Group 1 - The article discusses the rapid appreciation of the Renminbi and the simultaneous surge in gold and silver prices, with COMEX gold rising by 3.0% to $3475.5 per ounce and COMEX silver increasing by 6.7% to $40.3 per ounce [2][39]. - The S&P 500 index fell by 0.1%, while the French CAC40 dropped by 3.3%, indicating a bearish trend in developed markets [2][3]. - Emerging market indices showed mixed results, with Brazil's IBOVESPA rising by 2.5% and India's SENSEX30 declining by 1.8% [3][11]. Group 2 - The article highlights the impact of political events in France, where a proposed €440 billion austerity plan led to a significant drop in the CAC 40 index and a spike in government bond yields, raising concerns about the stability of the French government [47]. - The U.S. Treasury auction results showed strong demand for short-term and floating rate bonds, with the 6-month bond receiving a bid-to-cover ratio of 3.36, indicating robust investor interest [51][52]. Group 3 - The article notes that the U.S. fiscal deficit for the year 2025 has reached $1.14 trillion, with total expenditures of $5.31 trillion and tax revenues of $3.29 trillion, reflecting a significant increase in government spending compared to the previous year [54][56]. - The article mentions that the Federal Reserve is facing pressure to lower interest rates, with expectations of a 25 basis point cut in September and further reductions in the following months [77][81]. Group 4 - The article reports that the U.S. PCE price index for July matched market expectations at 2.6%, while the core PCE index was at 2.9%, indicating stable inflationary pressures [81]. - Initial jobless claims in the U.S. were reported at 229,000, lower than the market expectation of 230,000, suggesting a resilient labor market [84].

Core Insights - The article discusses the potential for a new "3 trillion" investment, focusing on the transition of demand towards the service sector as GDP per capita reaches between $10,000 and $30,000, while highlighting the current supply constraints in services and the investment gap that exists [4]. Group 1: Deep Dive Topics - The article emphasizes the need for investment in human capital to bridge the existing gaps in service supply and to facilitate the transition towards a service-oriented economy [4]. Group 2: Hot Topics - The article explores the contrasting expectations and realities of inflation in the U.S. post-tariff implementation, questioning whether inflation will resurge in the latter half of the year [8]. - It also discusses the significance of the "15th Five-Year Plan" as a critical period leading up to the 2035 vision, outlining potential focus areas for development [10]. - The article addresses geopolitical risks, specifically regarding Iran's decision to block the Strait of Hormuz, and evaluates the credibility of such threats and their potential market impacts [13]. Group 3: High-Frequency Tracking - Domestic shipping prices have been on the rise, indicating a recovery in port freight volumes despite overall weak infrastructure construction activity [15]. - In the U.S., recent bond auctions have performed better than expected, while retail sales data for May fell short of projections, indicating mixed economic signals [20].

Core Viewpoint - The article discusses the potential investment opportunities in the context of the new "three trillion" investment, focusing on the transition of demand towards the service sector as GDP per capita reaches between $10,000 and $30,000, while highlighting the current supply constraints in services and the investment gap that exists [4]. Group 1: Deep Topics - The article emphasizes the need for investment in human capital to bridge the existing investment gap in the service sector [4]. Group 2: Hot Topics - The article analyzes the contrasting expectations and realities of inflation in the U.S. following the implementation of reciprocal tariffs, questioning whether inflation will resurge in the latter half of the year [8]. - It discusses the key areas of focus for the "15th Five-Year Plan" as a critical period leading to the 2035 vision, outlining the progress and potential priorities [10]. - The article addresses the implications of Iran's parliamentary decision to block the Strait of Hormuz, assessing the credibility of such threats and their potential market impacts [13]. Group 3: High-Frequency Tracking - Domestic shipping prices have been continuously rising, indicating a recovery in port freight volumes despite weak overall infrastructure construction [15]. - In the U.S., the recent bond auction performed better than expected, while retail sales in May fell short of forecasts, reflecting mixed economic signals [20]. - The article outlines various recent domestic policy initiatives aimed at enhancing financial market regulation and promoting digital currency operations, including the establishment of a personal credit agency and offshore trade financial services [22].

Core Points - The U.S. Treasury auctioned $22 billion in 30-year bonds, showing strong demand, particularly from overseas buyers [1] - The winning bid rate for the 30-year bonds was 4.844%, the highest since January, and lower than the pre-auction rate of 4.859% by 1.5 basis points [1] - The auction's bid-to-cover ratio was 2.43, the second highest since January, indicating robust interest [3] Auction Data Summary - Indirect bid ratio reached 65.2%, the highest since January, compared to 58.9% last month, reflecting strong foreign demand [2] - Direct bid ratio was 23.4%, lower than last month's 27.2% but above the recent average of 22.3%, indicating stable domestic demand [2] - Primary dealers' allocation was 11.4%, the lowest since November, suggesting sufficient buying interest without needing dealer support [2] Market Reaction - Following the auction results, the market reacted positively, with the 10-year bond yield dropping to a daily low of 4.34%, below levels prior to last week's strong non-farm payroll report [5] Long-term Supply Pressure - Despite the strong auction performance, the U.S. faces significant long-term bond supply pressure due to financing needs from large spending plans initiated during the Trump administration [6]

Group 1 - The recent 30-year Treasury bond auction by the U.S. Treasury raised $22 billion, with a yield of 4.844%, which is approximately 1.5 basis points lower than the market level before the auction, indicating strong demand despite slightly lower foreign participation [1] - Following the auction, the yield on the 30-year Treasury bond dropped to 4.839%, down from above 4.9% at the market open, suggesting that successful auctions typically lead to higher bond prices and lower market rates [1] - Foreign investors purchased 65.2% of the 30-year bonds, slightly below the average of 67.4% from the last six similar auctions, while the 10-year bond auction saw a foreign participation rate of 70.6%, lower than the average of 73.4% [1] Group 2 - Analysts noted that the measurement of foreign demand may have technical biases, as "indirect bidders" are often seen as representatives of foreign investors, but some foreign buyers place orders directly through U.S. banks, which are not included in the "indirect bidder" statistics [2] - A more detailed report on investor classification will be released on June 24, which will provide a clearer picture of overseas demand for U.S. Treasury bonds [2] - Despite the subdued foreign demand, "direct bidders," primarily domestic institutions, showed strong interest, supporting the recent 10-year and 30-year bond auctions amid increasing U.S. fiscal deficits and debt supply [2]

Group 1: Report Overview - The report aims to introduce the process of US Treasury bond auctions, participants, and observation indicators for the primary market liquidity of US Treasury bonds [3][4] Group 2: US Treasury Bond Auction Process - The US Treasury releases financing plans for the current and next quarters and auction sizes for the next three months around the end of January, April, July, and October each year [3][5] - The Treasury announces specific auction dates, terms, and amounts one day to one week in advance [3][5] - After the auction announcement, investors start pre - trading in the When - Issued market, which helps with price discovery and bond distribution [5] - On the auction day, investors can bid electronically through Treasury Direct or TAAPS systems, with competitive and non - competitive bids available [5] Group 3: Participants in the US Treasury Bond Primary Market - Participants include institutional and individual investors, divided into competitive (including direct and indirect bidders) and non - competitive bidders [3][7] - Direct bidders are institutions or individuals submitting bids directly, such as primary dealers, investment funds, and insurance companies [3][7] - Indirect bidders bid through direct bidders, including FIMA through the New York Fed [7] - Non - competitive bidders are mainly small investors and FIMA, with certain bid amount limits [7][8] - The Federal Reserve's SOMA reinvests in maturing US Treasury bonds through non - competitive bids at auctions, and its roll - over amount is not included in the announced auction amount [3][7] Group 4: US Treasury Bond Auction Categories and Frequencies - For 2Y, 3Y, 5Y, and 7Y Treasury bonds, the Treasury issues them monthly; 10Y, 20Y, and 30Y bonds are issued quarterly; and Treasury bills with maturities less than 1Y are issued weekly [10] - Cash management bills are issued irregularly to meet the Treasury's temporary funding needs [10] - After the initial issuance, most bonds are reopened within the next two months to increase the bond's outstanding amount and liquidity [10][11] Group 5: Observation Indicators for US Treasury Bond Auction Demand - The bid - to - cover ratio, a higher ratio indicates strong investor demand, and it can be compared with the results of the last six auctions [13] - A high proportion of primary dealer allocations means insufficient demand from other investors, and their allocation share in Treasury auctions has been decreasing [15] - If the high yield is higher than the When - Issued yield (Tail), it shows insufficient auction demand; otherwise (Stop Through), it represents strong demand [17] - The indirect investor allocation ratio can reflect overseas investors' demand to some extent, and the Treasury publishes detailed investor category allocation information twice a month [20]

Core Viewpoint - The article highlights a significant shift in global asset allocation, with a notable inflow into European equities and bonds, while Chinese equities are experiencing outflows, indicating a "seesaw" effect in the market dynamics [1][3][41]. Market Review - The successful outcome of the China-US-Switzerland talks on May 12 has significantly boosted global risk appetite, leading to an increase in global stock indices [10][41]. - The 20-year US Treasury auction on May 22 was poorly received, with the final yield surpassing 5%, raising concerns about US fiscal pressure [1][10]. Global Asset Performance - In May, equity assets generally rose, while US Treasury yields increased and the dollar weakened. The 10-year US Treasury yield rose by 24 basis points [2][13]. - Gold prices increased by 2.1%, and Brent crude oil rose by 1.7% during the same period [2][13]. Global Fund Flows - In May, there was a significant inflow of $215 billion into global money market funds, with developed market equities receiving $305 billion, while emerging market equities saw an outflow of $83 billion [3][20]. - Developed European fixed income and equity funds attracted inflows of $190 billion and $247 billion, respectively, indicating stronger performance compared to the US [3][20]. China Market Dynamics - By the end of May, global equity funds experienced an outflow of $88.5 billion from China, a reversal from the inflow of $198.3 billion in April [4][41]. - The outflow was primarily driven by passive ETFs, which saw a withdrawal of $82.5 billion in May compared to an inflow of $203.9 billion in April [4][41]. - In terms of sector performance, there was a significant inflow into technology, real estate, and materials, while telecommunications, consumer staples, and healthcare saw outflows [4][41]. Country Allocation - Global market funds reduced their allocation to US equities by 1.0 percentage points in April, while increasing allocations to European equities [5][41]. - The allocation to China remains stable at 26.4%, indicating potential for further growth [5][41]. Emerging Markets - Emerging market funds saw a decrease in allocation to Chinese equities, with a drop of 1.6 percentage points compared to March, while the allocation to Indian equities also decreased [5][41]. - In May, emerging market equity funds experienced a net outflow of $45 billion, with China being the primary contributor to this outflow [43][46].

Group 1 - The upcoming auction of $22 billion in 30-year U.S. Treasury bonds is seen as a critical test of market confidence amid rising long-term bond yields and concerns over U.S. fiscal health [1] - The 30-year U.S. Treasury bond has been labeled the "least popular bond" as investor confidence in long-term debt wanes, with yields reaching a near 20-year high of 5.15% last month [2] - The rapid expansion of U.S. debt and deficits is identified as a key driver behind the rising yields, leading to a perception that long-term U.S. Treasuries are increasingly influenced by political factors rather than monetary policy [2] Group 2 - Despite prevailing concerns, there is potential for a turnaround as some investors find the 5% yield level attractive for purchasing 30-year bonds [3] - The U.S. Treasury will also auction $58 billion in 3-year bonds and $39 billion in 10-year bonds, with overall demand providing further insights into market sentiment [3] - The expectation is for a steeper yield curve, with short-term rates potentially declining if economic data weakens, while long-term rates remain pressured by deficits and a weak dollar outlook [4]

Investment Rating - The report maintains an "Overweight" rating for the non-ferrous metals sector [1]. Core Views - The non-ferrous metals sector experienced a 1.26% increase in the week from May 19 to May 23, ranking it in the middle among all primary industries. Precious metals saw a significant rise of 5.58%, while industrial metals increased by 1.86% [1][14]. - The report highlights that tariff policies and a cooling U.S. Treasury auction have negatively impacted macroeconomic sentiment, leading to a weakening in industrial metals [1][24]. - Gold prices have surged due to deteriorating U.S. fiscal conditions, with COMEX gold closing at $3,357.70 per ounce, a 4.75% increase week-on-week [4][49]. Summary by Sections Market Review - The Shanghai Composite Index fell by 0.57%, while the non-ferrous metals sector rose by 1.26%, outperforming the index by 1.83 percentage points [14]. - Among the sub-sectors, precious metals led with a 5.58% increase, followed by industrial metals at 1.86%, while small metals and new materials declined [1][14]. Industrial Metals - **Copper**: As of May 23, LME copper was priced at $9,614 per ton, up 1.76% week-on-week. Supply remains tight due to mining incidents, but domestic smelting capacity is unaffected in the short term [2][32]. - **Aluminum**: LME aluminum closed at $2,466 per ton, down 0.62%. The supply side is impacted by the shutdown of bauxite mines in Guinea, leading to a significant rise in alumina prices [3][36]. - **Zinc**: LME zinc price increased by 0.78% to $2,713 per ton, while SHFE zinc fell by 1.27% to 22,215 yuan per ton. Zinc inventories decreased week-on-week [39]. - **Tin**: LME tin price decreased by 0.46% to $32,665 per ton, with mixed inventory changes observed [45]. Precious Metals - Gold prices have risen significantly due to concerns over U.S. fiscal health, with a notable increase in both COMEX and SHFE gold prices [4][49]. - The report notes that the U.S. credit rating downgrade and a cooling Treasury auction have further weakened market sentiment, contributing to the rise in gold prices [4][51].

Investment Rating - The report maintains an "Overweight" rating for the non-ferrous metals sector [1]. Core Views - The non-ferrous metals sector experienced a weekly increase of 1.26%, ranking it in the middle among all primary industries. Precious metals saw a significant rise of 5.58%, while industrial metals increased by 1.86% [1][14]. - The report highlights that tariff policies and a cooling U.S. Treasury auction have negatively impacted macroeconomic sentiment, leading to a weakening in industrial metals [1][24]. - Gold prices have surged due to deteriorating U.S. fiscal conditions, with COMEX gold closing at $3,357.70 per ounce, a 4.75% increase week-on-week [4][49]. Summary by Sections Market Review - The Shanghai Composite Index fell by 0.57%, while the non-ferrous metals sector rose by 1.26%, outperforming the index by 1.83 percentage points [14]. - Among the sub-sectors, precious metals led with a 5.58% increase, followed by industrial metals at 1.86%, while small metals and new materials declined [1][14]. Industrial Metals - **Copper**: As of May 23, LME copper was priced at $9,614 per ton, up 1.76% week-on-week. Supply remains tight due to mining incidents, but domestic smelting capacity is unaffected [2][32]. - **Aluminum**: LME aluminum closed at $2,466 per ton, down 0.62%. The supply side is impacted by the shutdown of bauxite mines in Guinea, leading to a significant rise in alumina prices [3][36]. - **Zinc**: LME zinc price increased by 0.78% to $2,713 per ton, with inventories decreasing [39]. - **Tin**: LME tin price fell by 0.46% to $32,665 per ton, with mixed inventory trends [45]. Precious Metals - Gold prices have risen significantly due to concerns over U.S. fiscal health, with a notable increase in both COMEX and SHFE gold prices [4][49]. - The report notes that the U.S. credit rating downgrade and a lackluster Treasury auction have further weakened market sentiment, contributing to the rise in gold prices [51][49]. Rare Earths - The report indicates stable supply and moderate demand for rare earths, with prices showing a slight decline [4]. News Highlights - The report discusses the implications of U.S. tariff policies and their potential impact on the market, particularly in relation to gold and industrial metals [4][51].