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OEXN U.S. Inflation Data and Market Outlook

Inflation Data Overview The latest U.S. inflation data came in unchanged from the previous period but below market expectations, reinforcing the outlook for Federal Reserve rate cuts. Following the release, the U.S. dollar weakened, although the move lacked the momentum seen after the Non-Farm Payrolls earlier this month. The market remains in a tug-of-war between bulls and bears without showing sustained strength. From the current macro backdrop, rate-cut expectations for the dollar have strengthened, and the broader bearish trend remains intact, albeit with a slower pace. Trading Rhythm and Strategy Implications In trend trading, positioning is often more effective during periods of slower market movement rather than chasing volatility. For traders who maintain a bearish dollar outlook, this remains a favorable time to position strategically. After the inflation release, Wall Street raised the probability of a September Fed rate cut. While expectations are clear, the pace of change is likely to remain gradual, with well-defined outlooks often associated with low volatility. Geopolitical Risk Considerations This week, attention will also focus on the scheduled meeting between Donald Trump and Vladimir Putin on Friday. Trump has been promoting the potential for brokering a Russia–Ukraine ceasefire. However, markets are likely to remain cautious, recalling his previous meeting with Kim Jong-un in Vietnam, which ended without results. Should tangible progress be made toward ending the conflict, it could boost global risk sentiment and weigh on safe-haven assets. Precious Metals and Commodities Gold has seen a notable pullback in recent sessions. As discussed in the previous outlook, the metal remains in a wide trading range, and extreme bullish or bearish positions are not advisable. A flexible approach that adjusts between long and short positions in response to market signals remains prudent. Equity Markets and Emerging Economies In both the A-share and Hong Kong stock markets, sentiment is being supported by positive developments. The extension of U.S.–China tariff measures for another 90 days—while not a formal agreement—removes the risk of immediate tariff shocks. Additionally, growing expectations for U.S. rate cuts are supportive of emerging market assets. These are key signals to watch when assessing the current market environment.

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Publication date:

2025-08-13 11:35:28 (GMT)

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