Group 1 - The central bank of China set the RMB central parity rate at 7.0928, a decrease of 10 points [1] Group 2 - The probability of the Federal Reserve lowering interest rates by 25 basis points in October is 98.3%, while the probability of maintaining rates is 1.7% [2] - The cumulative probability of a 50 basis point rate cut by December is 93.4% [2] Group 3 - Bank of America now expects the Federal Reserve to end its balance sheet reduction at the end of October instead of December due to high repo market rates [3] - The report indicates an increased risk of the Fed ending quantitative tightening and starting large-scale purchases of Treasury securities [3]

Core Insights - As of the end of 2024, hedge funds in the Cayman Islands are projected to hold more U.S. Treasury securities than reported by official U.S. data, potentially exceeding it by $1.4 trillion [1] - The holdings of these funds are expected to reach $1.85 trillion by December, having increased by $1 trillion since 2022, while the U.S. Treasury reports only $423 billion [1] - The Cayman Islands has become the largest foreign holder of U.S. debt, surpassing China, Japan, and the UK [1] Group 1 - The discrepancy in reported figures may arise from official data not fully capturing transactions related to basis trading [1] - Hedge funds engage in basis trading by shorting U.S. Treasury futures and buying the underlying securities to profit from the price difference [1] - The purchased U.S. Treasuries are used as collateral in the repo market to finance basis trading, complicating the tracking of ownership [1] Group 2 - According to the researchers, while custodians may perceive the Treasuries as sold, the actual ownership may still reside with the hedge funds [1]