Economic Indicators - July manufacturing PMI recorded at 49.3%, down from 49.7% in June, indicating a significant contraction and falling below market expectations of 49.6%[2] - Non-manufacturing PMI decreased to 50.1% from 50.5%, while the composite PMI output index fell to 50.2%[2] Demand and Supply Dynamics - New orders fell below the expansion threshold, with new export orders declining by 0.6 percentage points, marking a four-month low[5] - The production index showed a notable decline but remained in the expansion zone, indicating ongoing production activity despite weakening demand[3] Price and Cost Pressures - Major raw material purchase prices surged, leading to a significant increase in factory prices, although the increase in factory prices lagged behind raw material costs, creating a record price gap for the year[7] - The supply chain faced pressures as the supplier delivery time index slightly increased, indicating stable logistics efficiency amidst rising costs[3] Inventory and Procurement Trends - Finished goods inventory saw a substantial decrease, reflecting a shift from passive to active inventory reduction strategies by companies due to high costs and weak demand[8] - Procurement volumes dropped significantly, entering a contraction phase as companies adjusted their purchasing strategies in response to declining orders[5] Sector Performance - Equipment manufacturing PMI fell to 50.3%, while consumer goods PMI dropped to 49.5%, indicating a contraction in consumer demand[4] - Large enterprises experienced a decline in PMI, while medium-sized enterprises showed a slight recovery, highlighting a growing disparity among different business sizes[4] Future Outlook - The July PMI data reversed the optimistic expectations from June, indicating a retreat in demand, inventory cycles, and industry dynamics[10] - The bond market is expected to reflect these economic realities, with the ten-year government bond yield showing an upward trend despite the contraction in manufacturing PMI[12]

Group 1: U.S. Economic Indicators - The Federal Reserve's Beige Book indicates weak economic growth, with only 3 out of 12 districts showing slight growth due to hiring slowdowns and concerns over tariffs affecting prices [1] - ADP reported that U.S. private sector employment increased by only 37,000 in May, significantly below the expected 110,000, marking the lowest increase in over two years [1] - The ISM reported that the U.S. non-manufacturing PMI fell below 50 for the first time in a year, indicating contraction, driven by declining new orders and rising prices due to higher import tariffs [1] Group 2: European Market Response - European markets reacted positively to the news of U.S. tariffs, with all three major indices rising, and the DAX index reaching a historical high [2] - The European Commission indicated that trade negotiations with the U.S. are progressing positively, which helped to soothe market sentiments [2] Group 3: Eurozone Economic Data - The Eurozone composite PMI for May was reported at 50.2, exceeding expectations, suggesting greater economic resilience amid U.S. tariff uncertainties [3] - However, the services sector in the Eurozone showed signs of weakness, with the PMI falling below 50, particularly in Germany, while France showed slight improvement [3] Group 4: Commodity Market Movements - International oil prices fell due to OPEC's decision to maintain production increases and OECD's downward revision of global growth forecasts, raising concerns about oversupply [4] - International gold prices saw a slight increase as the U.S. dollar index dropped below 99, with August gold futures closing at $1,399.20 per ounce [5]