, and higher consumption levels [65][66] Policy and Market Dynamics - The past decade has seen a shift from "export-oriented" to "global operations" for Chinese enterprises, driven by supportive policies and market conditions [30][32] - The "Belt and Road" initiative has catalyzed outbound revenue growth, particularly in the automotive and light industries [32][33] - The impact of geopolitical risks has led to a cautious approach in the oil and petrochemical sectors, resulting in a decrease in overseas operations [48] Future Outlook - Industries such as pharmaceuticals, automotive, electrical machinery, and electronics are expected to see continued overseas profit growth [81] - The challenges faced by food and beverage, electronics, and textile industries in improving profitability due to localization barriers and international uncertainties are highlighted [81][78]

Core Viewpoint - In August, China's export growth rate recorded a year-on-year increase of 4.4%, a decline of 2.8 percentage points from the previous month, with the month-on-month growth also below the median of the past five years, primarily due to a rebound in the base from the same period last year and weakened U.S. imports following tariff implementation [2][3]. Export Analysis - The decline in export growth is attributed to weakened U.S. imports due to tariffs and a rebound in the previous year's base, which has exerted pressure on exports [3]. - Exports to Southeast Asia have increased as a substitute for direct exports to the U.S., while exports to Europe have rebounded against a backdrop of a significant increase in the previous year's base [8]. - The electronic industry chain, particularly consumer electronics, has shown strong performance despite the overall decline in exports [12]. Import Analysis - In August, China's import growth rate was 1.3%, a decrease of 2.8 percentage points from the previous month, with the month-on-month growth hitting a five-year low, mainly due to a halt in production-related imports and continued weak domestic demand [11]. - Imports from major trading partners, except for ASEAN and the U.S., have generally declined, with significant drops from resource countries and "Belt and Road" nations [11][14]. Trade Surplus - China's trade surplus expanded to $102.33 billion in August, indicating that net exports continue to support the economy [17]. - Future export outlook suggests potential improvement in September due to a low base, but a significant increase in the fourth quarter's base may lead to a stable yet declining export center [17].

Global Asset Price Performance - The US dollar assets have strengthened, with mixed performance in global stock markets; US stocks rose while European and Japanese markets generally declined. The S&P 500, Dow Jones, and Nasdaq indices increased by 0.6%, 0.2%, and 1.2% respectively [2] - The 10-year US Treasury yield continued to decline by 6 basis points, likely due to weak employment data reinforcing rate cut expectations [2] - Oil prices fell, with WTI and Brent crude down by 1% and 0.6% respectively, while London gold prices increased by 3% [2] - The US dollar index rose by 0.5% [2] Major Central Bank Monetary Policies - Employment data has catalyzed rate cut expectations; Federal Reserve Governor Waller reiterated the call for a rate cut in the next meeting. Following the August non-farm payroll data, the probability of a 50 basis point cut in September rose to 12%, with an expected average of 2.8 cuts by year-end [4] - In Japan, the Ministry of Health, Labour and Welfare announced a 6.3% increase in the minimum wage for the fiscal year, supporting the "wage-price loop" and providing backing for continued rate hikes by the Bank of Japan [4] US Economic Dynamics - Employment data showed weakness, with the unemployment rate rising to 4.3%, the highest since the end of 2021. The increase was attributed to more unemployed individuals re-entering the job market, while the U6 unemployment rate also rose by 0.2 percentage points [8] - The ADP reported that new job additions in August fell to 54,000, and initial jobless claims reached a six-month high, indicating a cooling labor market and reinforcing expectations for a rate cut by the Federal Reserve [8] - Tariffs are beginning to impact consumer spending, with the Fed's Beige Book indicating stagnant economic activity across most regions, and many households experiencing wage growth that has not kept pace with rising prices [9] Other Regional Economic Dynamics - In Europe, long-term bond yields have significantly increased, with the Eurozone CPI growth rate at 2.1% and the unemployment rate steady at 6.2%. Concerns over government debt have risen due to increased fiscal spending in response to geopolitical and economic recovery challenges [19] - In the UK, the 30-year government bond yield surpassed 5.7%, the highest since 1998, while France's 30-year bond yield exceeded 4.5% [19] - Japan's manufacturing sector remains under pressure, with the manufacturing PMI at 49.7%, indicating contraction, despite nominal wage growth reaching 4.1% in July [19]

Group 1 - The core viewpoint of the article indicates a shift in the labor market towards oversupply, with the unemployment rate rising to 4.3%, the highest since the end of 2021, while the labor participation rate increased to 62.3% [2][5][14] - The U6 unemployment rate also rose by 0.2 percentage points, indicating increased difficulty for marginal labor to find employment, suggesting a cooling labor market overall [5][14] - Non-farm payroll additions decreased significantly in August, with only 22,000 new jobs created, and downward revisions of 21,000 jobs for June and July combined [2][14] Group 2 - The education and healthcare sector saw the largest decline in new jobs, losing 31,000 positions, while government and financial sectors also experienced notable job losses [4][5] - Job vacancies in the U.S. fell to 7.18 million in July, with a vacancy rate of 4.3%, indicating that labor supply exceeds demand, suggesting a potential turning point in the labor market [7][14] - Wage growth is slowing, with average hourly earnings increasing by only 3.7% year-over-year, reflecting a decline in workers' bargaining power [9][10] Group 3 - The market anticipates a rate cut by the Federal Reserve in September, with the probability of a 50 basis point cut rising to 12.2%, and expectations for 2.8 rate cuts within the year [14] - The actual wage growth, adjusted for inflation, was 1.2% year-over-year in July, indicating stable wage income growth despite the overall cooling labor market [16]

Global Asset Price Performance - US Treasury yields continue to decline, with the 10-year yield down by 3 basis points, reflecting ongoing expectations for interest rate cuts by the Federal Reserve [2] - Global stock markets show mixed performance, with the S&P 500 up by 0.5%, the Dow Jones flat, and the Nasdaq down by 0.2%. The French CAC40 index fell by 3.3% due to rising political uncertainty [2] - Oil prices rebounded, with WTI and Brent crude oil increasing by 1.5% and 1.3% respectively, while gold prices in London rose by 1.3% [2] - The US dollar index increased by 0.1% [2] Major Central Bank Monetary Policies - Federal Reserve Governor Waller advocates for a 25 basis point rate cut in September, with market expectations for this cut exceeding 85% [4] - President Trump dismissed Federal Reserve Governor Lisa Cook, marking a significant escalation in pressure on the Fed, with Cook filing a lawsuit claiming her dismissal was illegal [4] - The European Central Bank (ECB) indicated no need for further rate cuts as inflation is at the 2% target and economic outlook remains stable [4] US Economic Dynamics - US durable goods orders fell by 2.8% in July, marking a second consecutive month of contraction, but the decline was less severe than the previous month's 9.4% drop. Core capital goods orders, excluding transportation, rebounded by 1%, the fastest growth in nearly three years [8] - The PCE price index rose by 2.6% year-on-year in July, with core PCE at 2.9%, the highest level since February [8] - The second revision of Q2 GDP showed a 0.3 percentage point increase, with investment slightly up and consumption remaining weak [8] Other Regional Economic Dynamics - Political risks in France impacted markets, with Prime Minister Borne proposing a €44 billion austerity plan, leading to a potential government collapse and a spike in 10-year French government bond yields to 3.5% [19] - Japan's 10-year government bond yield reached 1.63%, the highest since October 2008, driven by concerns over new fiscal stimulus and persistent inflation [19]

Core Viewpoints - The US labor market is cooling down, with the three-month moving average of non-farm employment showing a downward trend, potentially nearing negative growth by October 2023 [2][5][6] - The quality of employment data has been questioned due to significant downward revisions in May and June data, with a total adjustment of 258,000 jobs [9][10] - The unemployment rate is on the rise, reflecting a broader cooling in the labor market, with a decrease in active job seekers and an increase in the duration of unemployment [10][11][30] Employment Sector Analysis - The education and healthcare sectors have been the main contributors to job creation, accounting for about half of non-farm employment from January to July 2024, supported by government funding [3][18] - Cyclical industries such as manufacturing and construction are experiencing a slowdown in job growth, with high interest rates limiting business operations and hiring plans [19][23] - The tightening labor market is evident in the information and professional services sectors, where job vacancy rates have increased, likely due to rising demand for AI-related positions [24] Future Labor Market Outlook - There is potential for marginal labor to return to the job market, with an increase in young job seekers aged 19-24, which may lead to higher unemployment rates if labor demand does not improve [25][30] - Small businesses remain cautious, with no improvement in hiring plans due to uncertainties in future policies and trade negotiations [28] - The labor market is at a turning point, with supply potentially exceeding demand, leading to a continued rise in the unemployment rate [30]

Global Asset Price Performance - US Treasury yields declined, with the 10-year yield down by 7 basis points, likely due to dovish comments from Powell at the Jackson Hole meeting [2] - Major global stock markets saw mixed results, with the S&P 500 and Dow Jones increasing by 0.3% and 1.5% respectively, while the Nasdaq Composite fell by 0.6% [2] - Oil prices rebounded, with WTI and Brent crude rising by 1.4% and 2.9% respectively, and gold prices increased by 1.1% [2] - The US dollar index decreased by 0.1% [2] Major Central Bank Monetary Policies - Powell signaled a dovish stance at the Jackson Hole meeting, indicating that the Fed may need to adjust its policy stance due to increased risks of employment downturn and reduced inflation risks [4] - The Fed's July meeting minutes suggested that officials believe interest rates are close to neutral, and maintaining the current stance is appropriate [4] - The Bank of Japan approved the first domestic yen stablecoin, JPYC, supporting financial technology innovation [4] US Economic Dynamics - The US housing market remains weak, with July new housing starts showing a year-on-year increase primarily due to a low base from the previous year [8] - The NAHB housing market index slightly decreased to 32, remaining in negative territory for 16 consecutive months [8] - The US has added 407 steel and aluminum products to its tariff list, with a 50% tax rate, which may increase procurement costs for downstream manufacturing companies [9] Other Regional Economic Dynamics - The Eurozone showed resilience with a 0.1% GDP growth in Q2 and a July CPI annual rate of 2%, aligning with the ECB's target [19] - Japan's long-term bond yields have risen, with the 20-year yield reaching 2.7%, the highest since 1999, driven by inflation expectations and concerns over fiscal expansion [19]

Core Viewpoint - The Federal Reserve is likely to initiate interest rate cuts soon due to rising downside risks to employment and diminished upside risks to inflation, as indicated by Powell during the Jackson Hole meeting [2][3]. Employment and Inflation - Employment growth is slowing, indicating a decrease in job creation opportunities, while GDP growth has also decelerated in the first half of the year, leading to increased downside risks for employment [2]. - Inflation is approaching the Fed's target, with tariffs expected to have a gradual and uncertain impact on prices. There is a lack of sustained upward pressure on inflation due to downward pressure in the labor market, which reduces the likelihood of a wage-inflation spiral [3]. Monetary Policy Framework Changes - The Fed has revised its monetary policy framework to return to a flexible inflation targeting regime, allowing for adjustments without waiting for inflation to remain below 2% for an extended period. This change acknowledges the weakening labor supply and demand [6][7]. - The new framework removes references to the effective lower bound as a decisive economic characteristic, reflecting the current low interest rate environment and the potential for more frequent constraints on the federal funds rate [6]. - The Fed has shifted its view on maximum employment, now considering it as the highest level of employment that can be sustained in a context of price stability, rather than focusing on employment shortfalls [7]. Long-term Inflation and Employment Goals - The Fed maintains that a 2% inflation rate, measured by the Personal Consumption Expenditures Price Index, is most consistent with its dual mandate of promoting maximum employment and price stability. Long-term inflation expectations should remain anchored at this level to enhance the Fed's ability to achieve maximum employment [8]. - The Fed's approach to monetary policy will balance the degree of deviation from its employment and inflation targets, considering the time required for both to return to target levels [8].