European bond yields fell, analysis of short-term trends of spot gold, silver, crude oil and foreign exchange on August 18

Global Market Review

1. European and American market trends

The three major U.S. stock index futures fell, Dow futures fell 0.07%, S&P 500 futures fell 0.10%, and Nasdaq futures fell 0.13%. The German DAX index fell 0.48%, the UK FTSE 100 index fell 0.07%, the French CAC40 index fell 0.81%, and the European Stoke 50 index fell 0.65%.

2. Market news interpretation

European bond yields fell, Jackson Hall and geopolitics became the focus of the market

⑴ On Monday, euro zone bond yields generally fell, with the yield on Germany's 10-year government bonds, which serve as regional benchmarks, fell by 2.3 basis points to 2.7569%. ⑵ Investors are closely watching this week's upcoming Jackson Hall seminar and geopolitical dynamics after the market shrinks its bet on the Fed's sharp rate cuts. ⑶ Ruisui analysts pointed out that the market had a "steeper bear market" trend last week, that is, the long-term bond yields rose more than short-term bonds, which reflects that investors are making advance arrangements to cope with the bond issuance wave that is about to return in September. ⑷ Despite previous reports that inflation is under upward pressure, the market's probability of the Federal Reserve cutting interest rates by 25 basis points next month remains around 85%. ⑸ As for the ECB, the market's bet on interest rate cuts before the end of the year remained at 11 basis points, indicating that the probability of a rate cut is about 45%.

The market is about to bet on inflation reversal, and the U.S. Treasury yield curve has steepened

⑴ The U.S. Treasury yield curve has continued to steepened, including 5- and 30-year Treasury bondsThe interest rate spread widened to 108.3 basis points, the widest level since October 2021. ⑵The main drivers of this trend include the market's pricing of the Federal Reserve's future policies, and the market expects the federal funds rate to be reduced by about 100 basis points by July next year. ⑶ The report also pointed out that although Trump's tariff rhetors have sparked potential inflation concerns, inflation pressure will eventually give way to a greater deflationary force, and crude oil futures prices may fall to the range of $30 to $60 per barrel, thereby significantly boosting the economy. ⑷In addition, the report expects mortgage rates to fall to 5% or below, which will strongly boost the weakest U.S. real estate market since World War II. ⑸ This week's market focus will focus on the minutes of the Federal Reserve meeting and Powell's speech at Jackson Hall to find more clues about future policy paths.

Emerging markets rose slightly. Investors focus on Trump's talks.

Emerging market assets rose slightly before Trump and Uzelensky talks. Investors are paying attention to whether there will be any signs of progress in the Russian-Ukrainian peace agreement. The MSCI Emerging Markets Stock Index once rose 0.6%. Investors were also cautious at Jackson Hole's annual meeting later this week, with Powell's speech likely suggesting the possibility of a rate cut in September. "The strong performance of risky assets has been impressive, and the valuation is becoming increasingly tight," a team led by Deutsche Bank analyst Jim Reid wrote in a report. Mark Haefele, chief investment officer of UBS Global Wealth Management, said in the report that given the huge gap in negotiation positions and the lack of decisive progress in the battlefield, "we expect the Russian-Ukrainian conflict to continue until next year. Any negotiation process will be lengthened because of the lack of trust and the large gap in targets, any agreement may be suspected."

India's unemployment rate fell to 5.2% in July 2025, a significant improvement from 5.6% in June and close to the historical low of 5.1% set in April. ⑵ Subdivided data show that the unemployment rate for men is 5.3%, while the unemployment rate for women is slightly lower than 5.2%; the unemployment rate among young people aged 15-29 is still as high as 14.9%. ⑶ This data reflects the strong performance of the Indian economy before the United States imposes tariffs. If the United States does not withdraw its tariff measures before the end of September, key industries in India may face impact.

Brazil's IBC-Br economic activity index fell for two consecutive months

⑴ Brazil's IBC-Br economic activity index fell by 0.1% month-on-month in June 2025, and fell for the second consecutive month (the decline in May was 0.7%), performing worse than the market's expected growth of 0.1%. ⑵ Sub-item data showed that the agricultural sector contracted sharply by 2.3%, industry fell slightly by 0.1%, and service industry and tax revenue both increased slightly by 0.1%. After excluding agriculture, the index rose slightly by 0.1%. ⑶ The year-on-year growth rate of the index slowed to 1.4%, significantly lower than 3.2% in May.

U.S. tariffs hit Japan's automobile industry's exports to the United States in June fell by 26.7% year-on-year

Japan's recentA series of macroeconomic and industry enterprises released in the second quarter showed that the US government's tariff policies hit Japan's automobile industry hard and hindered Japan's economic recovery. Given the increasingly prominent negative impact of US tariffs on the Japanese economy, Japan's industry and even the overall economic outlook are becoming more pessimistic. Trade statistics released by the Japanese Ministry of Finance show that from April to June, affected by the US government's tariff policies, Japan's exports to the US fell year-on-year for three consecutive months, and the decline showed an expansion. Since the United States' tariff rate on cars imported from Japan has increased significantly from 2.5% to 27.5% since April 3, Japan's automobile exports to the United States have dropped sharply in June, a year-on-year decrease of 26.7%. The Kyushu region has the largest decline, with exports decreasing by 67.8% year-on-year and exports decreasing by 76.3% year-on-year.

The energy game is intensifying! The EU's dependence on Russia's liquefied natural gas has not decreased, and imports have increased significantly year-on-year

⑴ Data from the EU Statistics Office shows that in the first half of 2025, the EU imported about 4.48 billion euros worth of liquefied natural gas (LNG) from Russia, up from 3.47 billion euros in the same period last year. ⑵ During this period, the total amount of LNG imports to the EU was approximately 26.9 billion euros. ⑶ Among them, the largest share of imports xmtraders.comes from the United States, with a total value of approximately 13.7 billion euros, continuing the United States' position as the largest supplier of liquefied natural gas in the EU. ⑷ Statistical reports show that in 2024, the United States once accounted for nearly 45% of the EU's total liquefied natural gas imports. ⑸ Although the EU has imposed sanctions on Russia's oil and coal, the EU has not yet taken sanctions on Russian natural gas due to the continued reliance on natural gas by some member states.

Brazil's inflation expectations were lowered, and economic growth and interest rate forecasts remained stable

The latest survey by the Brazilian Central Bank showed that economists slightly lowered their expectations for the 2025 annual IPCA inflation index, from the previous 5.05% to 4.95%. ⑵ Although inflation expectations have eased, the Selic benchmark interest rate forecast for the end of 2025 remains at 15.00%, consistent with previous expectations. ⑶ In addition, economists have maintained their forecasts for Brazil's economic growth, predicting that the gross domestic product (GDP) will grow by 2.21% in 2025 and 1.87% in 2026, both of which are the same as previous expectations. ⑷ The forecast for the Brazilian real exchange rate has not changed, and economists still expect the real real to remain at 5.60 and 5.70 by the end of 2025 and 2026 respectively. ⑸ Overall, most key indicators of Brazil's economic outlook remained stable, and only inflation expectations have been moderately lowered, showing that the market's views on the economic trajectory are relatively consistent.

Trump proposes to abolish mail-in ballots and electronic voting machines, proposes to implement executive orders to reform the electoral system

⑴U.S. President Trump posted on social media that he will promote the abolition of mail-in ballots and electronic voting machines. ⑵Trump criticized the current voting machine for being "highly inaccurate" and expensive, and advocated switching to "accurate and xmtraders.complex watermark paper"vote. ⑶ It said it will promote election reform by signing executive orders, requiring states to implement federal government directives in the 2026 midterm elections. ⑷ Trump stressed that the United States is currently "the only country in the world that uses mail-in voting" and that reforms will ensure that the election results are "no doubt".

Germany 10-year Treasury yield fell slightly, market adjusted Fed rate cut expectations

⑴Germany 10-year Treasury yield fell to 2.75% from a four-and-a-half-month high of 2.78% last week as traders cut bets on the Fed's aggressive rate cuts. The market focus turns to Washington, with Zelensky and EU leaders meeting with Trump after talks with Putin. ⑵ Although the details of the relevant proposals are unclear, the market is paying close attention to potential geopolitical impacts. Investors are also waiting for the Fed Jackson Hall workshop, and Chairman Powell is expected to provide guidance on policy prospects. ⑶The latest market pricing shows that the probability of the Federal Reserve cutting interest rate by 25 basis points in September is 85%. Previous inflation data showed that potential price pressure was stubborn, cooling down expectations for a 50 basis point cut. ⑷For the European Central Bank, market expectations remained stable after the stock market remained stable in July. Currently, the price cut was only 11 basis points before the end of the year, which means that the probability of another interest rate cut is less than 50%. ⑸ Investors will also pay attention to the initial value of the euro zone PMI to find clues to economic momentum. GDP grew only 0.1% in the second quarter, and the inflation rate remained at 2%.

3. Trends of major currency pairs in the New York Stock Exchange before the market

Euro/USD: As of 20:23 Beijing time, the euro/USD fell and is now at 1.1673, a drop of 0.26%. Before New York, the price of (Euro-USD) fell on the last trading day, trying to get positive momentum that could help it recover and rise again to get rid of the apparent overbought situation of (RSI), especially as negative signals emerge, its continued dynamic support represented by the exchange above the EMA50, moving within the scope of the bull channel that limits its short-term trading.

GBP/USD: As of 20:23 Beijing time, GBP/USD fell and is now at 1.3539, a drop of 0.13%. Before the New York Stock Exchange, the (GBPUSD) price rose slightly in the last trading day, ready to attack the key resistance level of 1.3585, leading to a bullish correction wave on a short-term basis, indicating the dominance of buyer power in the trading, especially due to the continued positive support of its trading above the EMA50, on the other hand, we noticed that (RSI) showed negative signals after reaching overbought levels, which could temporarily slow down the positive movement of the price as it required unloading overbought conditions, opening the way for more future goals.

Spot gold: As of BeijingAt 20:23, spot gold rose, now at 3346.74, an increase of 0.34%. Before the New York Stock Exchange, the (gold) price fell in the last session, affected by the top of the bearish correction channel that tested short-term trading restrictions. The negative pressure on its trading below the EMA50 continued, and after reaching overbought levels, negative momentum intensified as the (RSI) negative overlap signal began, eliminating the opportunity for recovery in the short term.

Spot silver: As of 20:23 Beijing time, spot silver rose, now at 38.164, an increase of 0.48%. Before the New York Stock Exchange, the (silver) price rose in the last intraday trading, retesting the resistance of $38.20, while retesting the small bullish trend line on the short-term basis. Therefore, with negative overlap signals appearing on the (RSI), the silver price rebounded lower, and after reaching the overbought level, it was exaggerated xmtraders.compared to the price trend, and the silver price was still under negative pressure as the trading was below EMA50.

Crude oil market: As of 20:23 Beijing time, U.S. oil rose, now at 62.180, an increase of 0.34%. Before the New York Stock Exchange, the (crude oil) price settled with a limited gain in the last day trading, affected by the stability of the key support level $62.00, trying to unload some obvious oversold conditions on the (RSI), especially as the positive signal emerged, adding more negative momentum to the price when its trading below EMA50.

4. Institutional view

Deutsche Bank: Tariffs may push up U.S. inflation and drag down the dollar

xmtraders.commerzbank's Michael Pfister said in a report that U.S. xmtraders.companies may pass on tariff costs to consumers, which will increase concerns about the economy and cause the dollar to weaken. This will increase inflationary pressure and may force consumers to reduce spending. “Because American consumers are the main driver of U.S. growth, this may deepen concerns about the real economy.” Higher inflation data may become increasingly obvious. However, given the political pressure of the Fed to cut interest rates, it remains to be questioned whether the Fed will stop policy easing under such circumstances. Deutsche Bank expects the euro to rise steadily against the US dollar EUR/USD until the end of 2026.

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