PBOC Signals No Urgency For Rate Cuts Despite Poor Economic News

Samantha Luan

Economic

Forex

Political

Summary:

China’s central bank indicated it’s holding back from aggressively easing monetary policy with moves such as interest-rate cuts, even though the economy just recorded its worst month so far this year.The People’s Bank of China pledged to “thoroughly” enact its “moderately loose” monetary policy while highlighting targeted support to the economy. The remarks in a quarterly report published late Friday followed shortly after disappointing statistics offered evidence of weakening domestic demand.

Together with a message painting an improved outlook for inflation, the PBOC is signalling it’s likely to put off using broad easing tools like cuts to interest rates or the reserve requirement ratio for later this year when the economy risks a more significant slowdown, according to analysts at global banks including Citigroup Inc. The RRR determines the amount of cash lenders must set aside in reserves.“Its emphasis on executing existing policies and targeted easing signaled limited appetite for broad-based monetary easing,” Goldman Sachs Group Inc economists including Chen Xinquan wrote in a report.

China’s economy stumbled in July, as a campaign to curb overcapacity at home added to the sting of higher tariffs. Weaker stimulus for infrastructure and consumption was also a key culprit behind the slowdown, revealing the extent to which private demand remains frail.But after posting a 5.3% year-on-year gain in gross domestic product in the first half of 2025, China can probably tolerate slower growth in the second half and still deliver on the official target of around 5%.

“Structural policies could be a more important venue for the PBOC in the next few months compared with broad-based rate or RRR cuts,” Citigroup economists including Yu Xiangrong wrote in a report Sunday.The economy faces a number of challenges including increasing trade barriers and insufficient domestic demand, but its foundation is solid and its resilience is strong, the PBOC said in the report.When it comes to deflation, a problem that’s haunted China for more than two years, the PBOC highlighted that the core consumer price index, which excludes volatile food and energy items, has improved in recent months.

The government’s crackdown on “disorderly” low-price competition, along with a policy pivot to boosting consumption, will have a positive impact on inflation, the PBOC said.Economists generally anticipate the PBOC will deliver another rate cut of 10 to 20 basis points by the end of this year, as well as a 50-basis point RRR reduction.Some analysts also expect the government to roll out additional fiscal stimulus if the economy weakens later this year. Citi forecasts a 500 billion yuan (US$70 billion or RM295.6 billion) quasi-fiscal injection to support demand.

In addition, the PBOC pledged to prevent funds from idly circulating within the financial system, indicating concern over financial stability and arbitrage. That’s another sign “the PBOC is in no rush for broad-based easing,” according to a report Saturday from Goldman Sachs.The PBOC also revealed that it’s set up a macro-prudential and financial stability committee in January, heeding top officials’ call to strengthen its mandate.The central bank expanded its reach in helping stabilise the property and stock markets in recent years, having facilitated a quasi-stabilisation fund for equity purchases earlier this year.

Source: Theedgemarkets

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Adam

Forex

Global money markets are closely watching Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium this week. Recently, expectations about the Fed’s monetary policy have changed quickly. The data from July made it less likely for significant interest rate cuts, and expectations for the September meeting have become more focused.

If Powell speaks cautiously, markets think the US dollar might strengthen against other major currencies. This is particularly true because the market still expects significant rate cuts, and careful messaging could boost the US dollar Index.

How Can the Fed Move on the Inflation-Employment Dilemma?

The US economy has been sending mixed signals lately. On one hand, strong retail sales show that consumer spending is robust. On the other hand, rising import prices suggest that tariffs are pushing costs higher. This situation keeps the risk of inflation alive, as these costs could soon affect retail prices. Meanwhile, the job market has weakened significantly. The unemployment rate’s three-month average rose to 4.2%, and job growth over the same period slowed to 35,000.

Last year, when faced with a similar situation, Powell indicated in his Jackson Hole speech that a rate cut was coming. However, the current situation is more complex. Inflation data has sharply increased, with the overall rate at 3.5% and the core rate at 3.7%. This makes it hard for the Fed to make quick decisions.

Therefore, Powell might not be as optimistic about rate cuts this year. Instead, he is likely to take a cautious and flexible approach, highlighting that they are closely monitoring both employment and inflation trends.

Trump-Putin Meeting and the Possibility of Peace

Geopolitical events also play a key role in influencing the direction of the US dollar. Last week, a meeting between US President Donald Trump and Russian President Vladimir Putin raised hopes that the Ukraine crisis could be heading towards a new phase.

Putin’s agreement to allow the US and Europe to offer Ukraine security guarantees similar to NATO’s Article 5 suggests that progress might be possible. However, unresolved issues concerning Russia’s demands over Donbas and Crimea remain significant hurdles.

For the markets, this situation can be interpreted in two ways: If a ceasefire becomes more likely in the short term, the reduced risk could decrease demand for the US dollar. On the other hand, if negotiations stall or break down, the US dollar index (DXY) might rise as investors seek safe havens. Consequently, every update from the peace talks will have a direct impact on the US dollar’s trajectory.

Market Pricing and Expectations

In the interest rate markets, the chance of a 50 basis point cut in September, once as high as 60%, is no longer being considered. Expectations have instead dropped to below 25 basis points, around 20 basis points. This reflects a general belief that the Fed won’t make any drastic moves.

Investors are keen to see how Powell will address these expectations. If his speech highlights the seriousness of inflation and warns against making quick decisions, the US dollar index might strengthen. Conversely, if Powell delivers a more optimistic message focusing on weak employment, we can expect the US dollar index (DXY) to decline.

US Dollar Technical Outlook

The US dollar index began the week just below 98, a crucial level in the pullback phase since it hit 100. The 98 mark acts as a midpoint in the stabilization phase following the slowdown of the main downward trend. Currently, there’s also focus on the short-term support trend around 97.85.

If the index closes below this support level on a daily basis, it could drop toward its main support at 96.50. Conversely, if events occur that boost demand for the US dollar, we might see the index rise to around 99.50.

Powell’s speech at the Jackson Hole Symposium could trigger a breakout from this narrow range. In the short term, if Powell takes a cautious stance, the US dollar index could approach 100. However, if he signals significant rate cuts, the index might drop below 97.

In summary, three key factors will influence the US dollar in global markets this week: the Fed’s interest rate policy, peace talks involving the US, Russia, and Ukraine, and the inflation-employment dilemma highlighted by US economic data. Powell’s upcoming speech will address these crucial factors at a pivotal moment. The Fed’s guidance will not only cause short-term market movements but will also affect expectations for rate cuts throughout the year.

In the near term, the US dollar is expected to move between 97 and 99 before Jackson Hole. If Powell takes a cautious approach, the US dollar might strengthen and approach the 100 mark, potentially putting pressure on emerging market currencies.

On the other hand, if Powell highlights employment concerns and suggests possible rate cuts, the US dollar could dip below 97. This could lead to a rise in gold prices and riskier assets.

Additionally, if the Fed takes its time in cutting interest rates, the US dollar may gradually strengthen over the rest of the year. However, if a lasting ceasefire is achieved in Ukraine, it could reduce safe-haven demand, limiting this strengthening trend.

Source: investing

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Adam

Economic

Three goals are topping the agenda as several European leaders join Ukrainian President Volodymyr Zelenskyy to meet U.S. leader Donald Trump in Washington D.C.

Friday’s Alaska summit raised concerns in Europe that Trump might have softened his stance toward potential sanctions on Russia, and is now pushing for a permanent peace deal in Ukraine instead of an initial ceasefire — an approach more aligned with Moscow’s position.

EU officials still recall Zelenskyy’s incendiary appearance in the Oval office in February, when Trump and Vice President JD Vance criticized the Ukrainian leader in front of TV cameras for not being thankful enough for U.S. support throughout the war.

This time around, EU leaders are traveling to the United States on Monday looking to bring Washington on the side of Ukraine. The European cohort includes heads of state that are close to Trump, such as Italian Prime Minister Georgia Meloni and Finnish President Alexander Stubb.

“The objective is mainly to support Zelenskyy,” a senior EU diplomat, who did not want to be named due to the sensitivity of the topic, told CNBC on Sunday. “The idea is to make sure [Trump] has the same objectives as Europe.”

The same diplomat outlined: “Our main objectives are: security guarantees, stop the killing and go for a trilateral meeting.”

Security guarantees

Facing a scenario that features the end of the war but no NATO membership for Kyiv, Ukraine has insisted on security reassurances that decrease the likelihood of further attacks and invasions of its territory.

According to U.S. Special Envoy Steve Witkoff, Putin agreed to allow Europe and the U.S. to provide such post-war security guarantees to Ukraine, which could be described as protections similar to Article 5 in the NATO alliance — a measure that states that an attack against one member is an attack on all.

An EU official, who follows these geopolitical topics but did not want to be named due to the sensitivity of the issue, told CNBC that “NATO article-5 like security guarantees for Ukraine are great, but unclear what they will entail in practice.”

Speaking to CNBC’s Europe Early Edition on Monday, former U.S. diplomat James Bindenagel said these security guarantees would allow Western — but not NATO — forces to be present in Ukraine, which “would have the ability to fight back to any violations of a ceasefire.”

Stop the killing

Putin has reportedly called for Ukraine’s withdrawal from the Donetsk and Luhansk regions in the east of the country and added that Moscow could freeze the front lines in the regions of Kherson and Zaporizhzhia in the south.

However, the promise to end the war in exchange for territorial concessions is a long-standing no-go for Kyiv, with Zelenskyy saying last week that such a surrender would be a “springboard” for a future new Russian offensive.

“As long as the bloodshed in Ukraine continues, Europe will maintain diplomatic and, in particular, economic pressure on Russia,” European Commission President Ursula von der Leyen said in a Sunday statement.

She added the EU will “continue to strengthen sanctions,” and is advancing preparations for a 19th package of measures to put forward in early September.

Trump, Putin and Zelenskyy?

The other objective that Europe wants to meet on Monday is securing White House support for a meeting that features Trump and Putin, but also brings Zelenskyy to the negotiating table.

“These are challenging times; only Ukraine can choose its own destiny,” von der Leyen said on Sunday.

Trump has spoken about a potential summit featuring himself, Russian and Ukrainian leadership, but he has not mentioned that prospect of such gathering since the Alaska summit.

Source: cnbc

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Warren Takunda

Cryptocurrency

Key takeaways:

ETH price hit a 4-year high weekly close at $4,475, driven by ETF inflows and high network activity.

A key support zone for Ether sits between support at $4,000 and $4,150.

Ether price hit another milestone this cycle after the ETH/USD trading pair achieved its highest weekly close since November 2021. Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_1

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_1

ETH/USD weekly chart. Source: Cointelegraph/TradingView

Ether completes best week in four years

Ether closed the week at $4,475 on Aug. 13, according to data from Cointelegraph Markets Pro and TradingView confirms.

This significant milestone follows a breakout above the $4,000 resistance level, which had been in place since 2021, signaling strong bullish momentum.

One of the reasons are spot Ethereum ETFs with massive inflows over the last month, and a record $1.02 billion on Aug. 11 alone. These inflows are led by BlackRock’s ETHA, now totaling over $12.6 billion, per data from Farside Investors.

BlackRock now holds more than half of all ETH ETF holdings, according to data from CryptoQuant.

“BlackRock’s ETHA now makes up 58.03% of all Ethereum ETFs, holding a massive 3,490,450 ETH in its wallets,” said CryptoQuant analyst Burakkesmeci in a Monday Quicktake analysis, adding:

“This momentum shows a clear ETF-driven rally in Ethereum, led by BlackRock’s dominance in the market.” Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_2

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_2

Ethereum ETF holdings, amount and percentage. Source: CryptoQuant

Ether continued dominating capital inflows into exchange-traded products (ETPs) last week, according to CoinShares. Inflows into ETH investment products totaled $2.9 billion, marking strong institutional investor appetite for the top altcoin. Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_3

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_3

Crypto ETP flows by asset. Source: CoinShares

Corporate treasuries, with 69 entities holding $17.3 billion in ETH (3.4% of supply), also add to the buy pressure.

Demand for ETH is also reflected in high network activity, with transaction volume hitting a record 1.74 million daily transactions on Aug. 5, according to data from Nansen.

More than 46.67 million transactions were recorded in July, fueled by stablecoin transfers, DeFi, and layer 2 growth. Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_4

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_4

Ethereum: Daily transaction count. Source: Nansen

ETH price levels to watch this week

As ETH trades at $4,300, several key price levels warrant extra close attention, based on technical analysis and market dynamics.

The immediate support zone lies around $4,100 to $4,000, a range that previously acted as a stubborn resistance in 2021 but has now flipped to a critical support area. Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_5

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_5

ETH/USD daily chart. Source: Cointelegraph/TradingView

This level aligns with the 20-day exponential moving average (EMA) at $4,140, and $4,150 is key support, where 341,000 ETH tokens were accumulated, per Glassnode’s Cost basis distribution heatmap. Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_6

Ethereum Sets Highest Weekly Close in 4 Years: Watch These ETH Price Levels_6

ETH: Cost basis distribution heatmap. Source: Glassnode

“As long as the weekly close holds the $4K–$4.25K region, I treat dips as consolidation,” said popular analyst Demi-Defi in an Aug. 18 post on X, adding that a weekly close below $4,150 could trigger a “deeper drop” to the $3,650–$3,750 region.

On the upside, the analyst said a weekly close above $4,550 could confirm a breakout into new all-time highs with targets set between $5,000 and $5,800.

”I remain bullish while $4.15K+ holds weekly.”

Source: Cointelegraph

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Dark Current

Economic

Commodity

Oil swung between gains and losses as traders awaited a meeting between Presidents Donald Trump and Volodymyr Zelenskiy, with the Ukrainian leader facing US pressure to agree to ceding territory to Russia.

West Texas Intermediate futures were little changed near $63 a barrel after fluctuating in a roughly $1 range. In a show of support, European leaders including European Commission President Ursula von der Leyen, French President Emmanuel Macron and NATO Secretary-General Mark Rutte will join the high-stakes meeting in Washington.

The US president said after his talks with Vladimir Putin in Alaska on Friday that he’ll urge Zelenskiy to make a quick deal and sounded receptive to the Russian leader’s demand that Ukraine give up large swathes of land.

“We’re still a long ways off,” Secretary of State Marco Rubio, who took part in the summit, told Fox News on Sunday. “We are not at the precipice of a peace agreement. We are not at the edge of one. But I do think progress was made.”

Talks about resolving the Ukraine war, which could allow Russia’s crude to trade more freely, have injected uncertainty into the market and kept oil trading in a narrow range recently. Still, futures are down more than 10% this year on concerns about the fallout from Trump’s trade policies and OPEC+ plans to rapidly return barrels to the market.

Trump told European leaders after the meeting that the US could contribute to any security guarantees, and that Putin was prepared to accept that. However, it remains unclear what kind of guarantees are being discussed with the Russian leader and what the Kremlin is willing to accept.

In a Truth Social post late Sunday, Trump said Zelenskiy “can end the war with Russia almost immediately, if he wants to, or he can continue to fight.” He also made a reference to Crimea, without providing further details.

Prior to the summit in Alaska, Trump told allies that reaching a ceasefire would be his key demand, and threatened to walk out of the talks and impose tough new measures on Moscow and countries buying its oil if it wasn’t met. On Friday, the US president signaled he was in no hurry to implement penalties.

So far, Trump has singled out India for buying Russian crude, imposing hefty tariffs on the South Asian nation for doing so. His trade adviser strongly criticized India’s purchases of Moscow’s barrels in the Financial Times on Monday. However, the US president said in a Fox News interview on Friday that he will hold off on increasing levies on Chinese goods due to the country’s purchases of Moscow’s crude.

“Russia retains the upper hand,” said Tamas Varga, an analyst at brokerage PVM. “As long as that remains the case, no bullish impetus will come from this part of the world.”

Source: Bloomberg Europe

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Adam

Commodity

Market Context: A Compression Before Time

Gold futures are trading at $3,381.7, holding steady within a razor-thin band ($3,375–$3,385) after declining from the August 7 high at $3,534.1. The market’s refusal to break below Daily Buy 1 ($3,376) and Weekly Buy 1 ($3,350) underscores the presence of firm demand. At the same time, rallies have stalled at the Daily Sell 1–2 levels ($3,393–$3,402), leaving the market trapped in a short-term stalemate.

This compression is not random—it coincides with the closing arc of a 360-day Gann cycle anchored from September 28, 2024, placing gold just six weeks away from a major cyclical pivot due on September 28, 2025. The alignment of time and price suggests the market is in the final basing process before a decisive rotation.

VC PMI Alignment: Equilibrium Battleground

Daily Buy 2: $3,368

Daily Buy 1: $3,376

VC PMI Daily Mean: $3,385

Daily Sell 1: $3,393

Daily Sell 2: $3,402

Weekly Buy 2: $3,317

Weekly Buy 1: $3,350

VC PMI Weekly Mean: $3,408

Weekly Sell 1: $3,441

Weekly Sell 2: $3,499

The $3,368–$3,402 band is an equilibrium fulcrum where both daily and weekly forces overlap. Price’s coiling action here is a textbook mean-reversion compression, which statistically precedes volatility expansion. The next directional close outside this range will likely set the tone for the September cycle window.

Gann 360-Day Cycle: The Closing Arc

Anchoring the cycle to September 28, 2024, the harmonic divisions unfold as follows:

90° (Dec 27, 2024): Minor corrective low → rally initiated.

180° (Mar 28, 2025): Major mid-cycle high, reversal followed.

270° (Jun 26, 2025): Secondary low, market base formed.

360° (Sep 28, 2025): Full cycle completion ahead, high-probability pivot.

We are now at Day 321 of 360, deep in the final quadrant. Historically, this phase tends to be the most volatile, as cycles seek resolution into the 360° completion. The probability of a major trend change or acceleration into late September is elevated.

Square of 9 Harmonics: Price Targets Beyond $3,523

Projecting from the August 7 high ($3,534.1) and the retracement low near $3,375, the Square of 9 highlights a powerful harmonic cluster:

$3,368–$3,350: 180° support band.

$3,402–$3,441: 45° countertrend resistance.

$3,467–$3,523: 78.6%–100% retracement cluster, magnet for breakout rally.

Above $3,523, the Square of 9 rotations project:

3552.7 → 3582.6 → 3612.6 → 3642.7 → 3672.9 (45° steps).

These act as natural “price ladders” for scaling profits on a successful breakout.

Forward Projection: October–November 2025

The cycle analysis and Square of 9 harmonics suggest that if gold defends the $3,350–$3,368 base, the market is primed to launch into a late-September breakout window. The 360° pivot (Sep 28, 2025) is immediately followed by the 405° (Nov 12, 2025) and 450° (Dec 27, 2025) extensions—both of which often carry trend momentum beyond the initial turn.

Our illustrative projection shows gold breaking above $3,402 into the 360° window, targeting $3,441–$3,467 initially. If momentum holds, a push into $3,523–$3,582 is feasible into Q4, aligning with the Square of 9 extensions.

Market Psychology & Probability Outlook

The MACD (14,3,3) is flat but quietly showing divergence as price holds firm against repeated sell attempts. This reflects latent bullish energy—a spring coiling before release. Market psychology is trapped in short-term doubt, but the structure suggests traders are underestimating the potential for a breakout coinciding with the cycle’s climax.

Probability bias: 65–70% in favor of upside resolution into the September 28 cycle date, provided $3,350 holds.

Risk factor: A close below $3,350 would negate the bullish cycle bias, exposing $3,317 and delaying the breakout window.

Strategic Outlook

Bullish Path: Close > $3,402 → rally to $3,441–$3,467 → cycle expansion toward $3,523–$3,582.

Bearish Path: Break

Cycle Edge: With the 360-day pivot due in late September, time is on the bulls’ side—support holds are statistically favored to trigger a rally.

Conclusion:

Gold is entering the final arc of a 360-day Gann cycle, coiled within the $3,368–$3,402 equilibrium band. This is a classic time–price compression where probability favors a breakout aligning with the cycle’s completion on September 28, 2025. If the $3,350 base holds, the odds strongly favor a rally sequence toward $3,523+ by Q4, with Square of 9 harmonics pointing to 3582–3612–3642–3672 as the next “ladder steps” in the advance.

Source: investing

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Damon

Palestinian-Israeli conflict

U.S. President Donald Trump pledged on Monday to issue an executive order to end the use of mail-in ballots and voting machines ahead of the 2026 midterm elections, a move likely to spark legal challenges by the states.

"I am going to lead a movement to get rid of MAIL-IN BALLOTS, and also, while we’re at it, Highly 'Inaccurate,' Very Expensive, and Seriously Controversial VOTING MACHINES," he wrote in a social media post.

Trump, who has promoted the false narrative that he, not Democrat Joe Biden, won the 2020 election, has long cast doubt on the security of mail-in ballots and urged his fellow Republicans to try harder to overhaul the U.S. voting system.

Some Republican states, such as Florida, however, have embraced mail-in voting as a safe, convenient way to expand voter participation. Trump voted by mail in some previous elections and urged his supporters to do so for the 2024 presidential election.

Mail-in ballots hit record highs in the U.S. in 2020 amid the pandemic as states expanded options for voters, but the numbers dropped in 2024, according to the U.S. Election Assistance Commission.

More than two-thirds of voters in the 2024 general election cast their ballots in person, while about three in 10 ballots were cast through mail voting, according to the commission.

Trump's comments follow his meeting with his Russian counterpart on Friday, after which Trump said Vladimir Putin agreed with him on ending mail-in balloting.

Each of the 50 U.S. states runs elections separately, but Trump warned them to comply.

"Remember, the States are merely an 'agent' for the Federal Government in counting and tabulating the votes. They must do what the Federal Government, as represented by the President of the United States, tells them, FOR THE GOOD OF OUR COUNTRY, to do," Trump wrote.

Trump repeated the false claim on Monday that the U.S. is the only country that permits mail-in balloting.

Nearly three dozen countries from Canada to Germany and South Korea allow some form of postal vote, though more than half of them place some restrictions on which voters qualify, according to the Sweden-based International Institute for Democracy and Electoral Assistance, an intergovernmental advocacy group.

Trump previously signed a March 25 executive order targeting elections that has been blocked by the courts after Democrat-led states sued.