China Aluminum Stocks Fall After Continuous Growth, SMM Says

The US July PPI data showed that inflationary pressures eased further: headline PPI was flat MoM, with the YoY increase pulling back to 4.7% from 5.5% in June; core PPI rose 0.2% MoM, below expectations of 0.3%, and the YoY increase fell to 4.2%. As a result, traders further lowered expectations for US Fed interest rate hikes in September.

Divisions within the US Fed over the next direction of monetary policy have become increasingly public. Cleveland Fed President Hammack reiterated a rate-hike stance, arguing that action is needed now, and warned of financial stability risks such as leverage in U.S. Treasuries and an AI bubble. Richmond Fed President Barkin, by contrast, advocated keeping interest rates unchanged, noting that inflation has mainly stemmed from temporary shocks, while also warning that AI investment and supply-chain issues could generate persistent price pressures.

Data released by the US Department of Commerce showed that retail sales fell 0.6% MoM in July, missing market expectations of a 0.1% increase and marking the largest decline since May last year. This unexpected contraction further clouded the outlook for US Fed rate hikes.