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Tariffs push up CPI expectations, and the US index stabilizes at a key level may continue to rebound
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: Tariffs push up CPI expectations and ferment, the US index stabilizes at a key level and may continue to rebound." Hope it will be helpful to you! The original content is as follows:
Asian market market
On Monday, the US dollar index rose slightly and once rose to an intraday high of 98.65 during the US session. As of now, the US dollar price is 98.48.
Trump statement: Gold will not be subject to tariffs.
The Trump team will include Bowman, Jefferson and Logan as candidates for the Fed, and the presidential candidates are expected to be announced this fall.
Trump: The meeting with Putin was a tentative meeting. The next time will be met with Zelensky or with Putin and Zelensky; Russia-Ukrainian territory will change.
The German government said that European leader and Ukrainian President Zelensky will speak Mandarin with Trump on Wednesday; it is reported that Europe will reiterate its red line.
The Indian government expressed to the United States that it hopes bilateral trade negotiations can continue; in addition, the WTO confirmed that Brazil has filed a lawsuit against U.S. tariff measures.
Trump declared a public safety emergency in Washington, DC, and would put the Washington, DC Police Department under direct federal jurisdiction and began deploying the National Guard on the same day.
Iraq and Iran signed a memorandum of understanding on the coordination of relevant security between the two countries' borders.
The draft peace agreement between Azerbaijan and Armenia was announced, and the two countries clearly gave up their territorial requirements.
Summary of institutional views
Nomura Securities: The Bank of Thailand may keep interest rates unchanged, but the tone is dovish
The Bank of Thailand is expected to keep policy interest rates unchanged on Wednesday, but the tone is dovish, Nomura Securities economists wrote in a report. Given concerns about limited policy space, the central bank’s focus is on the timing and effectiveness of interest rate cuts. The Bank of Thailand is closely monitoring financial conditions, especially overall credit growth, and using it as a key reference factor for policy decisions. Nomura Securities continues to predict that the Bank of Thailand will cut interest rates by another 75 basis points, which may be implemented in October and December this year and in the first quarter of 2026.
Barclays looks forward to the US July CPI: Core inflation rate continues to rebound, and the tariff transmission effect will peak.
Before the August non-farm data is released, the US July CPI data released tonight is a key data on whether the Federal Reserve cuts interest rates in September. Following early signs of inflation stickiness in June, we expect the core CPI monthly rate to rise slightly to 0.29% in July. This forecast is partly driven by the projection of a 0.1% increase in core xmtraders.commodity inflation, mainly due to the continued strong inflation in clothing, household goods, entertainment and other categories. In addition, service industry inflation is expected to rise moderately due to transportation services and housing costs. The CPI report released tonight will continue to reflect the tariff transmission effect, and this effect is expected to continue to intensify in the xmtraders.coming months, reaching its peak in September or October.
In addition to inflation, we also believe that retail sales figures in July will remain strong, with a monthly rate of 0.9% and a monthly rate of 0.5% for the control group, reflecting the strong reported car sales and the early boost to control group sales last month’s Amazon Member Day and other retailer promotions. But given weak household income, some growth in the July control group may be reaping in August and September.
Oriental Bank of England: Policy differences in the Bank of England emerge, pay attention to this week's labor market data
Last week, the Bank of England's Monetary Policy xmtraders.committee (MPC) lowered the bank interest rate by 25 basis points as expected. However, the vote showed that the decision-making process was very balanced, with the number of members who opposed further easing of policies doubled since the last rate cut in May. The Bank of England also raised its inflation outlook, suggesting that market expectations for rate cuts before the meeting may be too dovish.
The UK data released this week may provide more clear path options for the Bank of England's outlook and influence the price trend of the pound through its impact on the UK interest rate market. Specifically, we will get UK labor market data for July tomorrow, and on Thursday we will focus on GDP data for June and second quarters. Both of these figures will attract considerable attention, as recent disappointing economic activity and labor market data are the key drivers of market development of dovish expectations. If upcoming data this week shows signs of resilience in the UK labour market (such as employment) and the broader economy have re-emerged signs of resilience, it could prompt investors to reassess their dovish outlook for the Bank of England and help pound further consolidate its trend.In addition, strong market risk sentiment may also have a positive impact on the pound against the backdrop of weakening geopolitical risks.
Analyst Matthew Ryan: The nomination for the Fed chairman may be negative for the US dollar. The CPI and retail data set this week
The US economic data continues to emit a strong atmosphere of stagflation, the labor market has grown slowly (but there are no signs of systemic layoffs), and consumer demand has weak growth, but inflation pressure remains high. The ISM Business Fluctuation Index released last week reflects this situation, with orders growing slowly in July data, but the “paid price” sub-index soaring, which is likely to be related to tariff cost transmission.
Another big news last week was that dovish character Waller is allegedly expected to be nominated as the next Fed chairman. Given his tendency toward lower U.S. interest rates, this development could have a bearish impact on the dollar.
There will be two key data to verify this statement this week, and inflation data released on Tuesday is expected to show stubborn upward pressure on the core inflation sub-index. The July retail sales report released on Friday will also promptly reflect the true status of U.S. consumer demand.
Abstract, I think the market-priced Fed's expectations of two rate cuts this year are reasonable. However, given the huge uncertainty of who will bear the tariff costs (exporter, business or consumer), the importance of each inflation report will increase accordingly.
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