Core Viewpoint - The rumors regarding foreign capital selling US Treasury bonds are unfounded, as data from the US Treasury's International Capital Movement report indicates that the turmoil in May was not caused by foreign investors [1][2]. Group 1: Market Conditions - In May, global trade tensions eased, with the US's "reciprocal tariff" policy in a 90-day buffer period, leading to a 27.6% month-on-month decline in the US trade policy uncertainty index [1]. - The US government faced increasing criticism of the Federal Reserve, and Moody's downgraded the US's last AAA sovereign credit rating, raising concerns about the Fed's independence and the sustainability of US debt [1]. - The 10-year and 30-year US Treasury yields rose above 4.5% and 5.0%, respectively, with monthly increases of 24 and 26 basis points, resulting in a significant drop in Treasury prices [1]. Group 2: Capital Flows - In April, international capital experienced a net outflow of $146 billion, reversing a net inflow of $171.2 billion in March, coinciding with a 4.4% drop in the dollar index [2]. - In May, the US financial market rebounded, with the S&P 500 index rising 6.1%, leading to a net capital inflow of $311.1 billion, a month-on-month increase of $3.257 billion, marking the third-highest monthly inflow on record [2]. Group 3: Foreign Investment in US Securities - Foreign investors net purchased $318.5 billion in US long-term securities in May, a month-on-month increase of $369.1 billion, contributing 113.1% to the net capital inflow [3]. - Private foreign capital was the main contributor, with a net inflow of $333.2 billion, a month-on-month increase of $330.4 billion, marking the highest monthly net inflow on record [4]. Group 4: Types of Securities - Foreign investors significantly increased their holdings of US Treasury bonds, with net purchases of $1.463 billion in May, a month-on-month increase of $1.871 billion, contributing 50.7% to the net purchases of long-term securities [5]. - Private foreign investors were the primary buyers of US long-term securities, shifting from a net sale of $50.6 billion to a net purchase of $318.5 billion in May [5][6]. Group 5: Country Contributions - Canada was the largest contributor to the net purchase of US long-term securities in May, with a net inflow of $146.7 billion, accounting for 39.7% of the total [9]. - Other significant contributors included the Cayman Islands, Singapore, China, and Japan, with China ending a 10-month streak of net sales to net purchase $3.2 billion in May [10][11].

Core Viewpoint - The debate over the sustainability of U.S. debt is expected to dominate the U.S. market in the second half of the year, leading to upward risks for long-term U.S. Treasury yields [1] Group 1 - Analysts from Aramea Asset Management highlight that the "big and beautiful" legislation will significantly increase U.S. debt in the short term [1]

特朗普周一表示将对韩国、日本等国征收25%的关税，并对其他亚洲和非洲国家征收30%~40%不等的 关税，但生效日期被推迟至8月1日，这为谈判留出了更长的时间窗口。 然而，此次关税风暴的冲击不及4月，美国三大指数跌幅不到1%。7月8日开盘后，亚太股市表现更令人 意外，日、韩股市并没有明显受到关税的影响，日经225指数、韩国Kospi指数分别涨0.25%、1.81%， 上证综指和恒生指数分别涨0.7%和1.09%。 随着关税进入第二季，市场的心态显然出现转向。接受第一财经记者采访的投资经理和策略师表示，市 场对关税的担忧有所下降，高盛认为，近期看起来欧美贸易谈判达成协议的可能性变大，尤其是德国和 意大利首脑的态度，可能会实现一个框架协议，然后留有时间进行后续的谈判。同时，机构对股市的配 置热度普遍升温，投行更是逆势上调美股目标价，投资者亦更敢于加码包括中国在内的亚太股市；但不 变的在于，各界对美债可持续性的担忧持续，因而弱美元的共识依旧存在，机构开始严肃对冲美元的敞 口，全球央行增配黄金的趋势仍将继续。 关税第二季下风险资产淡定 就目前而言，仅英国、越南和美国达成协议，其他谈判结果仍不明确。美国财长贝森特在上周日 ...

Core Viewpoint - The article discusses the recent challenges facing U.S. Treasury bonds, including rising yields, structural imbalances in supply and demand, and declining confidence in U.S. creditworthiness, leading to concerns about the sustainability of U.S. debt [1][2][3]. Group 1: Market Dynamics - U.S. Treasury yields surged in May, with long-term yields exceeding 5% for three consecutive days, indicating an oversupply and insufficient demand for Treasuries [1]. - The total U.S. debt has surpassed $36 trillion, increasing by $1 trillion in less than six months, raising concerns about sustainability [1]. - Moody's downgraded the U.S. sovereign credit rating from AAA to AA1, citing that interest payments on debt have exceeded 10% of GDP, breaching international warning levels [2]. Group 2: Economic Policies and Impacts - The U.S. government's tariff policies have led to increased market uncertainty, contributing to fears of high inflation, high interest rates, and economic downturns [2][3]. - The U.S. GDP experienced a 0.3% quarter-on-quarter decline, further exacerbating concerns about the economic outlook [2]. Group 3: Buyer Trends - Foreign ownership of U.S. Treasuries has decreased, with major holders like Japan and China reducing their holdings, reflecting a broader decline in confidence in U.S. credit [4]. - The proportion of foreign official holdings of U.S. Treasuries fell from 45% in 2014 to 28% in 2023, indicating a significant shift in the international monetary landscape [4]. Group 4: Future Outlook - The U.S. Treasury Department's recent buyback of $10 billion in bonds raises questions about the demand for Treasuries and the need for domestic buyers to fill the gap left by foreign investors [1][5]. - The proposed "One Big Beautiful Bill" tax plan could increase U.S. debt by over $2 trillion, complicating the fiscal landscape and potentially leading to further increases in Treasury yields [6]. - As global investors seek safer assets amid rising uncertainty, the trend of selling U.S. Treasuries is expected to continue, with the Treasury Department increasingly forced to buy back its own bonds [6].

Core Viewpoint - The recent surge in U.S. Treasury yields and the record $10 billion buyback operation by the U.S. Treasury have raised concerns about the sustainability and demand for U.S. Treasuries, indicating structural imbalances in the market [1][2]. Group 1: Treasury Yield Dynamics - In May, U.S. Treasury yields soared while prices fell, reflecting an oversupply and insufficient demand for Treasuries [1]. - Long-term Treasury yields exceeded 5% for three consecutive days in late May, highlighting a structural imbalance in supply and demand [1]. - The total U.S. national debt has surpassed $36 trillion, increasing by $1 trillion in less than six months [1]. Group 2: Credit Rating and Economic Concerns - The decline of the "American exceptionalism" narrative has led to decreased global confidence in U.S. assets, including Treasuries, with Moody's downgrading the U.S. sovereign credit rating from AAA to AA1 [2]. - The interest expense on U.S. debt has exceeded 10% of GDP, surpassing international warning levels [2]. - The U.S. federal government's deficit rate is projected to exceed 6% in 2024, with a debt-to-GDP ratio over 123%, significantly above the Maastricht Treaty thresholds [2]. Group 3: Buyer Dynamics - There has been a notable decrease in foreign buyers of U.S. Treasuries, with Japan and China reducing their holdings [3]. - The proportion of Treasuries held by foreign governments has dropped from 45% in 2014 to 28% in 2023, indicating a loss of confidence in U.S. creditworthiness [3]. Group 4: Domestic Demand and Federal Reserve Actions - The increasing supply of Treasuries coupled with declining demand has led to rising yields, raising questions about who will purchase these bonds [4]. - The U.S. Treasury has been unable to rely on the Federal Reserve for bond purchases, as the Fed has been reducing its balance sheet from nearly $9 trillion to over $6 trillion since 2020 [4]. - The Fed's monthly reduction of Treasury holdings has been adjusted from $60 billion to $25 billion, limiting its capacity to absorb new debt [4]. Group 5: Fiscal Policy Implications - The introduction of the "One Big Beautiful Bill" tax plan is expected to exacerbate the situation, potentially increasing the national debt by over $2 trillion [5]. - The combination of rising Treasury issuance and soaring yields, along with the uncertainty from high tariffs, has led global investors to seek safer assets, resulting in continued reductions in Treasury holdings [5].