Group 1 - The Japanese government has revised its GDP growth forecast for the fiscal year 2025 from 1.2% to 0.7%, although this remains above the private sector's prediction of 0.5% [1] - The Bank of Japan's continuous interest rate hikes since the end of 2024 and a temporary strengthening of the yen have alleviated imported inflation pressures, but the yen's recent depreciation and delayed expectations for Federal Reserve rate cuts have led to a mild resurgence in inflation [3] - Japan's inflation pressure eased in June due to the restoration of gasoline subsidies, indicating a potential slowdown in inflation [3] Group 2 - Mechanical orders, a leading indicator of corporate equipment investment in Japan, show that while non-manufacturing investment growth has cooled, manufacturing mechanical orders remain at historically high levels [3] - The leading indicator for construction investment, specifically the non-residential building area, has recently increased, and the Sentix investor confidence index has rebounded significantly since April, reflecting improved corporate confidence in medium to long-term investments [3] - Overall, corporate investment in the second quarter has weakened due to tariff impacts, but inflation is expected to slow in the second half of the year, although it is anticipated to remain sticky [3]

Core Insights - Germany's inflation rate has unexpectedly slowed down, with July's consumer prices rising by 1.8% year-on-year, down from 2% in June, marking the first time in 10 months that it has fallen below the European Central Bank's target [1] - The overall trend of inflation in the Eurozone is also decreasing, as evidenced by France's inflation rate remaining below 1% for six consecutive months and Italy's inflation dropping to 1.7% [1] - However, Spain's inflation unexpectedly accelerated to 2.7%, exceeding market expectations, indicating mixed inflationary pressures within the Eurozone [1] - The Eurozone's inflation is projected to slightly decrease to 1.9% in July [1]

Core Viewpoint - The Governor of the Bank of Japan, Kazuo Ueda, stated that there is no clear prescription for raising interest rates amid a slowdown in inflation [1] Group 1 - The Bank of Japan is facing challenges in determining the appropriate timing for interest rate hikes due to the current inflation trends [1]

Group 1 - The core narrative revolves around the tension between political statements from Trump and the ambiguous signals from Fed Chair Powell regarding the strength of the US dollar and interest rate policies [1][2] - Trump's declaration of a "strong dollar" serves to protect his legacy and assert the White House's influence over market perceptions, while Powell's dovish hints suggest a potential shift towards easing monetary policy [2][3] - The recent CPI data indicating a significant drop in inflation has provided Powell with the confidence to signal a more flexible approach to interest rates, which has altered the dynamics of the power struggle [2][3] Group 2 - Market reactions have been pronounced, with the dollar index experiencing a sharp decline, gold prices reaching new historical highs, and US stock indices rising collectively due to expectations of interest rate cuts [3][4] - Non-US currencies have also benefited from the dollar's retreat, indicating a broader market shift as investors reposition themselves in response to the changing monetary landscape [3][5] - The upcoming period of anticipated interest rate cuts is characterized as a historically volatile yet potentially lucrative phase for investors [4][5]

Core Viewpoint - The Central Bank of Russia indicates that future decisions regarding key interest rates will depend on the persistence of inflation slowdown and the dynamics of inflation expectations [1] Group 1 - The Central Bank emphasizes the importance of monitoring inflation trends to inform monetary policy decisions [1] - The focus on inflation expectations suggests a proactive approach to managing economic stability [1]

Core Viewpoint - The Chief Economist of the Reserve Bank of New Zealand indicated that there is room for further interest rate cuts if inflation continues to ease [1] Group 1 - The Reserve Bank of New Zealand is closely monitoring inflation trends and is prepared to adjust monetary policy accordingly [1] - A continued decline in inflation could lead to a more accommodative monetary policy stance [1] - The central bank's focus remains on achieving its inflation targets while supporting economic growth [1]

Core Viewpoint - The Federal Reserve's Goolsbee stated that it is currently difficult to determine whether new tariff threats will undermine the prospects for inflation moderation [1] Group 1 - The uncertainty surrounding the impact of new tariffs on inflation is highlighted, indicating potential challenges for economic stability [1]

Core Viewpoint - The Reserve Bank of India may consider an interest rate cut in the fourth quarter, with a possibility of earlier action, as June's CPI is expected to decline to 2.2%, the lowest since February 2019 [1] Inflation Outlook - The June CPI year-on-year rate is projected to decrease to 2.2%, down from 2.82% in May, indicating a continued slowdown in inflation [1] - The decline in inflation is attributed to favorable base effects from food price inflation, which offsets the monthly increase in food costs [1] Central Bank Policy - The Reserve Bank of India is anticipated to lower interest rates by 25 basis points in the fourth quarter, with the potential for earlier action if inflation trends continue [1] - The risk of food price shocks is considered low, supporting the case for a rate cut [1]

Group 1 - The core viewpoint is that Goldman Sachs anticipates the Federal Reserve may lower policy interest rates in September due to a moderation in inflation and a slowdown in inflationary pressures [1] - The expected terminal interest rate has been revised to a range of 3% to 3.25%, down from the previous estimate of 3.5% to 3.75% [2]

Core Viewpoint - The Dutch International Bank anticipates that the Reserve Bank of Australia will lower the cash rate by 25 basis points to 3.6% in the upcoming meeting due to weaker-than-expected growth and inflation data [1] Inflation and Economic Data - Australia's overall inflation rate decreased from 2.4% in April to 2.1% in May, approaching the central bank's target range lower limit of 2-3% [1] - The latest monetary policy statement from the Reserve Bank of Australia indicates a decline in voluntary resignation rates, shifting wage negotiations towards job security, which may lead to a slowdown in wage growth beyond current expectations [1] Future Rate Expectations - Given the prevailing risks of declining growth and inflation, the forecast for rate cuts in 2025 has been increased by 25 basis points, with an expected cash rate of 3.1% by the end of the year [1] - Global tariff uncertainties persist, but both overall and core inflation have established a downward trend, likely maintaining around the midpoint of the 2-3% range in the coming quarters [1]