Group 1: Tariff Imposition - The Trump administration announced new tariffs on products from several countries, including a 50% tariff on all Brazilian products starting August 1, 2025, which exceeded market expectations [2] - Tariffs of 25% will be imposed on products from Brunei and Moldova, 30% on Algeria, Iraq, Libya, and Sri Lanka, and 20% on the Philippines [2] - The announcement led to a significant depreciation of the Brazilian real, with the USD/BRL exchange rate surpassing 5.60, reflecting a nearly 2.9% increase in the dollar's value [2] Group 2: International Reactions - Leaders from Japan and South Africa expressed regret and deemed the U.S. tariff actions as unreasonable, indicating a potential need for stronger countermeasures [3] - The European Union is preparing to respond to the U.S. tariffs, with ongoing disputes primarily focused on specific industries such as steel, automotive, and pharmaceuticals [3] - Analysts suggest that the trade war initiated by the Trump administration may accelerate a trend of "de-Americanization" as countries reassess their economic dependencies on the U.S. [3] Group 3: Federal Reserve Criticism - The Trump administration intensified criticism of Federal Reserve Chairman Jerome Powell, claiming that current interest rates are at least 3 percentage points too high [4] - If the Fed were to lower rates as Trump suggested, it would bring rates down to a range of 1.25%-1.50%, the lowest in three years [5] - The administration's criticism is linked to rising national debt levels due to the passage of the "Big and Beautiful" bill, prompting urgency in addressing interest rates [6]

Group 1 - The U.S. government, led by President Trump, unexpectedly extended the deadline for "reciprocal tariffs" to August 1, indicating a shift in trade policy just hours before the original deadline [3][5] - The U.S. trade deficit surged by 18% year-on-year in Q1 2025, with over 35% attributed to trade with China, highlighting a structural imbalance in the U.S. economy [5] - The potential for significant economic backlash from tariff increases is evident, as major retailers like Walmart and Home Depot warned of price hikes of 15%-20%, which could severely impact low- and middle-income families [10] Group 2 - China's strategic advantage in rare earth resources is significant, with the U.S. relying on China for 83.7% of its rare earth imports, and up to 97% for heavy rare earths [12][15] - The U.S. semiconductor industry faces a 20% capacity shortfall if tariffs are imposed on Malaysia, which supplies 40% of advanced packaging materials globally [7] - The trade negotiations between the U.S. and China have seen China leverage its resource control to negotiate favorable terms, such as linking rare earth exports to the lifting of U.S. technology restrictions [17][18] Group 3 - The U.S. tariff policy is reshaping global trade dynamics, prompting retaliatory measures from other countries, including a 25% retaliatory tariff from the EU on U.S. agricultural products [19] - Emerging market countries are increasingly seeking to reduce reliance on the U.S. dollar, with initiatives like the BRICS currency settlement mechanism and ASEAN's digital trade negotiations [21][23] - China's investments in ASEAN countries increased by 37% in the first half of 2025, focusing on critical sectors like semiconductors and renewable energy, thereby enhancing its strategic positioning against U.S. tariffs [25]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Global financial assets are being reallocated, with funds flowing to Chinese assets, and A-shares are expected to evolve into a capital-driven upward trend [2][3][4] - Multiple factors, including US debt monetization, countervailing tariffs, crude oil price surges, and China's anti-involution efforts, are contributing to a global inflationary trend [2][14][18] - Various factors such as Fed rate cut expectations and China's anti-involution are influencing the prices of different asset classes, including equities, commodities, gold, bonds, and foreign exchange [3][4][32] Summary by Related Catalogs Geopolitical Situation - The Israel-Iran ceasefire is a prelude to a larger conflict, and Iran may become "Gaza-like." Israel's actions against Iran are likely to occur in four steps [10] Crude Oil Market - The crude oil price surge in June was likely the first wave. In the context of the Israel-Iran conflict, future disruptions to Iran's oil production and potential blockades of the Strait of Hormuz could cause oil prices to skyrocket, similar to the 1970s [12][16] Global Inflation - US debt monetization, countervailing tariffs, crude oil price pulses, and China's anti-involution efforts are jointly contributing to a global inflationary curve [2][14][18] Global Financial Asset Reallocation - Global investment institutions are "de-Americanizing," selling US stocks, bonds, and the dollar, and reallocating funds to Chinese assets [2][20][23] Equity Market - Global financial asset reallocation and the migration of household savings and insurance funds to the stock market are driving A-shares towards a capital-driven upward trend [2][3][32] Commodity Market - China's anti-involution and Fed rate cut expectations are expected to help industrial product prices recover [3][32][36] Gold Market - Stablecoins are replacing the dollar in trade settlements, accelerating the decline of the dollar's credit, while gold is still in a technical adjustment phase [3][41][43] Bond Market - With a large-scale bond issuance and the central bank removing the mention of "timely reserve requirement ratio and interest rate cuts," the bond market faces certain pressures [44] Foreign Exchange Market - China is expected to achieve a double surplus in trade and capital, and the offshore RMB exchange rate is expected to continue strengthening [3][4][45] July Outlook for Various Asset Classes - **Equity Assets**: Global financial asset reallocation and the migration of household savings are driving funds into Chinese equities [4][46] - **Commodities**: Anti-involution and Fed rate cut expectations are expected to boost industrial product prices [4][36][46] - **Gold Assets**: Stablecoins are replacing the dollar in trade, and gold is in a technical adjustment [4][41][46] - **Bond Assets**: The central bank's policy adjustment and large-scale bond issuance are putting pressure on the bond market [4][44][46] - **Foreign Exchange Assets**: A double surplus in trade and capital is expected to strengthen the offshore RMB [4][45][46]

Report Information - Report Title: Global Economic and Major Asset Semi-Annual Report [1] - Date: June 26, 2025 [2] - Analyst: Yujunli [3] - Contact Email: yujunli@greendh.com [3] Key Points Global Economic Landscape - Global manufacturing PMI contracted in April and May due to reciprocal tariff impacts [7] - On May 12, China and the US reached an agreement in Switzerland to significantly reduce reciprocal tariffs, with tariffs lowered to 10%, and an additional 24% of reciprocal tariffs to be discussed after 90 days. The 20% tariff imposed by the US on China over fentanyl will be negotiated separately. The first meeting of the China-US economic and trade consultation mechanism in London (June 9 - 10) reached a principled framework agreement [11] Capital Flows - According to a Citi report on May 28, large global funds are collectively "de-Americanizing", reducing allocations in US stocks, bonds, and the US dollar, and increasing allocations in European and Asian stocks, gold, and non-US currencies. Institutions' overall allocation of US stocks has dropped to a neutral level, making it the least favored market globally. There is a consensus among large global funds to "buy Asia and Europe". European and Japanese stocks have been upgraded, and emerging market stocks remain overweight [12] - Institutions generally reduced holdings of US and Japanese bonds and shifted to increasing positions in UK, German, Italian government bonds, and emerging market local bonds [13] - In the foreign exchange market, selling of the US is more evident. The US dollar continues to be under-allocated, while the euro and yen continue to be added to portfolios [14] - According to a report from Bank of America on June 16, global central banks have sold $48 billion worth of US Treasury bonds since the end of March, and foreign investors' holdings in the Fed's reverse repurchase facility have also decreased by approximately $15 billion [15] US Economic Indicators - In May, US manufacturing prices continued to rise rapidly, and service prices accelerated their increase [23] - US retail and food sales reached $715.4 billion, remaining at a high level, with a year-on-year increase of 3.3% in the current month, indicating strong consumer demand [26] - In April, the monthly value of US goods imports recovered to normal at $277.9 billion, mainly affected by reciprocal tariffs [29] - In April, the monthly value of US consumer goods imports recovered to normal at $69.8 billion, with a year-on-year growth rate of 5.2%. US retailers stocked up on a large scale before the implementation of reciprocal tariffs, and imports decreased significantly after the tariffs were imposed in April [32] - In April, the monthly value of US intermediate goods imports was $51.9 billion, showing a significant month-on-month decline due to tariff impacts. Manufacturers stocked up on a large scale before the tariffs [35] - In April, the monthly value of US capital goods imports was $90.5 billion, second only to March, with a year-on-year growth rate of 18.2%, indicating an acceleration in the reshoring of US manufacturing and the "re-industrialization" of the US [38] - In April, the monthly value of the US goods trade deficit decreased significantly to $87.4 billion due to reciprocal tariff impacts [41] - In April, the monthly value of US service exports reached a new high for the year at $98.8 billion, indicating the continued strength of the US service industry [44] - In May, the year-on-year growth rate of the US core CPI was 2.8%, the same as the previous value, with a month-on-month increase of 0.2%. The market expects the Fed to start cutting interest rates in September [47] - In May, the US PPI was 2.6% year-on-year and 0.1% month-on-month [50] - In April, the number of job openings in the US increased to 7.39 million, and the number of hires reached a one-year high, indicating a tightening labor market [53] - In May, the hourly wage of US non-farm enterprises was $36.24, with a year-on-year growth rate of 3.9% [56] - In April, the year-on-year growth rate of US wholesalers' inventories was 2.3%, and that of manufacturers' inventories was 0.9%, indicating an active inventory replenishment phase [59] Other Regions' Economic Indicators - In May, the monthly value of China's manufacturing fixed investment was 2.93 trillion yuan, with a year-on-year growth rate of 7.8%. China continues to make large-scale investments in emerging and future industries [62][65][68] - The ceasefire between Israel and Iran boosted global risk appetite [71] - The China-US reached a phased framework agreement, stabilizing global economic expectations. The final value of the US Markit Manufacturing PMI in June was 52.0, continuing to expand. The manufacturing material procurement price index rose significantly by 5.4 points to 70, the largest increase in four years [72] - The Swiss National Bank cut interest rates by 25 basis points to 0% [73] - China carried out comprehensive rectification of involutionary competition. The European Central Bank has cut interest rates eight times. Germany significantly expanded its military by 30%, driving the recovery of European manufacturing [74] - Elon Musk's Robotaxi was put into operation [75] Major Asset Strategies - The rebound of US stocks after April was mainly driven by retail investors, while institutions withdrew one after another, and short positions of hedge funds reached a new high [78] - The US "Great Beauty" tax cut plan passed in the House of Representatives, and the yield of 30-year US Treasury bonds once exceeded 5% [80] - Inflation in Japan rose, and the yields of 40-year and 30-year Japanese government bonds increased significantly [83] - As a representative of China's offshore assets, the Hang Seng Tech ETF is expected to benefit from the reallocation of global financial assets [86] - Driven by the continuous inflow of various funds, the A-share market is expected to shift from a volatile recovery to a trending upward market. There is a bullish view on Chinese equity assets [89] - The savings of the household sector continue to shift to high-dividend sectors, and the Bank ETF has continuously reached new highs [91] - In May, the issuance of China's 50-year Treasury bonds was oversubscribed, and long-term Treasury bonds are under pressure. The flattening of the domestic yield curve is unsustainable [93] - The ceasefire between Israel and Iran is only a temporary respite, and peace is short-lived. Iran is likely to face a situation similar to Gaza. The pulse increase in crude oil prices in June is likely to be just the first wave [96] - Gold is still in a technical adjustment phase, mainly fluctuating within a range [99] - The RMB is expected to achieve a double surplus in trade and capital accounts, and there is continued optimism about the RMB [102]

Group 1 - The core issue of the negotiations revolves around the U.S. desire for China's rare earth resources, which are critical for various industries, including military and technology [1][12] - China has implemented export controls on seven types of heavy rare earths, significantly impacting U.S. manufacturing, with over 80% of global rare earth processing capacity located in China [1][12] - The U.S. military and technology sectors are highly dependent on rare earths, with a reliance rate exceeding 60%, leading to supply chain vulnerabilities for companies like Toyota and Boeing [1][9] Group 2 - The U.S. attempted to leverage three major strategies: upgrading AI chip bans, halting engine supplies for China's C919 aircraft, and tightening student visa regulations for Chinese STEM students [4] - These strategies have proven ineffective, highlighting vulnerabilities in U.S. dominance as China controls critical segments of the global supply chain [6][12] - The negotiations revealed that unilateral pressure from the U.S. could accelerate the "de-Americanization" process in global supply chains [6][12] Group 3 - The U.S. offered to relax some restrictions on chip design software and jet engine components in exchange for China lifting its rare earth export controls, indicating a zero-sum game approach [8] - China's countermeasures have effectively disrupted the U.S. military supply chain, with the F-35 production facing shutdown due to shortages of critical materials [9] - The U.S. has suffered significant losses, estimated at over $120 billion, due to its technology blockade against China, while China's domestic production rates in key sectors have improved significantly [10] Group 4 - The negotiations signify a shift in global power dynamics, with the era of coercive tactics yielding diminishing returns for the U.S. [12][13] - Rare earths are recognized as strategic resources essential for modern industries, and China's control over this resource is reshaping global supply chains [13] - China's proposal for a "rare earth industry community" aims to build a cooperative framework with ASEAN and EU countries, countering U.S. unilateralism [13][14]

Group 1 - Major asset management institutions have reached a consensus to "sell America," collectively reducing allocations in US stocks, US bonds, and the US dollar [1][2] - The largest 15 asset management firms, managing over $20 trillion, are seen as a barometer for global capital flows [1][2] - There is a growing consensus among these institutions to increase allocations in Asian and European markets [1][2] Group 2 - US stocks have become the least favored globally, with overall allocations reduced to neutral levels since the beginning of the year [2][8] - European and Japanese stocks have been upgraded, becoming consensus long positions, while emerging markets remain in an overweight status [2][8] Group 3 - Institutions are generally reducing holdings in US and Japanese bonds, while increasing positions in UK, German, and Italian government bonds, as well as local bonds in emerging markets [4][5] - There is a strong preference for European credit bonds, while opinions on US credit bonds remain divided [4][5] Group 4 - In the foreign exchange market, there is a clear trend of reducing exposure to the US dollar while increasing positions in the euro and yen [6][8] - The Swiss franc has been upgraded but remains in a bearish stance overall, indicating a strong consensus against the US dollar [6][8] Group 5 - Precious metals, particularly gold, have been upgraded, while oil and other cyclical commodities have been downgraded [7][8] - The strongest consensus long positions include European and Japanese stocks, the euro, the yen, and gold, while the clear short consensus includes the US dollar, Swiss franc, Japanese bonds, US bonds, and oil [7][8] Group 6 - In April, emerging market stocks rebounded strongly, particularly in Latin America, as market tensions eased following changes in US policy [11] - The bond market performed well due to rising risk aversion, while credit bonds underperformed with widening spreads [11] Group 7 - By May, asset prices generally recovered, with global stock markets rising, led by US stocks, and credit bond spreads narrowing [13] - The improvement in market sentiment was driven by reduced tariff risks and lower global recession expectations, although the bond market showed signs of divergence due to concerns over fiscal deficits, particularly in the US [13]

Group 1 - European and Asian investors have injected a record $2.5 billion into non-U.S. global equity funds from December last year to April this year, with over $2.1 billion flowing in during the last three months alone, marking a reversal of a three-year trend of net outflows [1][4] - The surge in demand for non-U.S. equity funds has prompted institutions like BlackRock, DWS, and Amundi to launch new ETFs, indicating a shift in investor sentiment towards non-U.S. markets [3][4] - Kenneth Lamont from Morningstar noted that the role of the U.S. in the global economy is being questioned, with sustained outflows from the U.S. market for the first time in years [3][4] Group 2 - Historically, U.S. stocks attracted foreign investors, but from 2022 to 2024, there was a net withdrawal of $2.5 billion from non-U.S. equity funds, while the MSCI World ex-USA index rose only 7% compared to a 25% increase in the S&P 500 [4] - Concerns over Trump's proposed tariffs have led to a rapid recovery of funds into non-U.S. equity funds, reversing previous outflows within five months [4][6] - The inflow into non-U.S. equity funds is partly attributed to European investors' "patriotic rebalancing" and the relatively high valuations of non-U.S. stocks, as well as a desire for portfolio diversification [6]

Group 1 - The European perception of the United States has shifted due to aggressive actions taken by the new U.S. government, leading to a reevaluation of strategic dependencies and a push for greater autonomy in Europe [1][2] - The European Commission has imposed fines of €500 million on Apple and €200 million on Meta for violations of the Digital Markets Act, which has escalated tensions between the EU and U.S. [1][2] - A recent poll indicates that 41% of British citizens believe the U.S. is doing bad things in the world, a significant increase of 16 percentage points from the previous year, reflecting a growing anti-American sentiment in Europe [2] Group 2 - The roots of the transatlantic rift stem from diverging values and institutional principles, as highlighted by U.S. Vice President's critical remarks about European democracy and media freedom during the Munich Security Conference [2] - Concerns over security have intensified in Europe, particularly due to the U.S. negotiating with Russia over the Ukraine crisis without European involvement, raising fears about NATO's commitment to European security [2][3] - The trust in economic relations between Europe and the U.S. has eroded, with calls for the EU to rebuild international trade frameworks and reduce reliance on U.S. markets [3] Group 3 - Europe is increasingly viewed as needing to strengthen its strategic autonomy, with experts suggesting that the U.S. role in global trade may be overestimated [3] - The EU is focusing on markets outside the U.S., emphasizing the potential for "de-Americanization" rather than "de-globalization" if the U.S. continues to adopt a confrontational stance [3] - In the information technology sector, Europe is taking steps to reduce dependence on U.S. technology, including the establishment of sovereign cloud services and measures to protect officials from U.S. surveillance [4] Group 4 - Europe is committed to maintaining a multilateral trade system, opposing U.S. protectionism, and supporting the principles of the World Trade Organization (WTO) [4][5] - Cooperation with China is becoming a significant aspect of Europe's strategic adjustments, with calls for deeper ties as a natural choice given the substantial bilateral trade volume of over €800 billion [5] - The shift in European policy towards China is seen as a strong indication of its commitment to strategic autonomy, diverging from U.S. approaches [5]

Group 1 - The U.S.-China trade tensions may see a potential easing of tariffs as President Trump indicated a desire to avoid further increases, suggesting a possible reduction in tariffs to encourage consumer purchasing [1][3] - The World Trade Organization reported that U.S. tariff policies have severely deteriorated global trade prospects, impacting both U.S. consumers and businesses [1][3] - The agricultural sector in the U.S. has faced significant losses due to the trade war, with no viable alternatives to replace the Chinese market for agricultural products [3][5] Group 2 - China has established a "de-Americanized" trade network by signing digital trade agreements with 120 countries, reflecting a shift away from reliance on the U.S. [5] - U.S. Treasury Secretary Mnuchin stated that the high tariffs imposed on China are unsustainable, indicating that China may eventually seek to negotiate [7] - Both economies are experiencing varying degrees of impact from the trade war, with U.S. consumers facing rising prices and supply chain disruptions, while Chinese exporters are seeing reduced orders [7]

Group 1 - The article discusses the transformation of the global financial system, highlighting how the U.S. has rewritten globalization rules to its advantage, effectively becoming a "wealth harvesting machine" through its dollar hegemony [1] - By 2025, the dollar is projected to account for 58.7% of global foreign exchange reserves, allowing the U.S. to extract $2.3 trillion annually in seigniorage, which is more than three times Saudi Arabia's annual oil export revenue and equivalent to Brazil's total GDP [1] - The article illustrates how U.S. monetary policy, particularly quantitative easing, has led to inflation and asset bubbles in emerging markets while keeping U.S. inflation below 2% through financial derivatives [1] Group 2 - The U.S. "supply chain security tariffs" are described as a last-ditch effort of a declining hegemony, impacting global supply chains indiscriminately, with South Korean semiconductor costs rising by 53% due to tariffs [2] - The article notes a significant decline in the dollar's usage in global trade settlements, dropping from 62% in 2016 to 47% in 2025, marking a historical low [2] - Emerging economies are forming counter-alliances, such as ASEAN's cross-border digital currency corridor, which has reduced the dollar's usage in regional trade from 81% in 2022 to 39% in 2025 [2]