Core Viewpoint - The global manufacturing sector is likely to experience a moderate slowdown, but there are structural highlights, particularly in ASEAN countries and Africa, where manufacturing sentiment remains high. Short-term positive trends may also be observed in ASEAN countries and the Eurozone manufacturing PMI [2][22]. Group 1: Global Manufacturing Cycle Status - The global manufacturing cycle is closely linked to global trade growth, analyzed through hard indicators like industrial production and soft indicators like manufacturing PMI [4][12]. - From the global industrial production index, there has been a decline in year-on-year growth from 3.6% in March to 3.1% in May, still above last year's average of 1.7% [5][14]. - The main contributors to growth are China, the Eurozone, developed Asian economies (excluding Japan), Africa, and the Middle East, with the top four regions contributing 2.8% to the global industrial production index [5][14]. - The Eurozone is leading in growth, while emerging Asian economies (excluding China) are experiencing declines, indicating a recovery in Eurozone industrial demand [5][14]. Group 2: Global Manufacturing PMI Analysis - The global manufacturing PMI has dropped below the expansion threshold to 49.7% in July from 50.4% in June, indicating a weakening manufacturing cycle [6][20]. - Factors suppressing manufacturing activity in the second half of the year include significant order front-loading in the first half, leading to a decline in new export orders and a reduction in inventory levels in the U.S. [6][20]. - Emerging markets are performing better than developed markets, but the gap is narrowing, with July manufacturing PMI for emerging markets at 50.5% and developed markets at 49.1% [7][20]. - Among 22 sample economies, only five had manufacturing PMI above the expansion line in July, with India leading at 59.1% [7][21]. - Notably, 14 economies saw an increase in manufacturing PMI from June to July, with Vietnam showing the largest increase of 3.5 points [7][21]. Group 3: Key Data Review and Tracking - Upcoming key economic data includes the U.S. July CPI on August 12 [29]. - Recent data shows the U.S. composite PMI exceeded expectations, while the Eurozone's performance was below expectations [30]. - The U.S. retail sales growth rebounded, with a year-on-year increase of 6.5% reported [34].

Group 1: Global Manufacturing Cycle Overview - The global manufacturing cycle is showing signs of moderate slowdown, with structural highlights in ASEAN countries and Africa, particularly South Africa[2] - The global industrial production index growth rate fell from 3.6% in March to 3.1% in May, still above last year's average of 1.7%[3] - The main contributors to industrial production growth are China, the Eurozone, and developed Asian economies, with the Eurozone leading the growth[3][13] Group 2: Manufacturing PMI Insights - The JPMorgan Global Manufacturing PMI dropped to 49.7 in July from 50.4 in June, indicating a contraction in manufacturing activity[5][19] - Among 22 sample economies, only 5 had a PMI above the neutral line in July, with India at 59.1% and Vietnam at 52.4%[5][20] - In July, 14 out of 22 economies saw an increase in PMI compared to June, with Vietnam leading at +3.5 points[5][20] Group 3: Economic Indicators and Trends - The US composite PMI for July was 55.1%, exceeding expectations, while the Eurozone's was 50.9%, below expectations[28] - The US initial jobless claims rose to 226,000, indicating a slight increase in unemployment[40] - Recent financial conditions in the US and Eurozone have improved, with the Bloomberg Financial Conditions Index for the US rising to 0.62[48]

Export Data Insights - In July, dollar-denominated exports increased by 7.2% year-on-year, while imports rose by 4.1%, both significantly exceeding expectations and reaching new highs since May 2025 and August 2024 respectively[11] - The strong export performance is attributed to four main factors: low base effect, robust exports to non-US economies, a surge in transshipment activities, and the restructuring of supply chains leading to increased demand for capital goods[3] - From a price perspective, refined oil (+0.82%) was the main driver, while mobile phones (-0.42%) and steel (-0.21%) were the main constraints; in terms of quantity, automobiles (+0.61%) were the primary driver, while refined oil (-0.84%) was the main constraint[34] Global Economic Context - The global manufacturing PMI fell to 49.3 in July, indicating a contraction in the manufacturing sector and a lack of reversal signals in the global manufacturing cycle[39] - The US market is a critical variable affecting external demand; a slowdown in US demand could lead to a downward shift in global export growth rates[43] - Recent US data indicates that tariffs have impacted corporate capital expenditures and employment demand, increasing the probability of an economic recession in the US[43] Inventory and Trade Dynamics - Unlike previous cycles, US wholesalers and retailers are experiencing declining inventory levels, with inventory-to-sales ratios at 1.30 and 1.31, below the central levels of 2023-2024[58] - The current inventory accumulation is likely occurring at the consumer level rather than the corporate level, suggesting a longer adjustment period when the cycle reverses[58] Risks and Uncertainties - Domestic policy effectiveness may fall short of expectations, and international geopolitical developments could introduce unexpected changes[63] - There is a potential for measurement errors in monthly import and export growth rates due to various variables in the models used[63]