Core Insights - The era of low interest rates in Japan is coming to an end as the belief in Japanese government bonds is being challenged due to rising inflation [1][3][5] - The underlying cause of this inflation is structural, stemming from Japan's manufacturing hollowing, declining birth rates, and prolonged low interest rates and currency depreciation [1][4][13] Group 1: End of Low Interest Rates - Japan's low interest rates have been a narrative for nearly 30 years, attributed to the aftermath of the real estate bubble burst [3] - In 2022, Japan experienced inflation exceeding 3%, marking a significant departure from its historical low inflation rates [4][5] - This inflation is sustained in a context where global oil prices have declined, indicating a shift from previous patterns of temporary inflation spikes [4][5] Group 2: Factors Behind the Current Inflation - Japan's inflation is influenced by external factors, particularly high inflation abroad, as Japan is sensitive to imported inflation due to its reliance on imports for basic resources [6][7] - The long-term undervaluation of the yen has amplified imported inflation, with a 10% depreciation of the yen estimated to increase the CPI by approximately 0.8 percentage points over eight quarters [9][10] - The initiation of a wage-price spiral is a key factor in the current inflation, driven by labor market imbalances and increased demand in the service sector [11][12] Group 3: Historical Context and Structural Changes - The reasons for Japan's previous low inflation and interest rates are now contributing to the current inflationary pressures, including the hollowing out of industries and a demographic shift towards an aging population [13][14][19] - Japan's shift towards globalization post-2001 has led to a reliance on imports, exacerbating its sensitivity to input inflation [15][16] - The prolonged low interest rate policies and quantitative easing have created a scenario where the weak yen has become a catalyst for current inflation [17][18]

作为典型的商品货币，澳元走势还深受全球资源品市场表现的影响。近期全球AI投资热潮带动工业金 属需求回升，叠加新能源转型与基建推进带来的长期增量需求，使得澳大利亚核心出口资源品价格企 稳，为澳元提供了额外的基本面支撑。不过制约因素同样存在，美国现行关税政策已对澳大利亚商业投 资和企业招聘造成压力，而三季度GDP环比仅增长0.4%的疲软表现，也一定程度上限制了澳联储的政 策收紧空间。 技术面来看，澳元兑美元自12月9日澳联储决议公布后震荡上行，已成功突破下降平行通道，站稳多条 均线支撑，日线级别呈现明确多头排列。当前汇价持续站在20日EMA上方，MACD红柱增速虽有放缓 但快慢线仍保持发散，不过RSI指标已升至相对高位，提示上行过程中可能伴随震荡放缓的风险。关键 阻力位聚焦0.6650关口，该点位既是前期高点也是重要心理关口，若有效突破，后续有望向今年9月 0.6707的年内高点发起冲击；下方核心支撑则集中在0.6616当日低点及0.6600心理关口。 后市展望方面，澳元兑美元走势将高度依赖四大核心变量的演变。其一为澳联储鹰派立场的延续性，后 续通胀、劳动力数据表现将决定其明年加息预期的兑现节奏；其二是美联储政策 ...

Group 1 - The Australian dollar (AUD) has been recovering against the US dollar (USD) since December 2025, with a reported exchange rate of 0.6647 as of December 15, reflecting a slight increase of 0.0007 from the previous trading day [1] - The core driver of the AUD's strength is the policy divergence between the Reserve Bank of Australia (RBA) and the Federal Reserve (Fed), with the RBA maintaining its benchmark interest rate and signaling a potential rate hike if inflation remains stubborn [1][2] - Following the RBA's hawkish stance on December 9, the AUD gained 0.3% to 0.6645, while the 3-year Australian government bond yield surged by 11 basis points to 4.152% [1] Group 2 - Australia's inflation rate reached 3.8% year-on-year in October, prompting the RBA to raise its medium-term inflation expectations and support its decision to rule out rate cuts [2] - The Australian economy is experiencing a dichotomy of high inflation and weak growth, with a projected budget deficit of AUD 14.39 billion over the next four years, while the labor market remains tight [2] - The technical analysis indicates that the AUD/USD has risen nearly 0.8% since the low on December 9, breaking through several short-term resistance levels, with 0.6650 becoming a key level to watch [2] Group 3 - The future trajectory of the AUD/USD exchange rate is highly dependent on the policy directions of both the RBA and the Fed, as well as global risk sentiment and commodity price fluctuations [3] - Investors should closely monitor the Fed's future rate cut pace, RBA communications, and changes in inflation and labor data to gauge the sustainability of the RBA's hawkish stance [3]

Group 1 - Japanese investors net sold 581.1 billion yen in foreign stocks, 354.4 billion yen in long-term bonds, and 798.7 billion yen in short-term bonds last week [1] - Foreign investors have net bought 690.1 billion yen in Japanese stocks for five consecutive weeks [1] - Japan's government is focusing on "responsible active fiscal" policies to support strategic industries such as semiconductors, AI, defense, and green industries, which have a more immediate impact compared to previous policies aimed at long-term growth [1] Group 2 - The Japanese yen has potential for upward fluctuations due to the normalization of the Bank of Japan's monetary policy and the ongoing interest rate cuts by the Federal Reserve [4] - The Nikkei 225 index has risen 31.4% year-to-date, with about half of this increase driven by policy expectations related to "expansionary fiscal policy and a weak yen" [4] - Future market sentiment is expected to become more rational by 2026, with the sustainability of future gains depending on the effectiveness of policy implementation [4] - Japan's export growth may be supported by the diversification of trade partners and the competitiveness of its advantageous industries, despite the narrowing of the US-Japan interest rate differential [4] - Domestic demand may improve if inflation recedes smoothly and real income levels rise, enhancing consumer confidence and corporate profitability through a "wage-inflation" spiral [4]

Core Insights - The U.S. labor market is experiencing a rare state of equilibrium, with both supply and demand contracting simultaneously, leading to a fragile balance [1][7] - Recent employment data shows a significant slowdown, with non-farm payrolls falling below expectations for two consecutive months and a three-month moving average dropping below 50,000 [3][19] - The labor supply is undergoing profound changes, with a decrease in the negative impact of immigration and a reduction in the effects of the retirement wave [12][14] Employment Data - Non-farm payrolls have seen a substantial downward revision, with a total adjustment of 250,000 jobs for May and June, resulting in negative job growth for June for the first time since December 2020 [3][5] - The annual revision in September indicated a downward adjustment of 910,000 jobs for March 2023, suggesting that the slowdown in the labor market began earlier than anticipated [5] Labor Supply Dynamics - The impact of immigration on labor supply is diminishing, with a new normal of low encounters and deportations for border immigration enforcement [12] - The retirement wave's influence is also decreasing, with a trend towards delayed retirement among the 55 to 64 age group, maintaining a labor participation rate above 66% [14] New Labor Force - The millennial generation, born between 1997 and 2007, is entering the labor market in large numbers, contributing to a stable growth in domestic labor supply [17] - The annual influx of new labor is estimated at 2.9 to 3 million, compensating for the decline in immigrant labor [17] Employment Balance - To maintain the current unemployment rate, a monthly job growth of 150,000 to 180,000 is required, but the average monthly job growth over the past year has been only 120,000, indicating a warning signal for the labor market [19] Policy Considerations - The Federal Reserve faces a challenging policy decision, balancing inflation risks with the rising risk of employment market slowdown [21] - The outcome of the September meeting will be crucial in determining the Fed's tolerance for rising unemployment and potential shifts towards a more dovish interest rate policy [23]

Core Viewpoint - The upcoming U.S. non-farm payroll report for August is expected to reveal further signs of a cooling labor market, with a median forecast of 75,000 new jobs added, compared to 73,000 in July, amidst various economic indicators showing weakness [1][2]. Labor Market Trends - The U.S. labor market is showing signs of slowing down, with July's non-farm payroll growth at 73,000, below the expected 110,000, and significant downward revisions of 258,000 for May and June combined [2][3]. - The Job Openings and Labor Turnover Survey (JOLTS) reported a decrease of 176,000 job openings to 7.181 million, the lowest since September of the previous year [2]. - The ADP employment report indicated an increase of only 54,000 jobs in the private sector, significantly below the market expectation of 68,000 [2][3]. Economic Implications - Analysts suggest that if the August non-farm payroll data falls short of expectations, it could heighten concerns about "stagflation" risks in the U.S. economy, leading to increased market speculation about potential interest rate cuts by the Federal Reserve [1][2]. - The probability of a 25 basis point rate cut by the Federal Reserve in September has risen to 99.4%, with expectations for a 50 basis point cut if the non-farm payroll number is below 40,000 and the unemployment rate reaches or exceeds 4.4% [5][6]. Market Reactions - Market reactions to the non-farm payroll data are anticipated to be significant, with potential impacts on the U.S. dollar and gold prices depending on whether the data meets or falls short of expectations [8]. - Historical data shows that gold and crude oil prices have a 42% probability of rising following the release of non-farm payroll data, while the Nasdaq 100 index has a 58% probability of increasing [9].

Core Viewpoint - The article discusses the evolving economic landscape in the U.S., highlighting a potential shift towards a "fiscal dominance, monetary coordination" policy model, driven by rising inflation and increasing fiscal deficits, despite the market's expectations for interest rate cuts by the Federal Reserve [3][20][24]. Group 1: Economic Recovery and Inflation - The U.S. economy is experiencing a bumpy recovery, with consumer and business confidence gradually improving as policy uncertainties decrease [5][9]. - Inflation is expected to trend upwards towards the end of the year, primarily due to a "wage-inflation" spiral and tariff impacts, which may challenge traditional monetary policy approaches [16][18]. - The labor market is showing signs of recovery, with job vacancies increasing and wage growth potentially on the rise, indicating a solid foundation for consumer spending [9][12][16]. Group 2: Fiscal Dominance and Monetary Coordination - The article outlines a new policy model characterized by fiscal dominance, where fiscal policy increasingly influences monetary policy decisions, particularly in light of persistent fiscal deficits [20][24]. - The federal deficit for the current fiscal year reached $1.63 trillion by July, with projections suggesting it could rise to $1.92 trillion for the full year, indicating a significant fiscal burden [20][21]. - The article suggests that the current administration's pressure on the Federal Reserve to lower interest rates is a strategic move to reduce financing costs for both the government and private sectors, especially ahead of upcoming elections [26][29]. Group 3: Bond Market Dynamics - The article anticipates a significant increase in U.S. Treasury bond issuance, with projections of $1 trillion in net issuance for Q3 and $590 billion for Q4, primarily in long-term bonds [33][34]. - The demand for bonds is expected to be driven mainly by households, money market funds, and foreign investors, although recent trends show a decrease in holdings by money market funds [37][41]. - The article warns that if the Federal Reserve cuts rates while inflation rises, it could lead to higher long-term interest rates, with projections suggesting the 10-year yield could reach approximately 4.8% by year-end [4][45].

Group 1: Report Industry Investment Rating - There is no specific industry investment rating provided for this report [7] Group 2: Core Viewpoints of the Report - In the June 2025 meeting, the Fed unanimously agreed to keep the policy rate unchanged at 4.25 - 4.5%. The meeting statement emphasized that the uncertainty of the economic outlook has decreased but remains high. The Fed maintained its forecast of two rate cuts this year, but Powell lacked confidence in this rate forecast due to high uncertainty [3] - The Fed continued to raise inflation expectations and lower growth expectations in the SEP economic forecast. It raised the PCE and core PCE growth rate expectations for the end of 2025 to 3% and 3.1% respectively, increased the unemployment rate forecast to 4.5%, and lowered the real GDP growth rate forecast to 1.4%. The Fed maintained its interest rate forecast, expecting the year - end policy rate to be 3.9%, implying two rate cuts this year [3] - At the press conference, Powell maintained a wait - and - see stance, believing that inflation pressure may still emerge in summer. After the Fed's press conference, U.S. Treasury yields and the U.S. dollar index rose, and the market priced in a more cautious Fed monetary policy stance [3] - In terms of strategy, the next 2 - 3 months are an important observation window. If inflation does not rise significantly in the next 2 - 3 months, the unemployment rate may rise and the market may price in a higher probability of Fed rate cuts, increasing bond market opportunities from September to the fourth quarter. If inflation rises significantly in the third quarter, the unemployment rate may face less upward pressure, the probability of a wage - inflation spiral increases, and interest rates may remain high or even rise further. The U.S. dollar index may be supported by high interest rate differentials this year [3] Group 3: Summary by Related Content 1. Fed Meeting Decisions - The Fed kept the policy rate at 4.25 - 4.5% in the June 2025 meeting and maintained the forecast of two rate cuts this year [3] 2. SEP Economic Forecast Changes - The Fed raised the PCE and core PCE growth rate expectations for the end of 2025 from 2.7% and 2.8% to 3% and 3.1% respectively, increased the unemployment rate forecast from 4.4% to 4.5%, and lowered the real GDP growth rate forecast from 1.7% to 1.4% [3] 3. Powell's Press Conference Stance - Due to high uncertainty, no one has much confidence in the submitted future interest rate path forecasts. Powell emphasized the need to see more actual data and that the Fed needs to maintain high interest rates to suppress inflation. He also mentioned that inflation pressure may appear in summer [3][4] 4. Market Reactions - After the Fed's press conference, U.S. Treasury yields rose slightly, the U.S. dollar index was supported, and the U.S. stock market was under pressure [3][6] 5. Investment Strategy Suggestions - The next 2 - 3 months are a window to observe inflation risks and consumer confidence. Different inflation trends in this period will lead to different market situations and investment opportunities, especially in the bond market and the U.S. dollar index [3]

Group 1 - The core viewpoint is that despite the upcoming CPI data release, the U.S. stock market may continue to rise, contrasting sharply with the pessimistic atmosphere observed during the market's drop to a 52-week low on April 8 [1] - The current logic shift is attributed to the delayed impact of tariffs, with businesses planning to pass on tariff costs by August, potentially leading to concentrated inflation pressure in Q3 [1] - Derivative traders are betting that the core CPI monthly rate will rise from 0.2% in April to 0.4% in August, before falling back below 0.2% by year-end, although these figures may not fully capture the risks of a wage-inflation spiral or economic recession [1] Group 2 - Barclays analysts noted that signs of stagflation have "quietly crept" into the data, with the upcoming inflation report possibly showing "concrete evidence of tariff-induced price increases" [2] - Gang Hu's predictions regarding inflation have been validated multiple times, and he now views tariffs as a double-edged sword that could either trigger a recession or compel the Federal Reserve to maintain interest rates between 4.25% and 4.5%, leading to a highly bifurcated economic outlook [2] - The significant market volatility this year reflects this uncertainty, with the S&P 500 and Nasdaq experiencing both record highs and lows within a short timeframe, indicating that the market may remain stable even amid uncertainty [2]

Core Viewpoint - The upcoming US May non-farm payroll report is anticipated to reveal significant cooling in the labor market, as indicated by a series of concerning leading indicators, particularly the disappointing ADP employment data [1][3]. Employment Data - The ADP report for May showed only 37,000 new jobs added, far below the expected 114,000, marking the lowest figure since March 2023 and the largest deviation from expectations in nearly three years [1][3]. - Job losses were noted in the goods-producing sector, with a decrease of 2,000 positions, while the service sector saw a modest increase of 36,000 jobs, primarily driven by leisure and hospitality (+38,000) and finance (+20,000) [3]. - Small businesses (fewer than 50 employees) were particularly affected, losing 13,000 jobs, reflecting the direct impact of macroeconomic policy uncertainty on these vulnerable entities [3]. Economic Indicators - Initial jobless claims rose to 247,000, exceeding expectations and reaching an eight-month high, with the four-week moving average also at its highest since November 2021, suggesting prolonged unemployment durations [4]. - The ISM non-manufacturing PMI unexpectedly fell to 49.9 in May, indicating contraction in business activity for the first time since mid-2022, attributed to policy uncertainties affecting order delays [4]. Policy Uncertainty - Current policy uncertainties, especially regarding tariffs, are seen as a core factor contributing to the unclear economic outlook, with potential cost increases looming if negotiations fail [5]. - The upcoming non-farm payroll report is crucial for understanding structural changes in employment, particularly in the goods-producing sector, small businesses, and temporary jobs [5]. Market Reactions - Market consensus for new non-farm jobs has dropped to 130,000 from a previous 177,000, with some institutions predicting as low as 125,000 [7]. - The unemployment rate is expected to remain at 4.2%, but a rise to 4.3% or higher could signal recession risks [7]. - Average hourly wage growth is projected to slightly increase to 0.3%, raising concerns about a potential wage-inflation spiral due to high labor costs and declining productivity [7]. Short-term Volatility - The release of employment data is likely to cause significant volatility in stock, bond, and currency markets, similar to the reactions following the ADP data release [8]. - Current interest rate futures reflect expectations of at least two rate cuts by the Federal Reserve this year, with increased bets on a September rate cut if unemployment rises significantly [8].