Core Viewpoint - Recent data indicates a broad-based slowdown in China's economy, increasing pressure on the government to stimulate growth and consumer spending amid external challenges such as tariffs from the U.S. [1] Economic Indicators - Retail sales and industrial production growth both decelerated in July compared to June, suggesting a tougher economic environment in the latter half of the year [1] - Industrial production in China increased by 5.7% year-on-year at the beginning of the third quarter, a decline from June's 6.8% growth [2]

Group 1 - The Canadian dollar (CAD) is exhibiting a "passive defensive" characteristic despite ongoing weak domestic economic data, primarily influenced by fluctuations in the US dollar (USD) [1] - The CAD is showing relative strength among non-USD currencies due to the lack of clear monetary easing signals from the Bank of Canada, leading to a "weakness selection" market logic [1] - The options market for CAD reflects a cautious but not pessimistic sentiment, with a slight dominance of put options indicating short-term downside risk, yet overall volatility remains stable without signs of panic [1] Group 2 - The USD/CAD pair is currently trading above the 20-day Exponential Moving Average (EMA) near 1.3740, indicating a consolidation trend [2] - A breakout above the August 1 high of 1.3880 could open up upward potential towards the May 15 high of 1.4000, with further targets at the April 9 low of 1.4075 [2] - Conversely, a drop below the June 16 low of 1.3540 may lead to a decline towards the psychological level of 1.3500 and the September 25 low of 1.3420 [2]

Economic Overview - The economy added only 73,000 jobs in July, significantly below the expected 104,000, with prior months' job gains revised down by a total of 258,000, leading to an increase in the unemployment rate to 4.2% [2] - Manufacturing activity has contracted, with factory hiring at its lowest since 2020, and consumer confidence has weakened, raising concerns about a potential economic slowdown or recession [2] - Analysts have increased the odds of interest rate cuts in September due to the combination of weak economic data [2] Federal Reserve and Interest Rate Expectations - The CME's FedWatch tool indicates an 87.4% probability of a 25-basis point rate cut in September, driven by weak data and declining consumer activity [1] - President Trump's nomination of Stephen Miran to the Federal Reserve Board is expected to reinforce dovish market expectations, potentially leading to earlier rate cuts [3] - JPMorgan has adjusted its forecast to expect the first rate cut in September, projecting a total of four cuts through early 2026 [3] Impact of Lower Interest Rates - Lower interest rates are anticipated to reduce borrowing costs, aiding business expansion and increasing profitability, which in turn stimulates economic growth and supports the stock market [4] - High dividend-yield sectors, particularly utilities and real estate, are expected to benefit significantly from rate cuts due to their sensitivity to interest rates [5] - Lower rates are likely to enhance consumer discretionary spending and encourage lending in the financial services sector, despite potential compression of net interest margins for banks [6] Sector-Specific Opportunities - Small-cap companies are expected to outperform in a lower-rate environment due to higher levels of debt, and rate cuts may boost foreign capital inflows into emerging markets like India [7] - Gold is projected to gain attractiveness as lower interest rates increase its appeal [7] Highlighted ETFs - **Vanguard Real Estate ETF (VNQ)**: Targets the real estate segment with an AUM of $33.5 billion, holding 155 stocks, and charges 13 bps in fees [9] - **Utilities Select Sector SPDR (XLU)**: AUM of $21.2 billion, focusing on utility companies, with 31 stocks and 8 bps in annual fees [10][11] - **Consumer Discretionary Select Sector SPDR Fund (XLY)**: AUM of $22.3 billion, covering the consumer discretionary space with 51 securities and 8 bps in fees [12] - **iShares Russell 2000 ETF (IWM)**: Largest small-cap ETF with an AUM of $60.4 billion, holding 1,979 stocks and charging 19 bps in fees [13] - **SPDR Gold Trust ETF (GLD)**: Tracks gold prices with an AUM of $104 billion and charges 40 bps in fees [14]

Core Viewpoint - The U.S. job market is cooling significantly, raising debates on whether the issue stems from a lack of workers or a decline in job demand, which directly impacts Federal Reserve's interest rate decisions [1][2]. Group 1: Supply Shortage Perspective - The labor force participation rate has dropped by 0.4 percentage points over the past three months, marking the largest decline in eight years, indicating reduced labor supply [3]. - Morgan Stanley's chief economist suggests that the slowdown in job growth is not contradictory to the low unemployment rate, especially considering immigration controls [3]. - Data shows a reduction of approximately 1 million foreign-born workers over the past three months, which the White House cites as a success of its immigration policies [3]. - Federal Reserve Chairman Powell indicated that as long as the unemployment rate does not rise significantly, the Fed will overlook the recent hiring slowdown [3]. Group 2: Demand Weakness Perspective - Citigroup's economist emphasizes that while immigration reduction has an impact, the details suggest that demand weakness is worsening [4]. - Analysts, including those from Bloomberg, argue that the report's data on foreign-born and native-born labor may contain statistical biases, as the sudden increase in native-born labor seems unrealistic [4]. - Analysts are focusing more on hiring data from business surveys, which were significantly revised down for May and June, to assess labor market conditions [4][5]. - Different analysts have drawn varying conclusions regarding the performance of industries heavily reliant on immigrant labor, with some indicating weakness in construction, manufacturing, and leisure sectors [5].

Economic Outlook - UBS Global Research predicts a significant slowdown in the US economy by mid-2025, with real GDP annualized growth rate dropping to 1.2%, a sharp decline from the strong growth rates of 2023 and early 2024 [2] - Domestic demand growth has decreased from over 3% last year to approximately 1% in recent quarters, indicating a weakening economic momentum [2] Labor Market Trends - Non-farm payroll growth has slowed dramatically, with only 73,000 jobs added in July, significantly below expectations, and the average monthly job growth over the past three months is only 35,000 [3] - The unemployment rate has slightly increased to 4.25%, the highest level since 2021, while the broader U-6 unemployment rate is also rising, exceeding pre-pandemic levels by over 1 percentage point [3] - The decline in labor force participation rate, rather than sudden immigration or population shocks, is identified as the primary reason for weak labor growth [3][4] Tariff Impacts - New tariff measures are expected to further drag down economic growth, with the weighted average tariff rate projected to rise from about 16% to approximately 19% starting in early August [5] - This increase in tariffs is estimated to reduce economic growth by 0.1 to 0.2 percentage points over the next year, with significant price increases anticipated in sectors such as automotive, semiconductors, and pharmaceuticals [5] Monetary Policy Expectations - As evidence mounts of continued economic and labor market weakness, alongside potential inflationary pressures from tariff policies, the Federal Reserve faces increasing pressure to ease monetary policy [6] - UBS expects the Federal Open Market Committee to cut rates by 25 basis points in September and a total of 100 basis points by the end of 2025 [6] - The overall economic outlook suggests a demand-driven slowdown rather than a supply shortage, indicating that the Federal Reserve may soon take action to achieve a "soft landing" for the economy [6]

Report Overview - The report provides daily analysis and insights on various commodities and financial markets, including overseas and domestic macroeconomics, stock indices, and futures contracts for commodities such as coal, sugar, rubber, and agricultural products. 1. Macroeconomic Analysis Overseas Macro - Early in the week, market bets on Fed rate cuts declined, but the August 1st non - farm payrolls data raised concerns about US employment and economic downturn. Market expectations for Fed rate cuts in the second half of the year have increased, which is favorable for gold. In the long - term, the weak US dollar pattern continues [1]. Domestic Macro - In the context of stable and progressive domestic economic operation in the first half of the year, the tone of the July Politburo meeting was to improve the quality and speed of using existing policies, with relatively limited incremental policies. The July composite PMI remained above the critical point. Attention should be paid to the progress of negotiations between the US and economies such as China and Mexico [1]. 2. Asset Views Domestic Assets - Domestic assets present mainly structural opportunities. The policy - driven logic will be strengthened in the second half of the year, and the probability of incremental policy implementation is higher in the fourth quarter [1]. Overseas Assets - Concerns about US employment decline and economic slowdown are rising. The long - term weak US dollar pattern continues. Attention should be paid to non - US dollar assets and be vigilant against volatility spikes [1]. 3. Stock Index Analysis A - share Market - On August 6th, the three major A - share indices rose collectively. The Shanghai Composite Index reached a new closing high for the year, with a 0.45% increase to 3633.99 points; the Shenzhen Component Index rose 0.64% to 11177.78 points; the ChiNext Index rose 0.66% to 2358.95 points. The trading volume of the two markets reached 1734.1 billion yuan, an increase of 138 billion yuan from the previous day [1]. CSI 300 Index - On August 6th, the CSI 300 Index remained strong, closing at 4113.48, a环比 increase of 10.04 [2]. 4. Commodity Futures Analysis Coke and Coking Coal - On August 6th, the coke weighted index showed a strong oscillation, closing at 1696.6, a环比 increase of 46.7. The coking coal weighted index maintained an upward - trending oscillation, closing at 1194.6 yuan, a环比 increase of 79.7. Some mines in Linfen have been shut down for rectification, and the supply of coking coal is difficult to increase significantly in the short term. The fifth round of coke price increases has been fully implemented, and the profitability of coke enterprises has improved [2][3]. Zhengzhou Sugar - International oil price decline and concerns about global demand weakness have pressured the US sugar market. Affected by the decline of US sugar and spot price adjustments, the Zhengzhou Sugar 2601 contract declined slightly on August 6th. As of July 31st, Yunnan's cumulative sugar sales reached 1.9514 million tons, with a sales rate of 80.68% [5]. Rubber - Due to large short - term gains, the Shanghai rubber futures oscillated and adjusted on August 6th. From January to June 2025, Hainan's natural rubber output was 91,900 tons, a 6.0% decrease compared to 2024 [6]. Soybean Meal - On August 6th, the international CBOT soybean futures closed down. The new - season soybean planting in Brazil is expected to expand, which will make the global soybean supply more abundant. The domestic soybean meal futures price showed a trend of rising and then falling. The domestic supply is sufficient, but there are concerns about future supply shortages, so the soybean meal may oscillate widely [7]. Live Pigs - On August 6th, live pig futures closed up. The short - term supply is sufficient, and the mid - term production capacity is still being released. The demand is weak due to high - temperature weather and reduced school procurement. The overall live pig market is in a state of loose supply and demand [8]. Palm Oil - On August 6th, palm oil futures failed to continue the previous day's strength. From August 1 - 5, 2025, Malaysia's palm oil production decreased by 17.27% compared to the same period last month [8]. Shanghai Copper - Globally, LME copper inventories are high, while SHFE inventories are low. US copper inventory may flow back, which may suppress prices. Technically, Shanghai copper is in a state of oscillation [10]. Cotton - On the night of August 6th, the main contract of Zhengzhou cotton closed at 13,660 yuan/ton. The cotton inventory in Xinjiang decreased by 90 lots compared to the previous day, and the cotton growth in Xinjiang is good, with the expected harvest time one week earlier than usual [10]. Logs - On August 6th, the 2509 log futures contract opened at 829, with a low of 826, a high of 836, and a close of 832.5, with a reduction of 370 lots. The spot prices in Shandong and Jiangsu remained unchanged. The increase in external quotes has driven up the domestic futures price [10][11]. Steel - On August 6th, the rb2510 contract closed at 3,234 yuan/ton, and the hc2510 contract closed at 3,451 yuan/ton. The sharp rise in coking coal futures has driven up steel prices. In the short term, steel prices may be strong, but there is a risk of correction if demand is insufficient [11]. Alumina - On August 6th, the ao2509 contract closed at 3,241 yuan/ton. The sentiment of "anti - involution" has cooled down. The supply of alumina has increased, and the market may maintain a range - bound oscillation [11]. Shanghai Aluminum - On August 6th, the al2509 contract closed at 20,650 yuan/ton. The macro environment is relatively cold, and the supply of aluminum is increasing slightly while the demand is shrinking. The aluminum price may oscillate within a range [12].

Core Viewpoint - The company anticipates a significant increase in shareholder losses for the first half of 2025, estimated between 28 million to 32 million HKD, compared to a loss of 15 million HKD in the same period of 2024 [1] Group 1: Financial Performance - The estimated shareholder loss for the first half of 2025 is significantly higher than the previous year, indicating a worsening financial situation [1] - The decline in sales revenue from paint and coating products is a major contributor to the increased losses [1] - The company reported a fair value loss on investment properties in mainland China during the first half of 2025, contrasting with a fair value gain of 3.2 million HKD in the same period of 2024 [1] Group 2: Market Conditions - The decrease in sales revenue is attributed to the economic slowdown in mainland China and Hong Kong, a weak real estate market, and intense competition within the paint and coating industry [1] - The overall market environment is challenging, impacting the company's revenue and profitability [1]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **U.S. labor market** and its implications for the economy and monetary policy, particularly in light of the **July non-farm payroll data** [1][2]. Core Insights and Arguments - **July Non-Farm Payroll Data**: The July non-farm payroll data showed an increase of only **73,000 jobs**, significantly below the expected **104,000 jobs**. Additionally, the job numbers for May and June were revised down by approximately **100,000 jobs** [2]. - **Unemployment Rate**: The unemployment rate rose to **4.2%**, which was in line with expectations. However, the average monthly job growth over the past three months was only **35,000 jobs**, a stark decline from the pre-pandemic average of **100,000 jobs** per month [2][5]. - **Sector Performance**: Job growth was concentrated in the **education and healthcare sectors**, which added **79,000 jobs** in July. In contrast, sectors like manufacturing and wholesale trade, which are sensitive to tariffs and interest rates, showed weakness [2][5]. - **Labor Market Dynamics**: The decline in labor participation rates has contributed to a downward pressure on the unemployment rate. Factors such as early retirements and reduced immigration due to strict policies have led to a rigid labor supply [4][9]. - **Economic Resilience Concerns**: Despite positive GDP data, the disruptions in imports and inventory, along with weak non-farm data, have raised concerns about economic resilience and increased expectations for interest rate cuts by the Federal Reserve [1][5]. Monetary Policy Implications - **Interest Rate Expectations**: The market widely anticipates that the Federal Reserve will cut interest rates by **25 basis points** in September. However, the lack of clear signals from the Fed regarding easing has led to fluctuations in these expectations [6][7]. - **Future Monetary Policy Adjustments**: If inflation data does not exceed expectations in the coming months, the Fed may be prompted to lower rates, especially as signs of weakness appear in residential investment, manufacturing, and auto consumption [5][6]. Political Environment Impact - **Political Influence on Economic Policy**: The current political climate, particularly actions by former President Trump against Federal Reserve officials, has increased uncertainty in economic policy and market conditions. This interference may lead to heightened asset volatility and a shift in market risk appetite [8][9]. Additional Important Points - **Labor Market Challenges**: The prolonged unemployment duration and the rise in long-term unemployed individuals indicate adverse effects on the job market due to demand contraction [1][2]. - **Market Reactions**: The adjustments in employment data and the political environment are likely to influence market behavior and investor sentiment moving forward [9].

Shopify investors responded to some positive tariff news today. It appears that they're choosing to shrug off last week's negative economic data. Shares of the e-commerce platform company Shopify (SHOP 5.14%) were rebounding today after stumbling on Friday after a weaker-than-expected jobs report. Investors regained some of their optimism for the company today, as the European Union says it's delaying some retaliatory tariffs on the U.S. for six months. Shopify investors are closely watching for any positiv ...

Market Performance - Developed and emerging markets both declined by 2.5% during the week of July 28 to August 1, 2025[1] - The Hang Seng Index fell by 3.5%, while the Hang Seng Tech Index dropped by 4.9%[1] - The S&P 500 decreased by 2.4%, and the Dow Jones Industrial Average led the decline with a 2.9% drop[4] Economic Indicators - U.S. non-farm payrolls added only 73,000 jobs in July, significantly below the expected 104,000 and previous month's 147,000[4] - The U.S. manufacturing PMI fell to 48 in July, below the expected 49.5, indicating a contraction in the manufacturing sector[4] - The U.S. Q2 GDP growth rate was 3.0%, surpassing expectations of 2.4%[4] Market Sentiment and Trends - There is a consensus to focus on dividend-paying stocks and identify sectors with growth potential, particularly in healthcare[1] - Concerns remain regarding internet technology stocks due to consumer spending factors, although some funds are increasing their allocations[1] - The market is experiencing increased volatility due to rising overseas risks and expectations of interest rate cuts in the U.S.[1] Tariff Impacts - The U.S. is set to implement reciprocal tariffs starting August 7, affecting various countries with rates as high as 39% for some[5] - The market's sensitivity to tariff issues appears to be diminishing, but ongoing monitoring is necessary[1] Fund Flows - Global equity ETFs saw a net inflow of $29.579 billion, with the U.S. leading at $19.55 billion[11] - Chinese equity ETFs experienced the largest outflow, totaling $5 billion[11] - Institutional investors are slightly reducing gold holdings, while retail investors are marginally increasing their positions[10]