Core Viewpoint - The article discusses the implications of China's significant holdings of U.S. Treasury bonds and the potential consequences of a sell-off, highlighting the complexities of U.S.-China economic relations and the U.S. debt situation. Group 1: U.S. Debt Situation - The total U.S. national debt has surpassed $37 trillion, which is 126.8% of the U.S. GDP, indicating that the country earns less in a year than it owes in debt [3] - In FY2023, the U.S. deficit reached $1.7 trillion, a 23% increase from the previous year, contributing to the growing debt burden [7] - By 2025, the U.S. is expected to spend $1.2 trillion just on interest payments, surpassing the defense budget and becoming the largest fiscal expenditure [5] Group 2: China's Holdings of U.S. Debt - China currently holds $760 billion in U.S. Treasury bonds, a significant reduction from a peak of $1.3 trillion, driven by changing international dynamics and the desire to mitigate risks [9][13] - The reduction in U.S. debt holdings by China is partly due to the U.S. freezing foreign assets, which has increased the perceived risks of holding U.S. debt [13] Group 3: Potential Consequences of a Sell-off - While the $760 billion in U.S. debt held by China seems substantial, it only represents about 2% of the total U.S. debt, making it unlikely to collapse the U.S. debt system [17] - The U.S. has other options to manage its debt, including the ability to print money through the Federal Reserve, which has previously printed $1.5 trillion in a short period [20] - A large-scale sell-off of U.S. debt by China could backfire, leading to a depreciation of its dollar assets and increased pressure on the Chinese yuan [22] Group 4: Economic Interdependence - The U.S. is China's largest export market, accounting for 17% of China's total exports, meaning that any economic slowdown in the U.S. could adversely affect Chinese export businesses and employment in manufacturing [24] - The article suggests that U.S. experts are more concerned about the potential for China to retaliate against U.S. tariffs by selling U.S. debt rather than an actual collapse of the U.S. debt market [26][29]

Report Overview - The report aims to objectively reflect the research views of futures and securities companies on various commodity varieties, track hot varieties, analyze market investment sentiment, and summarize investment driving logics [2]. Market Data Summary Commodity Prices and Weekly Changes - Gold closed at 780.10 with a 3.76% weekly increase [2]. - Silver closed at 8263.00 with a 2.00% weekly increase [2]. - Other commodities like corn, copper, and glass had varying degrees of price changes, with some increasing and others decreasing [2]. Stock Indexes and Weekly Changes - The Shanghai Composite Index and other indexes also had corresponding price changes, with the Hang Seng Index rising by 0.38% - 1.10% [2]. Bond and Exchange Rates - Chinese 10 - year government bonds increased by 2.61%, and the euro - US dollar exchange rate rose by 1.79% [2]. Commodity Views Summary Macro - Financial Sector Stock Index Futures - Strategy view: Among 9 institutions surveyed, 1 was bullish, 1 was bearish, and 7 expected a sideways movement [4]. - Bullish logics: RMB appreciation, capital inflow, net financing purchase, potential monetary policies, and policy support for the stock market [4]. - Bearish logics: Global debt issues, ineffective industrial policies, slow economic improvement, and low market trading volume [4]. Bond Futures - Strategy view: Among 7 institutions surveyed, all 7 expected a sideways movement [4]. - Bullish logics: Low possibility of tightened liquidity, declining interest rates, policy constraints on market rates, and weak real - economy financing demand [4]. - Bearish logics: Unlikely further interest - rate cuts, upcoming special treasury bond supply, rising risk appetite, and expected policy - driven inflation and growth [4]. Energy Sector Crude Oil - Strategy view: Among 9 institutions surveyed, 1 was bullish, 4 were bearish, and 4 expected a sideways movement [5]. - Bullish logics: Rebound in transportation data, decline in US active oil rigs, high gold - oil ratio, and lack of clear OPEC production increase data [5]. - Bearish logics: Approaching US debt crisis, rumored OPEC+ production increase, inventory accumulation, easing US - Iran relations, poor US debt auction, and tariff threats [5]. Agricultural Sector Palm Oil - Strategy view: Among 8 institutions surveyed, 0 were bullish, 2 were bearish, and 6 expected a sideways movement [5]. - Bullish logics: Increase in Malaysian palm oil exports, limited production increase in May, high Indian imports, and decreasing domestic inventory [5]. - Bearish logics: Increase in Malaysian palm oil production, excessive domestic purchases, higher - than - expected production data, seasonal production increase, and potential reduction in biodiesel demand [5]. Non - Ferrous Metals Sector Aluminum - Strategy view: Among 7 institutions surveyed, 2 were bullish, 0 were bearish, and 5 expected a sideways movement [6]. - Bullish logics: Tariff - buffer - driven exports, improvement in US manufacturing PMI, inventory reduction, and continuous decline in social inventory [6]. - Bearish logics: Low downstream processing profits, post - tariff - window demand pressure, potential decline in photovoltaic demand, and high valuation [6]. Chemical Sector Glass - Strategy view: Among 7 institutions surveyed, 0 were bullish, 3 were bearish, and 4 expected a sideways movement [6]. - Bullish logics: Improved regional sales, reduced inventory, potential policy support, and technical support at the current price [6]. - Bearish logics: Price cuts for inventory reduction, high daily melting volume, approaching traditional off - season, and weak real - estate demand [6]. Precious Metals Sector Gold - Strategy view: Among 7 institutions surveyed, 4 were bullish, 0 were bearish, and 3 expected a sideways movement [7]. - Bullish logics: Global bond market volatility, Chinese reduction of US debt, trade risks, and geopolitical tensions [7]. - Bearish logics: Market pricing of US fiscal bill impact, potential limited impact of tariff threats, possible decline in gold's relative attractiveness, and overbought technical signals [7]. Black Metals Sector Coking Coal - Strategy view: Among 9 institutions surveyed, 0 were bullish, 3 were bearish, and 6 expected a sideways movement [7]. - Bullish logics: Coal mine maintenance, high steel - mill profits, strong basis after price decline, and weak coking - enterprise production - cut incentives [7]. - Bearish logics: High mine inventory, declining iron - water production, high auction failure rate, shrinking coking profits, and high port clearance volume [7].