Translated by: GaryMa Wu says Blockchain

Summary
Wu says this week's macro indicators and analysis: Last week, the Federal Reserve kept interest rates unchanged as expected, U.S. July non-farm payrolls fell sharply, and May and June data were significantly revised down. This week, attention can be paid to the implementation of 'reciprocal tariffs' by the U.S. on August 7 and the U.S. hopes that the Russia-Ukraine conflict will end before August 8.

Last Week Review

  • The Federal Reserve announces the interest rate decision (upper limit) is 4.50%, in line with expectations of 4.50%, previous value 4.50%. The FOMC statement indicated that economic activity growth has slowed in the first half of the year, unemployment rate remains low, and inflation is still slightly high. The committee will continue to reduce the scale of its holdings of Treasury bonds, agency bonds, and agency mortgage-backed securities. Future policy adjustments will depend on a comprehensive assessment of economic data, changes in outlook, and risk balance. According to Caixin, the FOMC voting result was 9 in favor, 2 against, marking the largest policy divergence for the Federal Reserve in over 30 years. Before the meeting, the market expected a 60% chance of a rate cut at the September meeting, but Fed Chairman Powell stated that no decisions on monetary policy would be made in advance. The market expectation for a September rate cut dropped to 45%. When asked about the market focus on the September rate cut outlook, Powell responded that the Federal Reserve would make decisions based on various economic data and other information, but would not decide in advance.

  • The Bank of Japan kept interest rates unchanged as expected and raised inflation and economic growth expectations for this year.

  • U.S. July ADP Employment at 104,000, the largest increase since March, expected 75,000, previous value -33,000.

  • U.S. July Unemployment Rate at 4.2%, expected 4.20%, previous value 4.10%.

  • U.S. July non-farm payrolls fell sharply to 73,000, the lowest record in 9 months, and significantly below the expected 104,000. May and June data were significantly revised down. May non-farm payrolls were revised down by 125,000, from the original 144,000 to 19,000; June was revised down by 133,000, from 147,000 to 14,000. After this revision, the new jobs in May and June decreased by 258,000.

  • U.S. Q2 Core PCE Price Index Annualized Quarterly Rate Preliminary Value 2.5%, Expected 2.3%, Previous Value 3.50%.

  • U.S. Q2 Real GDP Annualized Quarterly Rate Preliminary Value 3%, Expected 2.4%, Previous Value -0.50%.

  • U.S. Initial Jobless Claims for the week ending July 26 at 218,000, Expected 224,000, Previous Value 217,000.

  • U.S. June Core PCE Price Index Year-on-Year 2.8%, Expected 2.70%, Previous Value revised from 2.70% to 2.8%.


Key Events & Indicators This Week
August 05

  • UK, US, France, Germany Eurozone July Services PMI


August 07

  • Bank of England announces interest rate decision, meeting minutes, and monetary policy report (19:00)

  • U.S. Initial Jobless Claims for the week ending August 2 (10,000 people) (20:30)

  • U.S. begins implementing 'reciprocal tariffs'


August 08

  • Bank of Japan releases summary of opinions from July monetary policy meeting (07:05)

  • U.S. hopes for the Russia-Ukraine conflict to end before August 8


August 09

  • China July CPI Year-on-Year (09:30)