Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The U.S. raid on Venezuela may increase crude oil volatility, but the overall expected impact is limited [11][12]. - U.S. weekly employment data has improved, and the economic surprise index has rebounded, leading to a rebound in U.S. Treasury yields and the U.S. dollar index [14][15][16]. - The short - term "theoretical dollar" has rebounded, and the dollar index is in an undervalued position compared to the model. The dollar is expected to strengthen in the short - term after the New Year, with a short - term target of 99 - 99.5 [31]. Summary by Related Catalogs 1. Week - to - Week Performance of Major Asset Classes and Market High - Frequency Data Fixed Income - U.S. Treasury yields of various maturities showed different weekly changes. For example, the 10 - year U.S. Treasury yield increased by 6.3bp to 4.19% on January 2, 2026 [33][34]. - Major developed government bond yields also had weekly changes, such as the 10 - year German government bond yield increasing by 3.8bp to 2.90% [33][34]. Exchange Rate Market - The U.S. dollar index rose 0.46% to 98.4240 on January 2, 2026. Other major currencies had different weekly performances, like the euro falling 0.45% and the yen rising 0.17% [68][70]. Commodities - Global major commodities had different weekly changes. For example, Shanghai gold fell 3.66%, while Shanghai copper rose 2.23% [110][111][112]. Overseas Equities - Global major indices had different weekly performances. The S&P 500 index fell 1.06%, while the European Stoxx600 index rose 1.26% [137][138][139]. - S&P index sub - sectors also had different weekly performances. The S&P energy index rose 3.00%, while the S&P optional consumer index fell 3.60% [140][141][142]. 2. Weekly Key Macroeconomic Logic Tracking and Asset Views Weekly Overseas Macroeconomic Highlights - The U.S. raid on Venezuela may increase crude oil volatility. Venezuela's current crude oil exports are 960,000 barrels per day, and its exports to China account for over 60% [11][13]. - U.S. weekly initial jobless claims were lower than expected, and continuing jobless claims decreased. The economic surprise index and hard - data surprise index rebounded [14][15][16]. Weekly Currency Group Scoring - Through the currency group scoring model, in the G10 currency group, the Japanese yen, Canadian dollar, Australian dollar, and Norwegian krone had relatively high comprehensive scores, while the euro and British pound had low scores. In the Asian currency group, the New Taiwan dollar, Philippine peso, Thai baht, and Indian rupee had high scores, and the CNY and CNH had short - term score differentiation [28][29][30]. FICC Asset Views - **Dollar**: In the short - term, it is expected to strengthen, with a target of 99 - 99.5. In the long - term, it will maintain a wide - range oscillation, with an annual oscillation range of 96 - 108, and there is an upward risk [31]. - **Non - U.S. Exchange Rates**: In the short - term, based on scoring, different currencies have different performances. In the long - term, the Japanese yen spot exchange rate is significantly undervalued [31]. - **USD/CNH**: In the short - term, the RMB has a seasonal strengthening trend, but the appreciation space is limited. In the long - term, the RMB is undervalued in the exchange - rate valuation model, and the annual low is expected to be in the range of 6.85 - 6.95, with a high of 7.20 [31]. - **10 - Year U.S. Treasury Yield**: In the short - term, it challenges the 4.20% short - term resistance level. If it breaks through, it can reach 4.30 - 4.35% technically. In the long - term, the central level is around 4.20%, with an upward risk [31]. - **2 - Year U.S. Treasury Yield**: In the short - term, it is expected to oscillate. In the long - term, the support level is around 3.20%, and the target is 3.68%. There is a risk of a "bear steepening" of the yield curve in the second half of the year [31]. - **London Gold Spot**: The Venezuela incident may stimulate safe - haven sentiment, which is beneficial to gold. After the holiday, the gold - silver ratio may continue to repair upwards [31]. - **London Silver Spot**: It is expected to build an oscillation platform at a high level first, waiting for a 20% increase later. The target in the first quarter of 2026 is 90 - 100 US dollars per ounce [31]. 3. Macroeconomic Data Hologram and Fundamental High - Frequency Data Real - Time Economic Momentum - It includes real - time GDP models, GDP sub - items, and sector economic surprise indices of the U.S., as well as economic surprise indices of the U.S., Europe, and China [192][196]. Financial Conditions - It involves the central bank's balance sheet and financial conditions index, including the Fed's balance sheet, G4 central banks' balance - sheet - to - GDP ratios, and financial conditions indices of the U.S. and the eurozone [200][203]. Fiscal Policy - It includes U.S. federal government fiscal expenditure and revenue sub - items, government debt issuance, and the government deficit - to - GDP ratio [208][213]. Employment Market - It tracks U.S. employment market data on a weekly and monthly basis, including non - farm payrolls, job vacancies, and unemployment claims [216][220]. Inflation Indicators - It analyzes U.S. inflation data, including inflation breakdown, core drivers, and inflation expectations [224][226][229]. Consumer Demand - It tracks U.S. consumer data on a weekly and monthly basis, including retail sales, consumer confidence, personal income, and household debt [233][240][247]. Cycle Positioning - It tracks industrial, manufacturing, and inventory cycle indicators, as well as U.S. wholesale, retail, and manufacturing inventories and inventory - to - sales ratios [255][264]. Credit Cycle - It tracks U.S. credit conditions, including corporate credit surveys and high - yield corporate credit spreads [268][270]. Transportation and Logistics - It tracks logistics data between China and the U.S., Europe and the U.S., as well as aviation, supply - chain indices, trucks, and shipping [272][277][279]. Real Estate Market - It includes the U.S. real - estate equity market, credit spreads, and commercial real - estate market data [287][292]. Eurozone - It includes macro - overviews, cycle positioning, and relative - strength analysis of the eurozone, such as deficit rates, inflation, and PMI indicators [297][305][314].

Core Insights - The Federal Reserve's latest report indicates that the dominance of the US dollar in the global bond market exhibits "cyclical fluctuations" rather than a long-term decline [1] Group 1: Dollar's Role in Global Bond Market - Over the past sixty years, the role of the US dollar in the global bond market has experienced cyclical ups and downs, without showing a clear long-term trend of "dollarization" or "de-dollarization" [1] - The research identifies three distinct "waves of dollarization" since the 1960s, highlighting the cyclical nature of currency usage changes [1] - The findings suggest that shifts in currency usage follow a cyclical pattern rather than indicating a steady structural change in the global financing landscape [1]

Core Viewpoint - The central theme of the articles is the Chinese government's continued strict stance against virtual currencies, including stablecoins, emphasizing the need to combat illegal financial activities associated with them and protect citizens' financial security [1][3]. Group 1: Regulatory Actions and Implications - The People's Bank of China has reiterated its commitment to prohibiting virtual currencies and will continue to crack down on illegal financial activities related to them [1]. - Stablecoins are classified as a form of virtual currency and are currently unable to meet requirements for customer identity verification and anti-money laundering, posing risks of being used for illegal activities such as money laundering and fraud [1][2]. - The international financial community is increasingly recognizing the systemic risks posed by stablecoins, particularly in the context of the U.S. using them to reinforce the dollar's global dominance [2]. Group 2: Market Dynamics and Risks - The market for stablecoins is expanding rapidly, with projections indicating that by the end of 2028, the issuance of dollar stablecoins could reach $2 trillion, creating an additional $1.6 trillion demand for U.S. short-term government bonds [2]. - The significant growth in stablecoin supply may lead to outflows from retail bank deposits, putting pressure on banks and potentially resulting in a $6.6 trillion deposit diversion in the U.S. banking sector [2]. - The largest dollar stablecoins hold substantial amounts of U.S. short-term government bonds, and a potential run on these stablecoins could trigger a sell-off of these assets, leading to broader financial market risks [2]. Group 3: Market Sentiment and Speculation - The instability of stablecoins is increasing, as evidenced by the recent significant de-pegging of USDe, which is not backed by fiat or hard assets but rather by users collateralizing their crypto assets [3]. - Speculative activities in the cryptocurrency market are being fueled by optimism in the U.S. stock market driven by AI advancements, creating a dual risk where concerns over an AI bubble could lead to a sell-off in crypto assets [3]. - The interconnectedness of AI infrastructure financing and cryptocurrency speculation presents substantial financial risks, particularly in a volatile market environment [3].

Core Viewpoint - The central theme of the articles is the Chinese central bank's ongoing commitment to prohibiting virtual currencies, including stablecoins, due to their potential for illegal financial activities and risks to financial stability [1][2][3] Group 1: Regulatory Actions - The central bank has convened a meeting with 13 departments to coordinate efforts against virtual currency trading and speculation, emphasizing the need to protect public financial security [1] - Stablecoins are classified as a form of virtual currency and are currently unable to meet customer identification and anti-money laundering requirements, posing risks of money laundering and fraud [1] Group 2: Market Dynamics - The market for stablecoins is expanding, with significant interest following their recognition in the U.S. as a legitimate financial instrument, despite concerns about their actual use primarily for purchasing cryptocurrencies [1][2] - The U.S. aims to leverage stablecoins to maintain the dollar's status as the world's primary reserve currency, with projections indicating that the issuance of dollar stablecoins could reach $2 trillion by the end of 2028, creating additional demand for U.S. short-term government bonds [2] Group 3: Financial Risks - The rapid growth of stablecoins could lead to significant outflows from retail bank deposits, increasing volatility in the banking sector, with estimates suggesting a potential $6.6 trillion in deposit outflows for U.S. traditional banks [2] - The largest dollar stablecoins hold substantial amounts of U.S. short-term government bonds, and a potential run on these stablecoins could trigger a sell-off of these assets, posing systemic risks to financial markets [2][3] Group 4: Speculative Environment - The instability of stablecoins is rising, highlighted by the recent decoupling of USDe, which is not backed by fiat or hard assets, leading to a dangerous leverage cycle in the market [3] - The speculative atmosphere surrounding cryptocurrencies is influenced by optimism in the U.S. stock market driven by AI, which could lead to significant sell-offs in cryptocurrency assets if concerns about an AI bubble arise [3]

Core Insights - OKX has launched OKX Pay and OKX Card in Brazil, providing users with access to USD-denominated stablecoin savings and payment solutions, addressing the demand for inflation-resistant financial options [1][8] Group 1: Rising Demand for Dollar-Based Finance - Stablecoins represent over 90% of cryptocurrency transaction volume in Brazil, driven by ongoing inflation and currency volatility [2] - Brazil is the leader in Latin America for crypto transactions and ranks fifth globally in adoption, with households and small businesses seeking financial stability through USD savings [2] Group 2: Transaction Efficiency - OKX Pay and OKX Card allow users to convert Brazilian reais (BRL) to USD stablecoins instantly via PIX integration, eliminating intermediaries and traditional banking delays [3] - The platform can save users up to $39 in fees and taxes on a $1,000 transaction compared to conventional services, with costs as low as $17.30 for transfers [4][5] Group 3: Earning and Spending in USD - OKX Pay offers users up to 10% annual percentage yield (APY) on stablecoin balances, with daily calculations and weekly distributions, and supports both domestic and international transfers [6] - OKX Card functions as an international USD Mastercard debit card, allowing users to make payments globally through Mastercard's network and integrates with Apple Pay and Google Wallet [7] Group 4: Company Vision - The CEO of OKX Brazil emphasizes the goal of making crypto practical and accessible, providing seamless and cost-efficient access to the global economy without hidden fees or conversion costs [8]

Core Viewpoint - The Trump administration is exploring strategies to encourage more countries to adopt the US dollar as their primary currency in response to the global trend of de-dollarization [1][2]. Group 1: Government Initiatives - Multiple government departments, including the Treasury and the White House, are involved in discussions about promoting dollarization, consulting experts in the field [1]. - A political figure connected to the White House expressed concerns about the diminishing use of the dollar in emerging markets, indicating a high-level interest in enhancing the dollar's international role [2]. Group 2: Focus on Argentina - Argentina is viewed as a prime candidate for dollarization due to its history of currency instability, although the government has not actively pursued this option [1][3]. - The Argentine economy minister recently ruled out the possibility of immediate dollarization, citing insufficient dollar reserves, but did not completely dismiss the idea [3]. Group 3: Market Stability and Future Policies - Following a period of crisis, Argentina's political landscape stabilized after recent elections, leading to expectations that the government may shift towards a more flexible exchange rate policy with US and IMF support [4]. - Concerns remain among bondholders that maintaining a fixed exchange rate could hinder the attraction of dollars needed to rebuild reserves [4]. Group 4: Debt and Economic Challenges - A significant portion of Argentina's debt has been lost to capital flight due to long-standing distrust in the peso, complicating the country's economic recovery [5]. - Experts suggest that without substantial investment in productive activities, the country will struggle to generate enough cash flow to service its debt [5].

Core Insights - The current international monetary system is facing a "lack of anchor" dilemma, with traditional dollar hegemony exposed due to decoupling from Chinese production, leading to a shift towards technology as a new anchor [1][5][7] - The U.S. tech sector has become a focal point for capital inflow, and any issues within this sector could trigger systemic risks across the U.S. financial ecosystem and potentially lead to global repercussions [2][10] - The relationship between gold and silver indicates that rising gold prices often correlate with economic recession and deflationary conditions, suggesting a complex interplay between monetary factors and asset prices [3][4] Monetary System and Anchors - The concept of "anchor" in the monetary system is crucial for maintaining price stability, and its absence can lead to significant risks for assets like Bitcoin and RWA, exacerbating the Triffin dilemma [4][6] - The historical context of the 2000-2008 "dual low" prosperity period illustrates how global value chains absorbed dollar liquidity, temporarily avoiding the Triffin dilemma, which is now challenged by the decoupling from Chinese production [5][7] Risks and Innovations - The emergence of stablecoins and their innovative combinations aims to address the Triffin dilemma, but they also introduce new risks such as decoupling and bank run scenarios, particularly evident during downturns in the tech sector [11][12] - The financial ecosystem's reliance on technology as a new monetary anchor raises concerns about potential bubbles and the stability of the entire U.S. financial system if the tech sector experiences significant declines [10][11] Globalization and Economic Dynamics - The decoupling between the U.S. and China disrupts the previous global resource allocation mechanisms that supported dollar liquidity, leading to a shift towards virtual assets and a decline in real investment [7][9] - The U.S. has increasingly focused on innovation and financial services, sidelining manufacturing, which has implications for the middle class and overall economic stability [8][9]

Core Viewpoint - Vietnam has actively borrowed from the RMB exchange rate system to enhance the flexibility of the VND exchange rate, allowing for two-way fluctuations in its exchange rate mechanism, which is crucial for strengthening financial cooperation with China and expanding bilateral currency settlement [1][30]. Group 1: Historical Exchange Rate Mechanism - Before 2015, Vietnam maintained a fixed exchange rate system pegged to the USD, experiencing significant depreciation during financial crises, with a cumulative depreciation of over 26% during the Asian financial crisis and 30% during the US subprime mortgage crisis [2][3]. - The exchange rate system was characterized by narrow fluctuations and intermittent large depreciations, despite being classified as a hard peg by the IMF [3][6]. Group 2: Reform and Development of Exchange Rate Mechanism - In 2014-2015, Vietnam initiated reforms to its exchange rate formation mechanism to stabilize the foreign exchange market and support its economic reforms [6][7]. - The official exchange rate was established based on supply and demand in the foreign exchange market, with the State Bank of Vietnam managing the exchange rate through monetary policy tools and market interventions [7][8]. Group 3: Introduction of the Intermediate Rate Mechanism - Following China's "8•11" exchange rate reform in 2015, Vietnam introduced an intermediate rate mechanism for the VND, allowing for a more flexible exchange rate that reflects market conditions and trade relationships [9][10]. - The VND exhibited a "half-following" characteristic to the RMB, where it remained stable against the USD until depreciation pressure accumulated, leading to a quick depreciation [11][15]. Group 4: Two-Way Fluctuation and Increased Flexibility - Since 2020, the VND has achieved two-way fluctuations, allowing for more elastic movements in response to market conditions, with significant depreciation occurring in 2022-2024 [16][25]. - The correlation between the VND and RMB has strengthened, with the VND no longer maintaining stability against the USD during RMB appreciation, but rather following the RMB's movements [25][26]. Group 5: Future Outlook for the VND - The VND has experienced a depreciation trend since February 2025, with a 5.06% depreciation against the USD and approximately 6.85% against the RMB [31][35]. - Key factors influencing the future exchange rate include trade tensions with the US and the Federal Reserve's hawkish stance, which may exert additional pressure on the VND [36][37].

Core Viewpoint - Gold prices have been steadily increasing, recently surpassing $4,000 per troy ounce, driven by economic turmoil and geopolitical instability, with a notable shift in investment strategies towards gold allocation [1][2][3]. Gold Market Dynamics - There has been a significant inflow of $38 billion into physical gold exchange-traded products this year, indicating a growing acceptance of gold as a mainstream investment [4]. - Prominent economists are suggesting a shift in portfolio allocation from a traditional 60/40 model to a 60/20/20 model, with 20% allocated to gold [5]. - Gold typically shows low to moderate correlations with major asset classes and an inverse correlation to the US dollar, making it an attractive hedge for investors [6]. Geopolitical and Economic Factors - Ongoing geopolitical risks, including tensions in the Middle East and potential trade restrictions from China, are contributing to the upward pressure on gold prices [7][8]. - Central banks have been actively buying gold, averaging about 1,000 tons per year over the last three years, which supports higher prices and allows for dollarization of assets [8][9]. Investment Strategies - Investors are generally underallocated to gold, with many holding less than the recommended 5% allocation in their portfolios [12]. - Gold mining equities have outperformed physical gold, with top-performing ETFs primarily consisting of gold and silver miners, returning 120-130% this year [13][14]. - The allocation strategy for gold and silver should consider the different risk profiles, with gold serving as a stable component and silver offering growth potential due to its industrial uses [22][23]. Silver Market Insights - Silver is increasingly recognized for its dual role as both a precious and industrial metal, with about 60% of its demand coming from industrial applications [22]. - There has been a notable inflow into silver miners, contrasting with outflows from gold miners, indicating a shift in investor preference [24]. - Silver's performance tends to be more volatile compared to gold, influenced by economic conditions and industrial demand [28].

Group 1: Trade and Tariffs - President Trump indicated that India may face tariffs ranging from 20% to 25%, with final rates yet to be determined as trade negotiations continue, aiming for an agreement by August 1 [1] - India has decided to postpone making new trade concessions to the U.S. before the August 1 deadline, opting instead to seek resolution through a comprehensive bilateral agreement [1] Group 2: Mergers and Acquisitions - The U.S. railroad industry is set to experience its largest merger in history, with Union Pacific Corporation proposing to acquire Norfolk Southern Corporation for approximately $72 billion, which would create the largest railroad operator in North America, covering 43 states and over 50,000 miles of track [3] Group 3: Economic Indicators - The U.S. trade deficit in goods narrowed by 10.8% in June to $86 billion, with imports decreasing to $264.2 billion, marking the lowest level of consumer goods imports since September 2020 [1] - The June JOLTS job openings in the U.S. were reported at 7.437 million, falling short of the expected 7.5 million, with the previous value revised down from 7.769 million to 7.71 million [3] Group 4: Market Dynamics - The Dow Jones Industrial Average fell by 0.46% to 44,632.99 points, the S&P 500 decreased by 0.3% to 6,370.86 points, and the Nasdaq Composite dropped by 0.38% to 21,098.29 points [4] - COMEX gold futures rose by 0.46% to $3,325.30 per ounce, while COMEX silver futures increased by 0.43% to $38.39 per ounce [5] - U.S. crude oil futures increased by 3.81% to $69.25 per barrel, and Brent crude oil futures rose by 3.53% to $71.77 per barrel [6]