Core Viewpoint - Japan's economy is experiencing a contraction, which may prompt Prime Minister Kishida to implement a large-scale stimulus plan, despite the Bank of Japan's intention to raise interest rates in the coming months [1][3]. Economic Performance - Japan's real GDP contracted at an annualized rate of 1.8% for the third quarter, marking the first decline in six quarters, although this was better than economists' median forecast of -2.4% [1][3]. - Private residential investment and exports were the main factors dragging down overall output, aligning with market expectations [3]. - Consumer spending, which accounts for the largest share of GDP, remained nearly flat and failed to offset the economic weakness [3]. Government Response - The GDP data may strengthen the Kishida administration's position to boost fiscal spending to stimulate the economy, with an economic plan expected to be announced soon [3][6]. - Economists anticipate that the scale of the economic stimulus will slightly exceed last year's 13.9 trillion yen (approximately 89.9 billion USD) [6]. Inflation and Consumer Behavior - Private consumption, which constitutes over half of the economy, only increased by 0.1%, indicating that households are controlling discretionary spending amid high living costs and stagnant real wages [6]. - Core inflation in Japan has consistently met or exceeded the Bank of Japan's 2% target for three and a half years [6]. Business Investment - Despite pressures from tariffs leading to lower profit expectations, large enterprises plan to increase capital investment this year, with capital spending growing by 1.0%, surpassing expectations of a slight decline [6]. - The strong capital spending reflects robust corporate confidence amid labor shortages and market competition, suggesting that wage growth momentum is likely to remain stable [6]. Monetary Policy Outlook - The Bank of Japan is expected to announce its next policy decision on December 19, with half of the observers anticipating a rate hike, and nearly all economists predicting action by January at the latest [7]. - The economic outlook from the Bank of Japan is not expected to change significantly, with a baseline expectation of a rate hike in December, although a delay until January is possible [7].

（文章来源：新华财经） 施纳贝尔认为，利率处于"绝对"合适的水平，决策者必须保持对"仍然相当强劲"的食品成本上涨以及服 务业通胀"粘性"的警惕。 新华财经北京11月12日电根据欧洲央行执委施纳贝尔的说法，由于经济正在积聚动能，且各国政府开始 在军事和基础设施上投入巨额资金，欧元区的通胀风险倾向于上行。 施纳贝尔表示："经济正在复苏，产出缺口正在缩小。"施纳贝尔目前被视为欧洲央行管理委员会中最鹰 派的成员。她补充说："这使我得出结论，如果说有什么风险的话，那就是通胀风险倾向于上行。" ...

Core Viewpoint - Trump's "tariff refund" plan could cost up to $600 billion, significantly exceeding the expected tariff revenue of approximately $300 billion, raising concerns about potential inflation similar to that seen during pandemic stimulus measures [1][4][5] Group 1: Financial Implications - The proposed plan suggests distributing $2,000 to American citizens from tariff revenues, with remaining funds aimed at significantly reducing national debt [2][5] - The total cost of the "dividend" plan, if designed similarly to pandemic payments, is estimated at $600 billion, far surpassing the U.S. government's tariff revenue capabilities, which totaled $195 billion for the fiscal year ending in September [4][7] - Current U.S. tariff revenues are being utilized to limit the scale of fiscal deficits, with the national debt nearing $20 trillion and the last annual surplus occurring over 20 years ago [7] Group 2: Economic Risks and Criticism - Economists, including Nobel laureate Paul Krugman, criticize the plan as irresponsible, especially given the increasing government debt [5][6] - The proposal evokes memories of pandemic-era stimulus checks, which some economists argue contributed to severe inflation between 2021 and 2022 [3][6] Group 3: Legal and Legislative Considerations - The legality of Trump's tariff imposition is currently under review by the U.S. Supreme Court, which could impact the feasibility of the proposed refund plan [8][9] - If tariffs are deemed invalid, it may take seven years for the government to gather sufficient revenue to fund the proposed "dividend checks" [9] - Treasury Secretary Becerra hinted that the $2,000 "dividend" might be implemented as tax reductions rather than direct cash payments, indicating uncertainty about the proposal's final form [11][12]

Core Viewpoint - The Bank of Indonesia unexpectedly decided to maintain its policy interest rate unchanged after three consecutive rate cuts, pausing the assessment of previous easing measures and ongoing fiscal stimulus impacts [1] Group 1: Monetary Policy - The central bank's decision came as a surprise, as most analysts had anticipated a fourth consecutive rate cut of 25 basis points [1] - Prior to this decision, Indonesia's foreign exchange reserves fell to a 14-month low in September, limiting the central bank's ability to support the Indonesian rupiah [1] Group 2: Currency Outlook - Despite the Indonesian rupiah maintaining a strong exchange rate against the US dollar this month, economists expect downward pressure on the currency due to capital outflows [1]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Economics - **Focus**: Economic performance and fiscal stimulus measures in China for Q4 2025 Core Insights and Arguments 1. **GDP Growth Stabilization**: Q4 GDP is likely stabilizing at 4.6-4.7% year-on-year, supported by fiscal stimulus measures totaling Rmb500 billion announced by the Ministry of Finance [3][6] 2. **Industrial Production Surge**: A notable increase in industrial production was observed in September, rising by 1.5 percentage points to 6.7% year-on-year, attributed to additional working days and quarter-end adjustments [2][6] 3. **Weakening Demand**: Despite the industrial production increase, there is a continued slowdown in fixed asset investment and retail sales, indicating persistent demand weakness [2][6] 4. **Deflationary Pressures**: The GDP deflator remains at -1% year-on-year, reflecting ongoing deflationary conditions in the economy [2][6] 5. **Nominal GDP Decline**: Nominal GDP has decreased by 20 basis points to 3.7% year-on-year, highlighting the impact of weakening demand [2][6] 6. **Fiscal Measures Impact**: The recent fiscal measures are expected to boost infrastructure capital expenditure in the coming months, aiding in stabilizing Q4 real GDP growth [3][6] 7. **Annual GDP Target**: The 5% annual GDP target is now considered largely achievable, reducing the likelihood of further significant stimulus measures for the remainder of the year [3][6] Additional Important Information 1. **Investment Trends**: Fixed asset investment year-to-date has shown a decline of 0.5%, with manufacturing and property sectors experiencing significant downturns [5][6] 2. **Retail Sales Performance**: Retail sales growth has slowed, with nominal growth at 3.0% in September, indicating a challenging consumer environment [5][6] 3. **Sector Contributions**: The primary industry contributed 4.0% to GDP growth, while the secondary and tertiary industries contributed 4.2% and 5.4%, respectively, showcasing varied performance across sectors [5][6] 4. **Future Outlook**: The economic outlook suggests that while Q4 may stabilize, the underlying issues of demand weakness and deflation remain critical challenges for the Chinese economy [2][6]

Core Insights - Gold prices have recently exceeded $4,200, maintaining a strong uptrend despite a brief drop following the Israel-Hamas deal, driven by US monetary policy expectations and fiscal settings [1][3] Monetary Policy - The breakout in gold prices in September was primarily influenced by expectations of aggressive US Federal Reserve rate cuts due to a deteriorating US labor market, with Federal Funds Futures indicating a potential drop in interest rates below 3% next year [1] - The attempted firing of Federal Reserve governor Lisa Cook for alleged mortgage fraud has led to expectations of a more dovish Fed, with speculation that Jerome Powell may be replaced by a policy dove, resulting in lower policy rates [2] Fiscal Settings - October's gold price movements have been significantly influenced by global fiscal settings, particularly following the election of Sanae Takaichi in Japan, which has contributed to a "run it hot" trade amid recession-like fiscal deficits in the US, Japan, and Germany [3] - The US deficit-to-GDP ratio is projected to be near 6% next year, indicating very expansionary fiscal settings, compounded by central banks prioritizing employment over inflation concerns [4] De-Dollarisation Trend - US trade policy has accelerated the trend of de-Dollarisation, with central banks, particularly the People's Bank of China, increasing gold purchases to diversify away from the US Dollar, leading to sustained demand for gold [5] - Export economies that previously invested surpluses in US Treasuries are now directing funds into gold, indicating a shift in reserve management strategies [5] Geopolitical Risks - Geopolitical tensions, particularly in the Middle East and Eastern Europe, have increased demand for gold as institutions and wealthy individuals seek to protect their wealth from sanctions [6] - The recent peace deal between Israel and Hamas temporarily reduced gold prices due to a decrease in geopolitical risk premium, but this was quickly reversed by escalating trade tensions between the US and China [6]

Core Viewpoint - The Japanese yen has weakened significantly, with the USD/JPY exchange rate rising to 153.27, reflecting a cumulative rebound of over 7.5% since late April, prompting concerns from Japanese officials about potential market volatility and inflationary pressures [1][2]. Group 1: Currency Market Dynamics - The USD/JPY exchange rate has increased by more than 3.6% this week alone, indicating a rapid upward trend [1]. - Japanese Finance Minister Kato Katsunobu expressed concerns over "one-sided rapid fluctuations" in the currency market and emphasized the need for stability that reflects economic fundamentals [1]. - The recent depreciation of the yen is attributed to policy expectation adjustments following the Liberal Democratic Party leadership election, which has led to significant market volatility [1][2]. Group 2: Policy Implications - Newly elected Prime Minister Kishi Sayaka is expected to advocate for aggressive fiscal stimulus and maintain a loose monetary policy, which has diminished market expectations for a near-term interest rate hike by the Bank of Japan [2][3]. - Economic advisor Honda Yoshirou suggested that raising interest rates in October may be challenging, recommending a delay until December [2]. - The joint statement from the Japanese government and the Bank of Japan, which has underpinned over a decade of ultra-loose monetary policy, may be re-evaluated under Kishi's leadership [2]. Group 3: Market Sentiment and Predictions - Following Honda's comments, the probability of a Bank of Japan rate hike in October dropped to below 20%, down from approximately 68% prior to the election [3]. - The options market indicates a shift in sentiment, with a decrease in demand for bullish yen positions, suggesting a cautious outlook for the yen in the short term [3][4]. - Despite short-term bearish sentiment, there remains a cautious optimism for the yen's long-term strength, as traders are still willing to pay higher premiums for put options on USD/JPY [4]. Group 4: Intervention Speculations - Speculation about potential foreign exchange interventions by Japanese authorities has increased, especially if the USD/JPY approaches the psychological level of 160 [4]. - Since 2022, the Japanese Finance Ministry has reportedly utilized approximately 24.5 trillion yen (around 160 billion USD) to support the yen [4]. - Analysts suggest that significant movements in the USD/JPY exchange rate could trigger policy responses from both the Japanese and U.S. governments to prevent excessive appreciation of the dollar against the yen [4].

Group 1 - The German government forecasts a modest economic growth of 0.2% in 2025, with a potential acceleration starting in 2026, despite external uncertainties such as U.S. trade policies [1][2] - The current economic recovery in Germany is driven by domestic demand rather than foreign trade, particularly through consumption and public investment [1] - High government spending, including infrastructure and defense investments, will be crucial for economic growth, contingent upon the implementation of structural reforms [1] Group 2 - After two consecutive years of economic contraction in 2023 and 2024, Germany experienced a quarter-on-quarter growth of 0.3% in the first quarter of this year [2] - The imposition of tariffs by the U.S. on imported goods, effective from April, led to a quarter-on-quarter decline of 0.3% in the second quarter, with expectations of continued weak performance in the third quarter [2] - A joint forecast by five major German economic research institutions indicates that U.S. tariffs will severely impact the global economy, suppressing Germany's export growth and contributing to the projected 0.2% growth in 2025 [2]

Core Viewpoint - The German government forecasts a modest economic growth of 0.2% in 2025, with potential acceleration starting in 2026, but faces external uncertainties, particularly from U.S. trade policies [1][2]. Economic Growth Projections - The German economy is expected to recover gradually, with growth driven by domestic demand rather than foreign trade, particularly through consumption and public investment [1]. - Economic growth is projected to strengthen from the end of this year into early next year, with a potential growth rate of 1.3% in 2026 [1]. Government Spending and Structural Reforms - Future economic growth will heavily rely on high government spending, including infrastructure and defense investments, contingent upon the implementation of structural reforms [1]. Impact of U.S. Trade Policies - The imposition of tariffs by the U.S. on imports, particularly on automobiles, has negatively impacted the German economy, leading to a contraction in the second quarter of this year [2]. - The joint forecast from five major German economic research institutions indicates that external demand weakness will suppress export growth, contributing to the anticipated 0.2% growth in 2025 [2].

Core Viewpoint - The persistent decline in German industrial orders dampens hopes for economic recovery, with August showing a 0.8% month-on-month decrease, marking the fourth consecutive month of decline [1] Group 1: Industrial Orders - In August, new industrial orders in Germany fell by 0.8% month-on-month, continuing a downward trend for four months [1] - Domestic demand increased by 4.7% month-on-month, but overseas orders dropped for the third consecutive month, decreasing by 4.1% [1] - Orders from the Eurozone decreased by 2.9%, while orders from outside the Eurozone fell by 5.0% [1] - The automotive sector saw a significant decline in new orders, with a month-on-month drop of 6.4% [1] - The computer, electronics, and optical products manufacturing sector experienced an 11.5% decrease in new orders, while the pharmaceutical industry saw a 13.5% decline [1] Group 2: Economic Outlook - The German Federal Ministry for Economic Affairs and Energy indicated that the recovery in domestic industrial demand suggests a potential stabilization, but weak overseas demand continues to hinder recovery [1] - Experts express concern over the decline in overseas orders, especially after a slight recovery earlier in the year [2] - The chief economist of Deutsche Bank predicts significant improvement in the economy will not occur until next year [1] - The economic outlook remains bleak, with expectations for economic growth in 2025 and 2026 being cautious, as indicated by various economists [2][3] Group 3: Government Response and Challenges - There are calls for the German government to implement substantial fiscal measures, with plans for significant investment in infrastructure [2] - The lack of effective economic stimulus measures after two years of recession is highlighted as a critical issue [2] - High energy costs and stagnant innovation investments are noted as factors undermining the competitiveness of German industrial products [2]