Daily Briefing | 2026-08-28: Hawkish Trends Rise Again, Nvidia Supports AI Narrative

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Today's main theme

Over the past 24 hours, global markets have returned to three main themes: "how long can high interest rates last, whether AI growth can offset macroeconomic pressures, and whether energy risks have truly eased." US PCE inflation remained significantly above the 2% target in July, and several Federal Reserve officials continued to send hawkish signals at the Jackson Hole meeting, indicating that the market's previous expectations for rapid easing are still facing revision. Meanwhile, Nvidia's doubling of revenue and rapid growth in its data center business once again demonstrated that investment in AI infrastructure has not cooled down, providing support for technology stocks. In Asia, the Bank of Korea raised interest rates for the second consecutive time, indicating that some economies have once again prioritized inflation and financial stability over growth. China has launched a year-long special campaign on automotive quality, shifting the focus of competition from price to safety, reliability, and long-term quality. In the Middle East, Iran and Oman continue negotiations on shipping arrangements in the Strait of Hormuz, but navigation is far from returning to normal, and the energy risk premium has not truly disappeared.

Five key news items

1. Jackson Hole sends hawkish signals: US inflation remains a core policy constraint.

Following the opening of the Jackson Hole Global Central Bank Conference on August 27, several Federal Reserve officials publicly emphasized that inflation risks have not yet been eliminated. Kansas City Federal Reserve President Jeffrey Schmid stated that the current policy interest rate of 3.50%-3.75% may not be sufficient to significantly constrain the economy, and he tends to raise interest rates further if inflation persists. Cleveland Fed President Beth Hammack also warned that inflation above 2% for several consecutive years would damage the Fed's credibility. The previously released U.S. PCE price index rose 3.7% year-on-year in July, making it difficult for the market to take "inflation under control" as the benchmark scenario. What really matters here is not the wording of a meeting, but the repricing of the interest rate path: if future data continues to be bullish, long-term US Treasury yields, the US dollar, and global financing costs may remain high, and overvalued growth stocks and highly leveraged assets will face higher discount rate pressure. The most crucial points to watch next are Federal Reserve Chairman Kevin Warsh's formal speech in Jackson Hole, as well as employment and inflation data ahead of the September policy meeting.Reuters

2. Nvidia's quarterly revenue surpassed $96.2 billion, and AI capital spending continues to accelerate.

Nvidia announced its results for the second quarter of fiscal year 2027, with quarterly revenue reaching $96.2 billion, up 106% year-over-year and 18% quarter-over-quarter. Data center revenue reached $89 billion, a year-on-year increase of 117%. The company expects revenue of approximately $108 billion next quarter, and made it clear that the guidance does not include data center computing revenue from China. More notably, Nvidia also disclosed that the Vera Rubin platform has entered the full-scale mass production stage and is promoting capital cooperation with companies including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, with plans to mobilize more than $500 billion in third-party funding to build AI infrastructure in the long term. This indicates that the AI market has expanded from simply "buying GPUs" to a complete capital expenditure chain encompassing data centers, networks, power supply, financing, and cloud computing. The risks are equally obvious: when earnings expectations and valuations are raised to extremely high levels, any slowdown in orders, decline in gross profit margins, or tightening of the financing environment could amplify stock price volatility. The next questions to be observed are whether the $108 billion revenue guidance can be met, whether Rubin's capacity ramp-up is smooth, and whether cloud vendors' huge capital expenditures will continue to translate into real AI revenue.NVIDIA

3. The Bank of Korea raised interest rates for the second consecutive time, indicating signs of a renewed tightening of the policy environment in Asia.

The Bank of Korea raised its benchmark interest rate by 25 basis points to 3.00% on August 27, marking its second consecutive rate hike. The central bank also raised its 2026 economic growth forecast from 2.6% to 3.3%, while maintaining its inflation forecast at 2.7%, indicating that South Korea's policy challenges have shifted from simply "stabilizing growth" to preventing demand, housing prices, and inflation from forming a positive feedback loop again. South Korea's real estate market and exchange rate stability are important backgrounds for this round of tightening: if economic growth is stronger than previously expected, and housing prices and inflation are difficult to decline, the central bank's continued easing could bring new pressures on asset prices and financial stability. For Asian markets, this decision has broader significance—with US interest rates still high, some Asian central banks may not have enough room to cut interest rates first, and may even need to tighten in reverse to stabilize their currencies and inflation expectations. Next, we need to pay attention to South Korean housing prices, core inflation, the trend of the South Korean won, and whether there will be a third interest rate hike this year.Reuters

4. China launches special campaign on automobile quality: Following the price war, regulatory focus shifts to safety and durability.

Chinese regulators have launched a year-long special campaign on automotive product quality and safety, requiring automakers to conduct comprehensive self-inspections of product quality, reliability, durability, and new technology testing, and to proactively submit recall plans if defects are discovered. This move comes against the backdrop of intense competition in the new energy vehicle industry, the rapid popularization of intelligent driving functions, and an increase in large-scale recalls. Reuters reported that recent recalls involving Tesla and eight Chinese automakers have reached approximately 4.3 million vehicles. The policy logic is clear: as the industry moves from "grabbing market share and competing on price" to a more mature stage, regulatory authorities begin to require companies to put costs, R&D, software updates, and intelligent driving capabilities back within the constraints of safety and quality. In the short term, this will increase the costs for automakers in testing, quality control, and after-sales recalls; In the medium to long term, this may accelerate industry clearing, giving companies with stronger scale, R&D systems, and supply chain management an advantage. For the capital market, the valuation logic may gradually shift from delivery volume to gross profit margin, quality costs, and brand trust. The most noteworthy issues going forward are the strength of local regulatory enforcement, intelligent assisted driving standards, and whether new centralized recalls will emerge.Reuters

5. Negotiations in the Strait of Hormuz are progressing, but navigation is still significantly below normal levels.

Iran is working out conditions for reopening the Strait of Hormuz and discussing with Oman a shipping lane that would pass through both Omani and Iranian waters. Iran's conditions include an end to regional wars, the lifting of port blockades, economic sanctions, and compensation, but specific arrangements have not yet been fully agreed upon. Meanwhile, Kpler data shows that only 10 commodity ships were visible passing through the strait the day before August 27. Although this was higher than the 8 ships the previous day, it was still lower than the moving average of 15 ships on the 10th, indicating that there is still a significant gap between "progress in diplomatic negotiations" and "the return of energy transportation to normal". Before the conflict, the Strait of Hormuz handled about one-fifth of the world's oil and liquefied natural gas transportation. Therefore, even if oil prices fall in the short term due to news of negotiations, actual shipping restrictions will continue to support the energy risk premium. If shipping is attacked again or negotiations break down, oil prices could rebound rapidly, which could then be reflected in global inflation and central bank policy. The most important things to observe next are the actual number of ships passing through, whether the Iran-Oman mechanism can be implemented, and whether an enforceable political arrangement has emerged between the United States and Iran.Reuters

RMB to Australian Dollar Exchange Rate Card

According to the latest foreign exchange rates on the Bank of China's official website,28-Aug-2026 06:40:45The Australian dollar spot selling price is 485.95 RMB / 100 AUD。 Converted accordingly:

• 1 Australian dollar ≈ 4.8595 RMB
• 100 AUD ≈ 485.95 RMB
• 1000 Australian dollars ≈ 4859.50 RMB

This is the Bank of China's spot selling price, which is used as a reference for bank quotes when purchasing Australian dollars in RMB. It is not the same as the market central parity rate. Actual transactions may still vary slightly depending on channels and timing.Bank of China Foreign Exchange Rates

Market Correlation and Today's Observation

There is a clear macroeconomic transmission chain between today's news items: US inflation remains high, making it difficult for global risk-free interest rates to decline rapidly; High interest rates should have suppressed the valuation of growth stocks, but Nvidia still demonstrated with extremely high revenue growth that AI investments have strong enough profit expectations, thus temporarily offsetting the pressure of rising discount rates. The problem is that this balance is highly dependent on the continued rapid growth of AI capital expenditures, and once the growth rate declines, valuation corrections can be very rapid. South Korea's continuous interest rate hikes further demonstrate that high inflation and financial stability issues are not unique to the United States, and that funding costs in Asia may remain higher than previously expected by the market.

The product side cannot be ignored either. The fact that navigation through Hormuz has not truly resumed means that oil prices may still suddenly rise; If energy prices push up global inflation again, the policy space of the Federal Reserve and other central banks will further narrow. For the Australian dollar, energy and commodity prices are typically favorable to Australia's terms of trade, but global risk aversion and a stronger US dollar may put negative pressure on the Australian dollar. Therefore, the RMB against the Australian dollar will not be determined solely by China's own factors in the short term. The upgrading of China's automotive regulations reflects another structural clue: policies are driving manufacturing competition from low-price expansion to quality, safety, and technological reliability. This is beneficial to the industry's long-term efficiency, but in the short term, it may increase corporate costs and widen the gap between leading and weaker manufacturers. The most noteworthy topics to follow today are the impact of Warsh's speech on US Treasury yields and the US dollar, the sustainability of tech stocks following Nvidia's earnings report, and whether there has been a continuous improvement in actual ship traffic in Hormuz.

Cover image:Moshafa / Pexels