Rate Cut Expectations Firm, Gold Prices Continue to Climb

Market Overview

Market consensus has solidified around the expectation of a Federal Reserve rate cut in September. The return of the “bad news is good news” narrative has attracted substantial dip-buying. Boosted by this sentiment, U.S. equities rebounded sharply, with the Dow Jones surging nearly 600 points and the Nasdaq up about 2%. Investors are now awaiting a heavy slate of Treasury auctions this week, sending yields lower across most maturities. The U.S. Dollar Index traded in a narrow range. Gold extended its upward momentum, closing slightly higher. Meanwhile, OPEC+s announcement of a significant production increase in September continued to weigh on crude prices, pushing U.S. WTI crude down more than 3% from its intraday highs.

Hot Topics Preview

Trump Threatens “Significant Tariffs on India”

Former President Trump accused India of buying large volumes of Russian crude and reselling most of it on the open market for huge profits. Indias Ministry of External Affairs rejected the accusation, stating that the U.S. had previously encouraged such imports and noting that both the U.S. and Europe continue to import Russian oil. Indian ETFs listed in the U.S. reversed gains, while the Indian rupee weakened nearly 1% against the dollar.

EU Suspends Retaliatory Measures

A European Commission spokesperson announced that, under an agreement reached with the United States, the EU will suspend two retaliatory tariff measures against the U.S. for six months. The suspension will take effect this Tuesday. The euro showed little immediate reaction, trading about 0.2% lower against the dollar as of press time. However, the agreement faced widespread criticism across Europe, with many viewing it as a signal of “European weakness and capitulation to Trump‘s pressure,” undermining the EU’s credibility as an autonomous strategic actor.

Key Focus (GMT+8)

• 14:30 US June Trade Balance (USD billions)

• 15:45 US July S&P Global Services PMI Final

• 16:00 US July ISM Non-Manufacturing PMI