Looking ahead to this week, the US Labor Department is set to release the July CPI data on the evening of August 12, Beijing time. Investors will closely monitor whether tariffs have driven up prices. Last month's data showed that US inflation in June was generally moderate, with core CPI rising 2.9% year-on-year. Market expectations currently suggest that the July CPI year-on-year increase will rebound from 2.7% in June to 2.8%, with the month-on-month growth rate remaining at 0.2%. Core CPI, excluding food and energy, is expected to rise 0.1 percentage points year-on-year and month-on-month compared to the previous month, reaching 3% and 0.3%, respectively.
Wells Fargo economists noted in a report that, following the significantly weaker-than-expected US July nonfarm payrolls report, the July inflation data will be a key factor for the market to assess whether the Federal Reserve needs to adjust monetary policy. Wells Fargo stated that the July CPI will further demonstrate how US tariff policies are pushing prices higher, with core CPI month-on-month growth expected at 0.3%, the largest increase in the past six months. Weakening service inflation can no longer offset the risks of strengthening goods inflation.
Citibank believes that after the previous June data showed "early signs of a significant rise in goods prices," investors will focus on the extent to which tariffs are impacting prices. They expect this pass-through effect to expand modestly in July, leading to a strong rise in core goods prices. However, this impact may become more pronounced in the fall and should not prevent the Fed from cutting rates next month, especially given the weakness in the labor market.
Additionally, this week will see a flurry of earnings reports from US-listed Chinese companies. In Hong Kong, leading internet firms such as Tencent Holdings, JD.com-SW, and NetEase-S will release their results. In the US, companies like Oklo Inc (a nuclear fission technology and fuel recycling firm), Southeast Asian tech company Sea, and US fintech firm Circle will also report earnings.
