Mini Program: Daily Investment Bank / Institutional Insights Summary
Overseas
1. Citigroup: Waugh notes that focus on broader inflation indicators could reduce the likelihood of near-term rate hikes
Citigroup economists Andrew Hollenhorst and Veronica Clark stated that Federal Reserve Chair Powell’s suggestion that other inflation indicators beyond the Personal Consumption Expenditures (PCE) price index will play a larger role in monetary policy has reduced the likelihood of an imminent rate hike. The core PCE inflation rate in June declined from 3.4% to 3.3%. In comparison, core Consumer Price Index (CPI) stood at 2.6%, closer to the Fed’s 2% inflation target. Hollenhorst and Clark said: “Over the coming months, the market should increasingly recognize that the broader inflation indicators Powell is monitoring show no signs of concerning inflation acceleration.” The market currently assigns a 59% probability to a Fed rate hike in September. However, the two economists believe this market expectation may be mistaken.
2. ABN AMRO: The European Central Bank is not expected to raise interest rates above 2.50%, with uncertainty still present.
Bank of the Netherlands analyst Alexander Krueger stated in a report that, despite the positive surprise from second-quarter economic growth, the European Central Bank is unlikely to consider raising interest rates above 2.50% from the current level of 2.25%. Krueger said, "The economy is making up for the losses in the first quarter, when Ireland dragged down growth; now it is helping to drive economic expansion." He noted that a 0.4% quarter-over-quarter growth in the second quarter, amid additional pressures from the Iran conflict, is a positive sign. However, the analyst said that the prolonged Middle East conflict will delay a return to normalcy, and the ECB will need to closely monitor economic developments and inflation.
3. Yamato Securities: Any intervention to support the yen may merely be buying time.
Kenta Tadaide, Chief FX Strategist at Daiwa Securities, said that any unexpected intervention by the Japanese government to support the yen may merely be a temporary measure to buy time. “To maximize the effectiveness of currency intervention, monetary policy must move in the same direction,” he said. He added, “Although the market broadly expects the Bank of Japan to hold its policy rate steady in today’s decision, attention is focused on the information conveyed in its policy statement and the press conference by Governor Kazuo Ueda.”
4. Mitsubishi UFJ: Market participants are expected to remain cautious in their short-term bets on the yen.
Michael Wan, Senior Foreign Exchange Analyst at Mitsubishi UFJ Bank, stated in a research report that, given the risk balance, market participants may remain cautious in their short-term bets on the yen. Net short positions in the yen remain at high levels close to historical highs, and “authorities in Japan may be attempting to unwind these positions.” Wan noted that whether the yen can sustain its Thursday gain of up to 3.3% “will depend on market reactions following the Bank of Japan’s policy meeting.” Overall, as we head into the weekend and early next week, we remain cautious on the USD/JPY pair.
5. Mitsubishi UFJ: If the Bank of England increases bets on a September rate hike, the pound could rise.
Derek Halpenny of Mitsubishi UFJ Bank stated in a report that if the Bank of England’s interest rate decision reinforces market expectations of a September rate hike, the pound could rise. He noted that the Bank of England may express greater concern about the impact of the Middle East conflict, adding that the prolonged nature of the conflict now appears to be a larger risk compared to the June meeting. Prolonged higher energy prices “would certainly force the Bank of England to act, even amid mixed labor market conditions.” Currently, markets reflect a 50% probability of a September rate hike.
6. Berenberg: The Bank of England Does Not Need to Stick to a Tightening Path
Berenberg Bank analyst Andrew Wishart stated in a report that, despite energy price shocks, European economic activity demonstrated resilience in the second quarter, reducing the likelihood of job market risks from “preemptive rate hikes” aimed at preventing new wage-price spirals. He said, “We believe that if energy prices rise further, the Bank of England may follow through on its threat to raise rates by 25 basis points.” However, since this economic resilience has not translated into a recovery in labor demand, the trend of slowing inflation is likely to persist. Wishart believes this will enable policymakers to soften their hawkish stance and shift toward rate cuts to support employment. He expects the Bank of England to resume rate cuts in December and lower the policy rate from 3.75% to 3.0% by mid-2027.
7. National Development and Reform Commission: Deeply implement the "East Data, West Computing" project, and coordinate planning and orderly construction of computing infrastructure.
On July 30, the National Development and Reform Commission held a briefing on the economic and development reform situation in the first half of 2026. The meeting emphasized that the development and reform system must effectively carry out all related tasks to promote sustained, high-quality, and favorable economic development, ensuring the fulfillment of annual targets and goals. Accelerate the construction of a modern industrial system by adopting tailored, region-specific strategies to foster and expand emerging and future industries; thoroughly implement the "East Data, West Computing" project, and coordinate the planning and orderly development of computing infrastructure; rapidly create benchmark applications of artificial intelligence, accelerating AI empowerment in key sectors such as manufacturing, agriculture, and energy, while expediting the legislative process for an AI law; promote high-quality and efficient development of the service sector, driving improvements, cost reductions, and carbon emission cuts in key industries. (National Development and Reform Commission)
Domestic
1. CICC: The U.S. economy has not yet shown significant slowdown, and demand remains robust.
CICC noted that U.S. Q2 GDP, annualized and quarter-over-quarter, grew by 1.5%, slightly below market expectations but still showing no signs of weakness. Imports, inventories, and government spending weighed on GDP, while private domestic final sales—a measure of domestic demand—rose at an annualized rate of 3.9%, the fastest pace since early 2023, indicating strong economic resilience. Consumer spending clearly rebounded, corporate investment driven by AI remained robust, and residential investment began to improve, signaling a gradual shift in growth momentum from fiscal stimulus to the private sector. On inflation, core PCE declined from the prior reading, but the recent rebound in oil prices suggests ongoing uncertainty for future inflation. Overall, CICC believes the U.S. economy has not shown clear signs of slowing, with demand remaining solid; the Fed’s policy focus will continue to center on controlling inflation, making a preemptive rate hike a reasonable option. Moreover, the Q2 growth expansion reflects a broadening base, not only suggesting a more stable foundation for this recovery but also aligning with recent trends of capital rotation and market-wide momentum in the U.S.
2. Dongfang Jincheng: July PMI data declined, but demand and supply for high-tech products remained strong.
In July, the Manufacturing Purchasing Managers' Index (PMI) stood at 49.2%, a 1.1 percentage point decline from the previous month, indicating that domestic demand still needs further stabilization. Meanwhile, structural highlights continued to emerge. Wang Qing, Chief Macro Analyst at Dongfang Jincheng, noted that the PMI for high-tech manufacturing and equipment manufacturing in July reached 53.3% and 51.4%, respectively, both remaining in expansionary territory. This reflects strong demand and supply for high-tech products, underscoring ongoing efforts to upgrade and transform China’s manufacturing sector. (Yicai)
3. Huafeng Securities: The outline of the policy package is becoming clearer
On July 30, the Political Bureau of the CPC Central Committee convened a meeting to analyze and assess the current economic situation and plan economic work for the second half of the year. Ren Zhiqiang, Assistant to the President and Director of the Research Institute at Huafu Securities, told the Securities Times that the second half of the year may enter a window where existing policy momentum accelerates and new policy measures intensify, potentially speeding up the transition between old and new growth drivers and raising expectations for capital market reforms. “The policy tone of this Political Bureau meeting is more proactive, and the framework of the policy package is clearer,” Ren said, noting that the policy floor has been further solidified. The meeting explicitly called for “enhancing countercyclical regulation,” signaling a clear shift in macro policy from “stabilization” to “progress,” which will help boost market confidence and improve expectations. Secondly, the emphasis on “accelerating the transition between old and new growth drivers” suggests that policy support for industrial transformation and upgrading may be further strengthened, with new quality productive forces emerging as the most certain long-term investment theme. Meanwhile, domestic demand chains are expected to see marginal improvement. As fiscal spending accelerates, monetary policy remains moderately loose, and the “six networks” advance rapidly, infrastructure investment and service consumption chains are likely to benefit from阶段性 recovery opportunities. In addition, expectations for capital market reforms are rising, and further progress in capital market reforms related to financing and investment is anticipated.
4. CITIC Securities: Housing is the most important large-ticket durable consumption, and commercial real estate is a significant offline consumption scenario.
According to a research report from CITIC Securities, residential housing is the most important large-ticket durable consumer good, while commercial real estate represents a significant offline consumption scenario. Both residential development and commercial real estate operations are aligning with the broader consumer goods industry. The government is also actively supporting the positioning of real estate as a large-ticket consumption sector. Developers that can integrate into this positioning have broad strategic growth prospects. Within the real estate industry, some companies are capable of sustained growth. Specifically, we are optimistic about developers that deeply understand resident needs and deliver high-quality products; enterprises with extensive historical experience in effectively managing and operating commercial real estate; and companies with strong consumer reputations in property management services.
5. Galaxy Securities: The "Six Networks," as critical infrastructure supporting the implementation of the technology strategy, are expected to accelerate progress.
According to a research report from Galaxy Securities, the "Six Networks"—key infrastructure supporting the implementation of the technology strategy—are expected to accelerate progress. The "Six Networks" specifically refer to the water network, the new power grid, the computing power network, the next-generation communication network, urban underground utility networks, and the logistics network. Among these, the computing power network, next-generation communication network, and new power grid are closely tied to the technology sector. The computing power network, as a critical infrastructure of the AI era, connects computing facilities nationwide into a unified network, enabling efficient cross-regional and cross-industry resource scheduling, directly supporting large model training and inference. The next-generation communication network encompasses 5G-Advanced, 6G, and satellite internet, achieving seamless, all-domain coverage across air, land, sea, and space to provide deterministic connectivity for embodied intelligence and intelligent connected vehicles. The new power grid supports "computing-power synergy" through intelligent dispatching, aligning data centers with new energy sources to address electricity load fluctuations triggered by the AI boom. Together, these three networks form the digital foundation of the intelligent economy, breaking down barriers to the flow of key production factors such as data, computing power, and energy, and providing ubiquitous, efficient, and reliable foundational support for the technology sector. The computing power network has already entered the implementation phase, presenting the technology industry with three tangible opportunities: technological breakthroughs, scenario integration, and ecosystem collaboration. Leading companies in this space are poised to capture significant market growth.