The currency fell to the lowest levels against the dollar since the summer of 2024 on Tuesday. ...

Group 1 - The core inflation rate in the U.S. for December remained at 2.6%, matching the previous value but lower than the expected 2.7% [1] - Following the CPI data release, U.S. stock index futures rose sharply, with all major indices turning positive [2] - International gold and silver prices saw a quick increase, with spot gold rising by 0.34% and spot silver increasing by 2.5% [3][4] Group 2 - The U.S. dollar index experienced a short-term drop of 20 points, currently reported at 98.95, while non-U.S. currencies collectively strengthened [10] - The market is likely to view the December CPI data as a one-time disturbance, which may not significantly alter expectations for the Federal Reserve's interest rate cuts in 2026 [11]

Core Viewpoint - Japanese Prime Minister Sanna Takashi has decided to dissolve the House of Representatives on the opening day of the National Assembly on the 23rd, leading to concerns about the deterioration of Japan's fiscal situation and resulting in a decline in bond prices and a depreciation of the yen in the financial markets [1] Group 1: Market Reactions - The Tokyo bond market experienced a sell-off of long-term government bonds, causing a sharp rise in long-term bond yields [1] - The yield on the newly issued 10-year government bonds reached 2.16%, the highest level since February 1999 [1] - The depreciation of the yen against the US dollar saw it drop to 158.97 yen per dollar, compared to around 147 yen per dollar in early October last year [1] Group 2: Political Context - Concerns are heightened as the ruling Liberal Democratic Party (LDP) does not hold a majority in the House of Representatives, raising fears that a victory in the upcoming elections could further support Takashi's expansionary fiscal policies [1] - Analysts suggest that the market remains highly vigilant regarding the dissolution of the House of Representatives due to potential fiscal risks associated with the LDP's policies [1]

Core Viewpoint - The global precious metals market is at a crossroads of high volatility and technical correction as it enters 2026, with significant downward risks accumulated from extreme price surges in late 2025 [1][4] Market Dynamics - Despite solid growth drivers in 2025 and potential indicated by ETF allocations, the extreme highs in gold, silver, and platinum group metals (PGMs) have created notable short-term correction pressures [1][4] - The potential threat from U.S. tariff policies has led to a large flow of precious metals into U.S. reserves, squeezing liquidity in other global markets [4] - The platinum market is expected to continue facing supply shortages in 2026, exacerbated by declining production in South Africa, which increases price sensitivity to buying interest [4] ETF and Speculative Positions - Gold and silver ETF holdings grew by 20% in 2025, but overall holdings remain below historical peaks, leaving room for potential investor entry [2][4] - Speculative net long positions have not reached extreme levels, indicating potential for further investment [2] - Technical indicators have raised warning signals, with platinum's daily RSI exceeding 90 in December, marking a severe overbought condition [2][4] - Historical data suggests that when prices deviate more than 20% from the 200-day moving average, a 10% to 20% deep correction is often anticipated [2][4] Geopolitical Influences - Geopolitical tensions have intensified in January, becoming a key driver for gold prices, with U.S. military and diplomatic actions in Latin America and strategic interests in Greenland's mineral resources complicating geopolitical relations and enhancing gold's safe-haven appeal [5] - Spot gold has stabilized above $4600 per ounce, but the extreme price increases in 2025 suggest a tendency for the market to consolidate at high levels to digest profit-taking [5] Silver Market Performance - The silver market has also experienced volatility, with prices reaching a new high of $84 per ounce before facing pressure due to increased margin requirements from CME and profit-taking by investors [3][5] - New export quotas for silver from major supply countries, effective January 1, have reduced the number of companies allowed to export to 44, tightening supply expectations and supporting a subsequent price increase of over 7% [3][5] Long-term Outlook - The long-term bullish logic for precious metals remains intact, but investors should be cautious of technical corrections following extreme overbought conditions [5] - Current gold and silver prices show strong resilience, but the dual pressures of policy uncertainty and increased margin requirements necessitate close monitoring of key support levels [5]

Group 1 - HSBC expresses a positive outlook on Chinese assets, recommending investors to increase holdings in mainland China and Hong Kong stocks by 2026 and to establish long positions in the renminbi [1] - The bank suggests a shift in investment focus towards assets supported by domestic demand amid potential market volatility, particularly favoring stocks in China, Hong Kong, India, and Indonesia [2] - HSBC advises selling Swiss francs and buying offshore renminbi, anticipating a gradual appreciation of the renminbi due to China's industrial upgrades and technological self-sufficiency [1][3] Group 2 - HSBC recommends an overweight position in stocks from mainland China, Hong Kong, India, and Indonesia, while advising a reduction in exposure to the crowded South Korean market due to concerns over the sustainability of AI-driven growth [2] - The bank highlights the potential for interest rate cuts by some Asian central banks to support local stock markets, although the pace of rate cuts by the Federal Reserve may limit this space [4] - In the fixed income sector, HSBC favors a curve steepening strategy and is optimistic about bonds from India and the Philippines, while being cautious about Thailand and Indonesia [4]

Group 1 - The South Korean Financial Services Commission (FSC) has decided to allow listed companies to allocate 5% of their capital to mainstream cryptocurrencies, marking a significant shift in East Asian financial history [1][3] - This decision addresses years of capital outflow pressure due to domestic restrictions on overseas crypto investments, and aims to position South Korea favorably in the global digital asset landscape by 2026 [1][3] - The strategy limits investments to the top 20 cryptocurrencies by market capitalization and a 5% capital allocation cap, reflecting a cautious regulatory approach of "compliance first, then expansion" [1][3] Group 2 - The introduction of a stablecoin licensing system with a 100% reserve requirement is central to building a domestic digital currency ecosystem [2][4] - The expected launch of a spot Bitcoin ETF in 2026 will create a three-part structure in the South Korean market, consisting of direct holdings, financial products, and stablecoin payments, potentially attracting around 3,500 institutional entities and bringing trillions of Korean won in liquidity [2][4] - South Korea's plan to deeply integrate Central Bank Digital Currency (CBDC) into treasury management aims to challenge the traditional SWIFT payment dominance, with a goal of digitizing 25% of treasury funds by 2030 [2][4]

Core Viewpoint - In 2025, the Singapore dollar (SGD) demonstrated resilience amidst global financial market turbulence, characterized by a strong dollar, geopolitical shifts, and divergent monetary policies. The SGD is expected to continue serving as a "stabilizer" in the global currency market in 2026, despite anticipated economic slowdowns and monetary easing conditions [1]. Exchange Rate Dynamics - The SGD exhibited a "weak to strong" trend against the USD in 2025, reflecting both the dollar's cyclical effects and Singapore's economic resilience. The year can be divided into three phases: 1. In Q1, the SGD faced pressure due to trade concerns and failed Fed rate cut expectations, with the USD/SGD reaching a high of 1.3751 on January 13. The SGD only depreciated by about 2.3%, outperforming other Asian currencies [2]. 2. In Q2, the SGD rebounded sharply as US trade policies were less aggressive than expected and local economic data exceeded forecasts, with the SGD/USD dropping to a low of 1.2698 by July 1, marking a ten-year high [2]. 3. In the second half, particularly Q4, the SGD became a preferred safe haven amid rising geopolitical risks, ending the year with a cumulative appreciation of approximately 6.14% against the USD [3]. Economic Performance - Singapore's economy outperformed initial pessimistic forecasts in 2025, achieving a GDP growth of 4.8%, significantly above the predicted range of 1% to 3% and higher than the 4.4% growth in 2024. The fourth quarter saw a robust growth rate of 5.7% [4]. - Inflation concerns were effectively managed, with core inflation rates dropping to a range of 0.5% to 1%, aided by declining import costs and government subsidies in healthcare and transportation [4]. Monetary Policy Adjustments - The Monetary Authority of Singapore (MAS) implemented its first policy shift in five years in 2025, slightly lowering the slope of the nominal effective exchange rate policy in January and April, signaling a transition from "anti-inflation" to "growth preservation" [5]. - MAS's communication strategy was successful, maintaining market confidence in the SGD as a "hard currency" while allowing for flexibility in monetary policy adjustments based on economic data [5]. Outlook for 2026 - The SGD is expected to experience a "stable yet rising" trend with reduced volatility in 2026, influenced by complex variables beyond just Fed interest rate changes. The anticipated depreciation of the USD due to continued Fed rate cuts could enhance the SGD's attractiveness [6]. - Geopolitical factors and Singapore's strong fiscal position will continue to attract safe-haven investments, with the government’s robust budget and substantial reserves providing a buffer against external shocks [7]. - The Ministry of Trade and Industry forecasts a return to normal growth rates for Singapore's GDP in 2026, estimating growth between 1% and 3%, with inflation projected to remain manageable [8]. Recommendations for Businesses and Investors - For import-oriented companies, the SGD's appreciation may lower dollar-denominated procurement costs, suggesting an increase in spot foreign exchange purchases. Export-oriented firms should be cautious of profit erosion due to SGD appreciation and consider using derivatives to hedge against currency fluctuations [9]. - Investors are encouraged to view SGD assets as a defensive holding in the context of global de-dollarization, especially as US Treasury yields decline, enhancing the relative attractiveness of Singaporean assets [9].

Core Insights - The current U.S. labor market is undergoing a structural adjustment, with non-farm payroll data indicating a divergence that reshapes Federal Reserve policy expectations and triggers a new round of global asset market dynamics [2] Group 1: Non-Farm Data Analysis - In September, non-farm payrolls increased by 119,000, significantly exceeding the market expectation of 51,000, while the unemployment rate rose to 4.4%, indicating a rare divergence of rising employment alongside increasing unemployment [3] - The increase in labor supply, with approximately 500,000 workers re-entering the market, counteracted the positive effects of new job creation, leading to this data divergence [3] - Statistical peculiarities, such as a 75.6% response rate from surveyed companies in August and the late reporting of employment data, contributed to the inflated job numbers in September [3] Group 2: December Non-Farm Report Insights - The December non-farm report showed a seasonally adjusted increase of only 50,000 jobs, below the market expectation of 60,000, with the unemployment rate at 4.4% [4] - The total non-farm employment increase for 2025 was only 584,000, the weakest performance since 2020, significantly lower than the 2 million increase in 2024 [4] - The three-month moving average indicated a decline of 22,000 jobs, suggesting potential suppression of consumer spending [4] Group 3: Federal Reserve Policy Implications - The non-farm data has been pivotal in shaping market expectations regarding Federal Reserve interest rate adjustments, with a significant drop in the probability of a rate cut in January from 11.6% to 2.8% [6] - The market's cautious stance reflects a balance between economic resilience and policy uncertainty, as indicated by the high yields on long-term U.S. Treasury bonds [9] Group 4: Asset Market Reactions - The precious metals market saw gold prices rise above $4,600 per ounce, driven by soft non-farm data and geopolitical risks, while silver prices also reached historical highs [7] - The U.S. dollar index fell by 1.2%, showing a typical negative correlation with precious metal prices, while the stock market may see renewed support for growth stocks if labor market weakness persists [9] Group 5: Comprehensive Data Analysis Approach - A multi-dimensional analysis approach is emphasized, focusing on employment quality, labor participation rate dynamics, and cross-verification with other economic indicators to avoid misinterpretation of single data points [10][13] - The upcoming December CPI data is expected to play a crucial role in determining future Federal Reserve policy, with potential implications for market discussions on policy easing [14]

Core Insights - The People's Bank of China (PBOC) emphasizes maintaining financial stability while promoting development, effectively managing financial risks, and ensuring the overall health of the financial system [1] Policy Tools Effectiveness - The PBOC has implemented a dual-pillar framework of monetary and macro-prudential policies to stabilize financial markets, which are crucial for economic development [2] - The foreign exchange market has shown resilience against external shocks, with the RMB performing steadily among major global currencies [2] - In the bond market, the PBOC has conducted operations to enhance liquidity and has warned against systemic risks associated with declining long-term bond yields [2] - New capital market support tools have been introduced to bolster confidence in China's capital markets [3] Risk Management Progress - The PBOC's financial institution rating system categorizes banks into 11 levels based on risk, with 97.9% of rated banks falling within the safer categories [4] - There has been a significant reduction in high-risk small and medium-sized banks, with a focus on coordinated risk management at both central and local levels [4] Strengthening Support Systems - The financial system has enhanced risk management resources, including the collection of deposit insurance premiums and the establishment of a financial stability guarantee fund [5] - The deposit insurance system, which covers various banking institutions, has provided full protection for over 99% of depositors, exceeding international averages [6] - Future efforts will focus on improving the legal framework for deposit insurance and expanding the accumulation of the deposit insurance fund [6]

Report Industry Investment Rating No relevant content provided. Core Views of the Report - Employment trend in the US is weakening but may be emerging from the worst period. The non - farm payroll increase in December was lower than expected, but the unemployment rate and wage growth were better than expected. Some employment indicators in December showed a rebound [11][13]. - The expected Q1环比 rebound in the US economy is being realized. The US economic surprise index has rebounded recently, and the retail sales data in January is expected to show growth [14][16]. - Inflation expectations have significantly rebounded. Attention should be paid to the CPI data reading. The release of December CPI data is affected by government shutdown, and the geopolitical situation in Iran has affected oil prices and inflation expectations [17][19]. - Attention should be paid to the tariff policy framework changes brought by the IEEPA ruling. If the US Supreme Court rules IEEPA unconstitutional, it may involve a $150 billion tariff refund and cause short - term tariff policy chaos [20][23]. - In FICC precious metals, the gold - silver ratio is returning. Gold has regained momentum, and silver should be wary of fluctuations. Geopolitical risks have increased the upward drive of gold, while the conditions for silver to continue to rise are becoming more demanding [24][26]. Summary by Relevant Catalogs 1. Fixed Income - **Overseas Fixed Income Weekly Performance** - Various US Treasury yields had different weekly changes. For example, the 3 - month US Treasury yield was 3.59% with a - 2.06bp change, and the 2 - year US Treasury yield was 3.53% with a 5.88bp change. Major developed country government bond yields also changed, such as the 10 - year German bond yield at 2.86% with a - 3.7bp change [41][42]. - **US Treasury Yield Curve and Credit Spread Tracking** - The US Treasury yield curve showed changes over 1 - month, 3 - month, and 6 - month periods, and the long - short spread of US Treasury yields was also tracked [49]. - **Relative Strength of Different - Rated Credit Bonds and Eurozone Bond Yields** - The relative strength of high - yield and Aaa - rated credit bonds was analyzed, along with the credit spreads between different - rated bonds [58][60]. - **US Treasury Issuance and Primary - Secondary Market Supply - Demand Indicators** - The issuance of US short - term Treasury bills, medium - and long - term Treasury bonds, and related subscription ratios were presented [71][73]. 2. Exchange Rate Market - **Global Major Exchange Rates Weekly Performance** - The US dollar index, euro, yen, and other major exchange rates had different weekly changes. For example, the US dollar index had a 0.72% change to 99.1330, and the euro had a - 0.70% change to 1.1637 [76][78]. - **Major Country Treasury Yield Spreads with US Treasuries** - The spreads between 10 - year US Treasuries and G7 countries' average yields, as well as the spreads between US and German 2 - year Treasury yields, were shown [79][80]. - **Evolution of China's Monetary Policy Framework** - China's "interest rate corridor" is formed with the 7 - day reverse repurchase in the inter - bank market as the "policy rate", SLF as the top, and the excess reserve ratio as the bottom. Traditional policy tools rely on MLF as the policy - guiding rate [88]. - **Monthly and High - Frequency Indicators of RMB Exchange Rate** - Monthly indicators include China's central bank gold and foreign exchange reserves, and high - frequency indicators include the spreads between Chinese and US 10 - year and 3 - month Treasury yields [93][101]. 3. Commodities - **Global Major Commodities Weekly Performance** - Various commodities such as Shanghai gold, Shanghai copper, and Brent crude oil had different weekly changes. For example, Shanghai gold had a 2.96% change, and Brent crude oil had a 4.09% change [119][121]. - **Commodity Ratios and Industry Chain Relative Strength** - Ratios such as the gold - silver ratio, gold - copper ratio, and their relationships with inflation expectations and US Treasury yield spreads were analyzed [123][124]. - **Commodity Price Mapping in Equity and Bond Markets** - The relative strength of commodities with global equity and bond indices, and the rolling correlation between upstream commodities and downstream equity cycle sectors were studied [131][134]. - **Macro Commodity High - Frequency Data** - Data such as OPEC+ crude oil production quotas, US energy department crude oil production, and global crude oil and copper inventories were presented [141][143]. 4. Overseas Equity - **Global Major Indices and US Stock Industry Weekly Performance** - Global major indices such as the S&P 500, Nasdaq Composite, and their weekly changes were reported. In the US stock market, different sectors of the S&P index also had different weekly performances [146][150]. - **Weekly US Stock Style Performance, Valuation, and Earnings Tracking** - Different US stock style sectors such as US large - cap growth and US small - cap value had different weekly changes. Valuations and earnings (EPS) of major indices were also analyzed [153][157]. - **Earnings Cycle Positioning - Quarterly EPS YoY Trends of Major Indices** - The quarterly EPS YoY trends of indices such as the S&P 500, Nasdaq, and Nikkei 225 were shown [164][165]. - **Volatility and Risk Sentiment Indicators** - Indicators such as the Chicago S&P Volatility VIX index, ICE Bond Volatility MOVE index, and CBOE option PUT/CALL ratio were presented [171][172]. 5. Cryptocurrency - **BTC, ETH, and Related Derivative Assets** - The relationships between Bitcoin, Ethereum, gold, and the US dollar, as well as the performance of major Bitcoin ETFs and their fund flows were studied [184][187]. 6. BOJ Post - YCC Era - **Yen Carry Trade System Market High - Frequency Data Tracking** - Data such as the net amount of Japanese investors' purchases of overseas bonds and stocks, USDJPY 1 - year exchange - rate hedging costs, and yen net positions of CFTC CME yen hedge funds and asset management institutions were presented [192][194]. 7. Macro Data Hologram and Fundamental High - Frequency Data - **Real - Time Economic Momentum** - Real - time GDP models, GDP components, and sector economic surprise indices of the US, as well as economic surprise indices of the US, Europe, and China were presented [202][206]. - **Financial Conditions** - The Federal Reserve's balance sheet and its weekly changes, G4 central banks' balance sheets as a percentage of GDP, and US and euro - area financial condition indices were analyzed [210][213]. - **Fiscal Policy** - US federal government fiscal expenditures and revenues, government debt issuance, and the government deficit as a percentage of GDP were studied [218][223]. - **Employment Market** - US employment market indicators such as non - farm payroll monthly increases, job vacancies, and weekly unemployment claims were tracked [227][228]. - **Inflation Indicators** - US inflation data was split, and trends of headline and core inflation, as well as inflation expectations, were analyzed [235][240]. - **Consumption Demand** - US consumption data such as retail sales, consumer confidence, personal income, and household debt were studied [244][259]. - **Cycle Positioning** - Industrial, manufacturing, and inventory cycle indicators, as well as US wholesale, retail, and manufacturing inventory and inventory - to - sales ratios were analyzed [267][277]. - **Credit Cycle** - US credit surveys, S&P index valuations, and high - yield corporate credit spreads were presented [280][282]. - **Transportation and Logistics** - Logistics data between China and the US, Asia and the US, Europe and the US, as well as aviation, supply - chain, and shipping data were studied [284][297]. - **Real Estate Market** - US real estate equity market, credit spreads, and commercial real estate data such as indices, loan amounts, and delinquency rates were presented [302][308]. - **Eurozone** - Eurozone macro - overview, cycle positioning, and relative strength data such as deficit rates, inflation, and economic surprise indices were analyzed [311][331].