Core Viewpoint - The international gold price has surged significantly, with London spot gold reaching a historic high of $4000 per ounce, marking an annual increase of over 50%, the first time since the 1970s that such a rise has occurred in a single year [1][2]. Group 1: Historical Context - Historically, only in the years 1973, 1974, and 1979 did London spot gold see annual increases exceeding 50%, with respective rises of 66.98%, 72.27%, and 126.55% [2]. - The current surge in gold prices reflects a level of distrust in the US dollar comparable to the 1980s, indicating a significant shift in investor sentiment [2]. - The 1970s saw a dramatic change in the global monetary system, with the collapse of the Bretton Woods system leading to a rapid increase in gold prices, driven by both policy changes and economic crises [5]. Group 2: Current Market Dynamics - The recent spike in gold prices can be attributed to various factors, including heightened global risk aversion due to potential US government shutdowns and expectations of Federal Reserve interest rate cuts [6]. - However, these factors are seen as short-term catalysts rather than the underlying drivers of a long-term bull market in gold, which has been ongoing since 2023 [6][7]. - The fundamental driver of the current gold price increase is a growing distrust in the US dollar, influenced by factors such as rising US debt and concerns over the independence of the Federal Reserve [7]. Group 3: Investment Strategies - To capitalize on the gold bull market, a long-term holding strategy is recommended, with an emphasis on matching funding timelines to avoid forced selling during unfavorable market conditions [9]. - Increasing the allocation to physical gold can help mitigate the risks associated with frequent trading, with small-weight gold bars being a viable option for long-term investment [9]. - For leveraging investments, financing gold ETFs and investing in gold mining stocks are suggested as safer alternatives, as they can amplify returns without the high risks associated with options and futures [10].

Group 1: Global Monetary Policy Tracking - The Federal Reserve has restarted its rate cut cycle, lowering rates by 25 basis points to a range of 4%-4.25% in September 2025, aligning with market expectations. The European Central Bank (ECB) has maintained its rates, while the Bank of Japan (BOJ) has signaled a more hawkish stance by opposing the current rate policy and announcing a reduction in ETF and REIT holdings [2][9][11] - Market expectations indicate that the Federal Reserve is likely to cut rates three times by the end of 2025, with a projected benchmark rate of approximately 3.75% by then. The ECB's rate cut expectations have diminished, with a current forecast suggesting no further cuts this year. The BOJ is anticipated to raise rates once by the end of the year [3][15][16] - In China, nominal interest rates have risen from 1.7% at the end of July to 1.88% by late September 2025, with real interest rates also increasing from 3.1% to 3.3% during the same period, placing China among the higher real interest rates globally [19][21] Group 2: Global Liquidity Tracking - The Federal Reserve's balance sheet reduction has led to significant liquidity tightening, with a reduction of $357.7 billion in reserves since the start of the tapering process. The overnight reverse repurchase agreement (ONRRP) balance has dropped sharply to $29.2 billion, indicating a near exhaustion of this liquidity tool [4][23] - The SOFR-EFFR spread has turned positive, reflecting a tightening liquidity environment for non-bank institutions. The spread reached a high of 0.18%, indicating that borrowing costs for these institutions have increased significantly [5][31] - U.S. Treasury liquidity has deteriorated, with the bid-ask spread for 10-year Treasuries fluctuating between 0.19 and 0.58 basis points, while credit spreads remain low, suggesting a mixed liquidity environment across different asset classes [6][37][40]

Group 1 - The core viewpoint indicates a significant decline in bond futures prices across various maturities, with the 30-year bond futures dropping by 2.7% and the 10-year bond futures down by 0.4% since September [1] - The equity market's strength is exerting pressure on the bond market, leading to a noticeable "see-saw" effect between stocks and bonds, as liquidity shifts from the bond market to equities [1] - Economic data from August shows weakness, with the official manufacturing PMI improving but still below the growth line, indicating economic pressure [1] Group 2 - The article highlights the importance of responding to potential liquidity tightening risks, suggesting strategies for hedging in such scenarios [2] - Historical research indicates that the basis is significantly influenced by funding rates, with tightening conditions favoring long positions in bond futures [2] - The article recommends participating in interest rate flattening strategies and prioritizing the "short TS long T" arbitrage strategy, as the net basis showed a pattern of first expanding and then contracting in September [2]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Asia ex-Japan rates market**, particularly analyzing the **Chinese financial market** and the liquidity conditions in September 2023. Core Insights and Arguments - The **7-day repo fixing** has gradually increased to **1.50%**, aligning with historical patterns from July and August but remaining lower than the rates observed in September 2023 and 2024 [5][5][5]. - Despite the maturity of **RMB 1.25 trillion** in Negotiable Certificates of Deposit (NCDs) this week, liquidity is not perceived as tight [5][5][5]. - The **7-day repo fixing** typically rises in the latter half of the month due to factors such as tax payments, increased Local Government Bond (LGB) supply, and month-end funding requirements [5][5][5]. - Expectations are set for the **7-day repo fixing** to rise to a range of **1.55% to 1.70%** in the upcoming weeks, with the spread to the **7-day OMO rate** widening to **15-20 basis points** in September, compared to **11 basis points** in August [5][5][5]. - The **People's Bank of China (PBoC)** is anticipated to ensure adequate funding, especially considering potential bond fund redemption flows, and may conduct **14-day OMOs** leading into the "Golden Week" holiday [5][5][5]. - The market is questioning whether the PBoC will allow liquidity to tighten further if stock market sentiment remains strong [5][5][5]. Strategic Recommendations - The analysts maintain a **Dec-IMM 1s3s flattener trade** with a conviction level of **3/5** and recommend paying in **5-year swaps** with a conviction level of **4/5** [5][5][5]. - Long-end rates are influenced not only by liquidity but also by equity market performance, macroeconomic data, and the ongoing anti-deflation narrative [5][5][5]. Additional Important Information - The report is produced by **Nomura International (Hong Kong) Ltd.**, and the analysts involved are Clair Gao and Albert Leung [6][7][6]. - The document includes disclaimers regarding the accuracy and reliability of the information provided, emphasizing that it should not be construed as investment advice [17][18][19]. This summary encapsulates the critical insights and strategic recommendations from the conference call, focusing on the current state and expectations of the Asian rates market, particularly in China.

Group 1 - The People's Bank of China (PBOC) conducted a 600 billion yuan reverse repurchase operation with a 6-month term on September 15, following a 10,000 billion yuan operation on September 5, indicating a proactive approach to liquidity management [1] - In September, there was a net injection of 300 billion yuan from reverse repos, marking the fourth consecutive month of increased reverse repo operations by the PBOC [1] - The PBOC's reverse repo operations in June to August had net injections of 200 billion yuan each month, followed by 300 billion yuan in September [1] Group 2 - The issuance of government bonds is at a peak in September, with commercial bank interbank certificates maturing at 35 trillion yuan, the second-highest level this year [2] - Analysts expect the PBOC to continue using reverse repos and Medium-term Lending Facility (MLF) tools to inject liquidity into the market, especially in response to tightening liquidity conditions [2] - The 600 billion yuan reverse repo on September 15 is seen as effective support during the tax payment period, helping to manage overall liquidity pressure [2]

Core Viewpoint - The article discusses the financial struggles of Wang Sicong, a prominent figure in the entertainment industry, as he attempts to sell his luxury property at a significant loss, reflecting broader market trends and personal financial challenges [1][5]. Group 1: Property Sale - Wang Sicong is urgently selling his luxury property, originally valued at 100 million yuan, now listed at 52 million yuan, indicating a drastic price drop of 48% [1]. - The property, located in a prime area, has seen a significant decline in the luxury real estate market, with transactions for properties over 20 million yuan halving year-on-year [2]. - The urgency to sell is compounded by personal financial issues and a shift in his lifestyle, as he has moved to Tokyo and is liquidating domestic assets [1][5]. Group 2: Market Conditions - The luxury real estate market in Shanghai is experiencing a liquidity crisis, with banks increasing down payment requirements for high-net-worth clients to 60% [2]. - The article highlights a general trend among wealthy individuals, particularly "second-generation rich," facing financial pressures due to tightening liquidity and increased regulatory scrutiny in the entertainment sector [5]. Group 3: Personal Financial Management - Wang Sicong's actions are seen as a strategy to convert depreciating assets into cash for future investments, reflecting a broader trend of wealth management among affluent individuals [5]. - The article notes that even high-profile individuals must prioritize cash flow, as evidenced by Wang's willingness to consider renting out his property if it does not sell soon [7].

Group 1 - The People's Bank of China conducted a 1,883 billion yuan 7-day reverse repurchase operation with a bid and winning amount of 1,883 billion yuan and an operation rate of 1.40% [1] - On the same day, 7,829 billion yuan of 7-day reverse repos matured, resulting in a net withdrawal of 5,946 billion yuan [1] - The Shanghai Interbank Offered Rate (Shibor) showed mixed movements, with overnight Shibor unchanged at 1.3160%, while 7-day Shibor decreased by 1.00 basis points to 1.4270% [1][2] Group 2 - In the interbank pledged repo market, the 7-day rates showed mixed trends, with DR001 and R001 weighted average rates rising by 0.1 basis points and 0.3 basis points, respectively [4] - The weighted average rates for DR007 and R007 decreased by 1.2 basis points and 0.6 basis points, respectively, with transaction volumes showing varied changes [4][6] - The funding market presented a balanced situation in the morning, shifting to a tighter stance in the afternoon, and then easing towards the end of the trading day [9] Group 3 - The issuance of interbank certificates of deposit reached 101, with an actual issuance volume of 1,435.4 billion yuan by the end of the day [9] - The bond market experienced a pullback, with trading sentiment being generally cautious, particularly favoring short-term risks [10] - The recent revision of the capital guarantee management measures for insurance companies aims to enhance the selection criteria for banks holding capital, reflecting a focus on risk management and internal controls [11]

Core Viewpoint - A global government bond sell-off is occurring, pushing the 30-year U.S. Treasury yield towards the critical psychological level of 5% [2][10] Group 1: Bond Market Dynamics - The sell-off has affected bond markets across the Atlantic, with yields rising in the U.S., U.K., Italy, and France [2] - The U.S. 30-year Treasury yield reached 5% for the first time since July, while the 10-year yield climbed to 4.291% [2] - The U.K. 30-year bond yield hit 5.72%, the highest since 1998, while Germany and France's yields reached 3.41% and 4.51%, the highest since 2011 and 2009, respectively [5][10] Group 2: Supply and Demand Factors - A significant influx of corporate bond supply is impacting the market, with predictions of $150 billion to $180 billion in U.S. investment-grade corporate bond issuance this month [10][12] - This issuance is expected to exceed last year's $172.5 billion, marking a near-decade high [12] - The market is experiencing a "never-ending primary market" for various spread products, necessitating investor adjustments to absorb new supply [12] Group 3: Fiscal Concerns - The sell-off reflects deep concerns about the fiscal health of developed economies, exacerbated by pandemic-related spending [14] - Governments are increasingly reliant on bond issuance to finance their deficits, raising investor skepticism [14] Group 4: Seasonal and Technical Factors - September is traditionally a challenging month for long-duration bondholders, with historical data showing a median decline of 2% for bonds over 10 years in this month [16] - Technical liquidity issues are expected, with predictions of nearly $200 billion being withdrawn from the banking system on September 15 due to various fiscal activities [16] Group 5: Market Focus on Employment Data - The market is closely watching the upcoming U.S. employment report, which will influence the Federal Reserve's interest rate decisions [18] - Strong employment data could heighten concerns over prolonged high rates, while weak data may reinforce expectations for rate cuts [18]

Group 1 - A global government bond sell-off is occurring, pushing the 30-year U.S. Treasury yield towards the psychological 5% mark [2] - The sell-off has affected bond markets across the Atlantic, with yields rising in the U.S., U.K., Italy, and France, reaching new highs since the financial crisis [2][4] - The U.S. 30-year Treasury yield has risen to 5%, marking the first time since July, while the 10-year yield has climbed to 4.291% [2] Group 2 - The U.K. 30-year Treasury yield has reached 5.72%, the highest since 1998, while Germany and France's yields have also hit their highest levels since 2011 and 2009, respectively [4] - Japan's 30-year Treasury yield has surged to 3.28%, the highest on record, with the 20-year yield reaching 2.69%, a new high since 1999 [7] Group 3 - The sell-off is attributed to a combination of massive corporate bond supply, concerns over government fiscal conditions, and seasonal liquidity tightening [8] - September is traditionally unfavorable for long bond holders, with significant corporate bond issuance expected, estimated at $150 billion to $180 billion in the U.S. alone this month [10][11] - The market is currently focused on the upcoming U.S. employment report, which will influence the Federal Reserve's interest rate decisions [8][14] Group 4 - The bond market's turmoil reflects deep concerns about the fiscal health of developed economies, exacerbated by pandemic-related spending [12] - Historical trends indicate that September is typically a poor month for long-duration bonds, with a median decline of 2% over the past decade [13] - Technical liquidity factors are also contributing to the market's challenges, with significant cash withdrawals expected in September [13]

Group 1 - A global government bond sell-off is occurring, pushing the 30-year U.S. Treasury yield towards the psychological 5% mark [1][9] - The sell-off has affected bond markets across the Atlantic, with yields rising in the U.S., U.K., Italy, and France, reaching new highs since the financial crisis [1][3] - The U.S. 30-year Treasury yield has risen to 5%, and the 10-year yield has climbed to 4.291%, leading to a 0.7% drop in the S&P 500 index, marking its worst single-day performance since August 1 [1] Group 2 - The U.K. 30-year Treasury yield has reached 5.72%, the highest since 1998, while Germany and France's yields have also hit their highest levels since 2011 and 2009, at 3.41% and 4.51% respectively [3] - Japan's 30-year Treasury yield has surged to 3.28%, the highest on record, with the 20-year yield also reaching 2.69%, a new high since 1999 [6] Group 3 - The sell-off is driven by a massive supply of corporate bonds, concerns over government fiscal conditions, and seasonal liquidity tightening [9][10] - September is traditionally unfavorable for long bond holders, with Wall Street predicting a corporate bond issuance of $150 billion to $180 billion this month, potentially exceeding last year's $172.5 billion [9][10] Group 4 - The global sell-off reflects deep concerns about the fiscal health of developed economies, exacerbated by pandemic-related spending [11] - There is a shift in market sentiment, with investors needing reassurance from governments to regain confidence in their bonds [11] Group 5 - Technical liquidity factors and historical trends also contribute to the current market turmoil, with September historically being a poor month for long-duration bonds [12][13] - Predictions indicate a significant liquidity drain in the U.S. market, potentially withdrawing nearly $200 billion from the banking system on September 15 due to various fiscal factors [13] Group 6 - Market focus is shifting to the upcoming U.S. employment report, which will influence the Federal Reserve's interest rate decisions [14] - Strong employment data could heighten concerns over prolonged high rates, while weak data may reinforce expectations for rate cuts, impacting the bond market's recovery [14]