Group 1 - The U.S. Treasury bond market is experiencing a mixed performance, with the 2-year bond yield dropping over 5 basis points while the 30-year bond yield approaches 4.95%, nearing the 5% mark [1] - There is a growing concern among investors regarding President Trump's recent strong stance against the Federal Reserve, which may undermine the central bank's independence and increase inflation expectations, impacting the dollar and the bond market [1] - The current political risk score for the U.S. is 41.79, close to the average of 28 emerging market countries at 44, indicating that the U.S. is becoming more similar to emerging markets in terms of risk [1] Group 2 - The U.S. Treasury issued $70 billion in 5-year bonds with a winning yield of 3.724%, the lowest since September last year, and lower than July's 3.983% [2] - The bid-to-cover ratio for the auction was 2.36, slightly better than the previous month's 2.31 but still below the recent average of 2.37 [2] - The indirect bid ratio, which reflects foreign demand, was 60.5%, up from 58.3% last month but significantly below the recent average of 69.3% [2]

Core Viewpoint - The ongoing conflict between President Trump and the Federal Reserve is escalating, with potential implications for the Fed's independence and monetary policy direction [1][11]. Group 1: Federal Reserve Actions - Federal Reserve Governor Lisa Cook is expected to file a lawsuit regarding her dismissal by President Trump [3][4]. - New York Fed President John Williams indicated that lowering interest rates may be appropriate at the right time, while maintaining a moderately restrictive policy stance [1]. - The Trump administration is exploring ways to exert more influence over the 12 regional Federal Reserve banks, particularly regarding the selection process for regional bank presidents [1][5]. Group 2: Implications for Fed Independence - Analysts warn that Trump's actions could signify the end of the Fed's independence, a status it has held since 1951, with financial markets yet to fully absorb this significant risk [1][11]. - Former Fed Vice Chair Lael Brainard views Trump's attack on Cook as part of a broader effort to pressure the Fed, potentially leading to the dismissal of multiple regional Fed presidents [6][8]. - The potential for Trump to control the Fed's monetary policy could result in higher inflation and increased volatility in the financial markets [11]. Group 3: Market Reactions - Current market conditions reflect a distortion in the Treasury market, with long-term yields rising and short-term real yields falling, indicating that the Fed's independence is perceived to be under threat [12]. - Deutsche Bank's report suggests that if Trump successfully removes Cook and appoints a candidate favoring significant rate cuts, the power dynamics within the Fed could shift dramatically, leading to a majority of "dovish" votes [12].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - The bond market is under phased pressure, and potential negative feedback effects should be vigilant. The recent bond market has been under continuous pressure, mainly disturbed by three factors: the strengthening of M1 year - on - year data, the significant recovery of market risk appetite, and the "anti - involution" policy expectation. The stock - bond cost - performance index shows that the bond allocation value is accumulating but has not reached the threshold for asset re - allocation. In the short term, the strong performance of the equity market is the biggest risk for the bond market, and investors are advised to maintain a defensive stance and a short - duration strategy [5]. 3. Summary According to the Table of Contents 3.1 Bond Market Weekly Review - From August 18th to 22nd, the yields of treasury bonds fluctuated upwards, and the stock - bond seesaw effect dominated the bond market trend. The yields of 1 - year and 10 - year treasury bonds increased by 0.42bp and 3.53bp respectively, closing at 1.3707% and 1.7818%. The bond market was affected by factors such as tax payment, LPR quotes, and equity market trends during the week [2][10]. 3.2 Bond Market Data Tracking 3.2.1 Funding Situation - From August 18th to 22nd, the central bank's open - market operations had a net injection of 12,652.00 billion yuan. The central bank conducted 20,770.00 billion yuan in reverse repurchases and had 7,118.00 billion yuan in maturities. The funding rates first increased and then decreased. R001, DR001, R007, and DR007 all increased compared to the previous week, and the funding situation remained in a tight balance. The central bank is expected to continue to maintain liquidity injection next week, and the funding rate center may remain flat [4][23]. 3.2.2 Supply Side - From August 18th to 22nd, the total issuance volume of interest - rate bonds increased, and the net financing amount increased. The total issuance scale of interest - rate bonds was 13,099.50 billion yuan, an increase of 1,335.28 billion yuan from the previous week. The government bond issuance scale decreased, and the net financing amount decreased. The issuance scale of inter - bank certificates of deposit decreased, and the net financing amount decreased [39][42]. 3.3 Next Week's Outlook and Strategy 3.3.1 Next Week's Outlook - The supply pressure of treasury bonds will ease next week. There are no treasury bond issuance plans, and the planned issuance of local government bonds is 3,515.97 billion yuan. Facing the cross - month disturbance and large - scale reverse repurchase maturity pressure, the central bank is expected to continue to maintain a stance of protecting liquidity, and the funding rate center may remain flat [3][60]. 3.3.2 Bond Market Strategy - The bond market is under phased pressure, and potential negative feedback effects should be vigilant. The recent bond market has been under pressure due to factors such as the strengthening of M1 data, the recovery of market risk appetite, and policy expectations. The stock - bond cost - performance index shows that the bond allocation value is accumulating. In the short term, the strong performance of the equity market is the biggest risk for the bond market. Investors are advised to maintain a defensive stance and a short - duration strategy [5]. 3.4 Global Major Assets - U.S. Treasury yields generally declined. As of August 22, 2025, the yields of 1Y, 2Y, 3Y, 5Y, 10Y, and 30Y U.S. Treasuries decreased compared to August 15. The U.S. dollar index declined, and the central parity rate of the U.S. dollar against the RMB decreased slightly. Gold, silver, and crude oil prices generally rose [69][70].

Core Viewpoint - Deutsche Bank suggests that if Trump successfully gains control of the Federal Reserve Board with four dovish votes, it could lead to aggressive monetary easing policies and allow for unilateral actions to lower the Interest Rate on Reserve Balances (IORB), bypassing the FOMC's decisions [1][3][12] Group 1: Control of the Federal Reserve Board - Trump's administration is seeking to gain control of the Federal Reserve Board by dismissing Governor Cook, which would enable the implementation of aggressive monetary policies [3][6] - Following the resignation of Governor Kuger, Trump has garnered increasing support for dovish monetary policies within the committee [4] - If Trump appoints a candidate favoring significant rate cuts to replace Cook, the power dynamics within the Board will change dramatically, potentially leading to a majority of dovish votes [6][7] Group 2: Impact on Monetary Policy - The emergence of four stable dovish votes within the Board would significantly increase internal pressure for faster and larger rate cuts, even amidst high inflation data [7][12] - The Board's majority could utilize its power to unilaterally lower the IORB, which has historically been aligned with FOMC targets, thus challenging the traditional decision-making framework [9][10] - This unilateral action could lead to unprecedented dynamics in the money market, creating potential chaos and directly impacting the FOMC's traditional decision-making process [11] Group 3: Restructuring the FOMC - The majority within the Federal Reserve Board also holds the long-term power to reshape the composition of the FOMC voting members, as all 12 regional Federal Reserve Presidents require Board approval for reappointment every five years [12][13] - A Board majority seeking aggressive easing could veto the reappointment of hawkish regional Fed Presidents, gradually eliminating opposing voices and paving the way for long-term easing policies [13]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - **Gold**: Due to the resurgence of European - American trade disputes, the gold price fluctuated and closed higher. The Shanghai gold premium continued to expand to 0.1 yuan/gram. With the high dovish expectations of the shadow Fed, the gold price is supported. Considering the global situation after Trump's inauguration and the shift from inflation to recession expectations, the gold price is still likely to rise and hard to fall [4]. - **Silver**: After Trump announced to "fire" the current Fed governor, but the Fed stated that Trump's power to remove the governor was limited, the silver price fluctuated and declined. The Shanghai silver premium expanded to about 440 yuan/kg. The silver price still mainly follows the gold price and is affected by tariff concerns [6]. 3. Summary by Directory 3.1 Previous Day's Review - **Gold**: The US three major stock indexes rose slightly, European three major stock indexes fell across the board. Most US bond yields declined, with the 10 - year US bond yield dropping 0.78 basis points to 4.261%. The US dollar index fell 0.20% to 98.24, and the offshore RMB against the US dollar appreciated slightly to 7.1534. COMEX gold futures rose 0.75% to $3443.20 per ounce [4]. - **Silver**: Similar to gold in terms of stock indexes, bond yields, and the US dollar index. COMEX silver futures fell 0.02% to $38.70 per ounce [6]. 3.2 Daily Hints - **Gold**: The basis is - 4.4, with the spot at a discount to the futures; the inventory of gold futures decreased by 12 kilograms to 37503 kilograms; the 20 - day moving average is upward, and the K - line is above the 20 - day moving average; the main net position is long, and the main long position increased [5]. - **Silver**: The basis is - 43, neutral; the inventory of Shanghai silver futures increased by 13692 kilograms to 1127333 kilograms; the 20 - day moving average is upward, and the K - line is above the 20 - day moving average; the main net position is long, and the main long position decreased [6]. 3.3 Today's Attention - Time TBD, from August 27th - 29th, the 2025 AGIC Shenzhen (International) General Artificial Intelligence Conference and General Artificial Intelligence Industry Expo will be held at the Shenzhen International Convention and Exhibition Center. - At 09:30, China's industrial enterprise profits above designated size in July and Australia's CPI in July will be released. - At 12:01, Richmond Fed President Barkin (a 2027 FOMC voter) will talk about the economy again [15]. 3.4 Fundamental Data - **Gold**: The logic is that after Trump's inauguration, the world entered a period of extreme turmoil and change, with inflation expectations shifting to recession expectations, making it difficult for the gold price to decline. The verification between the new US government's policy expectations and reality will continue, and the gold price sentiment is high, still prone to rise and hard to fall [10]. - **Silver**: It follows the gold price. The tariff concerns have a stronger impact on the silver price, and the silver price is prone to an enlarged increase [13]. 3.5 Position Data - **Gold**: On August 26, 2025, the long position volume of the top 20 in Shanghai gold was 625,171, an increase of 0.47% from the previous day; the short position volume was 472,276, an increase of 0.25%; the net position was 152,895, an increase of 1.14% [30]. - **Silver**: On August 26, 2025, the long position volume of the top 20 in Shanghai silver was 1,082,920, a decrease of 3.30% from the previous day; the short position volume was 993,680, a decrease of 2.78%; the net position was 89,240, a decrease of 8.77% [33].

Core Insights - The American consumer confidence index decreased from a revised 98.7 in July to 97.4 in August, indicating growing concerns about employment and income overshadowing optimism about the current and future business environment [1] Group 1: Consumer Confidence - The assessment index for current business and employment market conditions fell by 1.6 points to 131.2 [1] - The consumer expectations index, reflecting short-term income prospects and business conditions, dropped by 1.2 points to 74.8, significantly below the recession warning threshold of 80 [1] Group 2: Employment and Income Outlook - Consumer evaluations of current employment conditions have declined for the eighth consecutive month, while expectations for current business conditions have improved, somewhat offsetting the decline in the current index [1] - There is a slight increase in consumer pessimism regarding future employment conditions and a decrease in optimism about future income [1] Group 3: Inflation and Tariff Concerns - Consumers are increasingly concerned about tariffs, which are linked to worries about rising prices [1] - The average inflation expectation for the next 12 months rose to 6.2% in August, up from 5.7% in July, but still below the peak of 7.0% in April [1]

Group 1 - The consumer confidence index in the U.S. for August is reported at 97.4, showing a slight decline of 1.3 from July's revised data [1] - The present situation index, which assesses consumers' views on current business and labor market conditions, is at 131.2, down 1.6 from July [1] - The expectations index, reflecting consumers' short-term outlook on income, business, and labor market conditions, stands at 74.8, a decrease of 1.2 from July [1] Group 2 - The consumer confidence index for individuals under 35 has decreased, while those aged 35 to 55 remained stable, and the index for those over 55 has increased [1] - Concerns regarding tariffs have risen among consumers, with worries that tariffs may lead to increased prices and inflation rates [2] - The average inflation expectation for the next 12 months has increased to 6.2% in August, up from 5.7% in July, although it remains below the peak of 7% in April [2]

Summary of Key Points from Conference Call Industry Overview - The discussion primarily revolves around the U.S. Treasury bond market and its impact on interest rates in 2023 and 2025 [1][2][3][4][5]. Core Insights and Arguments - **Supply Shock and Yield Impact**: In 2023, the supply of U.S. Treasury bonds led to a yield increase primarily due to insufficient long-term demand, influenced by the Federal Reserve's balance sheet reduction and foreign investor sell-offs [1][2][3]. - **Market Expectations**: The market has adjusted to the anticipated increase in Treasury bond issuance, with the third-quarter financing scale raised to $1.007 trillion without causing significant disruption [1][4]. - **Short-Term vs Long-Term Bonds**: There is considerable pressure on short-term bond supply, but demand remains strong due to policy measures. The Treasury plans to supplement the Treasury General Account (TGA) to $850 billion, necessitating the issuance of $300 billion in short-term bonds [1][4][5]. - **Potential Risks**: There is a risk of long-term bond oversupply in August, which could affect yields. The actual issuance versus planned issuance will be critical in determining yield movements [1][4]. Additional Important Content - **Economic Resilience and Inflation**: The current economic environment shows marginal declines in resilience, with lower purchasing willingness among low-income groups. If interest rate cuts stimulate demand, it may lead to price increases, pushing up the Consumer Price Index (CPI) and hindering the decline in inflation expectations and long-term rates [5]. - **Federal Reserve's Position**: The Federal Reserve is expected to remain in a loose monetary policy phase, with one to two rate cuts anticipated. However, the transmission of tariffs on goods inflation has not fully materialized [5]. - **Future Yield Dynamics**: The potential for a steepening yield curve by the end of 2023 or early 2024 is noted, as long-term rates may rise faster than short-term rates due to the Fed's policy adjustments [5].

Core Viewpoint - Gold prices experienced a strong rebound after a brief adjustment, with a notable increase of $35, but faced a subsequent pullback, indicating a volatile trading environment around the $3400 mark [1][10]. Market Trends - Gold saw a minor adjustment of only $15 yesterday, followed by a V-shaped recovery today [3]. - The price surged to $3386 before retreating, suggesting a potential resistance level [4]. - Current focus is on the adjustment and rebound opportunities, particularly around the $3378 level [5]. - A breakthrough above previous highs indicates a target towards the $3400 resistance [6]. Support and Resistance Levels - The market is currently testing the $3378 resistance level, with potential support seen at $3350 [7][8]. - If the price continues to decline, a drop below $3350 could occur [9]. - The overall trend shows a four-month increase followed by a four-month consolidation phase, with the price oscillating around the $3300-$3400 range [10]. Economic Influences - Recent positive U.S. economic data, particularly in housing, has raised inflation expectations, impacting gold prices negatively [11]. - Political pressures from former President Trump on the Federal Reserve have also influenced market dynamics, contributing to gold's volatility [12]. - Upcoming economic data releases, including durable goods orders and consumer confidence, are expected to impact both the stock market and gold prices [13]. Investment Strategy - Investors are advised to focus on entry and exit points to maximize profits, emphasizing the importance of experience and risk management [13]. - A successful trading strategy involves following experienced traders to achieve higher accuracy and lower risk [13].

Core Viewpoint - The independence of central banks has become a focal point in the market following the resignation of Federal Reserve Governor Lisa Cook under Trump's directive, highlighting the importance of credible independent central banks in managing inflation post-pandemic [1] Group 1 - Jonathan Kearns, Chief Economist at Challenger and former senior manager at the Reserve Bank of Australia, noted that the market recognizes the benefits of credible independent central banks in reducing inflation after a surge during the pandemic [1] - Kearns emphasized that a credible independent central bank leads to stable inflation expectations, allowing for inflation reduction without significantly increasing unemployment rates [1] - Any actions that undermine credibility will ultimately harm households and businesses [1]