Core Viewpoint - The article discusses the resilience of the Chinese yuan (RMB) against the backdrop of a complex international environment, highlighting the positive trends in China's economy and the implementation of proactive macroeconomic policies to maintain stability in the RMB exchange rate [1][5]. Group 1: RMB Exchange Rate Trends - In the first half of 2025, the RMB appreciated nearly 2% against the USD compared to the end of the previous year, while the USD index fell over 10%, marking its worst performance since 1973 [2]. - The RMB exchange rate showed strong resilience, with a 0.65% appreciation in the first quarter, supported by effective policy measures and a stable domestic economy [2][4]. - The second quarter saw the RMB experience fluctuations due to US-China trade tensions, with the exchange rate initially depreciating before recovering to below 7.2 [3][4]. Group 2: Economic Indicators - In the first five months of the year, fixed asset investment grew by 3.7%, retail sales increased by 5%, and exports rose by 7.2%, indicating a positive economic performance that supports the RMB [5]. - The international balance of payments remained stable, with a surplus of $101.9 billion in foreign exchange payments, reflecting foreign investors' confidence in RMB assets [9]. Group 3: Future Outlook - The RMB is expected to experience fluctuations in the second half of the year, influenced by ongoing US-China trade negotiations and the potential for US economic weakening [5][6]. - The US economic slowdown and the Federal Reserve's potential interest rate cuts are anticipated to exert downward pressure on the USD, contributing to a dual-directional fluctuation of the RMB [7][8]. - Geopolitical risks and uncertainties in international trade negotiations may lead to temporary shocks in the RMB exchange rate, necessitating close monitoring of the situation [9].

Macro News - The Trump administration has issued tariff letters to 14 countries, imposing a 25% tariff on imports from Japan and South Korea starting August 1, and a tariff ranging from 25% to 40% on Malaysia, South Africa, Indonesia, Myanmar, and Thailand. Additionally, countries aligning with anti-American policies of BRICS nations will face an extra 10% tariff, with the suspension period for reciprocal tariffs extended to August 1 [1] - The European Union claims good progress in trade negotiations with the U.S., with Portugal's finance minister suggesting a potential agreement on very low tariffs, possibly below 10% [1] Federal Reserve Outlook - The probability of the Federal Reserve maintaining interest rates in July is 95.3%, while the probability of a 25 basis point cut is 4.7%. For September, the probability of maintaining rates is 35.3%, and the cumulative probability of a 25 basis point cut is 61.8%. The market anticipates one rate cut each in September and December this year [1] Central Bank Gold Purchases - As of the end of June, China's gold reserves stood at 73.9 million ounces (approximately 2,298.55 tons), reflecting an increase of 70,000 ounces (about 2.18 tons) month-on-month, marking the eighth consecutive month of gold accumulation [1] Institutional Perspectives - Following the resilience shown in non-farm payrolls, the temporary extension of the tariff suspension to August 1 alleviated market risk sentiment. However, the announcement of new tariff levels on countries including Japan and South Korea, combined with China's continued gold purchases, has led to a robust performance in the precious metals market, showing a V-shaped rebound after a decline. Overall, despite short-term market fluctuations, the substantial increase in U.S. tariffs suggests a baseline scenario of rising inflation and economic slowdown. Furthermore, with the advancement of the "Big and Beautiful" Act, the U.S. debt and deficit issues are likely to worsen, indicating that precious metals are expected to face upward pressure [1]

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 U.S. House of Representatives with a vote of 218 in favor and 214 against, following its approval in the Senate [1]. - The bill extends tax cuts for corporations and individuals initially implemented in 2017, including provisions to exempt tips and overtime pay from taxation [1]. Group 2: Financial Implications - Preliminary analysis indicates 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 U.S. national debt currently 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]. Group 3: Economic Concerns - The bill has been criticized for potentially leading to cuts in federal assistance and increasing long-term debt, particularly benefiting wealthy individuals and large corporations [1]. - The growing debt burden is projected to have negative implications for future generations, as highlighted by experts [2].

Group 1 - Ray Dalio, founder of Bridgewater Associates, emphasizes the need for bipartisan cooperation to reduce the fiscal deficit, which would improve the supply-demand balance of U.S. debt and lower interest rates [1] - The Congressional Budget Office estimates that the Senate version of the Trump tax reform and spending bill could increase the U.S. deficit by nearly $3.3 trillion over the next decade if passed [1] - BlackRock warns that rising U.S. government debt may diminish investor interest in long-term U.S. Treasuries and the dollar, citing concerns over the stability of the dollar as a reserve currency [1] Group 2 - BlackRock indicates that higher government debt could disrupt the typical correlation between long-term U.S. Treasury yields and U.S. monetary policy, potentially leading to rising yields even if the Federal Reserve cuts rates [2] - The increase in U.S. debt supply may face reduced demand from the Federal Reserve and foreign central banks [2]

Core Viewpoint - The downgrade of the U.S. sovereign credit rating by Moody's marks the end of the AAA era, highlighting structural issues in U.S. debt sustainability and raising concerns about the country's fiscal outlook [1][3][10] Group 1: Credit Rating Downgrade - Moody's downgraded the U.S. sovereign credit rating from "Aaa" to "Aa1," the first loss of the highest rating since 1919, indicating a significant shift in the perception of U.S. fiscal health [3][4] - The downgrade is attributed to the rising total debt, structural expansion of fiscal deficits, and increased interest payments amid a higher interest rate environment [3][4] Group 2: Market Reactions - Following the downgrade, there was a poor subscription for the 20-year Treasury bond auction, indicating rising financing pressures and a shift in market sentiment [1][4] - As of May 27, the 20-year Treasury yield fluctuated around 5%, while the 10-year yield remained at approximately 4.5%, reflecting heightened market concerns [1] Group 3: Structural Challenges - The U.S. debt sustainability is increasingly reliant on short-term debt refinancing, which exposes the financial system to significant vulnerabilities amid policy uncertainty and market volatility [4][5] - The current fiscal structure shows a growing dependency on short-term debt, which, despite its lower proportion, poses a critical risk due to its frequent issuance and reliance on market confidence [4][5] Group 4: Global Implications - The downgrade signals a potential reassessment of the risk-return profile of U.S. dollar assets by long-term investors, leading to increased allocations towards non-U.S. currencies and physical safe-haven assets [2][10] - The shift in the perception of U.S. Treasury securities as a "risk-free asset" could trigger a broader re-evaluation of asset pricing and liquidity expectations in global capital markets [10][11]

Investment Rating - Industry Rating: Recommended [4] Core Views - The macro sentiment has eased following the dialogue between the US and China, leading to a strong fluctuation in industrial metals [1][6] - Precious metals have seen a decline in safe-haven demand, with gold and silver prices experiencing slight increases this week [1][25] - The report highlights the impact of US economic indicators, including manufacturing and employment data, on market sentiment and metal prices [1][40] Summary by Sections Precious Metals - Gold prices increased by 0.54% to $3,331.00 per ounce, while silver prices rose by 9.24% to $36.13 per ounce this week [1][25] - SPDR Gold ETF holdings increased by 129,023.13 troy ounces, and SLV Silver ETF holdings rose by 13,038,422.40 ounces [1][25] - The gold-silver ratio fell by 7.96% to 92.19, indicating a shift in market dynamics [1][25] Base Metals - In the LME market, copper prices rose by 1.83% to $9,670.50 per ton, aluminum by 0.12% to $2,451.50 per ton, zinc by 1.25% to $2,662.50 per ton, and lead by 0.51% to $1,974.00 per ton [6][46] - SHFE market showed similar trends with copper up by 1.71% to ¥78,930.00 per ton and zinc up by 0.72% to ¥22,385.00 per ton [6][46] - The report notes a significant decrease in LME copper registered warehouse stocks, down 17.5% to 54,700 tons, the lowest level since July 2023 [44] Copper - Chile's copper exports in May reached 181,234 tons, with 32,721 tons exported to China [7][67] - Domestic copper rod enterprises' operating rates increased to 75.90%, reflecting a recovery in demand [7][67] - The report anticipates a long-term positive outlook for copper prices due to ongoing macroeconomic policies and infrastructure investments in China [8][68] Aluminum - The report indicates that aluminum demand is under pressure, with production costs decreasing and seasonal demand weakening [9][10] - The average cost of electrolytic aluminum in China fell to ¥16,374 per ton, while the average profit margin increased to ¥3,703 per ton [44] - The outlook for aluminum prices remains cautiously optimistic, supported by ongoing demand in the electric vehicle and power sectors [10][18] Zinc - The report highlights ongoing uncertainties due to tariffs and increased imports, leading to sustained supply pressures in the zinc market [11] - Domestic zinc ingot inventories increased by 0.43% to 79,300 tons, indicating a buildup in supply [11] Lead - Lead consumption is currently in a seasonal downturn, with inventories expected to continue rising [12] - The report notes that lead battery markets are experiencing reduced production, leading to cautious procurement strategies among downstream enterprises [12] Minor Metals - Magnesium prices have seen a decline of 3.25% to ¥17,590 per ton, with cautious purchasing behavior observed in the market [13][14] - Molybdenum prices have increased, supported by strong raw material prices, while vanadium prices have softened due to weak demand [15]

Investment Rating - The industry is rated as "Recommended" [5] Core Views - The macroeconomic sentiment has weakened, leading to a resurgence in gold prices, with COMEX gold rising 4.75% to $3,357.70 per ounce and SHFE gold increasing 3.76% to ¥780.10 per gram [1][27] - The U.S. economic uncertainty and global trade dynamics are prompting investors to shift towards safe-haven assets like gold and silver, with expectations of continued price appreciation [3][48] - The ongoing U.S.-EU tariff tensions and the recent U.S. debt auction results have contributed to the volatility in the market, reinforcing the attractiveness of precious metals [3][47] Summary by Sections Precious Metals - Gold and silver prices have increased significantly, with COMEX gold up 4.75% and SHFE gold up 3.76% [1][27] - The gold-silver ratio has risen by 0.99% to 99.81, indicating a stronger performance of gold relative to silver [27] - SPDR Gold ETF holdings increased by 119,821.97 troy ounces, while SLV Silver ETF holdings rose by 9,728,859.30 ounces [27] Base Metals - In the LME market, copper prices rose by 1.76% to $9,614.00 per ton, while aluminum fell by 0.62% to $2,466.00 per ton [52] - SHFE copper prices decreased by 0.45% to ¥77,790.00 per ton, while aluminum prices increased by 0.12% to ¥20,155.00 per ton [52] - The overall sentiment in the base metals market remains mixed, with supply concerns and fluctuating demand impacting prices [7][52] Small Metals - The price of magnesium has increased by 0.11% to ¥18,780 per ton, reflecting strong pricing power among manufacturers [14] - Molybdenum and vanadium prices have shown slight increases, with molybdenum iron at ¥227,500 per ton [15] - The market for small metals is currently stable, with limited price fluctuations observed [15][80]

Group 1: Apple and AI Development - Apple plans to launch smart glasses by the end of 2026 to capture the augmented reality device market, while halting the development of camera-equipped smartwatches [8] - The smart glasses will feature a camera, microphone, and speaker, capable of analyzing the environment and executing tasks via Siri, including phone calls, music playback, real-time translation, and navigation [8] - The shift towards smart glasses represents a transition from a "screen-centric" to a "perception-centric" platform, aiming to redefine the next generation of human-computer interaction [8][9] Group 2: U.S. Debt and Economic Concerns - The U.S. House approved Trump's tax reform bill, which aims to reduce taxes by over $4 trillion over the next decade and increase the debt ceiling by $4 trillion [2] - Concerns about the sustainability of U.S. debt financing are rising, with the debt-to-GDP ratio nearing 100% and annual interest payments exceeding $1 trillion [3] - The combination of monetary stagnation and fiscal stimulus is reducing the long-term attractiveness of dollar assets, leading to potential depreciation of the dollar and increased demand for gold [3] Group 3: Hong Kong IPO Market - Hong Kong's IPO market raised a total of HKD 145 billion in the past year, a 2.7-fold increase year-on-year, with mainland companies contributing 75% of the financing [6][7] - The A+H dual listing model is becoming a key strategy for companies to optimize financing sources and hedge against external uncertainties [7] - The influx of capital into Hong Kong is driven by stricter regulations in the U.S. and a declining dollar, positioning Hong Kong as a "value discovery platform" for Chinese assets [7] Group 4: Autodesk's Financial Performance - Autodesk reported a 15% year-on-year revenue growth to $1.63 billion for Q1 of FY2026, primarily driven by strong subscription service performance [10] - The company raised its full-year revenue forecast to between $6.93 billion and $7.00 billion, indicating confidence in its cloud strategy and market position [10] - Concerns remain regarding the quality of growth, particularly in the construction sector, and the effectiveness of AI tools in driving user migration and revenue [11] Group 5: Analog Devices' Strong Results - Analog Devices reported Q2 revenue of $2.64 billion, a 22% increase year-on-year, with adjusted earnings per share of $1.85, exceeding expectations [12][13] - The growth is attributed to strong demand for analog chips in the automotive and industrial sectors, as well as the integration of generative AI and electric vehicles [12] - The company maintains a positive outlook for Q3, projecting revenue between $2.65 billion and $2.85 billion, reflecting confidence in its market position [12][13]

Group 1 - The market is experiencing heightened demand for safe-haven assets like gold due to concerns over U.S. debt issues and economic pressures, with COMEX gold futures rising by 0.97% to $3316.60 per ounce, marking a three-day increase [1] - The U.S. Treasury issued $16 billion in 20-year bonds with a yield of 5.047%, the second instance of yields exceeding 5%, indicating a decline in demand as the bid-to-cover ratio fell to 2.46 from a previous 2.63 [1] - The extension of Trump's tax cuts is projected to increase the federal deficit by $1.8 trillion from 2026 to 2035, raising concerns about further expansion of federal debt [1] Group 2 - Current debt risks are overshadowing trade tariff concerns, with a downgrade in U.S. debt credit ratings coinciding with weak long-term demand for U.S. bonds, leading to potential sell-off risks for dollar assets [2] - Although panic in the market is temporarily subdued, volatility remains high, supporting the upward trend in precious metals [2]

Group 1 - The core viewpoint suggests that the risks associated with U.S. debt may be underestimated, prompting institutions to invest in safe-haven assets [1] - There is a focus on whether gold bulls can break through their current trading range, indicating potential volatility in the gold market [1] Group 2 - Institutions are increasingly buying safe-haven assets as a response to perceived risks in the U.S. debt situation [1] - The analysis highlights the importance of monitoring the performance of gold as a hedge against economic uncertainty [1]