Core Viewpoint - The "Big and Beautiful" tax and spending bill signed by President Trump is expected to significantly increase the U.S. fiscal deficit and debt risk, raising concerns about the long-term financial stability of the country [1][2]. Group 1: Legislative Overview - The "Big and Beautiful" bill was passed by the House of Representatives with a vote of 218 in favor and 214 against, and it extends tax cuts for corporations and individuals that were initially implemented in 2017 [1]. - Key provisions include tax exemptions for tips and overtime wages, with a primary focus on reducing corporate tax rates [1]. Group 2: Financial Implications - Preliminary analyses suggest that the bill could increase the U.S. deficit by approximately $3.3 trillion over the next decade and reduce tax revenue for decades to come [1]. - The current U.S. national debt stands at $36.2 trillion, and the bill is expected to exacerbate the structural deficit, making it more challenging for lawmakers to manage debt levels [2]. - The bill has been described as potentially the most expensive piece of legislation since the 1960s, raising concerns about the long-term impact on future generations due to increased debt burdens [2].

Group 1 - The recent uncertainty in the U.S. economic outlook is driven by the Federal Reserve's unclear policy direction and rising credit risks, leading to a risk-averse market environment [1][10][19] - The Federal Reserve's latest meeting minutes highlighted the complex situation of "rising inflation and unemployment," indicating a cautious approach to interest rate cuts while observing economic developments [1][10][11] - The downgrade of the U.S. sovereign credit rating from AAA to AA has intensified global investor concerns regarding the sustainability of U.S. fiscal policies, prompting a reassessment of the safety of dollar-denominated assets [1][16][19] Group 2 - The Federal Reserve's decision to maintain the federal funds rate target range at 4.25%-4.50% reflects the anxiety over economic uncertainties, with a focus on the dual risks of rising unemployment and inflation [10][11][14] - The Fed's acknowledgment of the structural causes of persistent inflation, such as supply-demand imbalances and labor market tightness, suggests a complex inflation management strategy moving forward [10][11] - Market expectations for interest rate cuts have shifted, with the probability of a rate cut in September reduced to 66.1%, indicating a growing consensus on the need for caution in monetary policy [14] Group 3 - The cautious stance of the Federal Reserve is expected to suppress risk appetite in financial markets, with a notable impact on equities and high-yield bonds, as investors adopt a more conservative outlook [16][19] - The demand for gold as a safe-haven asset is anticipated to rise due to the combination of U.S. credit rating downgrades, geopolitical tensions, and ongoing economic uncertainties, reinforcing its long-term value [16][19] - The overall adjustment in global financial market risk preferences is evident, with traditional risk assets facing significant pressure while gold's appeal as a core hedging asset continues to strengthen [19]

Group 1: Bond Market Dynamics - Long-term bond yields in major developed countries have risen significantly, with the US 30-year Treasury yield exceeding 5.15%, marking the highest level since 2007 [1][2] - The recent bond auctions in the US and Japan faced poor demand, with the US 20-year bond auction showing a bid-to-cover ratio of 2.46, the lowest since February [2][5] - Japan's 20-year bond auction also recorded a bid-to-cover ratio of 2.5, the worst since 2012, contributing to rising yields in the Japanese bond market [5] Group 2: Dollar Asset Concerns - There is a growing concern regarding the demand for dollar assets, as indicated by a historical peak in bearish sentiment towards the dollar among currency options traders [1][8] - The ICE dollar index has fallen approximately 10% from its yearly high, reflecting a decline in confidence in the dollar [8][11] - Speculative positions show a net short position of $17.32 billion in the dollar, nearing the highest level since July 2023 [11] Group 3: US Sovereign Credit Rating Outlook - Following a downgrade of the US sovereign credit rating, there are expectations that it may drop further by six levels to BBB+, just above investment grade [13][15] - The current public debt to GDP ratio is around 100%, projected to rise to 134% by 2035, raising concerns about the sustainability of US fiscal policy [13][15] - The market is increasingly worried about the US government's ability to manage spending, especially with recent budget proposals that could significantly increase the deficit [18][20] Group 4: Federal Reserve's Policy Implications - The rising bond yields are putting pressure on the Federal Reserve, with speculation about their decisions in the upcoming June meeting [20] - Analysts suggest that if the Fed signals a hawkish stance, it could exacerbate the bond sell-off and push yields higher, while a dovish signal might lead to dollar depreciation and inflation rebound [20]

Group 1 - The USD/JPY exchange rate has fallen below the psychological level of 144.00, reaching a two-week low, driven by expectations of a shift in the Bank of Japan's monetary policy despite weak trade data [1][3] - Japan's core CPI has risen for 27 consecutive months, with service price increases at their highest since 1993, raising concerns about persistent inflation and prompting speculation about a potential interest rate hike in 2025 [3] - The USD is under pressure due to two main factors: the market fully pricing in a 25 basis point rate cut by the Federal Reserve in September and Fitch's downgrade of the US sovereign credit rating to AA+, leading to a reassessment of the attractiveness of USD assets [3] Group 2 - The technical analysis indicates that the USD/JPY has broken key support levels, with the next target being the 143.65-143.60 area, which is a significant Fibonacci retracement level [3] - Short-term resistance levels are identified at 144.55 and 145.00, with any technical rebounds likely viewed as short-selling opportunities unless the price can reclaim 145.40 [4] - The market sentiment has shifted from merely trading interest rate differentials to speculating on policy expectation differences, indicating potential volatility due to discrepancies between actual policy adjustments by the Bank of Japan and market expectations [5]

Group 1 - Moody's downgraded the U.S. sovereign credit rating from Aaa to Aa1 due to "huge fiscal deficits and rising interest costs," marking the loss of the last AAA rating after Fitch's downgrade in 2023, which caused global market turbulence [1] - Following the downgrade, spot gold prices surged, with SGE9999 gold price surpassing 750 yuan per gram, and the Shanghai Gold ETF (518600) seeing a trading volume exceeding 90 million yuan, indicating high market activity [1] - The rise in gold prices is attributed to multiple factors, including increased market concerns over U.S. dollar assets and historical data showing that gold prices typically rise in the three months following U.S. rating downgrades [1] Group 2 - Current gold prices have retraced approximately 8.1% from the peak on April 22, with mixed opinions on future trends; some believe gold prices may continue to adjust due to easing geopolitical risks, while others emphasize long-term support from global central bank gold purchases and U.S. fiscal deficit monetization [2] - The World Gold Council reported that global gold demand is expected to reach 1,206 tons in Q1 2025, a 1% year-on-year increase, providing solid buying support for gold prices [2] - The Shanghai Gold ETF (518600) and its linked funds offer efficient tracking of gold price movements without physical gold delivery, with flexible T+0 trading, making them effective tools for participating in gold market trends [2][4]

1. Report Industry Investment Rating - No information provided 2. Core Viewpoints of the Report - For gold, it is recommended to take a wait - and - see approach as the short - term trend is downward, the medium - term is oscillatory, and the intraday is weakly oscillatory due to factors like the easing of Sino - US relations and the adjustment of the US sovereign credit rating [1][3] - For nickel, a wait - and - see stance is also advised. The short - term trend is downward, the medium - term is oscillatory, and the intraday is weakly oscillatory because of the strong upstream and weak downstream in the industry [1][5] 3. Summary According to Related Catalogs Gold - **Viewpoints**: Short - term: decline; Medium - term: oscillation; Intraday: weakly oscillatory; Reference view: wait - and - see [1][3] - **Core Logic**: Last week, the overall gold price trended downward. The decline was due to the easing of Sino - US trade relations and the expectation of a cease - fire in the Russia - Ukraine conflict, which reduced market risk - aversion demand. The rebound was caused by the recession expectation due to the US economic slowdown. Moody's downgraded the US sovereign credit rating, which supported the gold price. In the short term, the gold price rebounded after reaching the bottom and had strong support at the $3200 level [3] Nickel - **Viewpoints**: Short - term: decline; Medium - term: oscillation; Intraday: weakly oscillatory; Reference view: wait - and - see [1][5] - **Core Logic**: Since last week, the positive macro factors at home and abroad have not significantly pushed up the nickel price, indicating that the industrial fundamentals are suppressing the upward movement. The strong upstream mining end supports the futures price, while the weak downstream demand exerts pressure. It is expected that the nickel price will oscillate, and attention should be paid to the technical support at the 123,000 level [5]

证券研究报告•海外经济与大类资产简评 评级下调，是美债的卖点吗？ ——美债周观点（5） 发布日期：2025 年 05 月 18 日 分析师： 钱伟 SAC 编号： S1440521110002 核心观点： 继 2011 年标普、2023 年惠誉后，穆迪将美国主权信用评级从 Aaa 下调至 Aa1。评级下调对美债 影响路径包括： 市场走势回顾与展望： 2025 年 5 月 16 日，穆迪将美国主权信用评级从 Aaa 下调至 Aa1，评级展望从负面调整 为稳定。 本报告由中信建投证券股份有限公司在中华人民共和国（仅为本报告目的，不包括香港、澳门、台湾）提供。在遵守适用的法律法规情况 下，本报告亦可能由中信建投（国际）证券有限公司在香港提供。同时请务必阅读正文之后的免责条款和声明。 1 （1）抵押资质、合约要求导致的技术性违约，可以忽略； （2）风控要求、资本占用导致的机构抛售，实际影响小； （3）市场情绪冲击，一般伴随着债务上限的发酵； （4）美债的长期信誉被蚕食，财政可持续性担忧。 证券研究报告•海外经济与大类资产简评 简评： 历史上看，短线扰动明显，股债在 1-2 个交易日内，均出现大幅调整；但时间拉长，美债 ...

Group 1: U.S. Treasury Holdings Overview - As of March, foreign countries and regions held $90,495 billion in U.S. Treasury securities, with a month-over-month increase of $2,331 billion [1] - Japan remains the largest foreign holder of U.S. debt, increasing its holdings by $49 billion to $1,130.8 billion, marking the third consecutive month of increases [1][7] - China reduced its holdings by $189 billion, bringing its total to $765.4 billion, the lowest level since 2009 [2][5] Group 2: Changes in Major Holders - The United Kingdom increased its U.S. Treasury holdings by $289 billion to $779.3 billion, surpassing China to become the second-largest holder [2][6] - In March, total net inflows into U.S. securities and bank cash from overseas reached $2,543 billion, with private funds contributing $2,592 billion and official funds experiencing a net outflow of $49 billion [3][4] Group 3: Investment Trends and Motivations - In March, overseas net purchases of U.S. long-term securities amounted to $1,832 billion, with private investors net buying $1,460 billion and official institutions net buying $373 billion [4] - Japan's motivations for increasing its U.S. Treasury holdings include currency intervention, leveraging its holdings in trade negotiations, and adjustments in monetary policy [8][9][10] Group 4: U.S. Fiscal Challenges - Moody's downgraded the U.S. sovereign credit rating from Aaa to Aa1, citing increasing budget deficits and rising costs of debt refinancing under high interest rates [13][14] - The U.S. federal debt has surpassed $36 trillion, with a fiscal deficit exceeding $1.3 trillion in the first half of the fiscal year, marking the second-highest deficit on record [17]

Group 1 - President Trump criticized Federal Reserve Chairman Jerome Powell, suggesting that the Fed should lower interest rates sooner rather than later, indicating a consensus among many [1] - Powell stated that Trump's calls for rate cuts do not influence the Fed's decisions, emphasizing that the appropriateness of rate cuts depends on various economic conditions [2] - The Fed has paused rate cuts for the third time, maintaining the interest rate range at 4.25% to 4.50% [2] Group 2 - Recent economic data shows a rebound in import prices for April, while consumer confidence remains low due to concerns over Trump's trade policies [3] - Market expectations for Fed rate cuts have diminished, with Goldman Sachs pushing back its forecast for a rate cut from July to December [3] - Moody's downgraded the U.S. sovereign credit rating from Aaa to Aa1, citing rising government debt and interest payments, with a stable outlook [3][4] Group 3 - Moody's projected that mandatory spending, including interest, will rise from approximately 73% of total spending in 2024 to 78% by 2035, indicating limited budget flexibility [4] - The U.S. federal government debt has surpassed $36 trillion, with a projected deficit exceeding $1.3 trillion for the first half of the fiscal year [4] - The U.S. economy contracted by 0.3% in the first quarter, marking the worst quarterly performance since 2022 [4] Group 4 - Analysts suggest that ongoing tariff policies will increase economic uncertainty, potentially leading to higher inflation and unemployment rates [5] - The U.S. has lost its Aaa rating from all three major international credit rating agencies, including Fitch and S&P [6]