Group 1 - Precious metal prices experienced a pullback after reaching a high, with COMEX gold futures dropping 3.14% to $3381.7 per ounce, marking a near two-week low [1] - The U.S. added non-farm payrolls were significantly revised downwards, maintaining expectations for a Federal Reserve rate cut in September, with the number of expected cuts for the year rising to around three [1] - The market anticipates that the Federal Reserve will open a rate cut window in September, providing some support for gold prices [1] Group 2 - The Producer Price Index (PPI) data released showed a rebound in producer inflation, which slightly reduced the probability of a September rate cut by the Federal Reserve [1] - The ongoing negotiations between the U.S. and Russia are intensifying the bullish and bearish dynamics in the precious metals market, with potential outcomes affecting gold price movements [1] - Long-term factors such as the gradual opening of the Federal Reserve's rate cut window, persistent U.S. twin deficits, and declining dollar credibility are expected to provide solid support for gold prices [1]

Core Insights - Deutsche Bank warns that U.S. fiscal risks are accelerating, with the widening divergence between U.S. Treasury yields and the USD/JPY exchange rate becoming a crucial market indicator [1] - The recent strength of the Japanese yen, despite rising Japanese long-term yields, is seen as evidence of reduced foreign participation in the U.S. Treasury market [4][6] - The bank believes that the sale of Japanese government bonds poses a greater issue for the U.S. Treasury market by making Japanese assets more attractive to local investors, further encouraging divestment from U.S. assets [6] Group 1 - Deutsche Bank's foreign exchange research head, George Saravelos, notes that the strong yen indicates a lack of foreign investment in U.S. Treasuries, highlighting U.S. fiscal risks [1] - The bank argues that if Japan were truly facing fiscal concerns, the yen would weaken rather than strengthen, given Japan's positive net foreign asset position [4] - Following a weak U.S. Treasury auction, Saravelos observed a "very negative" reaction from market participants, indicating that the U.S. stock market may struggle to maintain resilience in this environment [7] Group 2 - Saravelos emphasizes that the simultaneous weakening of the dollar is a clear signal that foreign buyers are resisting U.S. assets, reflecting long-standing concerns about U.S. fiscal risks [7] - The core issue lies in foreign investors' unwillingness to fund the U.S. dual deficits (fiscal and trade) at current price levels [7] - Saravelos concludes that the solution to the current predicament is complex and ultimately lies with Congress rather than the Federal Reserve, suggesting that a depreciation of the dollar may be the final release valve for the U.S. dual deficit problem [7]

Core Viewpoint - Foreign investors continue to sell off U.S. assets, with a significant decline in purchases over the past two months due to U.S. tariff policies, despite a recent market recovery [2][4]. Group 1: Foreign Investment Trends - Deutsche Bank reports a sharp halt in overseas purchases of U.S. assets, indicating that foreign investors are still reluctant to buy despite a recent uptick in the U.S. market [2]. - The bank's analysis suggests that capital inflows into the U.S. may slow down significantly, raising concerns about the dollar's status as a global reserve currency [2][4]. - Data from Deutsche Bank shows that foreign investors have been consistently selling U.S. stocks and bonds, with stock sell-offs peaking during the announcement of "reciprocal tariffs" [4]. Group 2: Market Sentiment and Predictions - A survey by JPMorgan indicates that U.S. stocks are expected to experience the most significant capital outflows this year, with cash being the most favored asset class among investors [5]. - Multiple institutions express a cautious outlook on U.S. stocks, favoring European and Chinese markets instead, citing high valuations in the U.S. [6][7]. - HSBC and Allianz highlight a tactical preference for non-U.S. markets, with a focus on sectors like communications, industrials, finance, and healthcare [7][8].