The favored inflation indicator of the Federal Reserve showed a moderate increase, adding further signs of an economic 'soft landing'. The US core PCE price index rose 0.2% month-on-month in July, in line with expectations and previous values, with a year-on-year increase of 2.6%, matching the previous value and slightly below the expected growth rate of 2.7%.

Furthermore, the August PMI in Chicago exceeded expectations, and the latest survey from the University of Michigan showed that US consumers expect the inflation rate over the next year to decline to 2.8%, the lowest level since December 2020.

Commentators noted that the PCE report showed strong US consumer spending, dampening the market's expectation of a significant rate cut. While the possibility of a large 50 basis points rate cut in September has decreased, Wall Street still expects a significant rate cut in November or December. The CME FedWatch Tool shows that the likelihood of a 25 basis point rate cut in September has slightly increased from 66% to 67%, while the likelihood of a 50 basis point rate cut has slightly decreased.

Following the release of the PCE data, the US dollar and US bond yields strengthened together, pressuring commodities to generally fall. Reports indicate that OPEC+ will gradually increase production as planned, leading to a over 3% drop in US oil prices accompanied by decreases in gold and silver prices. The resilience of the economy and the gradual start of a global rate-cutting cycle boosted US stocks across the board, with chip stocks leading the gains. European stock markets also closed higher for the fourth consecutive day, with the pan-European stock index reaching a new closing high.

Internationally, the inflation rate in the Eurozone and France in August fell to the lowest level in three years at 2.2%, following easing inflation in Germany and Spain, strengthening the reasons for a rate cut by the European Central Bank. Investors are betting on two to three more rate cuts by the ECB this year and further measures in 2025.

ECB Executive Board Member Schnabel stated that the conditions for reaching a 2% inflation rate by the end of 2025 are now in place. The Governor of the Bank of Finland pointed out that economic growth prospects are weaker than expected, further reinforcing the reasons for a rate cut in September. The Governor of the Bank of France said that a rate cut in September would be 'fair and wise'.

Major U.S. stock indexes were down at midday, but maintained their gains throughout the day and closed at daily highs. The Nasdaq and S&P 500 rose more than 1%, leading the gains. Earlier, a series of positive news for some technology stocks were released, including Intel considering spinning off its manufacturing business, Dell reporting strong profits, and NXP Semiconductors raising dividends and buyback plans.

• All three major U.S. indexes rose. The S&P 500 closed up 56.44 points, or 1.01%, at 5,648.40, and rose 2.28% in August, marking the fourth consecutive monthly increase. The Dow Jones, closely tied to the economic cycle, rose 228.03 points, or 0.55%, to 41,563.08, and rose 1.76% in August. The tech-heavy Nasdaq rose 197.19 points, or 1.13%, to 17,713.62, and rose 0.66% in August.

• The Nasdaq 100 rose 1.29% and rose 1.10% in August. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, rose 1.39% and rose 0.61% in August. The Russell 2000, which is more sensitive to the economic cycle, rose 0.67% but fell 1.63% in August. The VIX fear index fell 4.15% to 15.00, and fell 8.31% in August, peaking at 65.73 on August 5 at 20:15 Beijing time.

• U.S. stock industry ETFs closed mostly higher. The semiconductor ETF rose over 2%, while the consumer discretionary ETF, global aviation industry ETF, and technology industry ETF rose by about 1.5%. The global technology stocks ETF, financial industry ETF, and banks ETF rose by about 1%, while the consumer staples ETF, regional banks ETF, utilities ETF, internet stocks ETF, and medical industry ETF rose by at least 0.5%.

• All 11 sectors of the S&P 500 index closed higher. The consumer discretionary sector rose 1.92%, while the industrial, information technology/technology, and materials sectors rose a maximum of 1.11%. The real estate and financial sectors rose more than 0.9%, while the telecom sector rose more than 0.8%. The energy sector had the weakest performance, rising less than 0.3%.

• The 'Big Tech Seven Sisters' only Apple declined. Nvidia rose by 1.51%, with a 7.73% decline for the week after releasing its financial report, and a 2.01% increase for August. Tesla rose by 3.8%, with a 2.82% decline for the week, and a 7.74% decline for August. The company plans to release the RoboTaxi prototype for autonomous vehicles on October 10th. Amazon rose by 3.71%, with a 0.81% increase for the week, and a 4.55% decline for August. Microsoft rose by 0.97%, with a 0.08% increase for the week, and a 0.29% decline for August. 'Metaverse' company Meta rose by 0.6%, with a 1.27% decline for the week, and a 9.79% increase for August. Google Class A shares rose by 0.99%, with a 1.35% decline for the week, and a 4.76% decline for August. Whereas Apple fell by 0.34%, with a 0.95% increase for the week, and a 3.12% increase for August.

• Chip stocks collectively rose. The Philadelphia Semiconductor Index rose by 2.58%, with a cumulative decline of 1.42% for August. The industry ETF SOXX rose by 2.61%, with cumulative declines of 1.8% for August and 4.56% for July; Nvidia's double long ETF rose by 2.89%, with a 15.62% decline for the week, and a 1.6% decline for August following a 14.68% performance decline in July. On Semiconductor rose by 2.06%, and Applied Materials rose by 2.22%. Marvell Technology rose by 9.16%, narrowing the loss per share in the second quarter, with performance guidance better than expected. Micron Technology rose by 0.7%, Arm Holdings rose by 0.72%, ASML ADR rose by 1.82%, KLA rose by 2.98%, and Broadcom rose by 3.75%. Taiwan Semiconductor's U.S. stocks rose by 1.51%, with a cumulative 3.56% increase for August. Qualcomm rose by 3.43%. AMD rose by 2.11%, with a cumulative 2.82% increase for August. NXP Semiconductors rose by 3.05%, and the company raised its dividend and buyback plans.

• Worth mentioning is that Intel rose by 9.49%, marking the largest single-day increase since October 2022, with a 27.85% decline for August. Reports suggest that Intel is exploring various solutions to tackle the most challenging period in its 56-year history, including the possible sale or spin-off of its wafer foundry business. The company is working with Goldman Sachs, Morgan Stanley, and other investment banks, with various proposals expected to be presented at the September board of directors meeting.

• AI concept stocks varied. BullFrog AI rose by 6.17%. Dell Technologies rose by 4.33%, exceeding expectations in the second quarter. Snowflake rose by 0.08%, C3.ai rose by 1.21%, Oracle rose by 1.34%, Palantir rose by 1.55%, CrowdStrike rose by 2.07%, Nvidia-backed AI voice company SoundHound AI rose by 1.03%, while BigBear.ai fell by 1.85%, Serve Robotics fell by 5.4%, and Super Micro Computer, a 'demon' in the AI market, fell by 2.48%. It experienced a 28.63% decline for the week and a 37.62% decline for August, the worst performance since its IPO in the United States.

• Most Chinese concept stocks rose. The Nasdaq Golden Dragon China Index rose by 1.20%, with a cumulative 0.73% decline for August. In terms of ETFs, the China Technology Index ETF (CQQQ) rose by 1.72% and had a 3.53% decline for August. The China Concept Internet Index ETF (KWEB) rose by 1.34% and had a 3.06% decline for August.

• In popular Chinese concept stocks, 21Vianet rose by 12.1%, Sohu.com rose by 4.92%, Pinduoduo rose by 2.88%, but experienced a major drop after its financial report, resulting in a 31.3% decline for the week. Alibaba rose by 2.86%, Tencent Holdings ADR rose by 0.54%, JD.com rose by 2.39%, Meituan ADR rose by 2.5%, Bilibili rose by 1.05%, Baidu rose by 0.95%, Trip.com rose by 0.88%, New Oriental rose by 0.54%, NIO rose by 2.54%. There were reports that NIO MONA MO3's listing saw orders of over 30,000 units within the first 48 hours, while Coupang fell by 0.12%, Li Auto Inc. fell by 1.17%, Mengniu Dairy ADR fell by 0.12%, and NetEase fell by 0.11%.

• Other key individual stocks: (1) Walmart rose by 13% in August, marking its largest monthly increase since 2014. (2) Monkeypox vaccine concept stock Emergent rose by 6.73% after the company's monkeypox vaccine received FDA approval. (3) Novavax rose by 8.6% after the U.S. Food and Drug Administration (FDA) approved the company's new COVID-19 vaccine. (4) Goldman Sachs rose by 0.62%, with the company set to lay off more than 1,300 people, expected to impact 3-4% of its total employees. The layoffs have already begun.

The Eurozone inflation rate has dropped to a 3-year low, strengthening expectations for an interest rate cut by the European Central Bank. European stock markets rose for the fourth consecutive day, with the pan-European Stoxx 600 index reaching a new all-time high at the close.

• 泛欧Stoxx 600指数收涨0.09%创盘中及收盘历史新高，8月份累计上涨1.33%，自8月5日低点以来持续震荡上行。欧元区STOXX 50指数收跌0.17%，8月份累涨1.75%。

• 德国股指收跌0.03%，8月累涨2.15%。法国股指收跌0.13%，8月累涨1.28%。意大利股指收涨0.53%，8月累涨1.37%。荷兰股指收涨1.21%，8月累跌0.21%。英国股指收跌0.04%，8月份累涨0.10%。西班牙股指收涨0.38%，8月累涨3%。

全球金融市场剧震带来避险需求，加之投资者关注上周五鲍威尔对9月将降息的“鸽派承诺”，两年期美债收益率8月累跌超33个基点，两年期德债收益率8月累跌约14个基点：

• 美债：尾盘时，对货币政策更敏感的两年期美债收益率涨3.91个基点，刷新日高至3.9330%。8月累跌33.27个基点，8月5日20:30曾跌至3.6498%。美国10年期基准国债收益率涨5.50个基点，刷新日高至3.9168%，月末因素使得美债期货成交量突出。8月份累跌12.04个基点，北京时间8月5日20:30曾跌至3.6653%，月内绝大部分时间处于下跌状态。

• 据彭博美债总回报指数，本月截至周四，美债的回报率为1.5%，四个月连涨，这将是2021年7月以来的最长连涨周期。随着降息预期增强，该指数扭转4月份下跌2.3%的走势并持续走高，今年以来的涨幅扩大至3%左右。

• 欧债：欧元区基准的10年期德债收益率涨2.4个基点，8月累跌0.5个基点。两年期德债收益率涨3.5个基点，8月份累跌13.9个基点。法国10年期国债收益率涨3.1个基点，8月份累涨1.2个基点。意大利10年期国债收益率涨4.7个基点，8月份累涨5.1个基点。西班牙10年期国债收益率涨3.5个基点，8月份累涨1.7个基点。希腊10年期国债收益率涨4.4个基点，8月份累涨3.3个基点。

As Powell "turns", the US dollar index fell by about 2.3% in August, marking its worst single-month performance since November 2023. Non-dollar currencies generally strengthened in August, with the yen up 2.53% for the month and reaching a high of 141.7 at the beginning of the month. Offshore yuan rose more than 1,300 points in August, while bitcoin futures fell more than 10% for the month, failing to hold above the $0.06 million mark.

• The US dollar, measured against a basket of six major currencies, rose 0.38% to 101.733. It fell overall in August, marking the second consecutive month of decline with a cumulative drop of 2.27%.

• The Bloomberg Dollar Index rose 0.18% to 1234.28, with a cumulative decline of 1.55% in August. It previously fell nearly 2.10% in December 2023, over 2.93% in November that year, and nearly 4.83% in November 2022.

• On the news front, US CFTC data showed that speculators turned bearish on the dollar for the first time since February.

• Non-dollar currencies rose in August. The euro rose 0.33% against the dollar, up 2.03% for the month; the pound fell 0.31% against the dollar, up 2.11% for the month; the dollar rose 0.35% against the Swiss franc, down 3.21% for the month; among commodity currencies, the Australian dollar fell 0.49% against the dollar, up 3.42% for the month; the New Zealand dollar fell 0.13% against the dollar, up 4.98% for the month; the dollar rose 0.08% against the Canadian dollar, down 2.27% for the month.

• The yen fell 0.83% against the dollar to 146.18 yen, up 2.53% for the month, reaching a high of 141.70 yen at 14:00 Beijing time on August 5th.

• Offshore Renminbi (CNH) against the US dollar rose 43 points at the end of the session, to 7.0900 yuan, with overall trading ranging from 7.0978 to 7.0710 yuan during the session. It reached a new high since June 2, 2023, at 15:39 Beijing time, and reached a peak of 6.9927 yuan on May 17 of that year, with an accumulated increase of 1366 points in August.

• Most cryptocurrencies fell. The largest market cap leader, Bitcoin, fell 0.75% at the end of the session to $59,275.00, with a cumulative decrease of 10.16% in August. On August 5, at 14:00 Beijing time, it fell to $49,785.00. The second largest, Ethereum, fell 0.51% at the end of the session to $2,527.50, with a cumulative decrease of 23.80% in August. On August 5, at 14:00, it fell to $2,193.50. The spot price of Bitcoin is currently $59,007, and it has fallen by about 8.56% in the first 30 natural days of August, showing an overall V-shaped trend. On August 5, at 14:00, it fell to $49,212.74.

Due to expectations of increased OPEC+ supply and strong US consumer spending data, hopes for a significant interest rate cut by the Federal Reserve in September weakened, dragging down US oil by over 3%. It has fallen by 5.6% in August.

• WTI October crude oil futures fell $2.36, or 3.11%, to $73.55 per barrel. It fell by 1.71% this week and by 5.60% in August.

• Brent October crude oil futures fell $1.14, or 1.43%, to $78.80 per barrel. It fell by 0.28% this week and by 2.38% in August.

• Intraday performance: US oil and Brent oil remained in a downward trend, with both rising slightly during the early European stock market session. US oil rose by nearly 0.9% to approach $76.60 at its peak, while Brent oil rose by over 0.8% to surpass $80.60. Subsequently, both prices continued to decline. Due to reports that OPEC+ may gradually increase oil production as planned starting from October, there was a significant drop in pre-market trading for US stocks. When the US stock market hit a new low before the close, US oil fell by nearly 3.4%, approaching the $73 mark, and Brent oil fell by over 1.7%, dropping below the $79 mark.

• On the news front, several representatives within the OPEC+ alliance mentioned that they are expected to push for an increase in production. Leading OPEC+ oil-producing countries such as Saudi Arabia and Russia are gradually increasing oil production at a rate of 0.18 million barrels per day. The pressure brought by this news exceeds the impact of a sharp drop in supply from Libya. The National Oil Corporation (NOC) of Libya stated that local turmoil has led to a 68% reduction in crude oil production. NOC is trying to minimize the losses caused by supply disruptions and expects the crisis to end 'soon'. According to CCTV news, Hamas sources claim that Gaza ceasefire negotiations are on the verge of collapse. The Israeli delegation left the Qatari capital, Doha, without any breakthrough in Gaza ceasefire negotiations because Israel insists on maintaining stationed troops in the 'Philadelphia Corridor' in Gaza, rejecting solutions proposed by Egypt, Qatar, and the US as mediators. The mediators expressed 'frustration' over this.

• In addition, data from the Intercontinental Exchange (ICE) shows that speculators' net long positions in ICE Brent crude oil reached a five-week high. Data from the Commodity Futures Trading Commission (CFTC) in the US indicates a rise in bullish sentiment towards WTI crude oil on the week of August 27. Net long positions in US natural gas dropped to a twelve-week low. Current US Vice President Harris, for the first time, mentioned that while promoting clean energy development, she will not shut down the controversial hydraulic fracturing technology that supports a significant portion of the US oil and gas industry.

• Natural gas: US October natural gas futures fell by 0.47%, at $2.1270 per million British thermal units, accumulating a nearly 4.5% increase in August.

Following the release of US PCE inflation data, the US dollar and bond yields strengthened together, causing gold to fall on Friday. However, due to lingering expectations of a rate cut by the US Federal Reserve in September, gold prices saw a monthly increase. Spot gold had reached a historical high of $2531.60 on August 20:

• Gold: COMEX December gold futures, which rebounded to a record high on Thursday's close, fell by 1.28% to $2527.6 per ounce, reversing the weekly uptrend. It experienced a 0.73% decline for the week and a 2.2% rise in August. Spot gold fell by 0.95% in late trading, at $2536.00 per ounce, marking a 1.72% increase for August. At 21:30 Beijing time on August 20th, it peaked at $2570.40. Throughout the day, spot gold maintained its downward trend with US stocks falling over 1% below $2500 at midday. At the close, spot gold dropped by 0.71%, at $2503.39 per ounce, accumulating a 2.28% increase for August. On August 5th, it had dropped to $2364.43, then fluctuated upwards, rising to $2531.75 on August 20, trading near this historic high for the remainder of the month.

• Silver: COMEX September silver futures fell by 1.98% in late trading, at $29.245 per ounce, marking a 0.42% decline in August. Spot silver maintained its downward trend throughout the day, dropping by nearly 2.5% below $28.70 at midday. By the close, spot silver fell by 1.89%, at $28.8647 per ounce, accumulating a 0.49% decline for August. On August 8th, it fell to $26.4513, then continued to fluctuate upwards, rising to $30.1920 on August 26.

• On the news front, US CFTC data shows that for the week of August 27, speculators' net long positions in COMEX gold surged to a more than four-year high.

• London industrial base metals saw mixed movements. The economic indicator 'Dr. Copper' fell by $9 to $9235 per ton. London lead rose by $18. London nickel fell by over 1.39%. Aluminum dropped by $10, with a weekly increase of over 6.85% in August. London zinc rose by $19, with an accumulation of around 8.26% in August. London tin rose by $1, with an accumulated increase of approximately 7.62% in August. London cobalt remained flat, with an accumulated decline of over 8.73%.

Editor/ping