Core Viewpoint - A moderate U.S. inflation report is strengthening traders' positions that the Federal Reserve will soon lower interest rates, with some speculating on the possibility of a significant rate cut [1][4]. Inflation Data Summary - July CPI increased by 0.2% month-on-month, matching expectations, while year-on-year growth was 2.7%, slightly below the forecast of 2.8% [1]. - Core CPI for July rose by 0.3% month-on-month, in line with expectations, and year-on-year growth was 3.1%, above the forecast of 3% [1]. Market Reactions - Following the CPI data release, short-term U.S. Treasury yields declined, and traders raised the probability of a Fed rate cut in September to 90% [1]. - There is growing interest in options betting on a rate cut exceeding 25 basis points in September, with approximately $2 million in options premiums added to positions linked to the Secured Overnight Financing Rate (SOFR) [1]. Expert Opinions - Rick Rieder from BlackRock anticipates a 50 basis point rate cut in September, citing the inflation report as slightly higher than previous months but not alarming [4]. - Claudia Sahm from New Century Advisors cautions that a September rate cut is not guaranteed, as definitive data is still pending [5]. Options Market Activity - Significant demand for call options at strike prices of 96.25 and 96.125 for September and December SOFR contracts indicates traders are pricing in further rate cuts [7]. - The options market remains close to neutral overall, with a slight bias towards bearish positions in long-term bonds [9].

Group 1 - The core point of the article highlights significant fluctuations in gold prices, with spot gold dropping below $3350 per ounce and COMEX gold futures falling nearly 2.5% [2][6][7] - Following a volatile week, gold prices rebounded above $3350 per ounce by August 12 [4] - The announcement by President Trump that no tariffs would be imposed on imported gold bars contributed to the market's reaction, leading to a decline in gold prices [6][8] Group 2 - The New York Mercantile Exchange saw a sharp decline in near-month gold futures, dropping nearly 2.5% and closing below $3400 per ounce, marking the largest drop since May [7] - The confusion regarding customs codes for gold bars led to a temporary spike in gold prices, which was later corrected after the White House announced plans to clarify the tariff situation [7][8] - Analysts noted that the current COMEX inventory levels are unusually high, indicating no liquidity issues despite the recent price fluctuations [8] Group 3 - Market attention is shifting towards upcoming U.S. inflation data, with expectations that the Consumer Price Index (CPI) and Producer Price Index (PPI) reports could influence Federal Reserve interest rate decisions [9] - A weaker-than-expected U.S. employment report has increased speculation about a potential rate cut by the Federal Reserve in September, with a 89.4% probability of a 25 basis point cut [9] - The ongoing trade tensions and tariff announcements are also impacting gold prices, as they have been significant factors driving price movements this year [9]

Group 1 - President Trump criticized Federal Reserve Chairman Powell, demanding an immediate interest rate cut and threatening a "major lawsuit" against him [1] - Trump highlighted the significant cost overruns in the Fed's renovation project, which escalated from an initial budget of $50 million to $3 billion [1] - The U.S. Labor Department reported a July CPI increase of 0.2% month-on-month and 2.7% year-on-year, with core CPI rising 0.3% month-on-month, the largest increase since January [1] Group 2 - Market analysts believe inflation remains moderate, providing the Federal Reserve with policy flexibility amid signs of a weakening labor market [2] - There is a high probability of a 25 basis point rate cut by the Federal Reserve in September, with estimates reaching 90.1% according to CME's FedWatch tool [2] - Goldman Sachs noted that the impact of tariffs on prices is mostly temporary, as companies are managing cost pressures through inventory reduction and cautious pricing [2]

Core Viewpoint - The July inflation data in the U.S. shows that the Consumer Price Index (CPI) remained stable, with a year-on-year increase of 2.7%, contrary to market expectations of a rise to 2.8% [1][2]. Group 1: Inflation Data - The July CPI increased by 0.2% month-on-month, consistent with expectations, and slowed down by 0.1 percentage points from the previous month [1]. - The core CPI, excluding volatile food and energy prices, rose by 0.3% month-on-month, matching expectations, while the year-on-year increase accelerated from 2.9% to 3.1%, surpassing the market forecast of 3% [2]. Group 2: Key Drivers - Housing costs were the main driver of the CPI increase, rising by 0.2% month-on-month, while food prices remained flat and energy prices decreased by 1.1% [4]. - New car prices remained unchanged due to the impact of tariffs, but used car and truck prices increased by 0.5% [5]. Group 3: Market Reactions - Following the data release, traders are betting on the Federal Reserve to cut interest rates in the remaining three meetings of the year, with the probability of a 25 basis point cut in September rising above 90% [5]. - Analysts suggest that the report may not alter the Federal Reserve's future trajectory, with expectations of rate cuts in the upcoming meetings [8].

Core Viewpoint - The July Consumer Price Index (CPI) data released by the U.S. Bureau of Labor Statistics indicates that inflation has not worsened, leading to market speculation about a potential interest rate cut by the Federal Reserve in September [1][12]. Economic Indicators - The CPI for July met expectations, with the overall index showing stability [5]. - The housing index increased by 0.2%, contributing significantly to the CPI rise, while food prices remained flat and energy prices fell by 1.1%, with gasoline prices decreasing by 2.2% [6]. - The core CPI, excluding food and energy, rose by 0.3%, up from 0.2% in June, with notable increases in healthcare, airfare, entertainment, household goods, and used cars, while lodging and communication indices declined [6]. Market Reactions - Following the CPI release, U.S. stock futures rose, with major indices opening higher, reflecting investor optimism regarding potential rate cuts [1][2]. - The probability of a 0.25% rate cut by the Federal Reserve in September increased to 87%, up from 57% the previous month, according to the CME FedWatch Tool [13]. Inflation Dynamics - Analysts suggest that the July CPI data does not indicate excessive inflation, supporting the feasibility of a rate cut in September [7]. - The impact of tariffs on inflation is seen as gradual, with some economists noting that inflation pressures appear manageable, which is a positive signal for the Federal Reserve [9]. - Deutsche Bank forecasts a divergence in short-term core inflation trends, with a three-month annualized rate expected to rise to 2.7%, while the six-month rate may drop to 2.4% due to price increases in tariff-sensitive goods [10]. Federal Reserve Outlook - The Federal Reserve is expected to have sufficient confidence to resume rate cuts in September as long as inflation remains under control [7][12]. - Federal Reserve Governor Bowman indicated that the actual trajectory of core personal consumption expenditures (PCE) inflation may be closer to the 2% target than reported, suggesting that the risks of sustained inflation from tariffs are diminishing [13].

Group 1 - Gold prices fell below $3350 per ounce, with COMEX gold dropping nearly 2.5% and COMEX silver down over 1.7% [2][4] - The significant drop in gold prices was attributed to reduced safe-haven demand due to potential peace prospects in the Russia-Ukraine conflict and the upcoming U.S. inflation report affecting Fed rate cut expectations [4][9] - The New York Commodity Exchange saw a sharp decline in near-month gold futures, falling below $3400 per ounce, marking the largest drop since May [4][5] Group 2 - Following the announcement that the U.S. would not impose tariffs on imported gold bars, gold prices initially surged but later retraced gains as clarity on tariff policies remained uncertain [5][6] - Analysts noted that the current COMEX inventory levels are unusually high, indicating no liquidity issues, and there is speculation that U.S. Customs may revise its stance on tariff codes [6] - The market is closely monitoring upcoming U.S. consumer price index (CPI) and producer price index (PPI) data, with expectations that inflation data could influence Fed's interest rate decisions [6][7] Group 3 - The potential for a more dovish monetary policy from the Fed is anticipated following President Trump's nomination of Stephen Miran to fill a vacancy on the Fed Board [7] - The trade war dynamics, including new tariffs on semiconductor chips and pharmaceuticals, are also influencing market sentiment and gold prices [7][8] - The upcoming meeting between President Trump and President Putin is seen as a pivotal moment that could impact gold prices due to its implications for geopolitical stability [9]

Group 1: Inflation Analysis - The report highlights concerns about inflation in the U.S. due to recent tariff increases, with tariffs reaching the highest level since 1933 at 18.6%[23] - Historical comparisons suggest that current inflationary pressures may resemble those seen during the 1970s oil crisis, where supply chain disruptions led to significant price increases[10] - The impact of tariffs is twofold: direct price increases and supply chain disruptions, which can lead to different inflationary outcomes[10] Group 2: Current Economic Indicators - Current inflation data tracking has become more challenging due to government layoffs and data collection issues, leading to a reliance on estimates for over one-third of inflation data[39] - Key inflation indicators show a mixed trend, with energy prices and used car prices expected to decline, while other core goods may see price increases due to tariffs[29] - The report emphasizes the importance of structural changes in inflation, noting that the breadth of price increases is rising across various sectors[32] Group 3: Risks and Concerns - There are significant risks associated with aggressive tariff policies, including potential stagflation or recession if inflation continues to rise without adequate demand control[42] - Geopolitical tensions and unexpected tariff expansions could lead to greater volatility in asset prices and a slowdown in global economic growth[42] - The accuracy of inflation data may be compromised by political influences and estimation methods, raising concerns about the reliability of reported figures[39]

Group 1: XAU/USD Gold Analysis - The article indicates that gold experienced high volatility last Friday, with a daily range of 325 points, and is currently stabilizing around the H4 trendline support near 3367 [1] - Key support and resistance levels are identified at 3367 and 3408 respectively, with a strategy to buy on dips in the 3367-3363 range [3] - The H1 trendline has shifted from red to yellow, suggesting a potential for short-term trading opportunities [4] Group 2: EUR/USD Euro/Dollar Analysis - The article notes that the euro was in a consolidation phase last Friday, with a daily range of approximately 50 points, and highlights the stability of European inflation at 2.0% [6] - Key support and resistance levels are set at 1.159 and 1.174 respectively, with a strategy to buy on dips in the 1.162-1.163 range [7] - The H1 trendline has also shifted from red to yellow, indicating potential for short-term trading based on the M5 model [8] Group 3: GBP/USD Pound/Dollar Analysis - The article mentions that the pound was in a consolidation phase last Friday, with a daily range of about 41 points, and discusses concerns over prolonged inflation impacting the Bank of England's rate decisions [10] - Key support and resistance levels are identified at 1.339 and 1.353 respectively, with a strategy to buy on dips in the 1.341-1.342 range [11] - The H1 trendline remains red, suggesting a cautious approach while looking for breakout signals [12] Group 4: GBP/JPY Pound/Yen Analysis - The article highlights that GBP/JPY experienced significant upward movement last Friday, with a daily range of 144 points, and is currently in a high-level consolidation phase [14] - Key support and resistance levels are set at 198.0 and 199.5 respectively, with strategies for both short and long positions based on market movements [17] - The H1 trendline remains red, indicating a focus on support and resistance transitions for trading decisions [18]

Group 1 - The U.S. labor market showed signs of slowing down, with non-farm payrolls increasing by only 73,000 in July, below the market expectation of 104,000, and a downward revision of nearly 260,000 jobs in the previous two months, resulting in an average increase of only 35,000 jobs over the past three months, the worst since the end of the pandemic [1] - The unemployment rate in July rose by 0.1 percentage points to 4.2%, in line with expectations, while average hourly earnings increased by 3.9% year-on-year, surpassing both June's increase and the expected 3.8% [1] - The ISM manufacturing index fell to 48 in July from 49 in June, indicating further contraction, contrary to expectations of a rebound to 49.5 [3] Group 2 - The Federal Reserve maintained the federal funds rate target range at 4.25% to 4.5% during the July meeting, with Chairman Powell emphasizing that the current moderate tightening policy remains appropriate despite risks in the labor market [3] - Market expectations indicate an 87% probability of two rate cuts by the end of the year, following a hawkish stance from the Federal Reserve [4] - Investment strategies suggest focusing on reasonably valued quality stocks that would benefit from rate cuts and diversifying stock portfolios into non-U.S. markets, while maintaining a neutral duration in bond portfolios to manage interest rate market volatility [4]

Group 1 - Federal Reserve Governor Michelle Bowman supports three interest rate cuts this year, citing recent weak labor market data as a key factor [3][5] - Bowman previously supported maintaining interest rates until June but voted against the decision in July, advocating for a 25 basis point cut [3] - She urges other policymakers to initiate rate cuts at the September Federal Reserve meeting to prevent further deterioration in the labor market [5] Group 2 - The U.S. labor market shows signs of cooling, with non-farm employment increasing by only 73,000 in July, below expectations, and the unemployment rate rising from 4.1% to 4.2% [6][8] - Core Consumer Price Index (CPI) is expected to rise by 0.3% in July, compared to a 0.2% increase in June, indicating potential inflationary pressures from higher tariffs [7] - Higher tariffs are beginning to affect consumer prices in categories such as household goods and entertainment, although core service inflation remains moderate [7][8]