Core Viewpoint - The Central Bank of Egypt has significantly cut interest rates by 200 basis points, marking the third rate cut of the year, driven by declining inflation and improving employment conditions [1][3]. Monetary Policy - The overnight deposit rate has been reduced from 24.00% to 22.00%, and the overnight lending rate from 25.00% to 23.00% [3]. - The Central Bank aims to anchor inflation expectations and maintain a downward trajectory of inflation through this rate cut [3]. - The unemployment rate decreased from 6.3% in Q1 2025 to 6.1% in Q2 2025, indicating a positive trend in the job market [3]. Inflation Outlook - The Central Bank forecasts that the average inflation rate for 2025 will be between 14% and 15%, with a target of 7% by Q4 2026 and 5% by Q4 2028 [3][5]. - Despite the positive outlook, inflation remains above the target level, indicating ongoing challenges [5]. Economic Growth - Egypt's economy is showing signs of recovery, with a real GDP growth rate of 5.4% in Q2 2025, compared to 2.4% in the previous fiscal year [4]. - The non-oil manufacturing sector grew by 16.03%, contributing 1.9 percentage points to GDP growth [7]. - The tourism sector, particularly restaurants and hotels, experienced a growth of 23% [7]. - Exports of goods and services surged by 54.4% in Q2, significantly outpacing the 18.7% increase in imports, contributing approximately 2.7 percentage points to GDP growth [7]. Sectoral Performance - The communication and information technology sector grew by 14.7% [7]. - However, the Suez Canal's transport volume has decreased due to geopolitical tensions, leading to a 23.1% decline in related revenues [7]. - The oil and gas sector is facing challenges but is expected to recover with new development projects [7].

Report Industry Investment Rating - Not provided Core Viewpoints - A-shares stabilized and rebounded, while commodities showed differentiation. The fundamentals in July remained resilient, with economic data in China and the US showing a mixed picture. Powell's attitude turned dovish, which may pave the way for a Fed rate cut in September. The current commodity fundamentals are still weak, and the volatility of commodity prices may remain high. The strategy is to go long on industrial products on dips [1][2][3][4] Summary by Related Catalogs Market Analysis - In July, the global economic data remained resilient. China's official manufacturing PMI in July dropped to 49.3, while the non-manufacturing sector maintained expansion. China's exports in July increased by 7.2% year-on-year in US dollars, higher than expected. The money supply in financial data exceeded expectations, but the financing and loan data were still weak. Investment data in economic data still faced significant pressure. On August 29, more than 2,800 stocks in the Shanghai, Shenzhen, and Beijing stock markets were in the green. The total turnover of the Shanghai and Shenzhen stock markets was 2.97 trillion yuan, a decrease of more than 190 billion yuan from the previous trading day. In the bond market, Treasury bond futures tumbled in the afternoon, with the 30-year main contract falling more than 0.7%. In the commodity market, domestic commodity futures continued to decline, with the container shipping index falling more than 3% and lithium carbonate once falling more than 5%. The onshore RMB against the US dollar closed at 7.1385 on August 28, up 237 points from the previous trading day. In the US, the non-farm payrolls data in July was below expectations, but the PMI in August continued to improve [1] Tariff Policies - On July 31, the White House issued an executive order to reset the "reciprocal tariff" rate standards for some countries. On August 19, the US Commerce Department announced that 407 product categories would be included in the steel and aluminum tariff list, with a 50% tariff rate. Trump said he would announce semiconductor tariffs within two weeks, with a possible rate of 300%. He also threatened to impose about 200% tariffs on China for rare earth magnet supplies and implement export restrictions and tariff measures against foreign digital taxes. The EU reiterated its right to formulate digital rules and refuted the US accusations. The EU plans to legislate to cancel US industrial product tariffs this week to exchange for the US to lower automobile tariffs. The US's 50% tariff increase on India has officially taken effect, and Indian exporters said a large number of orders have been cancelled [2] Central Bank Stances - On August 22, Powell's speech at the global central bank annual meeting turned dovish. He believed that the current situation means that the downside risk to employment has increased, and this change in the risk balance may mean that the policy stance needs to be adjusted. He clearly abandoned the 2020 flexible average inflation target framework and emphasized that the idea of "intentionally allowing inflation to moderately overshoot" is no longer applicable. After Powell's dovish turn, it paves the way for the Fed to cut interest rates in September, making the path of rising overseas inflation smoother. The European Central Bank's July meeting minutes showed that officials believed the inflation risk was "generally balanced" [2] Commodity Analysis - The black and new energy metal sectors are the most sensitive to the domestic supply side. The energy and non-ferrous sectors are more significantly benefited from overseas inflation expectations. Fundamentally, the black sector is still dragged down by the downstream demand expectation, and attention should be paid to the fact of "anti-involution". The supply constraint in the non-ferrous sector has not been alleviated. In the chemical sector, the "anti-involution" space of varieties such as methanol, PVC, caustic soda, and urea is also worthy of attention. Agricultural products are driven by tariffs and inflation expectations in the short term, but they still need to wait for signals from the fundamentals. Currently, the commodity fundamentals are still weak, and a cautious attitude should be maintained towards the implementation of current policy expectations. The volatility of commodity prices may still be high [3] Strategy - For commodities and stock index futures, go long on industrial products on dips [4] To-Do List - The main goal is to make important progress in the construction of a modern people's city by 2030, with continuous improvement of policies and systems suitable for high-quality urban development, accelerated transformation of old and new driving forces, obvious improvement of living quality, in-depth promotion of green transformation, strong consolidation of the safety foundation, full display of cultural charm, and significant improvement of governance level; basically build a modern people's city by 2035 [6] Market Trends - The market rebounded after hitting a low during the day. The Shanghai Composite Index rose more than 1% at the end of the session, the ChiNext Index rose more than 3%, and the STAR 50 Index soared more than 7%. More stocks rose than fell, with more than 2,800 stocks in the Shanghai, Shenzhen, and Beijing stock markets in the green. The total turnover today reached 3 trillion yuan. As of the close, the Shanghai Composite Index rose 1.14%, the Shenzhen Component Index rose 2.25%, and the ChiNext Index rose 3.82% [6] Exchange Rate - The onshore RMB against the US dollar officially closed at 7.1385 at 16:30 Beijing time, up 237 points from the official closing price of the previous trading day and up 115 points from the night session closing price of the previous day [6] Legal Dispute - On August 28, Fed Governor Lisa Cook filed a lawsuit in court, challenging President Trump's attempt to remove her from office on the grounds of fraud in her mortgage application. This move has triggered a historic legal battle over the Fed's independence [6] Economic Data - The revised annualized quarterly growth rate of the US real GDP in the second quarter was 3.3%, higher than the expected 3.1% and the previous 3%. The revised annualized quarterly growth rate of the US core personal consumption expenditure (PCE) price index in the second quarter was 2.5%, in line with expectations and the previous value. Data shows that the US economic growth rate in the second quarter was slightly faster than the initial level, thanks to the rebound in corporate investment and strong trade. Net exports contributed nearly 5 percentage points to GDP, a record high; previously, net exports dragged down GDP growth in the first three months of this year [6] Central Bank Meeting Minutes - The European Central Bank's July meeting minutes showed that most officials believed the inflation risk was "generally balanced", and their outlook for consumer prices still applied. The meeting summary released on Thursday showed that although further interest rate cuts were mentioned, keeping the deposit rate at 2% after eight interest rate cuts was considered a "prudent" approach. "Most members believed that the risks to the inflation outlook were generally balanced. The resilience shown in recent eurozone economic data has been fully reflected in the baseline scenario of the June forecast, and this forecast has been widely verified. Most policymakers believed that the current interest rate level was reasonable, the inflation rate was maintained around the 2% target, and the economy has so far shown resilience to headwinds such as tariffs and wars. In July, the EU and the US reached a trade agreement, locking in a 15% tariff for most export commodities in the region [6]

Group 1 - The independence of the Federal Reserve is facing significant challenges for the first time in decades, posing major risks to markets and the economy [1] - Trust in central banks is crucial for anchoring inflation expectations, and the effectiveness of monetary policy is enhanced by their independence [1] - Recent pressures from U.S. President Donald Trump, including attempts to dismiss Federal Reserve officials, have intensified the debate around central bank independence [1] Group 2 - Europe has a strong tradition of central bank independence, which is legally enshrined in EU treaties, reducing the likelihood of a similar situation as in the U.S. [2] - The European Central Bank is closely monitoring inflation trends, with expectations to maintain the deposit rate at 2% for the second consecutive month [2] - Geopolitical uncertainties and trade wars are overshadowing economic prospects, with inflation expected to fall below the 2% target in the short term due to various factors [2]

Core Viewpoint - Federal Reserve Governor Christopher Waller advocates for an immediate interest rate cut, supporting a 25 basis point reduction at the upcoming September meeting, with expectations for further cuts in the next 3 to 6 months [1][3]. Summary by Sections Interest Rate Policy - Waller supports a 25 basis point rate cut at the Federal Reserve's next monetary policy meeting on September 16-17, 2023, and anticipates additional cuts in the following months [1][3]. - He emphasizes that the neutral interest rate is around 3%, significantly lower than the current target range of 4.25%-4.50% [3]. Economic Indicators - Waller notes that the potential inflation rate is nearing the Fed's long-term target of 2%, while labor market weakness is becoming a concern [3]. - The recent non-farm payroll data showed a significant drop in job growth, with only 73,000 jobs added in July, and the unemployment rate rising to 4.2% [5]. Internal Fed Dynamics - Waller and fellow voting member Michelle Bowman expressed a rare divergence in opinion, advocating for a rate cut while others preferred to maintain the current rates [4]. - This internal disagreement highlights differing assessments within the Fed regarding tariffs and economic outlook [4]. Market Reactions - The market data supports the case for a rate cut, as the labor market shows signs of deterioration, which may prompt the Fed to adjust its policy stance [5].

Group 1 - Federal Reserve Governor Waller supports a 25 basis point rate cut in September and anticipates further cuts in the next 3 to 6 months unless there is a significant deterioration in August employment data and inflation remains controlled [1][2] - Federal Reserve Governor Lisa Cook has filed a lawsuit against the Trump administration, challenging the legality of her dismissal, and claims that any issues with mortgage documents may be mere "clerical errors" [1] - The European Commission proposed two legislative measures to implement a joint tariff declaration with the U.S., which includes the U.S. reducing tariffs on EU cars and parts from 27.5% to 15% [1] Group 2 - The Bank of Korea maintained its benchmark interest rate at 2.5%, indicating a pause in easing policies until financial imbalances in real estate, credit, and foreign exchange markets are significantly alleviated [1] - The Bank of Korea raised its 2025 economic growth forecast from 0.8% to 0.9% and increased its inflation forecast from 1.9% to 2.0% [1] Group 3 - Eurozone economic sentiment index fell to 95.2 in August, down from 95.7 in July, indicating continued weak market confidence and unclear economic recovery prospects [2] - U.S. Q2 real GDP annualized revised growth rate increased by 3.3%, surpassing expectations of 3.1% and the initial estimate of 3.0% [2] - Initial jobless claims in the U.S. were 229,000, lower than the expected 230,000, indicating stability in the job market [2] Group 4 - The Dow Jones Industrial Average rose by 0.16% to 45,636.9 points, the S&P 500 increased by 0.32% to 6,501.86 points, and the Nasdaq Composite climbed by 0.53% to 21,705.16 points, with both the Dow and S&P reaching new closing highs [3] Group 5 - COMEX gold futures increased by 0.82% to $3,476.9 per ounce, while COMEX silver futures rose by 1.27% to $39.71 per ounce [4] Group 6 - U.S. crude oil futures rose by 0.27% to $64.32 per barrel, and Brent crude oil futures increased by 0.31% to $67.65 per barrel [5] - The 2-year U.S. Treasury yield rose by 1.64 basis points to 3.627%, while the 5-year yield fell by 1.24 basis points to 3.687%, the 10-year yield decreased by 3.29 basis points to 4.201%, and the 30-year yield dropped by 4.68 basis points to 4.872% [5] - The U.S. dollar index fell by 0.33% to 97.87, with the euro rising by 0.38% against the dollar to 1.1682 [5]

Economic Growth - The second revision of the U.S. GDP for Q2 shows a quarter-over-quarter annualized growth of 3.3%, slightly up from the initial estimate of 3% [1] - This growth is primarily driven by a rebound in business investment and strong trade performance, indicating a stabilization of the economy after fluctuations in Q1 [1] Business Investment - Business investment continued to be a significant support, growing by 5.7% in Q2, significantly higher than the initial estimate of 1.9% [4] - Key factors include an upward adjustment in transportation equipment investment and the strongest growth in intellectual property products in four years [4] - The data suggests that the economy is adapting to the new trade policy environment after a contraction in Q1 due to accelerated imports before tariff adjustments [4] Gross Domestic Income (GDI) - GDI, another core indicator of economic activity, surged by 4.8% in Q2, far exceeding the 0.2% increase in Q1 [4] - GDI focuses on income and costs in the production phase, while GDP measures the value of final goods and services, both indicating increased economic activity [4] Corporate Profits - Corporate profits rose by 1.7% in Q2, reversing the largest decline since 2020 in Q1 [4] - Non-financial corporate after-tax profits accounted for 15.7% of total value added, significantly above the average level from the 1950s to pre-pandemic [4] - The ability of companies to pass on tariff costs to consumers is a critical variable, potentially impacting inflation [4] Trade Performance - Trade performance was a highlight, with net exports contributing nearly 5 percentage points to GDP, marking a historical high [4] - The calculation logic indicates that while non-U.S. produced goods are included in GDP during consumption, they must be deducted from the total during production [4] Consumer Spending - Consumer spending showed a moderate recovery, with a quarter-over-quarter annualized growth of 1.6% in Q2, up from the initial estimate of 1.4% but still below long-term trends [5] - The "final sales" metric, which excludes trade and inventory fluctuations, grew by 1.9%, indicating a need for stronger domestic demand [5] - Retailers exhibit mixed attitudes, with Walmart raising its annual sales forecast while Home Depot emphasizes customer financial health [5] Inflation and Monetary Policy - The core PCE index rose by 2.5% in Q2, consistent with the initial estimate [6] - Federal Reserve Chairman Powell noted that the impact of tariffs on prices has become evident, but there remains room for rate cuts in September due to employment market risks [6] - Overall, the U.S. economy shows resilience driven by trade and investment, but uncertainties regarding tariff policies, persistent inflation, and consumer momentum need to be monitored [6]

Group 1 - The core viewpoint is that the independence of the Federal Reserve is facing significant challenges for the first time in decades, which could pose substantial risks to the market and economy [1] - Olli Rehn emphasized that the credibility gained from central bank independence enhances the effectiveness of monetary policy, allowing central banks to avoid drastic measures in response to temporary economic fluctuations [1] - The recent pressure from President Trump, including attempts to dismiss Federal Reserve officials, highlights the ongoing threats to the Fed's independence [1] Group 2 - Rehn noted that the inflation outlook in the Eurozone remains uncertain, with the European Central Bank (ECB) expected to maintain the deposit rate at 2% for the second consecutive month due to the need to assess the impact of recent trade agreements with the U.S. [2] - Geopolitical influences and trade wars are casting a shadow over the economic outlook, with short-term factors such as falling energy prices and a stronger euro expected to bring inflation below the 2% target [2]

Group 1 - Gold prices have been fluctuating upwards, recently rebounding by $30 to break through the $3400 mark, but facing resistance and adjustments [1][6][12] - The market is currently in a rebound trend, with key support levels at $3384 and $3350, while resistance levels are at $3408 and $3438 [12][13] - The gold market has experienced four consecutive months of gains, but is now entering a period of consolidation, oscillating between $3300 and $3400 [12] Group 2 - Recent factors influencing gold prices include rising inflation expectations in the U.S., driven by tariff impacts and increased consumer confidence, alongside strong Japanese bond yields leading to a sell-off [13] - The upcoming U.S. unemployment claims data and second-quarter GDP figures are expected to significantly impact the labor market and economic outlook, which could influence Federal Reserve decisions [14] - The U.S. sovereign credit is facing unprecedented challenges, raising questions about the future of the dollar as a global reserve currency [15]

Core Viewpoint - The ongoing conflict between President Trump and the Federal Reserve is escalating, with significant implications for the Fed's independence and monetary policy direction [2][10]. Group 1: Federal Reserve's Independence - Trump's actions, including the dismissal of Fed Governor Lisa Cook, are seen as unprecedented attacks on the Fed's independence, potentially leading to higher inflation and decreased credibility [9][10]. - Analysts warn that if Trump successfully alters the composition of the Federal Reserve Board, it could lead to a shift towards more accommodative monetary policy, undermining the Fed's traditional data-driven approach [10][11]. Group 2: Impact on Monetary Policy - The Federal Reserve's current stance remains moderately restrictive, with officials indicating that rate cuts may be appropriate in the future, depending on economic conditions [3][4]. - The potential for Trump to influence the selection of regional Fed presidents could significantly impact monetary policy decisions, particularly if he gains a majority on the Fed Board [7][11]. Group 3: Market Reactions - The bond market has begun to show signs of distortion, with a steepening yield curve indicating rising inflation expectations and risk premiums due to perceived threats to the Fed's independence [4][11]. - Despite current market calmness, there is a growing concern that the political influence over the Fed could lead to increased volatility and higher inflation in the long term [10].

Core Viewpoint - The bond market is currently facing contradictions due to "anti-involution" policies and future inflation expectations, leading to adjustments in market sentiment and investment strategies [1][2]. Group 1: Bond Market Analysis - The 10-year government bond ETF (511260) rose by 0.07% on August 27, indicating stable performance, with a support level around 1.8% for the 10-year bond yield due to long-term institutional investments [1]. - The bond market is expected to experience fluctuations, with a recommendation for a wave trading strategy, as the yield remains above 1.75%, suggesting value in long-term bonds [1]. - The central bank's monetary policy remains accommodative, and rising inflation could increase the likelihood of interest rate cuts by year-end, which may lead to a potential restart of government bond trading [1]. Group 2: Market Sentiment and Investment Opportunities - The strong performance of the stock market is exerting pressure on the bond market, with prevailing pessimistic expectations among investors [2]. - Historical analysis shows that the relationship between stocks and bonds is unstable, as major bond market investors (like banks and insurance companies) are unlikely to shift significant funds to the stock market due to risk considerations [2]. - The high valuation of bonds, following a three-year bull market, has led to yields being at historical lows, making them relatively expensive compared to the dividend yields of the CSI 300 index (2.5-3%) [2]. - The release of pessimistic sentiment may create investment opportunities for bottom-fishing in the bond market after significant declines [2].