FPG ：This week marks a critical juncture as the U.S. faces a barrage of significant data releases alongside the unveiling of the Federal Reserve's meeting minutes. The challenges of making informed decisions amidst these influential events are evident. 1. [U.S. July PPI Exceeds Expectations] The U.S. annual Producer Price Index (PPI) for July marked a 0.8% increase, surpassing the anticipated 0.7% and ending a streak of "12 consecutive declines". The monthly PPI rate also saw a 0.3% rise, the most substantial uptick since January 2023. Comments: Driven by the robust resilience of the U.S. economy, strong corporate pricing influence, and elevated labor costs, the recovery in PPI growth could potentially impact expectations for a broader rise in the Consumer Price Index (CPI). 2. [Global Economy Affected by Heat Wave] The United Nations Meteorological Organization revealed that July 2023 witnessed the highest global average temperature in recorded human meteorological history, potentially breaking temperature records of the past 120,000 years. The presence of four "heat domes" across West Asia, North America, North Africa, and southern Europe led to soaring temperatures in the Northern Hemisphere, shattering numerous heat records. UN Secretary-General Antonio Guterres cautioned that the world is now entering a phase akin to a "boiling era". Comments: The adverse impact of extreme temperatures on labor productivity is well-documented. Developing nations are particularly susceptible due to challenging working conditions and increased exposure to high temperatures. The number of days marked by extreme high temperatures significantly influences the extent of productivity loss. 3. [Attack on Chinese Convoy in Gwadar Port] The Chinese Embassy in Pakistan issued a statement regarding an attack on a Chinese convoy near Gwadar Port on August 13. The incident resulted in Chinese casualties, and appropriate measures have been taken for the affected individuals' safety. Comments: Given the existing security situation, the Chinese Embassy in Pakistan urges Chinese citizens in the region to exercise vigilance and implement precautionary measures to safeguard their lives and property. 4. [Anticipated Interest Rate Cut in Q2 2024] Goldman Sachs analysts forecast that the Federal Reserve will initiate interest rate cuts in the second quarter of 2024. The Federal Open Market Committee (FOMC), responsible for setting interest rates, is expected to skip an interest rate hike next month and conclude in November with the statement that "The slowdown in core inflation is pronounced enough to render the last interest rate hike unnecessary." The priority for interest rate normalization isn't pressing enough to warrant an interest rate cut. Thus, a notable risk exists that the Federal Open Market Committee will opt to maintain interest rate stability. Comments: Goldman Sachs economists predict that the Federal Reserve will commence interest rate cuts by the end of June next year, subsequently implementing gradual quarterly cuts. 5. [Challenges Faced by the Tourism Industry] Recently released statistical data from August 14 indicates that South Korea's tourism revenue and expenditure projections posted a deficit of $4.65 billion during the first half of this year, marking a new peak since 2018's $7.06 billion deficit. In terms of visitor numbers, Chinese tourists to South Korea for the same period reached 546,000, representing only 19.5% of figures from the first half of 2019. On the other hand, American tourists accounted for 51.4 million visitors, which is 101.1% compared to the same period in 2019. Southeast Asian countries such as Thailand, Singapore, Malaysia, Indonesia, the Philippines, and Vietnam collectively welcomed 931,000 tourists, achieving a recovery rate of 73.5%. Japanese tourist numbers reached 862,000, regaining 52.1%. Comments: South Korea's tourism revenue and expenditure projection has maintained a deficit for 22 consecutive years since 2001, with the trend expected to persist this year. 6. [U.S. Debt Situation] A broader view reveals significant developments: Fitch downgraded the U.S. credit rating, and Moody's downgraded the credit ratings of 10 U.S. banks, underscoring issues within the U.S. sovereign credit and silver mining industry debt. Sovereign credit challenges primarily stem from U.S. political polarization, which hampers debt repayment capability. The banking debt challenge reflects structural pressures arising from tightened credit conditions and Federal Reserve policies. Subtle issues are also evident in the debt market due to different environments experienced by the private and public sectors during the first ten years post-crisis. While the low-interest-rate environment stimulated heavy borrowing during that period, the current rise in interest rates might lay the foundation for potential collapses. Comments: 1. Escalating private debt levels are concerning. 2. Corporate defaults have surged, with increasing instances of delayed payments. 3. Banks are seeking to offload high-risk debt. The cumulative impact of these factors is casting a pessimistic shadow over the future trajectory of U.S. stocks. FPG special analyst King’s opinion: Retail sales data in China and the United States will be closely followed. Considering the reaction of people to China’s disappointing economic data this week, there is reason to predict that if there is an unexpected decline, the price of gold will fall. The Federal Reserve will release the minutes of the July policy meeting on Wednesday. At the last meeting, the Federal Reserve decided to raise the policy interest rate by 25 basis points. Since the Federal Reserve made this decision, non-agricultural employment data and CPl data in July have failed to significantly change the market’s pricing of the Fed’s interest rate prospects, and the gold market’s technical sentiment has been bearish. FPG special analyst Dawson Daosheng’s opinion: Last Friday, U.S. crude oil was trading at around $83,30/barrel; oil prices fell nearly 2% on Thursday, hitting a nine-month high of $84,87/barrel, as OPEC’s outlook for oil demand remained optimistic, and U.S. inflation data weakened the forecast of another U.S. interest rate hike, but Concerns about Asian demand have limited the increase in oil prices. Although concerns about Asian demand have limited the increase in oil prices, OPEC remains optimistic about the prospect of oil demand, and the Fed’s expectation of further interest rate hikes has fallen, while geopolitical tensions still support oil prices. The daily line Bollinger band has an upward trend, and short-term oil prices may test the $85/barrel mark again. Dave, a special analyst at FPG: From the technical point of view of gold, it is mainly based on the shock at the low level. The upper part pays attention to the competition near the 1920 of the 4-hour mid-orbit. It is more likely to continue to rise after standing. After standing firmly, it is expected to test the pressure around 1930-32. Gold has now shown signs of rebound around 1910. The bearish data asked late did not fall again, which shows that the rebound demand brought by the technical oversold has been recognized by the market, and the short selling has also been taken into account. After the data, the decline of gold has touched After that, there was also a certain pull-up rebound again. However, it is expected that before gold rises above 1933, from a technical point of view, there is still a risk of further downward risk of gold prices in the short term. FPG special analyst Yue Lin’s opinion: Last Friday, the trend of U.S. stocks diverged. The Dow rose 0.3% to 35281.40 points; the ana index fell 0.68% to 13644.85 Point; The S&P 500 index fell 0.11% to 4464.05. The main indexes of European stocks fell. Today, A50 index futures opened down 1%. The Hong Kong Stock Hang Seng Index fell 1.98% at the opening. The Nikkei 225 index opened down 0.1%, and the East Securities Index opened up 0.1%; South Korea’s Seoul Composite Index opened 0.2% lower. The median price of RMB against the US dollar was 7.1686, down 99 basis points. The above analysis is only for the views of market researchers and is for reference only and is not Regarded as a specific investment suggestion. #Forex #trading #tradingforex