Weekly Macro Outlook: Fed Minutes Alongside PMI Data Release, Can KOSPI Sustain its Tech Bull Market? Market Focused on Three Key Variables

BlockBeats News, August 16th. Over the past week, global financial markets have seen an overall improvement in risk appetite. The S&P 500 and Nasdaq both hit new highs, with the main trading themes shifting from defense and safe-haven assets to interest rate cut expectations and AI profit-taking, led by gains in tech and semiconductor stocks. The South Korean KOSPI index surged by 11.5%, ending seven consecutive weeks of decline and reentering a technical bull market. The US Dollar Index was relatively stable throughout the week, with improved inflation data leading to a decreased Fed rate hike expectation. On Friday, a surprise negative growth in retail sales accelerated the dollar's decline.

The focus next week will be on three main variables:

First, whether there will be a breakthrough in the Strait of Hormuz. Iran and Oman are close to finalizing a shipping route agreement and establishing a shipping map, but the US, not involved in the negotiations, maintains a tough stance, and actual shipping volumes remain very low. If a joint statement is reached, the US signals a lifting of sanctions, and shipping volumes continue to improve, the geopolitical risk premium in oil prices is expected to fall, and risk appetite will recover.

Second, the Federal Reserve will release the minutes of the July meeting early Thursday morning. The market will be watching to see if, besides the public dissenters, more members are leaning towards a rate hike and how officials view the impact of energy and tariffs spreading to service prices.

Third, the flash PMI figures for Europe and the US released on Friday, if weaker, will further solidify expectations for the Fed's inaction in September.

Next week's key events overview (Beijing time):

Tuesday

20:15 US ADP Employment Change for the week ending August 1st

Wednesday

02:00 Federal Reserve releases minutes of July monetary policy meeting

20:30 US Initial Jobless Claims for the week ending August 15th, US Philadelphia Fed Manufacturing Index for August

Friday

07:30 Japan Core CPI YoY for July

21:45 US August Markit Manufacturing PMI Flash, US August Markit Services PMI Flash