Market Review: Dollar Fluctuations, Gold Surges, and Interest Rate Adjustments

Market Performance Overview

The Dollar Index experienced notable volatility this week, driven by mixed employment and inflation data in the United States. While employment figures showed weakness, the Producer Price Index (PPI) surprised with a decline, further fueling expectations of interest rate cuts by the Federal Reserve. Despite the Consumer Price Index (CPI) reaching new highs, the market maintained its expectations for monetary easing, leading to a second consecutive week of declines for the Dollar Index. In contrast, gold continued its upward trajectory, hitting record highs above $3674 per ounce. This surge represents a surpassing of the 1980 peak, with gold prices climbing nearly 40% since the beginning of the year. Silver also saw significant gains, outperforming with a more than 45% increase over the same period. As for other currencies, the Euro, British Pound, and Australian Dollar all made gains against the US Dollar. Conversely, the US Dollar weakened against the Japanese Yen, driven by expectations of monetary tightening by the Bank of Japan. Crude oil prices also rose, driven by geopolitical concerns in the Middle East and potential plans by the European Union to impose new sanctions on Russia. These factors contributed to an increase in oil prices for the week. US stock markets saw record highs, with the Dow Jones Industrial Average surpassing 46,000 points. Oracle Corporation also saw a significant increase in market capitalization, briefly leading its founder, Larry Ellison, to surpass Elon Musk as the world's wealthiest individual.

Investment Bank Insights

* **Morgan Stanley:** Believes that US investor interest in the Chinese market is at a three-year high. * **Goldman Sachs:** Indicates that global hedge fund net purchases of Chinese stocks in August were the highest since September 2024. * **Interest Rate Expectations:** Morgan Stanley anticipates four consecutive 25-basis-point rate cuts by the Federal Reserve. Wells Fargo projects five rate cuts by mid-2026. Mizuho claims the Federal Reserve has been "slapped" by reality and that an easing cycle is about to begin. Standard Chartered expects a 50-basis-point cut in September, and Barclays anticipates a series of rate cuts later this year. * **Gold Price Forecasts:** ANZ has raised its end-2025 gold target price from $3600/oz to $3800/oz. * **Stock Market Projections:** Deutsche Bank has raised its year-end target for the S&P 500 to 7000. * **Oil Market Outlook:** Goldman Sachs believes that modest OPEC+ production increases will lead to a slight increase in the oil market surplus in 2026. Capital Economics also suggests that OPEC+ will increase production cautiously.

Key Economic Events

1. **High Inflation vs. Weak Employment: What's the Fed's September Decision?** * US data showed a slight increase in the August CPI, while jobless claims rose to their highest level in nearly four years. The data prompted traders to bet more firmly on Federal Reserve interest rate cuts. 2. **Changes in Federal Reserve Personnel:** * An attempt to oust Lisa Cook was blocked, and Stephen Miran is expected to be confirmed. In addition, more candidates have been floated for the position of Federal Reserve Chair. 3. **Israel Launches Airstrike in Qatar:** * Israel conducted an airstrike in Doha, Qatar, targeting senior Hamas officials, raising geopolitical tensions. 4. **NATO Downs Russian Drone for First Time:** * NATO fighter jets shot down drones that entered Polish airspace, raising concerns about an escalation of the conflict. 5. **Changes in the Gold Market:** * Tighter domestic restrictions online, Vietnam opening to imports, and Switzerland expanding in the US. 6. **Argentine Presidential Election:** * The Argentine presidential election saw unexpected results, leading to a heavy sell-off in stocks, bonds, and currencies. 7. **Cambricon Succeeds in Private Capital Increase:** * Cambricon's private capital increase has been approved by regulators, and the funds will be invested in large model chip projects. 8. **Will Oracle Become the Second Nvidia?** * OpenAI helped boost Oracle's stock price, and the founder briefly became the richest person in the world. 9. **Alibaba Gaode Launches "Street Sweep List," Pledges Never to Monetize the List:** * Alibaba Gaode launched the "Street Sweep List," pledging never to monetize the list. 10. **European Central Bank Keeps Interest Rates Unchanged:** * The European Central Bank kept interest rates unchanged. Is the cutting cycle over? 11. **Protests "Block" France:** * A new Prime Minister takes office amid national demonstrations in France. 12. **Trump Political Ally Shot Dead While Speaking:** * A political ally of Trump was shot dead while giving a speech. 13. **Apple Launches the iPhone 17 Series:** * Apple launched the iPhone 17 series. Is this really "squeezing toothpaste"?