Core Viewpoint - The potential replacement of the UK Chancellor of the Exchequer by a more left-leaning successor is causing significant unrest in the bond market, leading to rising bond yields and the reactivation of "bond vigilantes" [1] Group 1: Market Reactions - The possibility of political turmoil in the UK is pushing bond yields higher [1] - The bond market is reacting negatively to the speculation of a left-leaning successor to the current Chancellor [1] Group 2: Bond Vigilantes - The term "bond vigilantes" refers to investors who influence government and central bank policies by driving down bond prices and raising yields [1] - The concept was first introduced by Wall Street analyst Ed Yardeni in the 1980s [1]

Group 1 - A series of long-term sovereign bond auctions globally have faced weak demand, raising concerns about the sustainability of government financing plans in countries like the US and Japan [1] - Japan's 30-year bond auction marked the third consecutive weak auction in three weeks, with one demand indicator hitting its lowest level in 2023 [1] - The upcoming US auctions of 10-year and 30-year bonds are under scrutiny due to growing concerns over the expanding fiscal deficit, leading investors to demand higher risk premiums for holding long-term US bonds [1] Group 2 - The market reaction to the auction results was relatively stable, with Japanese long-term bonds continuing to rise, influenced by weak US employment data and expectations of potential Fed rate cuts [3] - Demand fluctuations have prompted some countries to adjust their bond issuance strategies, with Japan seeking market participants' opinions on bond issuance and the UK reducing its long-term gilt issuance to a historical low [3] - The rising global yield trend signals investor concerns over the sustainability of government borrowing at near-zero interest rates, with fears of a repeat of the UK bond market crisis in 2022 [3]

Report Industry Investment Rating No relevant content provided. Core View of the Report Through macro - fundamental analysis and technical analysis using tools like the golden ratio line, horizontal line, and moving average, the report predicts the likely trends of today's futures main contracts. Specifically, stock index futures, ten - year and thirty - year treasury bond futures, gold, copper, and palm oil futures are expected to oscillate strongly; zinc futures will oscillate slightly stronger; silver and aluminum futures will oscillate sideways; alumina and container shipping (European line) futures will oscillate weakly; while industrial silicon, polysilicon, lithium carbonate, rebar, hot - rolled coil, iron ore, coking coal, glass, soda ash, crude oil, PTA, PVC, methanol, and natural rubber futures are expected to oscillate weakly [2][3][4]. Summary by Relevant Catalogs 1. Macro News and Trading Tips - In China, policies were introduced to improve the modern enterprise system, start environmental protection inspections, and strengthen employment public services. The on - shore and offshore RMB against the US dollar rose, and the water resource tax revenue increased. Globally, Moody's maintained China's sovereign credit rating, and there were developments in international politics, trade, and cryptocurrency, as well as news related to the cease - fire in Gaza and Japan's economic support policies [9][10][11]. - On May 26, international precious metal futures closed with mixed results, and international oil prices fluctuated slightly. OPEC + advanced its July production meeting and may plan a large - scale production increase. Global thermal coal prices hit a four - and - a - half - year low [13][14]. 2. Stock Index Futures - On May 26, the main contracts of CSI 300, SSE 50, CSI 500, and CSI 1000 stock index futures showed different trends, with some experiencing downward pressure and others rebounding. The A - share market was in a state of shrinking volume consolidation. It is expected that in May 2025, the main contracts of stock index futures IF, IH, IC, and IM will likely oscillate strongly in a wide range. On May 27, stock index futures are expected to oscillate strongly [16][17][20]. 3. Treasury Bond Futures - On May 26, the main contracts of ten - year and thirty - year treasury bond futures showed a slightly stronger oscillation. The central bank conducted a 7 - day reverse repurchase operation, resulting in a net investment of 247 billion yuan. It is expected that on May 27, the main contracts of ten - year and thirty - year treasury bond futures will likely oscillate strongly [39][41][43]. 4. Precious Metal Futures - On May 26, the main contracts of gold and silver futures showed different trends, with gold's upward momentum weakening and silver rebounding weakly. It is expected that in May 2025, the main continuous contracts of gold and silver futures will oscillate in a wide range. On May 27, the main contract of gold futures is expected to oscillate strongly, while silver will oscillate sideways [44][51][55]. 5. Base Metal Futures - On May 26, the main contracts of copper, aluminum, alumina, and zinc futures showed different trends. It is expected that in May 2025, the main continuous contracts of copper, aluminum, and zinc futures will oscillate strongly, and alumina will oscillate strongly in a wide range. On May 27, copper futures are expected to oscillate strongly, aluminum will oscillate sideways, alumina will oscillate weakly, and zinc will oscillate slightly stronger [55][61][71]. 6. Industrial Metal Futures - On May 26, the main contracts of industrial silicon, polysilicon, lithium carbonate, rebar, hot - rolled coil, iron ore, and coking coal futures generally showed downward trends. It is expected that on May 27, these futures will likely oscillate weakly, with industrial silicon, polysilicon, and lithium carbonate potentially hitting new lows since listing [75][77][79]. 7. Other Commodity Futures - On May 26, the main contracts of glass, soda ash, crude oil, PTA, PVC, methanol, palm oil, natural rubber, and container shipping (European line) futures showed different trends. It is expected that on May 27, glass, soda ash, crude oil, PTA, PVC, methanol, and natural rubber futures will oscillate weakly; palm oil will oscillate strongly; and container shipping (European line) futures will oscillate weakly [99][101][103].

Report Investment Ratings No investment ratings for the industry are provided in the report. Core Views - For stock index futures, consider taking phased profit - taking or defensive operations, and consider short - selling small and medium - cap indices on rallies. - For treasury bond futures, focus on the stock - bond seesaw logic and the steepening of the yield curve. - For container shipping on the European route, the previous trading momentum has been released, and now the focus is on the implementation of the freight rate increase. - For various commodities, different views and strategies are provided according to their respective fundamentals, such as trading strategies for eggs, apples, etc. [10][11][12] Summary by Category Macro News - The General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the "Opinions on Improving the Modern Enterprise System with Chinese Characteristics", aiming to improve the enterprise income distribution system. - Moody's maintained China's sovereign credit rating at "A1" with a negative outlook. The Chinese Ministry of Finance believes it reflects the positive prospects of the Chinese economy. - Central Huijin emphasized fulfilling its responsibilities in state - owned financial capital management. - Goldman Sachs is overweight on Chinese stocks, expecting moderate improvement in corporate earnings and increased foreign capital inflows. - Trump commented on US manufacturing and threatened to withdraw $3 billion in funding from Harvard. - The Minneapolis Fed President said the Fed may wait for clearer situations due to multiple uncertainties. - Nomura warned that multiple factors may trigger the "Bond Vigilantes" action. - OPEC+ advanced its July production meeting to May 31 and may plan a third consecutive monthly increase of 411,000 barrels per day. [7][8][9] Futures Strategies Stock Index Futures - Strategy: Consider phased profit - taking or defensive operations. Short - sell small and medium - cap indices on rallies. The market may enter a short - term consolidation phase. [10] Treasury Bond Futures - Strategy: Focus on the stock - bond seesaw logic and the steepening of the yield curve. Bond supply pressure has a significant impact on the capital market, and the previous policies showed limited support for the domestic economic downturn. [11] Commodity Markets Container Shipping on the European Route - The previous trading momentum has been released, and now the focus is on the implementation of the freight rate increase. The 08 contract may consolidate in the short - term and face uncertainties in the long - term. [12] Cotton - The Sino - US tariff friction has eased, which is beneficial for cotton prices in the short - term, but there are still pressures. Technically, the price is under the 60 - day moving average. Pay attention to the Sino - US trade situation and the downstream demand. [13][14][15] Sugar - The sugar market has sufficient short - term supply, but there are uncertainties in making up the production - demand gap. The international market expects an oversupply, while the domestic market may show a resistant and range - bound trend. [15][16][18] Eggs - Before the Dragon Boat Festival, consumption may improve, and the spot price may stop falling and rebound. However, the egg price may face greater pressure in June. It is recommended to short the 07 contract on rallies. [19] Apples - Adopt a light - position positive spread strategy. The market is in a volatile state due to inconsistent views on the apple production situation in different regions. [19][20] Red Dates - Hold short positions and pay attention to downstream demand and abnormal changes in the production areas. The market may be range - bound at the bottom due to the supply - demand pattern. [20][22] Pigs - The spot price is weak. With the increase in supply and the seasonal weakening of demand, it is recommended to short the near - month contracts. [23] Crude Oil - OPEC+ plans to increase production, and the global economic outlook is weak. The oil price is expected to be in a weak and volatile state in the long - term, with a possibility of a short - term rebound. [24] Fuel Oil - The fuel oil price will follow the crude oil price. The market has no main contradiction, and the demand is affected by multiple factors. [25] Plastics - Consider a long - position allocation for L and PP after the price decline, and also consider a long - position for the 9 - 1 month spread. [26][27] Methanol - Do not chase short positions in the short - term. Short the methanol after a rebound as the supply pressure is high. [27] Caustic Soda - The futures price may be strong in the context of strong spot prices. Pay attention to the resumption of production of alumina enterprises. [28] Soda Ash and Glass - Soda ash supply pressure increases, and the price is weak. Glass may be volatile in the short - term, and the price is likely to fall without significant improvement in demand. [29][30][31] Asphalt - The asphalt price is expected to follow the oil price and move towards 3400 after the basis convergence. [31] Polyester Industry Chain - It is recommended to short on rallies as the supply of PX and PTA is expected to increase. [30] Pulp - Pay attention to macro - sentiment. The market may be range - bound in the short - term, with a possibility of a rebound. Consider options strategies. [31] Logs - The market is expected to be range - bound in the short - term. Pay attention to downstream construction and port inventory. [31] Urea - The urea production is at a historical high. The market may be weak in the short - term and may turn strong if there are export - related positive factors. [30][31] Aluminum and Alumina - Aluminum is expected to be range - bound, and short - term range trading can be considered. Alumina is expected to reach a balance in June, and it is recommended to wait and see. [32] Industrial Silicon and Polysilicon - Maintain a short - position view on industrial silicon before the effective supply reduction in the wet season. For polysilicon, there is a risk of price decline due to increased supply and weak demand. [32] Steel and Iron Ore - The steel market has strong supply and weak demand. It is expected to be range - bound in the short - term and weak in the long - term. [33] Ferroalloys - For ferrosilicon, go long on dips; for ferromanganese, hold short positions. Consider a long - ferrosilicon and short - ferromanganese arbitrage. [33][34]

Core Viewpoint - The Japanese long-term bond market is experiencing a supply-demand imbalance, leading to a significant rise in yields for 10-year and 30-year Japanese government bonds, while U.S. Treasury yields are also increasing. Despite this volatility in the bond market, the stock market shows surprising resilience, indicating either market expectations of economic recovery or an impending correction in stock prices [1][2]. Group 1: Market Dynamics - Nomura Securities reports that the current market situation may represent a "calm before the storm," with potential for increased volatility in the coming months as the June U.S.-Japan summit approaches, focusing on exchange rates and trade negotiations [2][6]. - The bond market's turmoil is not expected to trigger immediate policy changes from either the Bank of Japan or the U.S. government, as both institutions show a lack of concern regarding the bond market chaos [7][8]. Group 2: Investment Recommendations - Nomura suggests that investors should wait for opportunities to buy Japanese stocks, targeting entry points at approximately 2,600 for the TOPIX index and around 36,000 for the Nikkei 225 index [9][10]. - The firm has raised its yield expectations for 10-year and 30-year Japanese and U.S. government bonds, indicating a more cautious outlook on bond investments [9][10]. Group 3: Future Projections - The 10-year Japanese government bond yield is projected to range from 1.15% to 1.70% by the end of 2025, while the 30-year yield is expected to be between 2.60% and 3.20% [10]. - The U.S. 10-year Treasury yield is anticipated to fluctuate between 3.80% and 4.80% during the same period, reflecting ongoing economic uncertainties [10].

Core Viewpoint - Concerns over the expanding deficit threatening the U.S. safe-haven status are reflected in the weak demand for a $16 billion 20-year Treasury auction, leading to declines in U.S. stocks, bonds, and the dollar [3][4]. Group 1: Treasury Auction Results - The U.S. Treasury auctioned $16 billion of 20-year bonds with a winning yield of 5.047%, marking the second instance of yields surpassing 5% since the bond's introduction five years ago [3]. - The winning yield was 24 basis points higher than April's 4.810% and approximately 1.2 basis points above the pre-issue rate of 5.035%, indicating a significant tail risk [3]. - This auction is considered one of the worst performances for this maturity since its launch, reflecting deteriorating investor sentiment towards U.S. Treasuries [3]. Group 2: Market Reactions - The weak auction results exacerbated a multi-week sell-off in Treasuries, highlighting growing investor dissatisfaction with increasing U.S. debt levels [3][4]. - The S&P 500 index fell by 1.5%, while the 10-year Treasury yield reached 4.607%, the highest since February 13 [3]. - Analysts noted that the market's reaction to the auction signals a collective avoidance of U.S. debt by foreign buyers, with rising financing costs putting pressure on the stock market [4]. Group 3: Political and Economic Implications - The White House intensified pressure on Republicans to approve Trump's tax plan, which could add trillions to the already ballooning budget deficit [6]. - Concerns were raised that the current administration is unlikely to make meaningful cuts to the deficit, as highlighted by former Treasury Secretary Steven Mnuchin [6]. - The bond market is seen as a barometer for fiscal sustainability, with rising yields indicating that investors are increasingly wary of the government's fiscal policies [7]. Group 4: Debt and Deficit Statistics - The U.S. public debt-to-GDP ratio is approximately 100%, with interest payments projected to reach about $880 billion in 2024, exceeding defense spending [8]. - The amount of outstanding debt surged from under $14 trillion at the end of 2016 to nearly $30 trillion [8]. - The annual sales of U.S. government debt reached a record $2.6 trillion last year, indicating a significant increase in borrowing [8].