Core Viewpoint - Global markets experienced an increase following Japan's Prime Minister Sanae Takaichi securing a more than two-thirds majority in the lower house, which provides her with a mandate to implement fiscal expansion and pro-growth policies [1] Group 1 - The victory of Prime Minister Sanae Takaichi is expected to lead to a more aggressive fiscal policy in Japan [1] - The pro-growth policies anticipated from this political shift may positively impact investor sentiment and market performance [1] - The majority win indicates strong political support for economic initiatives aimed at stimulating growth [1]

By Tom Westbrook SINGAPORE, Jan 20 (Reuters) - Japan's government bonds are in free fall as investors take a dim view of an atmosphere of competitive spending on the hustings, where politicians are jostling to cut taxes in an economy with the heaviest debt burden in the developed world. Prime Minster Sanae Takaichi called a snap election ​on Monday and is running on a platform of stimulus to drive a return to inflation and growth after decades of stagnation. But she launched her campaign - echoing oppo ...

随着主要发达市场国债收益率走高，投资者正重新评估通胀风险及特朗普及贸易战背景下的全球增长前景。这表明，去年启动的、曾推动全球股 市创下历史新高的宽松周期可能正步入尾声，市场焦点已转向各国激增的公共债务和更为顽固的通胀压力。 全球长债收益率已重返2009年以来最高水平，这一显著转变标志着市场对各国央行放松货币政策周期即将终结的共识日益增强。 在美联储备受瞩目的政策会议召开前几小时，债市并未如期上涨。尽管市场普遍预计美联储将连续第三次降息，但投资者正基于对长期通胀、财 政赤字及未来货币政策独立性的担忧抛售债券，推动30年期美债收益率重回多月高位，10年期美债收益率亦徘徊在9月以来的最高水平。 市场的重新定价已波及全球，交易员目前押注欧洲央行几乎不再有降息空间，同时预计日本央行本月加息几成定局，澳大利亚央行明年将加息两 次。据彭博数据显示，衡量全球长期政府债券的一项指标已回升至16年高点，澳大利亚和欧洲多国的长债收益率近期均大幅飙升。 "失望交易"在全球蔓延 随着投资者逐渐意识到各大央行的降息周期可能即将结束，一场"失望交易"（disappointment trade）正在多个发达市场展开。PGIM Fixed I ...

Market Outlook - Gold and silver are viewed as risk assets, with gold offering more downside protection [1] - Select commodities flowing into data centers are interesting due to increasing demand and less overownership compared to AI capex stocks [1] - Stock indices are expected to continue melting up, with thematic work focusing on the most interesting sectors in H1'26 [2] - Liquidity re-expansion is anticipated to lead to more true trending markets after a period of choppy rotational activity [2] - The buyer base for BTC and alts has been weakened financially and psychologically, potentially requiring a reset period [3] Cryptocurrency Analysis - There are real reasons for BTC and alts to increase in value, potentially benefiting the most from liquidity re-expansion [3]

Market Overview - U.S. and global markets experienced a bounce at the start of the week due to optimism surrounding trade, potential resolution of the government shutdown, and easing regional bank concerns [1] - Wall Street rally faced challenges early on Tuesday as corporate earnings reports were anticipated [5] Japan Market - The election of Sanae Takaichi as Japan's first female prime minister contributed to a surge in the Nikkei stock benchmark, reaching record highs [2] - The yen continued to weaken despite speculation about Satsuki Katayama being considered for finance minister, who has previously advocated for a stronger currency [2] China Market - Chinese stocks saw their largest gain in six weeks, driven by U.S. President Trump's optimism regarding a fair trade deal with President Xi Jinping ahead of the November 1 tariff deadline [3] - The upcoming Communist Party meeting focused on a new five-year economic plan also positively influenced market sentiment [3] U.S. Government and Banking Sector - There is hope for an end to the ongoing government shutdown, which has reached 21 days, as White House economic adviser Kevin Hassett indicated it could conclude this week [4] - Regional bank concerns eased slightly as Zions Bancorp reported decent earnings despite a significant loss on two loans, resulting in a 2% increase in its stock during after-hours trading [4] Corporate Earnings and Market Reactions - Wall Street stock futures declined slightly ahead of the corporate earnings season, with Netflix and major industrial and defense companies set to report [5] - A drop in crude oil prices to five-month lows contributed to softer U.S. Treasury yields and a stronger dollar, primarily due to the falling yen [5] Argentina's Economic Situation - Argentina's peso continued to weaken despite a $20 billion exchange-rate stabilization agreement with the U.S. Treasury, ahead of a key midterm election [6] - U.S. banks, including JPMorgan, Bank of America, and Goldman Sachs, are hesitant to lend the $20 billion to Argentina without guarantees or collateral [6]

Investment Rating - The report does not explicitly provide an investment rating for the industry or assets discussed Core Insights - Fiscal sustainability has gained increased attention from investors in the US, UK, and Japan, particularly regarding the US's persistent deficit and its impact on foreign demand for US assets [2][4] - The relationship between fiscal expansion and the Dollar is mixed, generally depending on the business cycle and monetary policy, but historically, greater US net issuance tends to be positive for the Dollar [4][5][21] - Concerns about fiscal sustainability and a declining appetite for US assets from foreign investors could lead to higher yields and a weaker Dollar, altering the historical relationship between fiscal expansion and currency strength [5][21] Summary by Sections Fiscal Risks and the Dollar - Investors are increasingly focused on fiscal sustainability, particularly in the context of the US's large and persistent deficit [2][4] - The effect of fiscal expansion on the Dollar varies, but on average, increased US net issuance is typically Dollar-positive due to structural foreign demand for Treasuries [4][5][14] Market Reactions - Pricing of US fiscal risks shows different implications across various foreign exchange (FX) pairs, with high-yielding currencies being more affected by steepening US yield curves [4][18] - A widening in US credit default swaps is often linked to underperformance in cyclical currencies [18][21] Historical Context - Historically, greater net issuance in the US has been associated with a stronger Dollar, but this relationship may not hold as foreign demand for US assets diminishes [5][14][21] - Other G4 economies do not exhibit the same positive relationship between net issuance and currency returns as seen in the US [10][11] Implications for Investors - Investors have accepted higher yields as compensation for holding US debt, but concerns about fiscal sustainability may now lead to a weaker Dollar as well [21] - The report suggests that the historical relationship between US issuance, foreign inflows, and the Dollar may begin to resemble that of other economies if current trends continue [14][21]