Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The further decline of US Treasury yields before September may be primarily driven by weaker economic data leading to higher expectations of interest rate cuts, or by the "see - saw effect" triggered by the weakness of other assets. The 10 - year yield is expected to fluctuate at a low level in the range of 4.00 - 4.30%, but inflation and the "Big and Beautiful" Act may impede the decline of long - term yields [4][14]. - In the two - week period from July 18 to August 1, 2025, affected by the US July non - farm payroll report, global investors' risk - aversion increased, resulting in a double - kill situation in the US stock and bond markets. Different asset classes showed various trends, including significant declines in US and UK government bond yields, a new high in the Japanese stock market, a slump in the US stock market, an upward trend in the coking coal index, a decline in Chicago agricultural product futures prices, and a depreciation of the ruble and the euro [5][15]. Summary According to the Directory 1. What Conditions are Needed for the Further Decline of US Treasury Yields? - **Monetary Policy**: At the July FOMC meeting, the interest rate and other monetary policies remained at the June level, in line with market expectations. Waller and Bowman voted against interest rate cuts, citing signs of weakness in the labor market, and Kugler, who was set to leave early, did not attend or vote. Kugler's early departure may increase Trump's influence on the Fed and lead to more divided views within the Fed [1][10]. - **Growth**: Q2 GDP showed a quarter - on - quarter increase of 3.0%, but the main drivers were a decline in imports and accelerated consumer spending. Private consumption and investment weakened, with PDFP growing by 1.2% quarter - on - quarter, lower than the 1.9% in Q1 [2][10]. - **Inflation**: In June, inflationary pressures emerged, with CPI at 2.7%, core CPI at 2.9%, PCE at 2.6%, and core PCE at 2.8%, all reaching the highest levels since March [2][10]. - **Employment**: In July, the ADP employment figure rebounded unexpectedly, but the non - farm payroll data was disappointing, with significant downward revisions to previous months' data. The unemployment rate rose from 4.1% to 4.2%, which greatly disrupted the interest rate market expectations, causing the 1 - year yield to decline by about 17bp on August 1 [2][11]. - **Policy Stance**: Some Fed presidents still recognize the resilience of the economy and employment and maintain a restrictive monetary policy stance, denying the risk of recession and affirming the risk of stagflation [3][12]. 2. Bi - weekly Overseas Macro - analysis - **Interest Rates**: In the past two weeks, US Treasury yields declined significantly, with the 1 - year and 10 - year yields both dropping 21bp to 3.87% and 4.23% respectively. Affected by US Treasuries, UK government bond yields also declined on August 1, increasing investors' risk - aversion [5][16]. - **Equities**: The Japanese stock market reached a new high, with the Nikkei 225 index rising 2.46% in the past two weeks, driven by the US - Japan trade agreement on July 23. However, trading volume was low in July. The US stock market slumped after the release of the July non - farm payroll report, with the Nasdaq index dropping 2.29% on the night of the report release [17]. - **Commodities**: The coking coal index rose 12.07% in the past two weeks after the central government emphasized governance of low - price and disorderly competition in the coal industry. Chicago agricultural product futures prices fell across the board, pressured by high expectations of a bumper US autumn harvest [18]. - **Foreign Exchange**: The ruble depreciated by 3.44% in the past two weeks after the Russian central bank cut interest rates by 200 basis points on July 25. The euro fell 1.24% due to the impact of the US - EU trade agreement and a decline in investor confidence [19]. 3. Market Tracking - The report presents multiple charts, including the bi - weekly fluctuations of global major economies' government bond yields, global major stock indices, major commodities, and global major foreign exchange rates (against the RMB), as well as the latest economic data panels of the US, Japan, and the Eurozone, and the yield curves and inflation trends of US, Japanese, and German government bonds [24][28][30][32][35][41][45].

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - Tariffs' impact on US inflation has partially emerged, with varying effects on different commodities, and further inflation effects will depend on the domestic production process [3][12] - The US still needs restrictive monetary policy to curb inflation from the demand side, and the relatively normal wage growth helps suppress inflation [3][15] - Replacing the Fed Chair alone may not change the policy direction and could damage monetary policy credibility. The Fed's rate - cut rhythm depends on tariffs' impact on inflation, and currently, a rate cut restart in October is expected [3][16] - If the Fed "changes leadership" soon, it may benefit the precious metals market and steepen the US Treasury yield curve [3][16] Summary by Relevant Catalogs High - frequency Data Panoramic Scan - Tariffs' impact on US inflation is partially reflected in terminal goods. Different products are affected differently, and the impact on inflation will further manifest with the domestic production process [3][12] - The US needs restrictive monetary policy to control inflation from the demand side. In June, the core commodity CPI expanded, and retail data showed resilience [3][15] - Replacing the Fed Chair may not change the overall FOMC attitude. The probability of Powell being replaced soon is low, and the Fed's rate - cut decision depends on tariff - inflation effects [3][16] - A list of high - frequency data's weekly环比 changes is provided, including data on food, other consumer goods, energy, metals, real estate, and shipping [19] High - frequency Data and Important Macroeconomic Indicators' Trend Comparison - Multiple charts show the comparison between high - frequency data and important macro - indicators such as PPI, CPI, and export amounts [24][26][29] Important High - frequency Indicators in the US and Europe - Charts display US weekly economic indicators, employment data, sales data, financial conditions, and the implied interest - rate adjustment prospects of the Fed and ECB [84][86][91] Seasonal Trends of High - frequency Data - Charts present the seasonal trends of various high - frequency data, including production data, price indices, and real - estate - related data [95][99][109] High - frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen - Charts show the year - on - year changes in subway passenger volume in these four cities [152][154]

Group 1 - The core viewpoint is that tariffs are expected to have an increasingly significant impact on inflation in the coming months, which aligns with the Federal Reserve's current restrictive policy stance [1][3][6] - John Williams predicts that tariffs will raise inflation rates by approximately 1 percentage point from the second half of this year until 2026 [3][6] - The initial effects of tariff increases on core goods prices are already being observed, particularly in categories such as appliances, instruments, luggage, and tableware [4][6] Group 2 - The U.S. economic growth is forecasted to slow to around 1% this year, with the unemployment rate expected to rise to approximately 4.5% [5][8] - The Federal Reserve's decision to maintain the current interest rate is a balancing act between economic growth and inflation control, as raising rates could further suppress growth while lowering rates could exacerbate inflation [6][7] - Concerns about rising inflation pressures are shared among Federal Reserve officials, indicating a cautious approach to policy-making in light of recent economic data [7][8] Group 3 - The weakening of the dollar may further intensify inflationary pressures, complicating the economic landscape as it affects the prices of imported goods [7][8] - The observed price fluctuations in core goods due to tariffs could lead to changes in consumer behavior and production plans, impacting overall economic performance [7][8]

Core Viewpoint - The Federal Reserve's monetary policy remains restrictive, indicating a cautious approach to economic conditions and inflation management [1] Group 1 - The current monetary policy is characterized as having a restrictive stance, which suggests that interest rates are maintained at levels that may limit economic growth [1] - Federal Reserve officials, including Daly, emphasize the importance of monitoring economic indicators to assess the effectiveness of the current policy [1] - The ongoing restrictive policy aims to combat inflation and stabilize the economy, reflecting the Fed's commitment to its dual mandate [1]

Group 1 - The core viewpoint indicates that the silver market is experiencing a slight pullback after a previous increase, with current trading at $36.87 per ounce, reflecting a decrease of 0.12% [1] - The Australian economy shows signs of uncertainty, with nearly 90% of economists predicting a potential 25 basis point rate cut by the Reserve Bank of Australia, despite some economists being less certain [2] - Independent economist Saul Eslake suggests that the current inflation rate is below the target midpoint, indicating that there is no need for a restrictive monetary policy given the low economic growth [2] Group 2 - Technical analysis of the London silver market shows that after a strong rally, there is a demand for upward movement, with today's high opening at $37.25 and targets set at $36.9 and $36.7 for the downside [2] - Key support levels for silver are identified at $36.85 and $36.70, while resistance levels are noted at $37.20 and $37.60 [3]

Core Viewpoint - The Bank of England emphasizes the necessity of maintaining a restrictive monetary policy for an extended period until the risks of inflation sustainably returning to the 2% target diminish [1] Group 1 - The Bank of England's stance indicates a commitment to controlling inflation through prolonged restrictive measures [1] - The focus on a 2% inflation target highlights the central bank's priority in stabilizing the economy [1]

Core Viewpoint - The Deputy Governor of the Bank of Mexico indicated that the "stagnant economy" provides room for a reduction in restrictive monetary policy [1] Group 1 - The current economic stagnation in Mexico is seen as a factor that could lead to a more accommodative monetary policy [1] - The Bank of Mexico may consider easing its monetary stance in response to the economic conditions [1] - The Deputy Governor's comments suggest a shift in focus towards supporting economic growth through potential policy adjustments [1]