1. Report Industry Investment Rating - The investment rating for the US dollar bond market and the US stock market is "Underperform" [1][4] 2. Core Viewpoints - US economic data shows increasing divergence, with employment data dragging down interest - rate cut expectations, while the service sector is strong and the manufacturing sector is in contraction. Trump's order for Fannie Mae and Freddie Mac to buy $200 billion in MBS increases fiscal dominance risk and may steepen the yield curve [1][2] 3. Summary by Related Catalogs 3.1 US Macroeconomic and Liquidity - US December non - farm payrolls increased by 50,000, lower than the expected 65,000, and the annual increase was the weakest since the pandemic. After the release of the weak employment report, the expectation of a Fed rate cut in January almost disappeared, and the first rate cut is expected to be postponed to June, with an annual rate cut of about 50 basis points [1] - The December ISM manufacturing PMI fell to 47.9, contracting for the tenth consecutive month, while the ISM services PMI rose to 54.4, the highest in nearly a year [2] - Trump's order for Fannie Mae and Freddie Mac to buy $200 billion in MBS may accelerate the steepening of the US Treasury yield curve, and long - term interest rates are under pressure [2] 3.2 Exchange Rate - The report may analyze the trends of non - US currencies in the past year and recent changes, as well as the relationship between the US dollar index and other factors such as the 10 - year US Treasury yield and the RMB index [53][59][61] 3.3 Chinese - funded US Dollar Bonds - The report shows the return trends of Chinese - funded US dollar bonds since 2023 (by level and industry), as well as the yield and spread trends of investment - grade and high - yield Chinese - funded US dollar bonds [67][69] 3.4 Rating Actions - In the past two weeks, the three major international rating agencies took one downgrading action on a Chinese - funded US dollar bond issuer. On December 30, 2025, Moody's downgraded Vanke's rating from Caa2 to Ca [75][76] 3.5 Investment Recommendations - Adopt a "short - duration core + steepening satellite" configuration. Focus on 3 - 5 - year investment - grade bonds for stable coupon income, long the 2s10s spread to capture curve - steepening opportunities, increase TIPS allocation to hedge against service - sector inflation stickiness, and strictly control exposure to US Treasuries over 10 years [3] - In the next two weeks, focus on December CPI data and public statements by Fed officials [3]

Report Industry Investment Rating - The report gives an investment rating of "Underperform" for the US stock market and the US dollar bond market [1][4] Core Viewpoints of the Report - US economic data shows increasing divergence, with employment data dragging down interest rate cut expectations, and the risk of fiscal dominance is rising. The Trump administration's MBS purchase plan by Fannie Mae and Freddie Mac will intensify the risk of fiscal dominance and the re - evaluation pressure of term premium, and may promote the steepening of the yield curve [1][2][3] Summary of Each Section US Macroeconomic and Liquidity - The US December non - farm payrolls increased by 50,000, falling short of expectations, with the annual increase being the weakest since the pandemic. The unemployment rate dropped from 4.5% to 4.4%, and wage growth was 3.8% year - on - year, but the labor force participation rate declined. After the release of the employment report, the expectation of a Fed rate cut in January almost disappeared, and the first rate cut is expected to be postponed to June, with an annual rate cut of about 50 basis points [1] - The US December manufacturing PMI continued to contract, dropping to 47.9, while the service industry recovered, with the ISM services PMI rising to 54.4, the highest in nearly a year [2] Exchange Rate - There is no specific text - based summary information provided, but there are figures showing the trends of non - US currencies in the past year, recent changes in non - US currencies, Sino - US sovereign bond spreads, etc. [53][59][61] Chinese - funded US Dollar Bonds - There is no specific text - based summary information provided, but there are figures showing the returns of Chinese - funded US dollar bonds since 2023 (by level and industry), the yields and spreads of investment - grade and high - yield Chinese - funded US dollar bonds, and returns in the past two weeks (by level and industry) [67][69][71] Rating Actions - In the past two weeks, the three major international rating agencies took one downgrading action on the issuer of Chinese - funded US dollar bonds. On December 30, 2025, Moody's downgraded the rating of China Vanke Co., Ltd. from Caa2 to Ca [75][76] Investment Recommendations - Adopt a "short - duration core + steepening satellite" configuration. The core position focuses on 3 - 5 - year investment - grade bonds to obtain relatively stable coupon income; the satellite strategy is to go long on the 2s10s spread to capture the opportunity of curve steepening; increase the allocation ratio of TIPS to hedge the inflation stickiness of the service industry, and strictly control the exposure to US bonds over 10 years to avoid the risk of rising long - term interest rates caused by fiscal expansion [3] - In the next two weeks, focus on the December CPI data and public speeches of Fed officials [3]

Group 1: Gold Market Insights - Central bank gold purchases, concerns over fiscal risks, and steady investment demand are expected to drive gold prices higher in the second half of 2026 [1][5] - After a rapid increase, gold and silver prices reached historical highs, and platinum group metals (PGM) also peaked, indicating a need for price consolidation [1][6] - Approximately 43% of central banks plan to increase their gold reserves while reducing dollar holdings, which will support long-term gold price increases [6] Group 2: Silver Market Dynamics - Silver demand may face pressure in 2026, particularly from photovoltaic silver, with limited growth in industrial and jewelry consumption [3][7] - Despite high prices in 2025, investment demand from ETFs and retail investors suggests potential upward momentum for silver prices [3][7] - Silver's price movements will be influenced by the gold market, economic conditions, and monetary policy, with potential for upward movement if gold prices continue to rise [3][7] Group 3: Platinum Group Metals (PGM) Overview - PGM supply is expected to be tight in 2026, but declining demand may reduce deficits, particularly for palladium and rhodium due to decreased sales of light-duty internal combustion vehicles [2][6] - Rhodium's market tightness is supported by demand from data center construction, but prices may have peaked in the short term [2][6] - Overall, the PGM market faces downward risks, especially in the context of economic slowdown or potential recession [2][6]

Core Insights - The gold market experienced a sudden drop in prices, with gold prices falling over 2% in a matter of minutes, breaching the $3,350 mark, while physical gold was rapidly sold out globally [1] - In September, global central bank gold reserves surpassed U.S. Treasury holdings for the first time since 1996, amid a backdrop of rising U.S. debt [3] Group 1: Market Dynamics - A significant sell-off occurred in the early hours of October 18, driven by a surge of 120,000 short positions in gold, primarily from quantitative funds, leading to a chain reaction of selling [4] - The disconnect between paper gold and physical gold was highlighted, as physical gold withdrawals reached a monthly high of 47 tons even as paper gold prices plummeted [6] Group 2: Central Bank Actions - Central banks have been aggressively purchasing gold, with net purchases reaching 1,180 tons in 2024, the highest since 1950, as countries like China, Poland, and India increased their gold reserves [6] - The decline in foreign ownership of U.S. Treasuries from 34% in 2010 to 24% reflects a growing distrust in U.S. debt [5] Group 3: Economic Context - The U.S. dollar is under pressure, with Buffett increasing cash reserves to $350 billion while diversifying into Japanese companies and RMB assets [8] - Since the collapse of the Bretton Woods system in 1971, gold has appreciated by 10,204%, outperforming major commodities and the S&P 500 index [8] Group 4: Geopolitical Factors - The gold market reflects a broader East-West capital struggle, with Asian buyers focusing on physical gold while Western hedge funds manipulate paper gold prices [9] - Political pressures, including Trump's threats to the Federal Reserve, complicate the economic landscape and challenge the independence of the central bank [14] Group 5: Financial Stability Concerns - The U.S. federal deficit reached $711 billion in the first quarter of fiscal 2025, raising concerns about the sustainability of U.S. debt levels, which surpassed $37 trillion [15] - The iShares 20-Year Treasury Bond ETF has seen a cumulative decline of over 40%, indicating potential challenges for U.S. Treasuries in the coming decade [15]