Core Viewpoint - Despite strong retail sales and industrial production data in the U.S. for August, gold prices continue to rise, reaching historical highs [1][3]. Economic Data - U.S. retail sales for August increased by 0.6% month-over-month, surpassing the expected 0.2% [6]. - Industrial production in August showed a slight increase, with factory output rising by 0.1%, indicating moderate growth in manufacturing activities [6]. Federal Reserve Outlook - Weak employment data supports a dovish stance from the Federal Reserve, with market participants awaiting policy decisions and economic forecasts [2][4]. - The market has fully priced in a 25 basis point rate cut, with minimal expectations for a 50 basis point cut [8]. - Deutsche Bank and other banks anticipate three rate cuts of 25 basis points this year, bringing the federal funds rate to a range of 3.50%-3.75% [9]. Geopolitical Factors - Progress in U.S.-China trade negotiations provides geopolitical support for gold prices [5]. Market Movements - The gold price reached a record high of $3,703 before retreating slightly, currently trading around $3,690 [3][12]. - The U.S. dollar index fell by 0.74% to 96.62, while U.S. Treasury yields remained stable [10][11]. Technical Analysis - Gold is hovering around $3,690, with bullish sentiment aiming for a challenge of the historical high, potentially extending to $3,750 and $3,800 [12]. - The Relative Strength Index (RSI) indicates overbought conditions, suggesting limited short-term upside [13].

Group 1 - The European Central Bank (ECB) is expected to maintain its interest rates during the upcoming decision on September 11, aligning with long-standing views and current market expectations [1][2] - Economic data since the July meeting has shown mixed results, with August PMI slightly better than expected and a 0.1% quarter-on-quarter GDP growth in Q2, although this may be revised down [1][2] - There are signs of anti-inflation since June, including the appreciation of the euro and higher-than-expected tariffs from the US on the EU, but the ECB's inflation forecasts are not expected to be downgraded [2] Group 2 - ECB President Lagarde emphasized that the current state is stable, indicating no intention for further rate cuts, which supports the view that data is insufficient to change policy in September [2] - The ECB's inflation target of 2% is likely to be missed in the coming year, with projections suggesting it may only be reached by 2027 [2] - Lagarde may be questioned about France's situation and the potential use of the Transmission Protection Instrument (TPI), but it is anticipated she will avoid the topic, stating it is too early for such discussions [3]

Group 1 - President Trump nominated Stephen Moore to the Federal Reserve Board, indicating a potential shift towards a more dovish stance from the Fed [2][4] - The nomination follows the resignation of Fed Governor Kugler, allowing Trump to make a new appointment ahead of schedule [2][4] - Analysts suggest that Moore's appointment may lead to a weaker dollar as he has previously supported policies that could undermine the currency's strength [4][5] Group 2 - The Japanese stock market saw significant gains, with the TOPIX index rising 1.5% and surpassing the 3000-point mark for the first time, marking a historical high [5] - SoftBank Group's stock surged over 12% after reporting a net profit of 421.82 billion yen for the first quarter, significantly exceeding market expectations [5][6] - Sony's stock increased by over 6%, with the company raising its full-year profit guidance after reporting a 36% year-on-year increase in operating profit for the first quarter [6]

Core Viewpoint - The recent dissent within the Federal Reserve marks a significant shift in its traditionally consensus-driven decision-making process, influenced by external pressures such as President Trump's policies and rhetoric [1][3]. Group 1: Federal Reserve's Decision-Making - On July 30, two Federal Reserve rate setters, Christopher Waller and Michelle Bowman, voted against the majority to maintain interest rates at 4.25% to 4.5%, proposing a 0.25 percentage point cut instead, indicating a rare occurrence of "dual dissent" within the board [3]. - Waller and Bowman had previously expressed their views advocating for rate cuts, reflecting differing interpretations of the current economic conditions, particularly regarding labor market stability [5][6]. - Powell acknowledged the internal disagreements as stemming from noble intentions and polite discussions, emphasizing the thoughtful nature of the rate policy despite external noise [6]. Group 2: Economic Context and Market Reactions - Trump's administration has exerted pressure on the Federal Reserve, with considerations of dismissing Powell, although recent visits to the Fed did not lead to significant market fluctuations [8]. - Following the July 30 meeting, investor confidence in Powell's judgment increased, despite the dissent, as he defended a cautious approach to interest rates, which led to a slight rise in U.S. Treasury yields and a drop in the stock market [8]. - Expectations for the Fed's next meeting in September shifted, with the likelihood of a rate cut dropping from two-thirds to less than half after Powell's remarks, highlighting market uncertainty regarding future monetary policy [9].

Core Viewpoint - The Federal Reserve decided to maintain interest rates unchanged at 4.25%-4.50%, marking the fifth consecutive meeting without a rate change, amidst rare dissent among board members [1][3]. Group 1: Federal Reserve Decision - The decision to keep rates steady was supported by 9 out of 12 voting members, while two members, Waller and Bowman, opposed the decision, advocating for a 25 basis point cut [3]. - This dissent is notable as it marks the first time since 2020 that more than one Federal Reserve official voted against the chair's decision [3]. - The Fed's statement highlighted that while the unemployment rate remains low and the job market is stable, inflation is still slightly elevated, and economic growth has slowed in the first half of the year [3]. Group 2: Future Rate Expectations - Fed Chair Jerome Powell indicated that the central bank is monitoring the potential impact of tariffs on inflation and has not yet made a decision regarding a rate cut in September [4][5]. - Following the Fed's announcement, traders significantly reduced their expectations for a September rate cut, with the probability of maintaining rates at 58.8% and a 41.2% chance of a 25 basis point cut [6]. - The probabilities for future meetings show a cumulative 47.4% chance of a 25 basis point cut by October and a 14.6% chance of a 50 basis point cut [6][7]. Group 3: Market Reactions - Analysts noted that Powell's remarks reflected both hawkish and dovish tendencies, suggesting that the threshold for a policy shift has lowered, allowing for potential rate cuts if upcoming data is unfavorable [8]. - The market reacted positively to the hawkish signals, with the dollar index rising close to 100, although a disappointing non-farm payroll report could reverse these expectations [8].

Group 1 - The Federal Reserve decided to maintain the federal funds rate target range at 4.25% to 4.50%, marking the fifth consecutive meeting this year where rates were held steady, aligning with market expectations [1] - The Fed's latest statement was perceived as slightly dovish, acknowledging a slowdown in U.S. economic growth and removing previous language that suggested reduced economic uncertainty, indicating greater downside risks to employment goals [1] Group 2 - During the press conference, Fed Chair Powell's tone shifted to a more hawkish stance, emphasizing that tariffs only pose a one-time shock to price levels and that the Fed will ensure tariffs do not trigger inflation [2] - Powell noted that the current labor market is in a state of supply-demand balance with low unemployment rates, suggesting that key indicators should focus on unemployment rather than employment growth, which may slow significantly [2] - The hawkish signals from the press conference surprised the market, leading to a sell-off in short-term government bonds, contradicting expectations that Powell would pave the way for a rate cut in September [2]

Core Insights - The Bank of Japan has raised its CPI forecast for 2026, but the increase is moderate, indicating a cautious stance on inflation risks [1] - Despite the current inflation levels justifying a hawkish approach, the Bank of Japan remains vigilant regarding global risks, particularly U.S. tariff policies [1] - There is significant uncertainty in trade negotiations between Japan and the U.S. due to differing interpretations of tariff agreements [1] - Domestic political instability in Japan adds to the uncertainty, allowing the Bank of Japan's Governor Ueda to adopt either a dovish or hawkish stance based on external and internal factors [1]

Group 1 - The core viewpoint is that Japan's significant investment in the U.S., amounting to $550 billion, along with the dovish stance of the Bank of Japan, may exert pressure on the Japanese yen [1] - The U.S. President Trump announced a joint initiative with Japan to advance the Alaska LNG project, emphasizing that most benefits will remain in the U.S. [1] - The Deputy Governor of the Bank of Japan, Masayoshi Amamiya, indicated that there is no urgent need for interest rate hikes, suggesting a continued dovish approach [1] Group 2 - The economist Min Joo Kang believes that the Bank of Japan may require more time to assess the details of the trade agreement and its specific impacts on the economy [1]

Core Viewpoint - The potential successor to Powell may intentionally exhibit a dovish stance to increase their chances of being selected [1] Group 1 - The article discusses the implications of the Federal Reserve's leadership transition and how it may affect monetary policy [1] - It highlights the strategic positioning of candidates in relation to current economic conditions and market expectations [1] - The potential successor's approach could signal a shift in the Fed's policy direction, impacting investor sentiment and market dynamics [1]

Core Viewpoint - Federal Reserve Governor Waller maintains the most dovish stance among his colleagues in the Federal Open Market Committee (FOMC) [1] Group 1 - Waller supports the idea of considering interest rate cuts in the next meeting to avoid waiting for a collapse in the job market [1] - There is an indication that the FOMC does not support a rate cut in July based on current data [1] - Waller may be laying the groundwork for dissenting support for a rate cut in the July meeting [1]