Core Viewpoint - The financial markets faced a sudden storm in August, primarily driven by disappointing economic data, particularly the U.S. non-farm payroll report for July and significant revisions to previous months' data, raising concerns about the U.S. economic recovery and the Federal Reserve's monetary policy direction [1][2]. Economic Indicators - The final value of the S&P Manufacturing PMI was reported at 49.8%, while the ISM Manufacturing PMI was even lower at 48, indicating a contraction in the manufacturing sector for the first time since December of the previous year [2]. - The University of Michigan Consumer Sentiment Index also fell short of expectations, ending at 61.7, further painting a bleak picture of the economy [2]. Market Reactions - Major U.S. stock indices, including the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500, experienced significant declines, with the Dow down 1.38%, Nasdaq down 1.92%, and S&P 500 down 1.51% [6]. - The technology sector was particularly hard hit, with notable declines in stocks of major companies such as Amazon, which fell by 6.38% due to disappointing earnings expectations [1][6]. Inflation and Interest Rate Expectations - One-year inflation expectations surged to 4.5%, exceeding market forecasts, while five-year expectations decreased, indicating persistent short-term inflationary pressures [3]. - The anticipation of a potential interest rate cut by the Federal Reserve gained traction, leading to a significant drop in the U.S. dollar index, which fell by 1.12% to 98.8510 [5]. Global Market Impact - The risk-averse sentiment spread globally, affecting European markets, with major indices like the FTSE 100, DAX, and CAC 40 all experiencing declines, some exceeding 2.7% [5]. - The weakening dollar contributed to increased volatility in global markets, with non-U.S. currencies appreciating against the dollar [5]. Future Outlook - The upcoming non-farm payroll data for August is expected to be a critical focus for the market, as it will influence perceptions of the U.S. economic recovery and potential capital outflows [7]. - The current market turmoil highlights underlying structural issues within the U.S. economy, with a fragile market sentiment that may lead to further volatility in the future [7].

Core Viewpoint - Chinese equity assets are expected to outperform overseas markets in the second half of the year due to strong policy expectations and favorable liquidity conditions in the Asia-Pacific emerging markets [22]. Group 1: Global Economic Impact - The average import tariff level in the U.S. has reached 15.6% this year, significantly higher than the 2.4% expected in 2024, which may elevate U.S. inflation and weaken corporate profitability [11]. - The U.S. tariff policy is likely to slow global trade flows, reduce investment and consumption growth, and reshape global supply chains, potentially leading to a "de-Americanization" and "multilateralization" of trade among non-U.S. economies [11]. Group 2: U.S. Monetary Policy Outlook - The Federal Reserve is expected to maintain interest rates unchanged as long as the U.S. economy and labor market remain robust, with market expectations for rate cuts cooling down [14]. - It is anticipated that the Federal Reserve will cut rates four times by June next year, totaling 100 basis points [16]. Group 3: Investment Strategies - Investors are advised to increase their allocation to non-U.S. assets, particularly European investment-grade bonds and stocks, which are expected to benefit from Germany's fiscal stimulus plan [20]. - A focus on Chinese A-shares and H-shares is recommended, as they are likely to attract international capital inflows due to policy support and improving fundamentals [20]. Group 4: Sector Focus in China - The market is expected to show a "high-low cut" characteristic, with significant interest in cyclical stocks driven by infrastructure policies and technology events [23]. - The technology sector, particularly AI-related stocks, is projected to remain a core focus, with recommendations to monitor semiconductor, optical module, and high-end PCB stocks [23].

Group 1: Market Overview - The global capital market continues to exhibit a complex and volatile trend as of July, with macroeconomic data, geopolitical situations, and monetary policies influencing the market outlook for August [1] - The average import tariff level in the U.S. has reached 15.6% this year, significantly higher than the 2.4% expected in 2024, which may elevate U.S. inflation and weaken corporate profitability [8][12] - The impact of U.S. tariff policies includes potential slowdowns in global trade flows, reduced investment and consumption growth, and a reshaping of global supply chains [8] Group 2: Trade Policies and Economic Impact - The trade agreements reached have prevented the implementation of higher tariffs, which is generally favorable for the market; however, the tariffs already in effect since April have led to a notable decline in U.S. imports and affected consumer confidence [8][11] - The tariffs have a more pronounced effect on industries such as automotive, steel, and aluminum, with significant declines in revenue and profitability for companies heavily exposed to the U.S. market [8][11] - The legal standing of Trump's tariff policies remains uncertain, pending a final ruling from the Supreme Court [9] Group 3: Monetary Policy and Interest Rates - The Federal Reserve decided to maintain interest rates in July, with expectations of potential rate cuts in September or October, and a total of four cuts anticipated by June next year, amounting to 100 basis points [11][13] - High tariffs may constrain the Fed's ability to lower rates, as they could lead to increased inflation and weakened consumer and investment activity in the U.S. [12] Group 4: Investment Strategies - The outlook for gold prices is positive, with a forecast of $3,700 per ounce by June 2026, driven by ongoing geopolitical risks and central banks increasing gold reserves [14] - Investors are advised to increase allocations to non-U.S. assets, particularly European investment-grade bonds and stocks, which are expected to benefit from Germany's fiscal stimulus [18] - Chinese equity assets are projected to outperform overseas markets in the second half of the year due to strong policy expectations and improved fundamentals [20] Group 5: Sector Focus - The market is expected to show a "high-low cut" characteristic, with significant interest in cyclical stocks driven by infrastructure policies and technological advancements [21] - The AI sector is anticipated to remain a core focus, with recommendations to pay attention to semiconductor, optical module, and high-end PCB stocks [21] - For low-risk investors, there are opportunities in undervalued stocks with cash value and liquidation reassessment potential, particularly in sectors that have lagged since last year [22]

Core Viewpoint - The July non-farm payroll data in the U.S. fell short of expectations, with significant downward revisions to the previous two months' data, while the unemployment rate only saw a slight increase. The impact of Trump's immigration policies on the labor market is becoming more pronounced, leading to a divergence between non-farm payroll growth and unemployment rates. Future observations will focus on the Jackson Hole central bank meeting, as concerns about the independence of the Federal Reserve may resurface [1][2]. Non-Farm Data - The downward revision of non-farm payroll data exceeded market expectations, raising concerns about data quality. Historical comparisons indicate that the extent of this revision is unusual, suggesting a weakening in the private sector job market [2]. - Despite the significant drop in non-farm payrolls, the unemployment rate only experienced a minor increase. This divergence is attributed to the effects of immigration policies, which have led to a noticeable decline in the proportion of foreign-born individuals in the workforce and a decrease in the share of people holding multiple jobs [2]. Federal Reserve - The Federal Reserve faces a dilemma regarding monetary policy, balancing between employment conditions and inflation risks influenced by immigration and tariff policies. The July non-farm data is unlikely to alter Powell's hawkish stance, with the upcoming Jackson Hole meeting being a critical point for observing policy statements [2].

Core Viewpoint - The macro data and events this week were dense, culminating in the non-farm payroll data released on Friday, which dominated market trading. The disappointing and significantly revised non-farm employment data reignited recession concerns, leading to a sharp decline in U.S. stocks and a drop in U.S. Treasury yields. Under baseline expectations, the U.S. economy is still in a soft landing phase, with short-term asset price volatility reflecting market concerns about the "slope" of the U.S. economic downturn [1]. Major Asset Classes - The non-farm payroll data dominated market trading, with recession concerns leading to renewed expectations for interest rate cuts, resulting in declines in both U.S. stocks and Treasury yields. The disappointing new non-farm jobs and significant downward revisions to previous data caused a drop in U.S. stocks, while expectations for rate cuts increased, leading to a decline in U.S. Treasury yields. For the week (July 28 to August 1), the 10-year Treasury yield fell by 17.2 basis points to 4.216%, and the 2-year yield dropped by 24.2 basis points to 3.682%. The U.S. dollar index rose by 1.53% to 99.14, while the S&P 500 and Nasdaq indices fell by 2.36% and 2.17%, respectively [2]. Overseas Economy - Short-term data amplified recession concerns, but the U.S. economy remains in a soft landing phase. Key U.S. economic data this week, excluding ADP private employment, showed weakness in GDP (core GDP excluding net exports and inventory changes), non-farm payrolls, and manufacturing PMI, raising recession fears. The ISM manufacturing PMI for July recorded 48, significantly below the consensus expectation of 49.5. Notably, the decline in PMI was primarily due to a substantial shortening of supplier delivery times, indicating improvements in the supply chain amid declining demand. The U.S. GDP for Q2 2025 grew at an annualized rate of +3.0%, better than the consensus expectation of +2.6% [3]. Monetary Policy - The July FOMC meeting was hawkish, but there are internal divisions within the Federal Reserve. The FOMC decided to maintain the policy rate at 4.25-4.5% with a 9-2 vote. Fed Chair Powell indicated that while the labor market is balanced, inflation remains high, necessitating a restrictive policy rate. Two dissenting votes were cast by Waller and Bowman, who argued for a rate cut in July, citing the one-time impact of tariffs on inflation and the downward risks in the labor market [4]. Overseas Politics - Trump officially signed an executive order announcing the "Reciprocal Tariff 2.0" rates for various trade partners, which may accelerate negotiations. The new tariff rates, effective August 7, show a significant reduction compared to the previous version. The announcement includes a 15% tariff for the EU and Japan, and a 10% tariff for other partners. The legal challenges surrounding Trump's authority to impose these tariffs may lead to further adjustments in tariff rates to expedite trade agreements, indicating ongoing uncertainty in trade relations [5].

Core Viewpoint - The Federal Reserve's reluctance to lower interest rates despite questionable non-farm payroll data indicates a strategic approach to maintain market expectations, particularly in relation to China's economic situation [1][3][12] Group 1: Non-Farm Payroll Data Analysis - Non-farm payroll data has shown a pattern of strong initial reports followed by significant downward revisions, with over 300,000 jobs adjusted downwards this year alone, raising concerns about the accuracy of economic indicators [5][10] - The June non-farm payroll report initially indicated an addition of 206,000 jobs, but subsequent revisions revealed a decrease in April's job additions to 108,000, highlighting discrepancies in employment data [5][9] - The healthcare sector accounted for 42% of the new jobs in June, suggesting a potential misalignment between reported job growth and overall economic health, as this sector's growth may not reflect broader economic recovery [9][10] Group 2: Market Reactions and Implications - The market's response to the non-farm payroll data has been significant, with gold prices rising and oil prices falling, indicating a shift in investor sentiment towards skepticism about the economic narrative [5][10] - The dynamic between U.S. monetary policy and Chinese market performance is evident, as expectations of rate cuts in the U.S. correlate with positive movements in Chinese markets, while strong non-farm data leads to market pressure in China [7][12] - The recent trends in the A-share market, particularly in the ChiNext and CSI 300 indices, suggest a potential turning point in market sentiment, driven by reactions to U.S. economic data and its implications for global markets [10][12]

Market Overview - The cryptocurrency market is experiencing a significant downturn, with Bitcoin briefly falling below $112,000 [2][4] - As of the latest report, Bitcoin is priced at $112,526.3 [2] - Other cryptocurrencies, including Ethereum, Dogecoin, and BNB, have also seen declines of over 3%, with Dogecoin experiencing a 19% drop over the past week [4] Market Data - Bitcoin's market capitalization is approximately $2.24 trillion, with a 24-hour trading volume of $57.35 billion [5] - Ethereum is priced at $3,404.20, with a market cap of $409.07 billion and a 24-hour trading volume of $29.76 billion [5] - The total liquidation amount in the cryptocurrency market over the past 24 hours exceeded $369 million, with long positions accounting for $310 million and short positions for $58.17 million [6] Economic Context - Recent U.S. non-farm payroll data for July fell significantly short of expectations, indicating a deteriorating labor market, which has led traders to increase bets on a potential interest rate cut by the Federal Reserve in September [6] - The growing concerns about a U.S. economic recession have heightened market risk aversion [6]

Core Insights - The cryptocurrency market is experiencing a correction, with Bitcoin dropping below $112,000, leading to over 110,000 liquidations in the past 24 hours [1] - The U.S. non-farm payroll data for July significantly underperformed expectations, indicating a rapid deterioration in the labor market, which has increased traders' bets on a potential interest rate cut by the Federal Reserve in September [1] - There is a rising concern about a U.S. economic recession, contributing to heightened risk aversion in the market [1] Market Analysis - Analysts from BiyaPay indicate that Bitcoin is currently in a consolidation phase since late June, with $115,000 identified as a critical support level [1] - If Bitcoin falls below $114,000, it may test the support range of $111,000 to $112,500 [1] - Long-term holders currently control 53% of the supply, suggesting that any significant selling pressure would require new capital inflows to stabilize the market [1]

Group 1 - The Non-Farm Payrolls (NFP) is a key economic indicator released monthly by the U.S. Department of Labor, reflecting employment growth outside the agricultural sector [3][4] - NFP data significantly influences traditional financial markets, including stocks, bonds, and commodities, and is increasingly impacting the cryptocurrency market [4][22] - The relationship between NFP data and cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) is becoming more pronounced, as these assets are now viewed similarly to risk assets and gold [4][22] Group 2 - Strong NFP data typically leads to expectations of interest rate hikes by the Federal Reserve, which can pressure risk assets like BTC, while weak data may enhance expectations for rate cuts, benefiting these assets [7][8] - The correlation between NFP data and cryptocurrency prices is evident, with altcoins often experiencing more volatility than BTC due to lower liquidity [8][5] - The increasing participation of institutional investors in the cryptocurrency market is tying BTC and ETH prices more closely to macroeconomic indicators [4][22] Group 3 - In August, BTC experienced a pullback, testing a critical support level of $112,000, with expectations of a subsequent upward trend aligned with potential rate cuts in September [17][19] - ETH also faced a decline but is expected to test higher resistance levels, with significant trading volume indicating strong market interest from institutional investors [19][22] - The upcoming NFP data release is anticipated to influence both traditional and cryptocurrency markets, highlighting the interconnectedness of these financial ecosystems [21][22]

Core Viewpoint - The Federal Reserve's decision on interest rate cuts remains uncertain, with Chairman Powell considering the legacy of his policies and the balance between tight and loose monetary policy [1][17]. Group 1: Interest Rate Policy - The Federal Reserve decided to maintain its policy rate, citing that inflation is slightly above target and the job market remains strong, with an unemployment rate of 4.1% [4][6]. - There were two dissenting votes in the recent meeting, marking the first occurrence since 1993, indicating differing views on the necessity of rate cuts [1][4]. - Powell emphasized that the current monetary policy is slightly restrictive, and future decisions will depend on upcoming inflation and employment data [4][7]. Group 2: Tariff Impact - Recent government tariffs have generated significant revenue, with monthly collections reaching $30 billion, but the impact on consumer prices is still being assessed [5][11]. - The Fed is adopting a "wait and see" approach regarding the impact of tariffs on core consumer prices, aiming to prevent temporary price increases from becoming persistent inflation [5][8]. - Powell noted that the effects of tariffs on prices may take time to materialize, and the Fed is focused on ensuring that any price impacts do not lead to sustained inflation [5][11]. Group 3: Employment and Economic Indicators - The U.S. economy showed a GDP growth of 1.2% in the first half of the year, a decline from the previous year's 2.5%, while the job market remains stable with low unemployment [9][10]. - There is a concern that the balance between job demand and supply is weakening, which could indicate underlying risks in the employment market [10][11]. - The Fed's dual mandate focuses on achieving full employment and price stability, rather than solely on economic growth [9][10]. Group 4: Federal Reserve Independence - Powell reiterated the importance of the Fed's independence from political pressures, especially in light of recent calls from President Trump for rate cuts [15][16]. - The Fed aims to focus on economic data and risk assessments rather than political influences, which is crucial for maintaining credibility in monetary policy [15][16]. - The independence of the Fed is seen as vital for effective economic governance, ensuring that monetary decisions are made based on economic conditions rather than political motivations [15][16].