Group 1 - The core idea emphasizes the importance of foundational knowledge in investment and fund selection, suggesting that solid fundamentals are essential for successful investing [2] Group 2 - The article discusses why yield is commonly used instead of price for bonds, highlighting that yield provides a unified standard that price cannot offer, making it more comparable across different bonds [3]

Core Viewpoint - The recent 30-year U.S. Treasury bond auction revealed weak market demand, raising concerns about the overall interest in U.S. debt securities [1][2] Group 1: Auction Results - The U.S. Treasury issued $25 billion in long-term bonds with a winning yield of 4.813%, exceeding pre-auction market yields by over 2 basis points, indicating investors' demand for higher returns [1] - Following the auction results, the 30-year Treasury yield rose to 4.829%, reflecting investor disappointment and a decline in bond prices [1] - This marks the third consecutive weak auction this week, following lackluster demand in the 3-year and 10-year bond auctions [1] Group 2: Investor Participation - Primary dealers, seen as market "backstop buyers," subscribed to 17.5% of the issuance, the highest since August 2024, indicating they are taking on more of the subscription when other investors show less interest [2] - Indirect bidders, including foreign central banks, accounted for 59.5% of the auction, below the average of over 61% from the past three auctions [2] - Direct bidders, such as domestic pension funds, subscribed to 23%, slightly below recent averages [2] Group 3: Market Sentiment - The limited interest in the 30-year Treasury bonds is not surprising, as previous auctions in February, March, and May also faced weak demand due to the higher interest rate risk associated with long maturities [2] - The overall trend of weak demand across different maturities suggests that investors are dissatisfied with current Treasury yields, believing that fair value should be higher [2] - This situation poses challenges for the new administration, which is more focused on controlling federal borrowing costs, as weak demand may force the Treasury to issue bonds at higher rates, increasing government debt interest burdens [2]

Core Insights - The 10-year U.S. Treasury yield reached an all-time low of 0.51% on August 4, 2020, marking a significant historical moment in the bond market [1] - Since that low, the yield has increased by nearly 400 basis points, leading to the worst rolling five-year total return on record for 10-year U.S. Treasuries [1] - The current yield of approximately 4.25% is near its long-term average, making it unlikely to replicate the historical performance seen in the early 1980s [5][6] Group 1: Historical Context - The last time the rolling five-year nominal return for 10-year Treasuries was negative was only a few times in the past 230 years [4] - The only three periods with worse real returns than the past five years were the 1790s, post-World War I high inflation, and the years leading up to 1981 [5] Group 2: Future Outlook - The current bond market is seen as correcting a long-standing overvaluation, with prices now closer to fair value if inflation is contained [6] - Despite the potential for positive real returns, the overall annual return is expected to remain in the low single digits, likely not exceeding 1% [6]

Group 1 - The euro experienced a short-term rise of approximately 20 points, approaching 1.1750, with overall narrow fluctuations and remaining roughly flat during the day [1] - The Eurozone STOXX 50 index futures increased by 2.4%, while European bond prices declined [1] - The S&P 500 index rose by 0.57%, the Dow Jones increased by 375 points or 0.84%, and the Nasdaq gained 0.39%, whereas the semiconductor index fell by 0.21% [1] Group 2 - Reports indicate that the US and EU are close to reaching an agreement regarding the 15% tariffs imposed by the Trump administration on the EU [1] - The US and EU will eliminate tariffs on aircraft, spirits, and medical devices [1]