Core Viewpoint - Strong employment data has led to a significant shift in market expectations, resulting in a large-scale unwinding of long positions in U.S. Treasury futures, which in turn has driven yields higher [1][2]. Group 1: Market Reactions - Following the release of robust non-farm payroll data, traders sold approximately $7 billion in 10-year Treasuries, leading to a sharp decline in open positions [1][2]. - The strong employment figures have caused market participants to reduce their expectations for a rate cut in July to zero, prompting a sell-off in bonds [1][2]. Group 2: Auction Pressure - Upcoming auctions of $39 billion in 10-year Treasuries and $22 billion in 30-year Treasuries are expected to further pressure long positions, especially if demand appears weak [1][3]. - A recent auction of $58 billion in 3-year Treasuries showed solid results, providing some support for subsequent auctions [3]. Group 3: Positioning and Sentiment - Asset managers aggressively increased their long positions in Treasury futures before the employment report, with net long positions in 5-year and 10-year contracts reaching record highs [3]. - Following the employment data, traders are seeking both upside and downside protection, indicating increased uncertainty regarding interest rate prospects [3].

Group 1 - The geopolitical tensions in the Middle East have led to rising oil prices, raising inflation concerns and putting pressure on the US and European bond markets [1][8] - The US 2-year Treasury yield rose by 2 basis points to 3.96%, while the 10-year Treasury yield increased by 3 basis points to 4.43%, underperforming compared to German bonds [2][5] - The yield curve for US Treasuries has steepened, indicating market expectations of higher future inflation and interest rates, with the 2-year yield increasing by 8 basis points since last Thursday, lower than the increase in the 10-year yield [5][6] Group 2 - Analysts suggest that the US Treasury yield curve may continue to steepen due to increased geopolitical uncertainty, which could raise future military spending and make inflation more persistent if oil prices remain high [6][8] - Since the escalation of tensions between Israel and Iran, the benchmark US Treasury yield has risen by 9 basis points, reflecting historical patterns where similar conflicts have led to increased yields [7] - Investors are facing dual risks: inflation concerns stemming from trade tensions and worsening US debt issues, which may require higher risk premiums for holding US Treasuries, leading to sustained upward pressure on yields [8]

Group 1 - The core viewpoint is that the recent U.S. Federal Court ruling has boosted market risk sentiment, leading to a decrease in safe-haven demand and a decline in gold prices for four consecutive trading days, reaching a one-and-a-half-week low [1] - Multiple factors are pressuring gold prices, including hawkish signals from the Federal Reserve's meeting minutes, rising U.S. Treasury yields, and the dollar index returning to the 100 mark [1] - Despite the recent weakness in gold prices due to a rebound in the dollar and decreased safe-haven demand, medium to long-term support factors are accumulating, particularly in the context of the Federal Reserve maintaining high interest rates and escalating geopolitical tensions in the Middle East [1] Group 2 - The upcoming release of the U.S. PCE price index on Friday is highlighted as an important reference point for assessing the Federal Reserve's monetary policy direction and gold price trends [1] - The short-term gold price trend is indicated to be weak, with the Bollinger Bands showing an upward opening, while the short-term moving averages are in a bullish arrangement, continuing to exert pressure on gold prices [3] - The suggested trading strategy includes maintaining a low long position, focusing on buying opportunities after pullbacks, with specific resistance and support levels identified for trading [2][3]