Market Review
Headlines
Chinese Market
1. People's Bank of China: Investors look at the medium and long term trend of the RMB
Experts interviewed by the Financial Times, supervised by the central bank, indicated that despite the recent fluctuations in the RMB exchange rate due to multiple internal and external factors, cross-border capital and exchange rate expectations remain relatively stable. From a medium to long-term perspective, the basic support ensures that the RMB exchange rate remains stable at a balanced level.
2. State Council: Focus on expanding domestic demand
Efforts to expand domestic demand continue to open policy space for expanding consumption and promoting investment, boost major consumption, motivate private investment, and solidly prepare for major projects.
3. Wider decline in China's secondary housing market
Data released by the National Bureau of Statistics shows that in July 2023, the number of cities with rising housing prices decreased in 70 large and medium-sized cities, with secondary market housing prices either remaining flat or declining month-on-month, and varying year-on-year. Among them, the year-on-year growth rate of housing prices in first- and second-tier cities fell back, while the decline in third-tier cities widened.
Overseas Markets
1. Federal Reserve Meeting Minutes: Warnings of significant upside risks to inflation
The minutes of the Federal Reserve meeting show that the staff's assessment of the economy is more optimistic, no longer predicting a recession this year. Policymakers warned of higher inflation risks, which could force further rate hikes.
2. U.S. mortgage rates hit a new high since 2001
Data from the Mortgage Bankers Association (MBA) indicates that the contract interest rate for 30-year mortgages in the U.S. rose to 7.16%, reaching the highest level since 2001. Applications for home mortgage loans declined for the fifth consecutive week, dropping to the second lowest level since 1995.
3. Atlanta Fed's GDPNow model upgrades U.S. economic growth forecast
The Atlanta Federal Reserve's GDPNow model has raised its real GDP growth forecast for the U.S. in the third quarter to 5.8%. According to the model report, new residential construction and industrial production data led to an upward revision of the forecasts for real personal consumption expenditure and real gross private domestic investment growth to 4.8% and 11.4%, respectively.
4. U.S. industrial and manufacturing output both rise
Data from the Federal Reserve shows that U.S. manufacturing output grew for the first time in three months in July. Industrial output, including mining and utilities, saw its largest increase since the start of the year.
5. UK core inflation strengthens interest rate hike expectations
Data from the UK's National Statistics Office shows that the annual CPI in July rose by 6.8%, although it was significantly lower than the 7.9% increase in June. However, the core CPI, excluding volatile food and energy prices, remained unchanged, strengthening expectations for further interest rate hikes by the Bank of England next month.
6. EIA crude oil inventories and Saudi oil production both decline
EIA data revealed that U.S. commercial crude oil inventories decreased by 5.96 million barrels up to August 11, bringing the total inventory to its lowest level since the week of January 6, 2023. Moreover, data from the Joint Organisations Data Initiative (JODI) shows that Saudi Arabia's oil production decreased to 9.956 million barrels per day in June.
