Core Viewpoint - France is facing a political crisis with Prime Minister Borne's government on the brink of collapse, which may lead to a larger economic or debt crisis if a strong fiscal consolidation plan is not implemented [1][6] Political Situation - A confidence vote in parliament is scheduled for September 8, with Borne's government likely to lose due to unpopular austerity measures [1] - Major political parties in France have vowed to overthrow the government unless unexpected abstentions occur [1] - President Macron aims to avoid early elections by seeking a consensus among parties to appoint a new Prime Minister [1] Debt Concerns - Analysts warn that without a robust fiscal plan, France's public debt-to-GDP ratio could rise by 10 percentage points to 125% by 2030 [4] - The current political deadlock is pushing the economy towards a dangerous edge, with market concerns already evident as long-term government bonds face selling pressure [2][5] Economic Outlook - The French economy is described as lacking growth momentum, with domestic demand suppressed by high political uncertainty [5] - Any tightening of financing conditions could jeopardize the anticipated economic recovery expected in 2026 [5] - The immediate economic consequences are currently manageable, but long-term investor concerns about France's fiscal situation are growing [6]

Core Viewpoint - The global bond market is experiencing significant sell-off pressure, leading to a surge in long-term bond yields across multiple countries [1] Group 1: Bond Yield Movements - The yield on the US 30-year Treasury bond has risen to 5%, marking the first increase since July [2] - Japan's 30-year bond yield has reached a historic high, while the 20-year bond yield has climbed to its highest level since 1999 [3] - Germany's 30-year bond yield increased by 2 basis points to 3.4340%, the highest level since July 2011 [4] - The UK 30-year bond yield briefly reached 5.735%, the highest since May 1998, with the 20-year and 10-year yields also hitting their highest levels since 1998 and January 2025, respectively [4] - France's 30-year bond yield is nearing 4.5%, the highest since 2009 [5] Group 2: Underlying Causes of Market Turmoil - The turmoil in the global bond market is attributed to heightened investor concerns regarding national debt levels [6] - In the US, the federal government's deficit for the current fiscal year is projected at $1.7 trillion, slightly down from $1.83 trillion in fiscal 2024, but still at a high level [6] - Concerns about the effectiveness of Trump's tariff policies in reducing the deficit have been raised, with significant uncertainty surrounding future revenue estimates [6] - In France, a no-confidence vote regarding the government's debt reduction plan is expected, with predictions that Prime Minister Borne may not survive the vote [6] - In the UK, recent cabinet reshuffles have failed to alleviate investor concerns about the country's fiscal situation, characterized by high borrowing and sluggish economic growth [6] Group 3: Political Uncertainty and Debt Sustainability - Political uncertainty in Japan, particularly regarding Prime Minister Kishida's leadership, is contributing to investor anxiety [7] - The global sustainability of debt is becoming a deeper concern, with investors demanding higher risk premiums for long-term bonds [7] - Analysts warn of a vicious cycle where rising debt concerns lead to higher yields, which in turn worsen debt dynamics [7] - The International Monetary Fund predicts that global public debt could exceed 95% of GDP by 2025, complicating efforts for fiscal consolidation [7]

Report Industry Investment Ratings - Aluminum: Oscillating with an upward bias [1] - Alumina: Range-bound oscillation [1] - Cast aluminum alloy: Monitor policy implementation progress [1] Core Viewpoints - The report updates the fundamental data of aluminum, alumina, and cast aluminum alloy, including futures market prices, trading volumes, open interests, spot market prices, import and export profits and losses, and inventory levels [1]. - It also presents some external information such as Dalio's warning about the US economic situation and the US 8 - month ISM manufacturing PMI data [3]. Summary by Relevant Catalogs Futures Market - **Aluminum**: The closing price of the SHFE aluminum main contract was 20,720, with a change of 75 compared to T - 1. The trading volume was 103,466, a decrease of 55,120 from T - 1. The open interest was 213,947, down 7,232 from T - 1 [1]. - **Alumina**: The closing price of the SHFE alumina main contract was 3,022, up 14 from T - 1. The trading volume was 310,480, a decrease of 45,801 from T - 1. The open interest was 242,297, down 5,508 from T - 1 [1]. - **Aluminum Alloy**: The closing price of the aluminum alloy main contract was 20,300, up 25 from T - 1. The trading volume was 1,760, a decrease of 199 from T - 1. The open interest was 8,140, down 81 from T - 1 [1]. Spot Market - **Aluminum**: The domestic aluminum ingot social inventory was 616,000 tons, unchanged from T - 1. The LME aluminum ingot inventory was 479,600 tons, a decrease of 1,400 tons from T - 1. The aluminum spot import loss was 1,236.17 yuan, a loss increase of 52.67 yuan from T - 1 [1]. - **Alumina**: The domestic average alumina price was 3,212 yuan, a decrease of 10 yuan from T - 1. The alumina CIF price at Lianyungang was 386 US dollars per ton, unchanged from T - 1 [1]. - **Aluminum Alloy**: The three - place inventory totaled 34,501 tons, an increase of 786 tons from T - 1 [1]. Other Information - **Trend Intensity**: Aluminum trend intensity was 0; alumina trend intensity was 0; aluminum alloy trend intensity was 0 [3]. - **External News**: Dalio warned that Trump was leading the US towards a 1930s - style governance model, and the US might face a debt crisis in three years. The US 8 - month ISM manufacturing PMI was 48.7, contracting for the sixth consecutive month [3].

Core Viewpoint - Ray Dalio warns that the current political and social climate in the U.S. resembles that of the 1930s, with Wall Street investors remaining silent due to fear of retaliation for criticizing presidential policies [1][3]. Group 1: Political and Economic Interventions - Dalio highlights Trump's intervention in the private sector, such as acquiring a 10% stake in Intel, as indicative of "strong authoritarian leadership" driven by a desire to control financial and economic situations [2][3]. - The increasing wealth gap, value gap, and erosion of trust are pushing the U.S. towards more extreme policies, weakening democratic institutions and leading to a rise in authoritarian leadership [3]. Group 2: Federal Reserve Independence - Dalio expresses concern over the independence of the Federal Reserve, stating that a politicized central bank will undermine confidence in its ability to protect the value of the currency [2][5]. - International investors are reportedly shifting from U.S. Treasury bonds to gold, reflecting concerns about the stability of the dollar system amid political pressures on the Federal Reserve [6]. Group 3: Debt Crisis Predictions - Dalio predicts that the U.S. will face a debt crisis in about three years, driven by a significant fiscal imbalance where annual spending is approximately $7 trillion against $5 trillion in revenue [7][8]. - Investors are questioning whether U.S. Treasury bonds remain a reliable store of wealth, as the demand for debt is unlikely to keep pace with supply [8].

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - The recent strong performance of the precious metals market is driven by factors such as the strengthening expectation of the Fed's interest rate cut, Trump's pressure on Fed officials boosting risk - aversion sentiment, and the trading sentiment of the gold - silver ratio returning to the historical average. However, if the economic resilience is significantly stronger than expected, the gold price may have a phased correction, but the probability of a sharp decline is low. Technically, both gold and silver are in the over - bought zone and may need short - term adjustment [2] Summary by Relevant Catalogs Futures Market - **Closing Price**: The closing price of the Shanghai gold main contract was 804.32 yuan/gram, up 3.76; the closing price of the Shanghai silver main contract increased by 49 yuan/kilogram [2] - **Position**: The position of the Shanghai gold main contract was 138,624 hands, down 2,067; the position of the Shanghai silver main contract decreased by 12,097 hands. The net position of the top 20 in the Shanghai gold main contract was 176,304 hands, up 11,434; the net position of the top 20 in the Shanghai silver main contract increased by 3,513 hands [2] - **Warehouse Receipts**: The warehouse receipt quantity of gold was 40,191 kilograms, up 447; the warehouse receipt quantity of silver increased by 8,001 kilograms [2] Spot Market - **Spot Price**: The Shanghai Non - ferrous Metals Network gold spot price was 802 yuan/gram, up 6.62; the silver spot price increased by 165 yuan/kilogram [2] - **Basis**: The basis of the Shanghai gold main contract was - 2.32 yuan/gram, up 2.86; the basis of the Shanghai silver main contract increased by 116 yuan/kilogram [2] Supply - Demand Situation - **ETF Holdings**: The gold ETF holdings were 977.68 tons, up 9.74; the silver ETF holdings decreased by 22.59 tons [2] - **CFTC Non - commercial Net Positions**: The gold CFTC non - commercial net position was 214,311 contracts, up 1,721; the silver CTFC non - commercial net position decreased by 83 contracts [2] - **Supply and Demand Quantities**: The total quarterly supply of gold was 1,313.01 tons, up 54.84; the total annual supply of silver decreased by 21.4 million troy ounces. The total quarterly demand for gold was 1,313.01 tons, up 54.83; the total annual global demand for silver decreased by 47.4 million ounces [2] Option Market - **Historical Volatility**: The 20 - day historical volatility of gold was 9.2%, up 0.98; the 40 - day historical volatility of gold increased by 0.7% [2] - **Implied Volatility**: The implied volatility of at - the - money call options for gold was 20.18%, up 3.9; the implied volatility of at - the - money put options for gold was 20.19%, up 3.91 [2] Industry News - Ray Dalio said that international investors are shifting from US Treasuries to gold, and the US economy is on the verge of a debt crisis. The probability of the Fed keeping interest rates unchanged in September is 10.4%, and the probability of a 25 - basis - point rate cut is 89.6%. The probability of keeping interest rates unchanged in October is 4.9%, the probability of a cumulative 25 - basis - point rate cut is 47.3%, and the probability of a cumulative 50 - basis - point rate cut is 47.9%. Spot gold broke through $3,500, and domestic gold jewelry prices increased significantly [2]

Group 1 - The UK 30-year government bond yield has risen to its highest level since 1998, reaching 5.69%, amid growing concerns over the sustainability of public finances [1] - The British pound has depreciated over 1%, marking its largest single-day decline since June 17, with the exchange rate against the US dollar falling to 1.33 and against the euro to 86.98 pence [1] - The UK government forecasts that fiscal spending will account for 60% of GDP, up from 53% during the pandemic, while revenue is expected to slightly decrease to below 40% of GDP, leading to a projected national debt of 274% of GDP by 2073 [1] Group 2 - Analysts express that the UK's fiscal situation remains precarious, with expectations of higher risk premiums for the pound as the autumn budget approaches [2] - The UK Chancellor, Reeves, faces immense pressure to address a projected £50 billion fiscal deficit, with expectations of potential tax increases despite warnings that this could further suppress economic growth [2] - Opposition parties argue that increasing taxes would worsen the situation, advocating for spending cuts instead [2] Group 3 - Economists warn that Reeves' tax and spending policies could lead the UK towards a debt crisis similar to the 1970s, potentially necessitating assistance from the International Monetary Fund (IMF) [3] - The retail sector is also raising alarms about rising taxes and administrative burdens pushing the UK into a "stagflation" era, with food price inflation expected to remain around 5% next year [3] - The former director of the National Institute of Economic and Social Research (NIESR) indicates that the current economic conditions could lead to a collapse, drawing parallels to the 1976 IMF intervention [3] Group 4 - A former member of the Bank of England's Monetary Policy Committee highlights that the current situation resembles the 1970s, suggesting that Reeves' fiscal policies could lead to a crisis similar to the 1976 Healey crisis [4] - The increase in public spending, borrowing, and taxes is seen as a driver of both demand-pull and cost-push inflation, raising concerns about potential economic collapse if policies do not change [4]

Group 1 - Ray Dalio criticizes the Trump administration, warning that the U.S. is descending into a form of authoritarian politics reminiscent of the 1930s [1][2] - Dalio attributes the rise of extreme policies in the U.S. to increasing wealth disparity, value conflicts, and a breakdown of trust [2][3] - He highlights government intervention in the private sector, such as the acquisition of Intel shares, as a sign of authoritarian leadership [2][3] Group 2 - Dalio's "Big Cycle" theory suggests that during periods of heightened conflict and risk, leaders tend to exert more control over markets and economies [3] - He notes that the widening wealth gap and value conflicts can lead to populism, undermining democratic institutions and strengthening authoritarian leadership [3] - Despite concerns among Wall Street investors regarding Trump's policies, few have publicly criticized him, with Dalio emphasizing the fear of retaliation [3] Group 3 - Dalio expresses concern over Trump's attempts to undermine the independence of the Federal Reserve, warning that this could threaten the credibility of U.S. monetary policy [5] - He predicts that a politically weakened Fed, forced to maintain low interest rates, could lead to a loss of confidence in the dollar and a shift towards gold assets by international investors [5] - Dalio warns that the U.S. is on the brink of a debt crisis due to unsustainable debt growth and significant budget deficits [5][6] Group 4 - The U.S. government currently spends approximately $7 trillion annually while generating only $5 trillion in revenue, leading to a significant budget imbalance [6] - Dalio compares the U.S. debt situation to a circulatory system blocked by a blood clot, indicating that debt servicing is crowding out other expenditures [6] - He anticipates a potential economic crisis within three years due to this debt imbalance, with the Fed facing tough choices that could impact the dollar [6]

Group 1: Political and Social Climate - Ray Dalio compares the current political and social climate in the U.S. to that of the 1930s and 1940s, highlighting issues such as wealth disparity, value gap, and a collapse of trust driving the adoption of more extreme policies [1][2] - The Trump administration's intervention in the private sector, particularly the acquisition of a 10% stake in Intel, is seen as a manifestation of "strong authoritarian leadership" driven by a desire to control financial and economic situations [1][2] Group 2: Wall Street's Response - Despite growing concerns among Wall Street investors regarding Trump's policies, few prominent financial figures have publicly criticized the president due to fears of retaliation [2] - Dalio emphasizes that his statements are merely a description of the causal relationships driving the current situation, reflecting the political pressure faced by the financial community [2] Group 3: Federal Reserve Independence - Dalio expresses concerns over the independence of the Federal Reserve, particularly following Trump's dismissal of a Fed governor, which he believes could undermine confidence in the Fed's ability to protect the value of the currency [3] - The political pressure on the Fed may lead to a loss of attractiveness for dollar-denominated debt assets, prompting international investors to shift towards gold [3] Group 4: Debt Crisis Prediction - Dalio predicts that the U.S. will face a debt crisis in approximately three years, driven by a significant fiscal imbalance where annual expenditures of about $7 trillion exceed revenues of $5 trillion [5] - The growing skepticism among investors regarding the reliability of U.S. debt as a store of value is highlighted, with Dalio stating that debt demand is unlikely to keep pace with supply [5] - The Federal Reserve faces a difficult choice between allowing interest rates to rise, risking a debt default crisis, or printing money to purchase unwanted debt, both of which could damage the dollar [5]

Group 1 - Ray Dalio compares the current political and social climate in the U.S. to the global situation of the 1930s and 1940s, highlighting issues such as wealth disparity and a collapse of trust driving extreme policies [1][2] - Dalio emphasizes that Wall Street investors are largely silent about Trump's policies due to fear of retaliation, despite growing private concerns [2][3] - The intervention of the Trump administration in the private sector, particularly the acquisition of a 10% stake in Intel, is seen as a manifestation of "strong authoritarian leadership" [1][2] Group 2 - Concerns about the independence of the Federal Reserve are raised, particularly following Trump's dismissal of a Fed official, which could undermine confidence in the Fed's ability to maintain currency value [3][4] - International investors are reportedly shifting from U.S. Treasury bonds to gold, reflecting worries about the stability of the dollar system [3][4] - Dalio predicts a debt crisis in the U.S. within approximately three years, driven by a significant fiscal imbalance where annual spending is around $7 trillion against $5 trillion in revenue [4]

Core Viewpoint - Prominent economists warn that the UK is heading towards a debt crisis similar to the 1970s due to the fiscal policies of Chancellor Reeves, potentially requiring assistance from the IMF [1][3][4] Economic Situation - The UK's fiscal deficit is projected to reach £50 billion, with rising borrowing costs leading to increased interest rates on government debt [1][6] - The debt-to-GDP ratio has reached 96.3%, ranking fifth among developed countries, with interest payments expected to total £111.2 billion this year [6] Inflation and Economic Growth - Economists predict that inflation, particularly in food prices, may remain around 5% next year, contributing to a period of "stagflation" [1][6] - The current economic policies are seen as exacerbating demand-pull and cost-push inflation, reminiscent of the 1970s [4] Political Reactions - Opposition leaders criticize the government's approach, suggesting that tax increases will worsen the economic situation, advocating for spending cuts instead [6][7] - The Conservative Party emphasizes its historical role in stabilizing the economy during past crises, including the 1976 IMF bailout and the 2008 financial crisis [7] Government Response - The UK Treasury dismisses claims of an impending 1970s-style debt crisis as unfounded, asserting that current fiscal measures are aimed at stabilizing the economy and promoting growth [8]