On Tuesday (August 18, Beijing time) in early Asian trading, spot gold was trading around $4,420 per barrel. Gold prices rose on Monday, supported by a weaker dollar to its lowest level in more than two months and reduced market expectations for a Fed rate hike in September. Geopolitical risk aversion also supported gold prices. Trump called on Iran to "raise the white flag and surrender," threatening to bomb the Strait of Hormuz if Oman intervenes, while Iran has decided to shift its policy "from defensive to full-scale offensive." Geopolitical tensions helped oil prices recover, with US crude oil rising more than 3% on Monday, briefly reaching the $85 per barrel mark, and currently trading around $84.20 per barrel.

Key Focus Today

stock market

U.S. stocks closed lower on Monday, with the Dow Jones Industrial Average falling 0.51% to 53,459.78, the S&P 500 down 0.52% to 7,745.06, and the Nasdaq Composite down 0.31% to 26,644.91. Investors were cautious after weak July retail sales and employment data, awaiting quarterly earnings reports from major retailers such as Home Depot (Tuesday) and Walmart (Thursday) for clues about consumer spending trends. Meanwhile, amid fading hopes for a near-agreement between the US and Iran, the energy sector was the only one of the 11 sectors in the S&P 500 to close higher (up 0.87%), while all other sectors declined. Communication services and consumer staples both fell by about 1.5%, while financials and consumer discretionary fell slightly more than 1%. The technology sector fluctuated throughout the day but ultimately closed down nearly 0.2%, with significant divergence within the sector—the Philadelphia Semiconductor Index rose 1.6%, with Micron and Applied Materials rising 4% and 5.5% respectively, while the Software and Services Index plummeted 2.8%, with Microsoft and Meta Platforms both falling more than 3%, becoming the main drag on the market. Concerns about whether the high investment in AI will yield returns continued to escalate. In terms of individual stocks, shares of Latin American oil company Vista Energy, listed in the US, surged 5.6% after Peter Thiel acquired a 1% stake. Osaic Wealth's chief market strategist pointed out that summer trading volumes are typically light, and weak economic data coupled with the anticipation of consumer data has made the market somewhat sluggish. In addition, investors are also eagerly awaiting the earnings report to be released next week by Nvidia, the world's most valuable artificial intelligence chip manufacturer.

Gold Market

Gold prices rose on Monday, with spot gold closing up 0.93% at $4,416.43 per ounce, supported by a weaker dollar to its lowest level in more than two months and market expectations for a Federal Reserve rate hike in September falling to 33% from 51.2% the previous month. The global head of commodities strategy at TD Securities noted that the market is digesting a stagflationary environment due to weak employment data and expectations that the Federal Reserve will tolerate current inflation levels, while investors await the release of the Fed's July meeting minutes on Wednesday for policy clues. Geopolitically, warnings from senior Iranian officials that a diplomatic breakdown with the US would exacerbate tensions in the Strait of Hormuz and the region also added to safe-haven demand. Other precious metals rose in tandem, with spot silver up 1.7% to close at $65.77 per ounce, platinum up 1.3% to $1770.3, and palladium up 1.1% to $1326.92.

oil market

Oil prices rose on Monday, with Brent crude closing up 2.78% at $91.05 a barrel and WTI crude up 3.09% at $84.95 a barrel. Global supply concerns continued to escalate due to a combination of factors, including a bleak outlook for US-Iran diplomacy, Trump's threat to bomb Oman and his statement that Iran should "raise the white flag and surrender," and warnings from senior Iranian officials that failure to fully implement the interim agreement would exacerbate tensions in the Strait of Hormuz. The day coincided with the deadline for the US and Iran to reach a final agreement, but the deadlock remained unbroken, and shipping through the Strait of Hormuz slowed significantly—data showed only five commodity ships passed through on Saturday, zero on Sunday, compared to 31 the previous weekend. Abu Dhabi National Oil Company sold at a premium to Asian refiners for at least 14 million barrels of spot crude oil, while Saudi Aramco offered some buyers crude oil sources outside the Strait. The US Energy Secretary stated that Iran is currently unable to export oil, part of the US's "economic strangulation" strategy. Meanwhile, US strategic petroleum reserves fell by approximately 5.3 million barrels last week to 293.4 million barrels, the lowest level since December 1982. Analysts pointed out that with escalating rhetoric and increased shipping uncertainty, oil prices traded around $90, as the market weighed the possibility of further disruptions and the reopening of the Strait. Meanwhile, negotiations between Iran and Oman on a Straits management agreement continued, but were complex and time-consuming, limiting the potential for a significant drop in oil prices.

Foreign exchange market

The dollar index fell on Monday, hitting a two-month low of 99.28, as weak data including the first decline in U.S. retail sales in July in nine months, an unexpected drop in non-farm payrolls, and moderate inflation led traders to significantly lower their expectations for a Federal Reserve rate hike (the probability of a September rate hike fell from 52.2% a week earlier to 30.6%). Industrial Bank strategists pointed out that the market is concerned about the reaction to US economic growth and interest rate policy, while net long positions in the US dollar are extremely large and were squeezed in late August. Investors are preparing for next week's Jackson Hole symposium of the Federal Reserve for policy clues. The US dollar fell against the euro and the Swiss franc. The euro hit a two-month high against the dollar, rising 0.08% to close at $1.1578. The dollar fell 0.34% against the Swiss franc to 0.81085. The dollar rose slightly by 0.11% against the yen to 159.49, giving back earlier gains, as Japan's second-quarter economic growth of 1.1% at an annualized rate was weaker than expected, and US and Japanese authorities intervened in the foreign exchange market in late July to curb the yen's depreciation. Morgan Stanley believes that although the market has already priced in a more aggressive rate hike by the Bank of Japan, global risk appetite and expectations for the Fed's terminal interest rate may still push the dollar higher against the yen.

International News

Trump Calls for Iran to "Raise the White Flag and Surrender," Threatens Bombing if Oman Interferes in Strait of Hormuz US President Donald Trump said in a phone interview with Fox News on Monday that Iran should "raise the white flag" and formally surrender to end the nearly six-month-long US-Iran war. He reiterated his core objective of preventing Iran from acquiring nuclear weapons and acknowledged that direct communication with members of the Iranian Revolutionary Guard Corps had been established through other channels. Trump also issued a stern warning to Oman, stating that the US would bomb it if Oman "interferes" with efforts related to the Strait of Hormuz. This threat is particularly noteworthy because Oman is not a major party to the war, but rather shares the strait with Iran and has long played a mediating role. There has been no public order for a military attack on Oman. UK and Japan Reduce US Treasury Holdings in June US Treasury data shows that in June, both the UK and Japan reduced their holdings of US Treasury bonds compared to May. Japan held $1.117 trillion in US Treasury bonds, a decrease of $26.4 billion from May; the UK held $939.9 billion, a decrease of $8.7 billion. Trump Says He Will Not Seek Extension of Memorandum of Understanding with Iran On August 17, local time, US President Trump stated that the United States will not seek to extend the memorandum of understanding with Iran. The US and Iran released the official text of the memorandum of understanding on June 17, with Article 3 stating that the US and Iran pledged to negotiate and reach a final agreement within a maximum of 60 days. On August 17, the 60-day negotiation window set by the memorandum expired. Due to serious differences on issues such as the Strait of Hormuz, the US-Iran negotiations reached a stalemate and made no substantial progress. Iranian Official Says Deadline Set for US According to a senior Iranian official in an interview on August 17, Iran has set a "deadline of several weeks" for the US to fully implement the Iran-US memorandum of understanding, and Iran "will not allow the US to continue its maritime blockade indefinitely." The official stated that because "efforts to reach a permanent ceasefire agreement with the US have stalled," Iran has decided to shift its policy "from defensive to fully offensive"—if diplomatic efforts fail, Iran is prepared to escalate tensions in the Strait of Hormuz and the Middle East. Iran's timetable will be conveyed to the US through the mediator. (CCTV International News) US Media Reports US Government Reduces War Objectives Against Iran A CNN report on August 16th analyzed that the US government has further reduced its objectives in the war against Iran, indicating that the US may be preparing to back down or even significantly lower its expectations. With the US midterm elections approaching, the war with Iran is severely impacting the Republican Party's electoral prospects. Some senior Republican campaign advisors privately admitted that the Republicans' chances of retaining control of both the House and Senate are diminishing. Sources revealed that US President Trump has approved millions of dollars from his political action committee to support Republican candidates. (CCTV International News) Japanese Government Bonds Face Sell-Off; US-Japan Alliance Fails to Reverse Yen's Decline Due to renewed tensions in the Middle East and recent market concerns about a potential further deterioration in Japan's fiscal situation, Japanese government bonds have been sold off by investors. 17 On the same day, the yield on Japanese 10-year government bonds continued to rise, reaching a high of 2.93%, a new high in nearly 30 years. Meanwhile, just two weeks after the US and Japan jointly intervened in the foreign exchange market, the yen exchange rate again approached the low of 160 yen to the dollar. Industry analysts say that foreign exchange intervention can temporarily change the exchange rate, but it is difficult to change Japan's economic logic. Under the triple pressures of a weak yen, low growth, and high debt, the Japanese economy is facing increasingly severe tests. Some analysts say that the more Japan tries to prop up the economy through stimulus, the greater the pressure on its fiscal and exchange rates may become. Therefore, only the optimization of Japan's economic growth model and fiscal structure can stabilize the yen exchange rate. For the Japanese government... In other words, what Japan truly needs to address may never be just "defending the yen," but rather the ability of the Japanese economy to regain sustained growth. (CCTV Finance) The probability of a Fed rate hike in September is 35%, and the probability of at least one rate hike this year is 67%. According to CME's "FedWatch": The probability of the Fed keeping interest rates unchanged by September is 65%, and the probability of a cumulative rate hike of 25 basis points is 35%. The probability of the Fed keeping interest rates unchanged by October is 51.4%, the probability of a cumulative rate hike of 25 basis points is 41.3%, and the probability of a cumulative rate hike of 50 basis points is 7.4%. The probability of the Fed keeping interest rates unchanged by December is 32.8%, and the probability of at least a rate hike of 25 basis points is 67.2%.

Domestic News

China's innovative drug market is experiencing explosive growth . In the first half of the year, 38 globally novel innovative drugs were approved in China. Meanwhile, the total value of overseas licensing transactions for innovative drugs in China reached approximately US$110 billion, already accounting for 80% of the total value for the entire year of 2025, setting a new record for the same period. From the approval of the world's first CAR-T cell therapy drug for solid tumors to the record-breaking overseas licensing transaction value for innovative drugs, China's innovative drugs are entering a new stage of development. Data shows that as of the end of June, the National Medical Products Administration (NMPA) had approved 2,318 drug registration applications this year, including 38 globally novel innovative drugs. The total value of overseas licensing transactions for innovative drugs in China in the first half of the year reached approximately US$110 billion, already accounting for 80% of the total value for the entire year of 2025. From "following" to "running alongside," from single products to full-industry chain capabilities, Chinese innovative drugs are accelerating their global expansion. For an innovative drug to go from the laboratory to the market, it requires both original innovation and large-scale, low-cost manufacturing capabilities. Today, artificial intelligence is deeply embedded in the drug development process. At the National Key Laboratory for Neuro-Oncology Drug Development in Shanghai, AI is helping researchers reduce trial-and-error costs, from target discovery and molecular design to activity prediction and toxicology assessment. Researchers explained that previously, generating 1,000 small molecules took about 10 days; now, with the help of an AI-assisted drug design platform, it only takes about 2 minutes, increasing screening efficiency by nearly 30 times. If laboratory innovation is the source of new drug development, then large-scale, low-cost manufacturing is the "last mile" for innovative drugs to reach patients. As industry insiders say, China's innovative drugs are transitioning from being a follower of global innovation to becoming a co-builder alongside top global pharmaceutical companies. (CCTV Finance) Driverless vehicles are becoming a new logistics force; ride-hailing driverless vehicles are here. In March of this year, Shenzhen took the lead nationwide in opening nighttime road rights to functional driverless vehicles. In just a few months, driverless delivery has gradually moved from being an experiment by a few companies to entering more logistics scenarios. Late at night, the Shenzhen Longhua Shengli Transfer Center remains brightly lit. It handles an average of 150,000 parcels daily, with 60 driverless vehicles operating at night, averaging one departure every 10 minutes. In Shenzhen's Futian Transportation Hub, a pioneering "unmanned vehicle + subway" same-city delivery model has been launched nationwide. Unmanned vehicles, loaded with parcels from distribution points, drive into subway station entrances. After standardized processing, the cargo boxes are loaded into the logistics carriages of Metro Line 11, separating people and goods and minimizing interference. The unmanned vehicles typically arrive in just over ten minutes, making inter-store goods transfers more convenient and reducing operating costs by approximately 30%. Data shows that in July, Shenzhen's functional unmanned vehicles traveled approximately 40,000 kilometers at night, with 437 nighttime routes opened, a 32% increase month-on-month; 172 vehicles were deployed for nighttime operation, a 60% increase month-on-month. Zeng Qianyu, a first-level chief staff member of the Smart Transportation Division of the Shenzhen Transportation Bureau, stated that with the opening of road networks and the improvement of technological maturity, unmanned vehicles will gradually reach more corners of the city and guide the transformation of daytime logistics to nighttime logistics. (CCTV Finance)