The Federal Reserve welcomes new dovish, and the rate cut in September is almost a foregone conclusion, and gold may fall into the "eye of the storm"!

There is not much economic data this week, but some data still clearly show that demand is slowing down. Although U.S. labor productivity remains strong, slowing economic activity and rising service prices suggest that the market is showing signs of moderate stagflation.

There were several central banks meeting this week, with cautious action from the UK, India and Mexico, and the Bank of England slashing interest rates, but its statements suggest that the rate cuts may stop soon. The Bank of India, on the other hand, kept interest rates unchanged due to currency concerns. Inflation in Switzerland unexpectedly rose, while core inflation in Mexico remained high despite overall slowdown. In New Zealand, weak employment data points to a possible rate cut.

Despite these dynamics, the global stock market continues its impressive gains. In the U.S., buyers have returned, boosted by hopes of possible action by the Federal Reserve in September and the dovish turnaround signal from a Trump ally joining the council, and strong earnings have kept investors confident in Wall Street despite inflation concerns.

In Europe, the region's stock markets have had their best performance in 12 weeks driven by bank stocks and hopes of a ceasefire in conflict with Russia and Ukraine. The European Stoke 600 index rose 0.2% on Friday, up 2.2% this week. Eurozone bank stocks rose 1.9% on Friday, leading year-to-date performance with a 56.8%.

Forex Market:The US dollar index fell overall this week, closing at 98.24, and once hit a 10-day low in the middle of the week. The main reason was that Trump nominated a more dovish Federal Reserve director, which led to increased market expectations for future interest rate cuts. At the same time, the US dollar is still affected by concerns about political interference in monetary policy.In terms of non-US currencies, the pound performed strongly this week, once approaching a two-week high. Although the Bank of England cut interest rates, there are large differences in voting, reflecting the "hawkish" interest rate cut, triggering market expectations for a stronger pound. This week, the dollar was mainly fluctuating against the Japanese yen, and the euro recorded an increase against the dollar, but trade negotiations still affected market sentiment and restricted the euro's rise.

Gold Market:Spot gold continues to be strong, recording a second consecutive week of gains this week, closing at $3,397.37 per ounce. As market expectations for the Federal Reserve's interest rate cuts heated, news of the US imposing new tariffs on 1 kilogram of gold bars also pushed up the gold price, but later it was reported that White House officials may have misunderstood it. New York gold futures once reached a record high of $3,534 per ounce. Spot silver continued to perform well, recording an increase for six consecutive trading days, closing at $38.31 per ounce this week, up 3.53%.

Crude oil market: In terms of international oil prices, OPEC+'s significant increase in production offsets market concerns that the market's sanctions on Russian oil may trigger supply shortages. Trump and Putin's meeting next week also raised traders' expectations for a ceasefire in Russia and Ukraine, and international oil prices fell for seven consecutive trading days.

Review of the week's news

1. Trump's tariff updates: Japan's emergency corrections, India's "back stabbing", the EU suspends countermeasures...

The adjusted "reciprocal tariffs" by the US government took effect on August 7 local time, and tariffs ranging from 10% to 41% are imposed on dozens of trading partners.

Japan's chief trade negotiator Ryomasa Akazawa said on Thursday that the United States has confirmed it will stop imposing general tariffs on Japan and lowered automobile tariffs as promised. However, the two sides have not reached an agreement on the specific implementation time.

The Japanese side once pointed out that in the specific implementation, the United States initially had the problem of "repeated taxation": that is, "reciprocal tariffs" are imposed again on the already levied taxes. In response, the United States agreed to correct this mistake and ensure that if the original tax rate of a vifu.netmodity is below 15%, the total tax rate is capped at 15%; if the original tax rate is above 15%, no additional tax will be imposed.

India is subject to a 25% "reciprocal tariff", but due to the "direct or indirect import of Russian oil", the United States imposes an additional 25% tariff on it, and this part of the tax rate will take effect at the end of August.

Indian Prime Minister Modi said that India will not harm the interests of its own farmers, dairy industry and fishermen due to tariffs. Indian Foreign Minister of Economic Relations Ravi believes that the US raising tariffs lacks logic and is just a temporary problem and will eventually find a solution.

Swiss faces a "reciprocal tariff" rate of 39%, the highest among developed countries. After the Swiss cabinet held an emergency meeting, it said it was still vifu.netmitted to consulting with the United States and strive to reduce tariffs. The Swiss federal president has traveled to Washington to try to persuade the United States to lower tariffs, but failed to meet with U.S. President Trump. Switzerland will not consider taking tariff countermeasures for the time being, as this will put an additional burden on the Swiss economy.

2. Trump plans to meet Putin in Alaska, and the ceasefire negotiations are deadlocked, territorial exchanges have caused controversy

U.S. President Trump and Russian President Putin will meet in Alaska on August 15. The focus of the meeting was on the discussion of plans to achieve long-term peace in Ukraine.

This will be the first offline meeting between the U.S. and Russia in four years. The last meeting was in 2021, when US President Biden and Putin met in Geneva, Switzerland. Since Trump returned to the White House, he and Putin have had six calls in the first half of this year.

The report said that Trump said any potential peace agreement could involve a territorial exchange between the two sides, saying it was a "complex but beneficial to both sides." This statement aroused strong opposition from Ukraine and its European allies, who firmly refused to cede occupied territories including Crimea, Donetsk, Lugansk, Khlsson and Zaporoze.

Putin insisted that any agreement must require Ukraine to abandon areas controlled by Russia since 2014, while calling on the West to stop aid to Ukraine and prevent it from joining NATO.

Previously, Putin met with Trump's envoy Witkov in Moscow, and both sides said the talks were fruitful. However, the bilateral meeting between Russia and the United States is not expected to include Ukraine, and Putin had previously refused to meet with Zelensky. Zelensky's main assistant said Ukraine is preparing important security-related vifu.netmunications with its partners. Zelensky previously said that the pressure on Russia has taken effect and Moscow is more "inclined" to ceasefire.

3. Dovian directors will join the Federal Reserve, and officials frequently release the signal of a rate cut in September. Trump announced the nomination of White House Economic Advisory vifu.netmittee Chairman Stephen Milan as Fed director, and replace Fed director Kugler, whose term will expire in January next year. Milan may become another voice in support of loose policies, strengthening market expectations for the Fed's interest rate cut this year.

Milan holds a PhD in economics from Harvard University and has always supported Trump's claim to cut interest rates. He once criticized the Fed for having a "group thinking" and advocated divesting the Fed's bank regulatory authority to achieve the separation of monetary policy and financial regulation. Milan is also the designer of the Mar-Lago Agreement, which aims to reshape the global trade and financial system through measures such as the devaluation of the US dollar and debt restructuring.

The Senate is currently in August recession and is expected to review Milan's nomination after the resumption of the meeting in early September, but the Democrats may obstruct it.

In terms of the candidates for the next Fed chairman, Trump is reexamining the candidates, with the number of candidates expanding to about 10. New candidates include former St. Louis Fed Chairman Brad and former President Bush’s economic adviser Marc Sumerlin.

Mid week, according to foreign media reports, Federal Reserve Director Waller is becoming a popular candidate. Trump's advisers were impressed by Waller because he was willing to adjust policies based on predictions rather than current data, and he had a deep understanding of the Fed system, people familiar with the matter said.

Waller has already settledThe position met with the presidential team, but has not met with Trump himself. He voted against the meeting in July, believing that interest rate cuts should be cut immediately by 25 basis points.

4. Trump will collect "100% chip tariffs", and Apple invests $100 billion in Ping An.

Trump announced on Wednesday that it will impose 100% tariffs on imported semiconductor chips, but provides exemptions to vifu.netpanies such as Apple that promise to invest in the United States. This policy is seen as a major victory for Apple and also marks a new stage in the Trump administration's strategy of "using tariffs to promote return".

Apple has announced plans to add $100 billion in investment in the United States, including a new manufacturing project aimed at transferring more production links to the United States. Previously, Apple had promised to invest $500 billion in the United States in the next four years, and the new investment brought Apple's cumulative vifu.netmitment to $600 billion.

Apple's "Made in the United States" partners include Corning, Applied Materials, and Texas Instruments. Corning will set up a special factory in Kentucky to produce glass for Apple, and the state's workforce is expected to increase by 50%.

6. Brazilian President Lula refuses to have direct dialogue with Trump, and former President Bolsonaro is under house arrest.

After the United States imposes 50% tariffs on Brazilian goods exported to the United States, Brazilian President Lula makes it clear that there is no need to have a direct dialogue with Trump at present, because such dialogue may be a "humiliation."

Lula stressed that Brazil will not immediately announce reciprocal tariffs, but will not abandon cabinet-level negotiations. He pointed out that when he thinks Trump is ready for a constructive conversation, he will not hesitate to contact the other party, but at the moment, Trump does not seem willing to have such a conversation.

Lulla believes that Trump has linked the tariff issue to the suspension of prosecution of former Brazilian President Bolsonaro, causing U.S.-Pakistan relations to drop to their lowest point in 200 years. Bolsonaro was tried for planning to overturn the 2022 election results. Lula said that the Brazilian Supreme Court will not change the direction of the trial due to Trump's remarks, and Bolsonaro should also be further tried for inciting Trump's intervention.

On August 4, local time, a judge of the Supreme Court of Brazil announced that Bolsonaro was ordered to be placed under house arrest, prohibited from going out of home, and required to wear electronic shackles, and vifu.netmunication equipment was confiscated. The house arrest could provide an excuse for Trump to further punish Brazil.

The above content is about "[XM Foreign Exchange Platform]: The Federal Reserve welcomes a new dovish, and the interest rate cut in September is almost a foregone conclusion. Gold may fall into the "eye of the storm"!". It is carefully vifu.netpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!

Life in the present, don’t waste your current life in missing the past or looking forward to the future.