Daily Brief Macro: ECB Job Tightened By Jobs and more

• The EA labour market proved tighter than the ECB expected in Q2 as the unemployment rate held at a downwardly revised 6.2%. That is hawkish news to its neutral stance.
• Most countries still face falling unemployment, suggesting monetary conditions were slightly loose, and avoiding pressure to lower underlying inflation further.
• A hawkish domestic surprise should keep the ECB on hold, especially with the US trade policy risk fading. Passthrough of past cuts may mean the ECB needs to hike later.

• Magellan in the Know podcast discusses consumer sector turnaround opportunities
• Definition of a successful turnaround and examples of companies that do and do not meet the criteria
• Importance of consistent investment philosophy and focus on protecting against permanent capital loss

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• The Korean government announced disappointing new tax polices for dividends, capital gains, corporate, and higher transaction taxes on securities transactions.
• The new tax policies announced today is likely to have the biggest negative impact on the Korean financials with high dividend yields. 
• They will also likely to negatively impact other high dividend yielding stocks in Korea.

• The BoJ held rates steady at 0.5% while dramatically raising its fiscal 2025 inflation forecast to 2.7% from 2.2%, exceeding market expectations and signalling potential policy acceleration.
• The risk assessment shifted from downside-skewed to balanced, the most hawkish change in recent quarters, though Governor Ueda’s dovish press conference comments tempered near-term hike expectations.
• The Japan-U.S. trade deal reduces the increased tariff rate to 15%, materially improving the economic outlook. There is now an increased probability of rate hikes by year-end despite ongoing uncertainties.

• South Korea rebounds from a record low, with fund allocations rising from 8.6% to 10.4%—bringing net positioning close to equal weight for the first time in 17 years.
• Tech and Financials lead the revival, with SK Hynix surging in both price and ownership. Other names like NAVER and Hyundai Rotem show growing traction.
• Selectivity is back. While some stocks still lag, the shift toward Korea’s global leaders is helping EM investors rebuild exposure after years of structural underweight.

• China-U.S. /: U.S. and China buy more time with another 90-day tariff truce extension
• Flood /: Nursing home’s low-lying location turns deadly in Beijing floods
• Bribes /In Depth: When is a bribe not a bribe?

• The Politburo signalled only mild policy easing on July 30, disappointing investors hoping for stronger measures to address China’s property slump.
• China’s July NBS Manufacturing PMI fell, highlighting fading pre-tariff export momentum and persistently weak domestic demand conditions.
• Prices are below the 9‑day moving average, and a bearish MACD crossover suggests a potential short‑term pullback.

• Both the Federal Reserve and Bank of Japan kept interest rates steady, despite inflationary pressures 

• The U.S. faces rising debt servicing costs due to heavy bond issuance, reinforcing the case for sustained higher interest rates

• Expect further normalization in rates globally, with a likely rise in the 10-year U.S. Treasury yield and a bullish outlook on the Japanese Yen.