China Industrial Profits Fall 1.7% in July, Defying Expectations; Hang Seng Index Experiences Mixed Movement

By Bob Mason | Published August 27, 2025, 02:36 GMT

China’s industrial profits drop 1.7% in July during the January to July period. The fall comes close to the 1.8% that experts had predicted. Tariffs, lower global demand, and price cuts from fierce competition add weight to the loss.

Industrial Profits and Margins Under Pressure

The drop in profits is a sign of weakness in China’s manufacturing sector. Companies now face high input costs and lower selling prices. US tariffs and soft export numbers push margins down. These pressures also make it hard for firms to win new business.

Manufacturing Sector Weakness Reflected in PMI Data

China’s S&P Global Manufacturing Purchasing Managers’ Index fell from 50.4 in June to 49.5 in July. The score slipping below 50 shows that manufacturing activity is contracting. Export orders have dropped for four months in a row.

Key points in the PMI report include:
• Export orders falling for a fourth month
• Input prices rising with higher raw material costs
• Companies cutting selling prices to deal with competition

Lower demand and squeezed margins force manufacturers to reduce their workforce. Fewer jobs add to the problems in the labor market and may slow Beijing’s drive to boost domestic spending.

Labor Market Challenges Mount

China’s job market shows signs of strain. The overall unemployment rate rose to 5.2% from 5.0% in June. Youth joblessness climbed from 14.5% to 17.8% at the same time. Many new graduates now face a hard search in a tight job market. Policymakers are working on plans that bring more jobs and steady the economy.

Beijing’s Policy Response to Economic Headwinds

With the economic speed dropping in the third quarter, Premier Li Qiang has announced plans to increase government spending, steady the housing market, and fix work market issues. Experts expect Beijing to introduce more support measures this year to meet the 5% GDP goal for 2025. Natixis Asia Pacific Chief Economist Alicia Garcia Herrero said:
"China may meet its 2025 growth aim if more stimulus comes; the later months must face risks from trade issues and falling prices. The government is ready to add more steps when needed."

Market Reaction and Outlook

While profits fell less than expected, the market did not show full confidence. The Hang Seng Index reached 25,653 and then dropped to 25,565. It finally closed 0.26% higher at 25,592. Meanwhile, Mainland China’s CSI 300 and Shanghai Composite Index dropped slightly by 0.05% and 0.18%.

Looking ahead, the National Bureau of Statistics Manufacturing PMI for August and new trade talks with the US will shape views. Reports say China’s trade official Li Chenggang may soon visit Washington to restart discussions. A PMI score above 50 could ease worries, while a lower score might push Beijing to push stronger measures to boost growth.

About the Author:
Bob Mason has more than 28 years of experience in finance. He studies money, raw goods, stocks, and major economic trends across Europe and Asia.

For more detailed reading and current market views, visit FXEmpire’s Economic Calendar.

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Powell Signals Possible Fed Rate Cut as Policy Risks Shift After Jackson Hole Speech

By James Hyerczyk | August 22, 2025, 14:27 GMT

At the Jackson Hole Economic Symposium, Powell spoke in a clear, tight manner. He flagged that the Fed may cut rates soon. He did not promise a change, but his speech showed that the Fed sees more risk to growth. The market now links his words with a possible rate cut at the September FOMC meeting.

Cautious Yet Dovish Tone from Powell

Powell chose his words with care. His calm tone met market views that hint at softer policy soon. He tied today’s economic shifts to growing risks for growth. Powell said the risks might push the Fed to adjust its policy. His words kept the option for a cut open while urging care in each step.

Market Reacts: Stocks Rally, Yields Decline

Soon after Powell’s talk, U.S. stocks climbed. The Dow rose by over 600 points in one day. The two-year Treasury yield dropped 8 basis points to 3.71%. These moves reflect market ties between his words and a coming rate cut. Powell made it clear that future moves will rest on fresh economic data.

Mixed Economic Signals: Solid Labor Market, Inflation Risks

In his talk, Powell painted a picture that mixed strength with warning. The labor market stayed strong and overall growth held steady. Yet he pointed to trade and tariff risks that may push prices up. Supply problems from trade issues add pressure on inflation. Powell said reset time is needed before these factors calm down. His tone shows that the Fed will work from real data each day.

Revisiting Fed Framework and Maintaining Credibility

Powell recalled the 2020 move to flexible average inflation targeting. This plan let inflation rise above 2% for a time. He admitted that an unexpected run in prices after the pandemic forced a tough look at the plan. The goal remains a steady 2% inflation mark. Powell’s words stressed that the Fed must keep its promise on price stability while watching for growth risks.

Independence Amid Political Pressure

Powell also addressed the topic of politics. He stated that the Fed makes choices from data alone. His clear words push back on claims of political influence. In doing so, he upheld the idea that the Fed’s work rests on economic facts.

Looking Ahead: Data the Deciding Factor for September

Powell kept his focus on data. He said that future moves depend on fresh numbers, especially from inflation and consumer spending. Even though many now tie his words to a rate cut, the Fed waits for clear signals. Analysts see a chance to buy during market pulls when the data comes in weak. The big test lies ahead in September, with each number playing its part.

Summary

Powell’s Jackson Hole talk hints at a near-term rate cut as the Fed sees extra risk for growth. Markets pushed stocks up and pulled yields down, yet the Fed stands by a data-first path. Investors should look to upcoming reports as the September meeting draws near.

About the Author:
James Hyerczyk is a market analyst and teacher from the U.S. He brings over 40 years of experience in following price moves and chart trends. He has written two books on technical analysis and works with both futures and stocks.

For more detailed economic calendars and market forecasts, visit FXEmpire.

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US Jobless Claims Increase Amid Weakening Regional Manufacturing and Rising Inflation Pressures

Date: August 21, 2025
Author: James Hyerczyk

Recent US numbers show the link between rising jobless claims and slowing growth in manufacturing. Labor market data now joins manufacturing figures in pointing to a softer economy. Traders worry as the Federal Reserve reads these signals when it sets its next steps.

Rising Jobless Claims Signal Cooling Labor Market

Initial US claims reached 235,000 for the week ending August 16. This number beats forecasts of 225,000 and sits at the highest level since June. The rise builds week after week. Continuing claims now total 1.97 million; they top past expectations and hit a peak last seen in November 2021. These signs tie more workers to unemployment benefits. They also connect weak labor demand with possible market shifts ahead of a Federal Reserve meeting. The data keep both traders and analysts alert.

Manufacturing Sector Outlook Deteriorates

The August Manufacturing Business Outlook Survey shows manufacturing losing ground. The overall activity index falls from 15.9 to -0.3. New orders sink into negative figures at -1.9 for the first time since April. Shipments drop to 4.5, while the employment index falls to 5.9, yet it still hints at some hiring.

A slight rise in the average workweek cannot mask the decline in new orders. Seventy-four percent of companies report no changes in employment, while only 16% see more workers. This pattern ties low order levels to weak regional production in the third quarter.

Inflationary Pressures Remain Elevated

Prices keep rising as manufacturers face higher bills and costs. The prices paid index jumps by 8 points to settle at 66.8, a level unseen since May 2022. Meanwhile, prices received by manufacturers grow to 36.1. Firms now expect 12-month cost rises to reach 4.1%, up from 3.8% back in May.

More than half of the companies expect costs to rise over the next six months. Seventy-one percent see competitors raise prices soon. Even though forecasted wage growth slows from 4.0% to 3.5%, high input and output price expectations hold inflation high.

Market Implications: Cautious Sentiment on Economy and Fed Policy

The mix of rising unemployment claims, soft manufacturing orders, and ongoing inflation yields a mixed outlook. Firms keep a positive view for the future even as current figures show slowing growth. Analysts see these links as a sign of trouble for US equities and industrial stocks. All eyes now turn to upcoming job reports and inflation readings to fix views on Fed moves in this shifting scene.

About the Author

James Hyerczyk is a skilled technical analyst and educator based in the US. He brings over 40 years of experience with market charts and price trends. He has written several books and knows the futures and stock markets well.

For ongoing economic news and analysis, visit FXEmpire’s Economic Calendar and Market Forecasts.

Disclaimer: This article serves for educational and informational aims. It should not stand as investment advice. Be sure to do your own research and talk with financial experts before taking any action.

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FOMC Minutes Reveal Fed Members Expect Higher Inflation Ahead

August 20, 2025 – FXEmpire

The latest FOMC minutes of the Federal Reserve give key views on inflation and the economy. Fed members see inflation rising soon. They point to higher tariffs as a cause of the change.

Tariff Effects Becoming More Evident

The minutes show that tariffs affect the economy more each day. Recent data shows goods get more expensive. Fed members see that price changes for consumers will not come at once. They think the change will grow slowly. Business actions, such as building up stock, add to the delay. Firms have raised inventories before tariffs change. This stock buildup and slow shifts in input costs make price rises occur bit by bit.

Who Bears the Tariff Costs?

Fed members see that American businesses and buyers pay most of the extra costs. Foreign exporters cover only a small share. This mix makes it likely that companies pass on higher costs to buyers step by step.

Economic Uncertainty and Inflation Risks

The minutes show that uncertainty about the economy stays high. Some members worry that inflation might go above their current views. These risks could make rules stick tighter if prices keep rising. Investors now watch more closely for any move in policy.

Market Reactions: Stocks and Currency Movements

After the minutes came out, markets reacted:

• The S&P 500 Index dropped toward the 6375 mark. Traders read the news as a sign that the Fed will keep a strict focus on rising prices. They worry that rate cuts in September might be postponed.
• The U.S. Dollar Index made a small bounce after dropping in an earlier session. Traders watch the dollar, especially with fresh political news coming in.
• Gold prices stayed near $3345 per ounce. Since gold reacts to moves in the dollar, traders will keep an eye on how the currency shifts.

Looking Ahead

The minutes show that the Fed keeps a close watch on inflation risks from tariffs. Traders will study upcoming data and Fed news for clearer signs on how inflation and rates may move. For more details on economic events and how they could change the market, watch the economic calendar and related analysis.

About the Author:
Vladimir Zernov is an independent trader with over 18 years of experience in stocks, futures, forex, indices, and commodities. His work focuses on both short-term and long-term market trends.

Disclaimer: The information provided herein is for educational and research purposes and does not constitute financial advice or investment recommendations. Trading involves risk, and individuals should do their own research before making financial decisions.

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UK Inflation Uptick Clouds Bank of England Outlook, GBP/USD Eyes $1.35 Breakout

By Bob Mason | Updated: August 20, 2025, 12:29 GMT+00:00

UK inflation data now adds doubt to the Bank of England’s future plans. Inflation moved higher in July, a sign that the central bank’s careful view faces more challenges amid mixed signals. In currency markets, traders watch the British pound against the US dollar as it nears a key resistance at $1.35. ### UK Inflation Rises in July, Challenging Rate Cut Expectations

In July, inflation in the UK stepped up. The Consumer Prices Index climbed to 3.8% year-on-year from 3.6% in June. Core inflation, which leaves out energy, food, alcohol, and tobacco, moved to 3.8% from 3.6%. Monthly, prices went up 0.1% after a 0.3% rise in June.

The Office for National Statistics shows that when owner-occupier housing costs are added, the CPIH reached 4.2% over twelve months, a small rise from 4.1%. Airfares pushed transport costs up, which acted against lower costs for housing and household services.

Core CPIH year-on-year fell slightly to 4.2% from 4.3%, while price rises in services grew to 5.0% from 4.7%. These numbers show that inflation problems continue across different parts of the economy, making it hard for the BoE to balance price control with growth.

Economic Context: Mixed Signals from GDP and Labor Market

Recent data from GDP and the labor market show mixed results. The UK economy grew by 0.4% in June after a 0.1% drop in May. Second-quarter GDP grew 0.3%, a slower pace compared to 0.7% in the first quarter. This slow growth raises worries about a stagnant economy even with high inflation.

Data on wages show that average earnings, with bonuses, moved up by 4.6% year-on-year in June, down from 5% in May. This soft wage growth may lower consumer demand and stir inflation concerns.

James Smith, Research Director at the Resolution Foundation, said, "Overall, Q2 GDP was better than many feared. Growth has held up okay this year and Rachel Reeves will stress the UK’s good spot among the G7. But stagnation remains a big problem with the risk of a lower growth forecast looming over the Autumn Budget."

BoE’s Monetary Policy Outlook Clouded by Inflation and Growth Dynamics

Last week, the Bank of England cut its main interest rate by 25 basis points to 4%. The vote was 5-4 and showed deep differences over inflation risks and wage trends. The rise in July inflation lowers the chance of another cut in September, even if some experts see easing later in 2025. ING Economics doubts that the BoE will change plans because of better GDP figures. One expert noted, "This might boost those who favor fewer rate cuts now. But upcoming inflation and jobs data will matter more." Analysts point out that GDP in the second half of the year may show weaker growth since the labor market faces more strain, with payrolled jobs dropping in eight of nine recent months.

The dates and size of future rate cuts will depend on coming inflation and employment reports. For now, the July figures push policymakers to be cautious about fast cuts.

GBP/USD Reacts to Inflation Data, Eyes $1.35 Breakout

Currency traders responded quickly to the new inflation data. Before the figures, GBP/USD hit a high of $1.34927 before falling to $1.34616. After the report, the pair slipped to $1.34757, then quickly rose to $1.34980. As of midday on August 20, the value held steady at about $1.34907. This movement shows that traders now do not expect an immediate rate cut by the BoE.

Market eyes now turn to August’s flash private sector PMIs due on August 21. Since UK services account for more than 70% of GDP, a clear drop in the Services PMI might push a rate cut in November. Signals from input prices, output prices, and employment in the sector will be watched closely for hints that inflation is easing.

Lower prices and cuts in jobs in services could push the BoE toward a softer stance. This may put pressure on the British pound.

Outlook

The new inflation figures mark ongoing price challenges in the UK even as growth slows. With this uncertain path, market watchers will track new economic data to see what the BoE does next and how GBP/USD handles the next test near $1.35. For live updates on BoE plans, UK inflation, and currency forecast news, follow FXEmpire’s real-time analysis and coverage.

About the Author

Bob Mason has over 28 years of work in the financial world. He has worked with global rating agencies and multinational banks. He now focuses on currencies, commodities, alternative asset classes, and global equities with a focus on European and Asian markets.

Full money-growing playbook here: 
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