Group 1: Conditions for Currency Transition - The international status of a currency reflects the comprehensive strength of its issuing country, which includes economic, trade, and military power[8] - Currency transition requires significant lag and stickiness, meaning a currency can maintain its dominant position even after the issuing country's economic decline[14] - Wars often catalyze the decline of an international currency, leading to increased fiscal burdens and weakened currency credibility[14] - A mature and open financial market is essential for currency internationalization, facilitating trade and capital flows[14] Group 2: Dollar Replacing Pound - The transition from the pound to the dollar occurred in four phases: latent (1870s-1913), loosening (1914-1930), collapse (1931-1944), and termination (1945-1971)[15] - During the latent phase, the U.S. economy began to surpass the UK, with U.S. GDP share rising from approximately 10% in 1870 to 32% by 1913, while the UK's share fell from 60% to 13.6%[16] - The loosening phase saw the dollar emerging as a competitor to the pound, with U.S. overseas assets rising to 36% by 1930, compared to the UK's 44%[24] - The collapse phase marked a significant decline in the pound's status, with its share in global debt dropping from 85.6% to 30.2% by 1944, while the dollar's share rose to 56.6%[38] - The termination phase solidified the dollar's dominance, with its share of global foreign exchange reserves exceeding 70% by 1971, following the end of the Bretton Woods system[41]

Group 1 - The current market situation is similar to the oil crises of the 1970s, primarily driven by geopolitical tensions affecting oil supply [2][48] - The macroeconomic environment is characterized by a weakening dollar credit system, reminiscent of the post-Bretton Woods era [2][48] - The ongoing AI technology revolution adds a unique dimension to the current economic landscape, lacking historical parallels with stagflation [2][48] Group 2 - Oil prices are expected to remain high in the short term, influenced by the unresolved situation in the Strait of Hormuz [49] - The trajectory of oil prices follows supply-side changes, with potential for further escalation due to geopolitical developments [49] - The market is currently experiencing significant uncertainty regarding oil supply, which could lead to increased volatility in oil prices [49] Group 3 - U.S. Treasury yields are likely to face upward pressure due to persistent inflation expectations, with a potential narrowing of yield spreads [50] - The current environment lacks the safe-haven sentiment that characterized previous periods, leading to different dynamics in Treasury yields [50] - If oil prices remain elevated and the Federal Reserve's rate cut expectations are delayed, Treasury yields may not decline significantly [50] Group 4 - The U.S. dollar index is expected to face upward pressure in the short term, but the momentum may not be as strong as in the 1970s [50] - The long-term outlook for the dollar depends on the expansion of credit cracks and the economic performance of regions like Europe and Japan [50] Group 5 - Commodity prices may enter an upward trend due to persistent supply chain disruptions and increased demand for energy driven by AI infrastructure [3][49] - The potential for a prolonged high-price environment for commodities is supported by OPEC's pricing strategies and China's production controls [3][49] Group 6 - Gold is currently experiencing short-term liquidity shocks but retains long-term investment value, particularly in a stagflationary environment [3][49] - Historical patterns suggest that gold may benefit from declining real interest rates during stagflation, presenting a long-term investment opportunity [3][49] Group 7 - The U.S. stock market is influenced by the interplay between AI industry trends and external shocks, with long-term growth potential still present [3][49] - The performance of major tech companies is critical to the resilience of the U.S. stock market amid stagflation expectations [3][49]

Group 1: Key Recommendations - The report highlights the expected divergence in oil price impacts, suggesting that while oil prices have been volatile, the overall market response has been muted due to strategic reserves and easing sanctions. However, this buffer is depleting, indicating potential future price increases [7]. - The report recommends focusing on domestic supply chain stability and re-evaluating asset values in advanced production capacities, particularly in the coal chemical industry, ethylene production from imported US ethane, and large refining sectors [7]. - It suggests a balanced asset allocation strategy across domestic bonds, commodities, and broad market indices, with a positive outlook on sectors such as AI applications, coal, non-ferrous metals, and innovative pharmaceuticals [7]. Group 2: Profit Trends in Domestic Industry - The report notes that in January-February 2026, the total profit of industrial enterprises above a designated size increased by 15.2% year-on-year, significantly up from the previous value of 0.6% [10]. - The increase in profits is attributed to three factors: revenue growth, profit margins, and a low base effect from the previous year, particularly due to the timing of the Spring Festival [11]. - The report indicates that while profits are expected to stabilize, geopolitical uncertainties and potential inflationary pressures could impact downstream profit margins, necessitating a review of domestic demand policies [10][11]. Group 3: Economic and Financial News - The State Council has called for expanding market access and opening up the service sector, emphasizing the importance of service industries in modern economic development [14]. - The People's Bank of China has reported that the financial sector remains stable, with ongoing efforts to mitigate financial risks and enhance the monitoring and assessment of financial stability [15]. - Russia plans to ban gasoline exports starting April 1, 2026, to stabilize domestic prices amid geopolitical tensions affecting energy markets [16]. Group 4: Market Performance - The A-share market showed mixed performance, with the Shanghai Composite Index closing at 3913 points, up 0.63%, while the Shenzhen Component and ChiNext indices also saw gains [17]. - The report notes that the energy metals sector led the market with a significant increase of 6.11%, while other sectors such as chemical pharmaceuticals and agricultural chemicals also performed well [22]. - The report highlights that the overall market sentiment has improved, with a notable increase in net inflows of large capital into various sectors [20].

Core Insights - The report highlights that the recent short-term decline in gold prices may provide a strategic allocation window for long-term investments, particularly as geopolitical tensions in the Middle East evolve and stabilize [2][10] - The domestic economic fundamentals and funding environment are expected to support the A-share market, with potential decision points approaching in April as earnings reports begin to surface [11][12] - Investment focus should be on sectors that have experienced significant declines but show stable earnings, particularly in new energy and previously oversold sectors [12][39] Geopolitical and Market Dynamics - Geopolitical fluctuations, particularly in the Middle East, remain a primary factor influencing market conditions, with oil prices remaining high and gold prices under pressure [9][10] - The current gold-to-oil ratio stands at 37.25, having decreased by 49.28% from its recent peak, indicating a significant shift in market dynamics [9][16] Domestic Economic Environment - The domestic economic environment is showing signs of recovery, with fiscal measures taken in early 2026 leading to improvements in both production and demand [11] - Institutional long-term funds are expected to provide substantial support to the A-share market throughout the year, with potential risks arising from rising U.S. Treasury yields [11][12] Sectoral Investment Opportunities - The report suggests focusing on new energy investments, particularly in solar and wind power, which are less affected by geopolitical tensions and fossil fuel price fluctuations [12][39] - The report identifies that sectors such as non-ferrous metals and technology are likely to regain momentum as market liquidity stabilizes, with these sectors having experienced significant declines but showing positive earnings trends [12][39] Market Sentiment and Trends - Recent market sentiment indicators show a recovery in investor confidence, with the BOCIASI sentiment index rising from 63.9% to 67.6% over the week [27] - The A-share market has seen a shift from a strong linear trend to increased sector rotation, indicating a more dynamic market environment [35][36]

Group 1: Oil Price Threshold Effects - The relationship between oil prices and major asset prices is not linear and exhibits threshold effects, where crossing certain oil price levels leads to different asset price responses[4] - Three transmission mechanisms for the threshold effect of oil prices are identified: investor psychological anchors, central bank tolerance levels, and corporate breakeven points[5] - Historical data shows that 60% of oil prices are below $75/barrel and 80% are below $100/barrel, establishing these as key thresholds for asset pricing[8] Group 2: Impact on Inflation and CPI - A simple OLS regression indicates that a 10% increase in Brent crude oil prices could raise the U.S. CPI energy component by approximately 2.7%, with potential increases of 5.4% and 8.1% for 20% and 30% increases, respectively[6] - During the 2022 Russia-Ukraine conflict, Brent crude prices rose by an average of 43%, leading to an 11.6% increase in the U.S. CPI energy component[6] Group 3: Asset Performance Under Different Oil Price Scenarios - In the "medium oil price range" ($75-$100/barrel), the Nasdaq index shows the best performance with an average increase of 2.61% in the following months[10] - The 10-year U.S. Treasury yield increases by an average of 42.6 basis points when oil prices exceed $100/barrel, compared to 8.2 basis points in the medium oil price range[10] - The VIX index rises by an average of 13.5% in the "high oil price range," indicating increased market volatility[11] Group 4: Sensitivity of Assets to Oil Price Changes - The sensitivity of major U.S. stock indices to oil price changes turns negative once oil prices exceed $100/barrel, indicating a shift from demand-driven to cost-push inflation dynamics[22] - The 10-year U.S. Treasury yield shows a significant increase in sensitivity to oil price changes in high oil price scenarios, with coefficients rising from -0.169 to 1.601 when oil prices exceed $100/barrel[23] - Gold prices exhibit a U-shaped relationship with oil prices, performing best in high oil price scenarios and worst in medium oil price scenarios[16]

Core Insights - The global asset pricing logic is changing under the backdrop of high oil prices, high inflation, and high interest rates, with U.S. Treasury yields becoming more sensitive to inflation and supply factors [2] - The long-term interest rate is facing upward pressure, while gold retains its allocation value in an inflationary and uncertain environment [2] - The U.S. dollar is supported by safe-haven demand in the short term but faces adjustment pressure in the medium term due to fiscal constraints and reserve diversification [2] - The attractiveness of RMB assets is expected to increase as China distances itself from conflict-prone areas and maintains policy space [2] - A-shares are influenced by external disturbances but still present structural opportunities in sectors like power equipment and high-end manufacturing [2] - Hong Kong stocks are more affected by foreign capital flows and exhibit higher volatility, but their attractiveness for medium to long-term capital is increasing due to low valuations [2] Section Summaries 1. U.S.-Iran Conflict Dynamics - The U.S.-Iran conflict has escalated into a prolonged confrontation, impacting global energy supply and prices, with Brent crude oil prices rising significantly [6][7] - The conflict has led to increased military spending by the U.S., with costs exceeding $10 billion related to Iran, contributing to the rapid expansion of U.S. federal debt [15] 2. U.S. Federal Reserve's Hawkish Shift Amid High Energy Prices - The Federal Reserve has signaled a significant reduction in rate cut expectations, with most officials supporting only one rate cut in 2026 [8][12] - Inflation forecasts have been revised upward, with the core PCE inflation expected to rise to 4.0% [8][12] 3. U.S. Treasury Debt Outlook - U.S. federal debt has surpassed $40 trillion, with rapid growth driven by persistent fiscal deficits and military spending related to geopolitical tensions [15][19] - Interest payments on the debt are projected to exceed $1 trillion, raising concerns about fiscal sustainability [19] 4. Asset Class Changes Under Re-Inflation Narrative - The core logic of global asset pricing is shifting towards a framework of multiple constraints, including high energy costs and inflation persistence [32] - The traditional safe-haven role of U.S. Treasuries is weakening as inflation and supply factors dominate market dynamics [34] - Gold is expected to benefit from its dual role as a hedge against inflation and a currency alternative [34] 5. Structural Changes in Asset Pricing - The current asset pricing system is undergoing a fundamental reconfiguration, with energy costs, fiscal constraints, and credit stability becoming central [41] - Assets with supply security and credit stability characteristics, such as gold and energy, are likely to gain new premium sources [41]

Group 1: Oil Price Impact and Market Reactions - The blockade of the Strait of Hormuz has caused a global oil supply shock, reducing daily supply by approximately 20%, or 20 million barrels, which is ten times greater than previous conflicts like the Ukraine war[9][10]. - Initial market reactions to the oil price surge mirrored those during the Ukraine conflict, characterized by a strong dollar, rising bond yields, and declines in U.S. equities and gold[1][9]. - Despite the oil price shock being twice as severe as during the Ukraine crisis, the rise in the dollar and U.S. Treasury yields has been relatively muted, indicating that the market has not fully priced in the prolonged impact of high oil prices[1][17]. Group 2: Scenarios for Future Oil Prices - In a pessimistic scenario, if the conflict persists until the end of May, oil prices could rise to the range of $150-160 per barrel, with a potential 30% increase leading to a 75 basis point rise in Fed rate hike expectations[2][25]. - A neutral scenario suggests oil prices may stabilize between $100-120 per barrel, with market fluctuations continuing without significant changes in Fed rate expectations[2][26]. - An optimistic scenario could see the Strait of Hormuz partially reopen, allowing oil prices to drop back to the $80-100 range, which would likely renew expectations for Fed rate cuts[2][27]. Group 3: Investment Strategies and Risk Management - Emphasis on position management is crucial due to the unpredictable nature of geopolitical developments and market reactions, suggesting a strategy of "bottom positions + directional bets" to mitigate risks[3][48]. - For aggressive investors, focusing on sectors like power generation and energy storage is recommended, while conservative investors should consider high-dividend stocks as a stable base[3][49]. - The convertible bond market has faced challenges, with the index showing nearly zero returns year-to-date, indicating a need for careful observation of equity market stabilization before increasing exposure[3][51].

Core Insights - The report highlights that the current geopolitical tensions, particularly in the Middle East, have led to a significant rise in oil prices, with Brent crude exceeding $110 per barrel, which is expected to have a cascading effect on global inflation and asset performance [1][2] - It identifies four key pathways through which rising oil prices will impact equity allocations, emphasizing the potential for Chinese assets to perform better relative to other markets due to lower dependency on oil and improved foreign exchange reserves [2][3] Pathway 1: Inflation and Asset Performance - High inflation is expected to weaken non-US assets, while Chinese assets may exhibit greater safety and potentially independent performance due to the US's involvement in the conflict and its resultant inflationary pressures [2][3] - Historical data suggests that rising oil prices lead to increased production costs globally, pushing up the US CPI and prompting the Federal Reserve to tighten monetary policy, which typically strengthens the dollar and negatively impacts non-US assets [1][2] Pathway 2: Price Transmission Chain - The report outlines that the market often trades on expectations, with chemical and agricultural products' prices moving in tandem with oil prices, forming a transmission chain from energy to chemicals to agriculture [3][4] - The sustainability of price increases in chemicals and agricultural products will depend on overseas demand, particularly in sectors like energy storage, AI, and machinery [4] Pathway 3: Substitution Effects - The report discusses the limited substitution effect of coal in mitigating rising oil prices, noting that while coal prices may rise alongside oil, the impact is primarily felt in regions like China and India due to European climate policies [5][6] - Increased capital expenditure in energy infrastructure is anticipated as countries prioritize energy security, with significant investments in renewable energy sectors such as wind, solar, and battery technologies [6][7] Pathway 4: Impact on Japanese and Korean Industries - The ongoing geopolitical tensions are expected to disrupt the semiconductor supply chains in Japan and South Korea, which are heavily reliant on oil imports, leading to systemic risks in their manufacturing sectors [8][9] - The report indicates that rising storage prices due to supply constraints could hinder the development of AI applications, potentially delaying advancements in the sector [9][10]

Group 1: Geopolitical Insights - The US-Iran conflict has highlighted the vulnerability of global energy supply chains, significantly impacting European countries and emerging economies, while the dollar has experienced a temporary rebound[3] - Compared to other non-US assets, Chinese assets may emerge as the optimal choice, with the RMB appreciating more against the USD this year, indicating a shift in asset price narratives towards China and the US[3] - Commodity prices are driven by political factors rather than economic fundamentals, with a continued positive outlook for scarce small metals, while basic metals show limited price increases[3] Group 2: Economic Data Overview - Post-holiday production indicators are recovering, with notable improvements in high furnace operation rates and rebar production rates, showing a narrowing of year-on-year negative growth[4] - The oil transportation index (BDTI) has surged to a year-on-year increase of 250%, up from 126% the previous week, indicating significant volatility due to geopolitical tensions[4] - Inflation remains politically driven, with pork prices showing a double-digit year-on-year decline, while prices for geopolitically sensitive commodities like oil and gold have risen significantly[18] Group 3: Financial Market Trends - The foreign exchange market has seen significant volatility, with the USD strengthening against non-USD currencies, including the Euro and Yen, due to ongoing tensions in the Middle East[21] - The 10-year Treasury yield has fluctuated around 1.8%, slightly declining this week, reflecting market responses to expectations of monetary easing[21] - Upcoming data releases on inflation, trade, and social financing are expected to provide critical insights into economic trends as the data vacuum period concludes[23]

1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Views - This week, stagflation trading overseas has heated up. The escalation of the US - Iran situation, with a trend from "blitzkrieg" to "protracted war" and the blockade of the Strait of Hormuz, has led to a surge in oil prices. The weakening of US non - farm data has also contributed. Except for the US dollar strengthening due to global liquidity concerns, other assets seem to be "opponents" of crude oil [2]. - The financial market shows a sharply differentiated pattern of "strong oil and weak everything else". Brent crude oil soared 27.88% to $92.69 per barrel in a single week. Global stock markets were generally under pressure, with Europe leading the decline and the US Dow Jones Industrial Average falling 3.01%. The 10 - year US Treasury yield rose 20bp to 4.14%, reflecting rising inflation expectations. Spot gold fell 2.03% as the strong US dollar and rising yields suppressed its hedging function. The VIX soared to 29.49, and market panic increased but did not break the extreme threshold. Chinese bonds declined slightly, and the domestic liquidity - loose pattern was not significantly affected [2]. - In terms of macro data, US non - farm and PMI data show stagflation signals of "weak quantity and rising prices". In February, the number of new non - farm jobs was - 92,000, far worse than expected. The unemployment rate rose to 4.44%, and the labor participation rate was only 62.0%. The ISM manufacturing PMI remained at an expansion level of 52.4, but the price index soared to 70.5, the highest since June 2022. The manufacturing PMIs of the Eurozone and Japan rose to 50.8 and 53.0 respectively, returning to or accelerating expansion [2]. - High - frequency data shows that the US economic momentum is still relatively strong, but financial conditions have tightened marginally. GDPNow indicates a first - quarter growth rate of 2.1%. The initial jobless claims were 213,000, remaining at a low level, while the continued jobless claims rose to 1.868 million, indicating that the difficulty of re - employment may have increased. The Redbook retail sales increased year - on - year to 7.0%, showing consumption resilience. The 30 - year mortgage rate dropped to 6.11%, supporting housing demand. The CRB commodity index rose 12.6% in a single week, hitting a new high, and the financial conditions indexes of the US and Europe both declined significantly, and risk appetite declined [2]. - At the overseas policy level, there are obvious differences among Federal Reserve voting members in their assessment of the impact of geopolitical and tariff shocks. Some are inclined to continue cutting interest rates, while others are more cautious and may even consider raising rates. The ECB emphasizes two - way flexibility, the BOJ incorporates the Middle East shock into its assessment framework, and the US shows a tactical relaxation of Russian oil sanctions to ease the supply gap [2]. - In terms of geopolitical situation, Iran has entered the most dangerous leadership transition period in its history, and the direction of the conflict is still highly uncertain. After the death of Khamenei, power has been transferred to a three - member temporary committee. Missile launches have dropped by nearly 90%, but the "Kurdish card" is being re - considered. Trump's definition of "unconditional surrender" is becoming more flexible, and there is a possibility of a "decent retreat" after declaring victory. Although oil prices have incorporated a large amount of risk premium, the continued blockade of the Strait and the risk of oil tanker attacks still pose upward pressure. China maintains a cautious distance from the conflict, and the process of Trump's visit to China is unlikely to be affected [2]. 3. Summary by Directory 3.1 Weekly Overview: Stagflation Trading Heats Up - US non - farm data was significantly worse than expected, mainly due to the Kaiser strike and the BLS birth - death model adjustment. The manufacturing PMI remained in expansion, but the price sub - item soared, and inflation pressure re - accumulated. The US - Israel joint strike on Iran led to a sharp escalation of the Middle East situation, with the tanker transportation in the Strait of Hormuz interrupted. Brent crude oil soared nearly 28% in a single week, global stock markets were generally under pressure, and US Treasury yields rose due to rising inflation expectations [6]. 3.2 Financial Markets: Oil Surges, US Dollar Strengthens, Stocks, Bonds, and Gold Under Pressure - The commodity sector showed significant differentiation. Crude oil soared due to the escalation of the Iran war, becoming the most volatile asset class. Brent crude oil rose from $72.48 per barrel at the beginning of the week to $92.69 per barrel, with a weekly increase of 27.88%. Spot gold fell 2.03% to $5171.74 per ounce, as the strong US dollar and rising US Treasury yields suppressed the gold price. London aluminum rose 9.75% to $3446 per ton, possibly due to the expected increase in aluminum smelting costs caused by rising energy costs [14]. - Global stock markets were generally sold off. Geopolitical conflicts and soaring energy prices had a double - blow to corporate profit prospects. European markets had the largest decline, while A - shares and US stocks were relatively resilient. In the US stock market, the Dow Jones fell 3.01%, the S&P 500 fell 2.02%, and the Nasdaq fell 1.24%. In the Chinese stock market, the CSI 300 fell 1.54%, the Hang Seng Index fell 3.28%, and the Hang Seng Technology Index fell 3.71% [15][16]. - The yields of government bonds in major global economies mostly rose, reflecting market concerns about inflation caused by soaring energy prices. The 10 - year US Treasury yield rose 20.08bp to 4.1383%, and the 30 - year rose 14.61bp to 4.7567%. The 10 - year Chinese Treasury yield fell 0.80bp to 1.801%, and the 30 - year fell 1.20bp to 2.285%, indicating that the domestic liquidity - loose pattern was not significantly affected by external shocks [18]. - Global major spread indicators showed the characteristics of widening credit spreads, narrow - range fluctuations in term spreads, and expanding European sovereign spreads. The US high - yield bond spread widened by about 14bp, reflecting an increase in the market's pricing of low - rating credit risks. The US term spread (10Y - 2Y) fluctuated in a narrow range, and the yield curve shape was relatively stable. The yields of 10 - year German and Italian bonds rose, and the Italian - German spread widened. The 10 - year Japanese bond yield also continued to rise moderately [19]. - In terms of exchange rates, geopolitical conflicts drove safe - haven funds into US dollar assets, the US dollar index strengthened, and non - US currencies were generally under pressure, but the RMB was relatively stable. The US dollar index rose from 97.608 to 98.986 (+1.41%). The on - shore RMB depreciated slightly to 6.9047, and the RMB appreciated against the euro. Volatility indicators soared, and market panic increased, but the absolute level was still lower than the historical extreme value [24][25]. 3.3 Overseas Released Data 3.3.1 US Non - Farm Data Weakens More Than Expected - In February, the number of new non - farm jobs was - 92,000, far lower than the market expectation of 55,000. The main reasons were the Kaiser strike, which affected about 31,000 workers in California and Hawaii, and the BLS's systematic adjustment of the birth - death model. Without these two impacts, the new non - farm jobs would have exceeded market expectations [26]. - The unemployment rate in February was 4.44%, up 0.12% from the previous month. The labor participation rate was only 62.0%, and re - entrants to the labor market were the main factor driving up the unemployment rate. The labor market had a greater impact on young people and ethnic minorities, reflecting certain structural problems [29][31]. - Looking ahead, the Fed's interest - rate cut path may be disturbed. If the current oil price increase does not significantly raise inflation expectations, the probability of an interest - rate cut in June may further increase [33]. 3.3.2 US PMI Price Index Soars, Eurozone PMI Returns to Expansion - In February 2026, the manufacturing PMIs of major overseas economies generally improved, and most returned to the expansion range. The Eurozone manufacturing PMI reached 50.8, breaking through the boom - bust line for the first time in nearly two years. Germany's manufacturing PMI rose to 50.9, driving the Eurozone's manufacturing recovery. Japan's manufacturing PMI jumped to 53.0, reaching a new high in recent years [36]. - The US ISM manufacturing PMI in February was 52.4, remaining in the expansion range for the second consecutive month. The new order index and production index slowed down but still expanded, the employment index improved slightly but remained in contraction, and the price index soared to 70.5, the highest since June 2022, indicating re - accumulated inflation pressure in the manufacturing sector, which may strengthen the Fed's wait - and - see stance [37]. 3.4 Overseas High - Frequency Data Tracking 3.4.1 Economic Prosperity: Tightening of US and European Financing Conditions - The US economic surprise index first rose and then fell in the past week, while the Eurozone economic surprise index stabilized after a significant decline. Overall, the US economic data exceeded expectations more than the Eurozone. The US and European financial conditions indexes both tightened, which may be related to the increasing uncertainty of global trade policies and the decline in risk appetite [39][41][42]. 3.4.2 US High - Frequency Employment Data Remains Robust - The US labor market high - frequency data was generally stable, but the continued jobless claims rebounded slightly. The initial jobless claims remained at a low level, indicating limited short - term lay - off pressure, while the increase in continued jobless claims suggested that the difficulty of re - employment may have increased [44]. 3.4.3 US Commodity Prices Rise Significantly, Mortgage Rates Fall - The US consumer market showed resilience, with the Redbook retail sales year - on - year growth rate rising to 7.0%. The 30 - year mortgage rate dropped to 6.11%, and the MBA mortgage application index improved, indicating that low interest rates supported housing demand. The CRB commodity index rose 12.6% in a single week, hitting a new high, and the impact of commodity inflation on core inflation needs to be monitored [46][47]. 3.5 Overseas Policy and Geopolitical Analysis 3.5.1 Overseas Macroeconomic Policy: Pay Close Attention to the Inflation Impact of the Middle East Situation - There are differences among Federal Reserve voting members on whether to regard the inflation disturbance caused by geopolitical and tariff issues as short - term noise. Some members believe that further interest - rate cuts are necessary if inflation falls as expected, while others are more cautious. The ECB emphasizes two - way flexibility, and the BOJ has incorporated the Middle East shock into its policy assessment framework. The US has shown a tactical relaxation of Russian oil sanctions [51][52]. 3.5.2 Geopolitical Analysis: Uncertainty in the Iranian Situation Increases - Politically, Iran has entered the most dangerous leadership transition period in its history. Power has been transferred to a three - member temporary committee. Militarily, the scale of Iran's missile attacks on Israel has significantly decreased. The US military goal may be achievable, but Israel's political goal may be difficult to achieve. Trump's definition of "unconditional surrender" is flexible, and there are possibilities of a "decent retreat". Oil prices have incorporated a large amount of risk premium, but there is still upward pressure. The "Kurdish card" may be played again, aiming to disrupt Iran's internal stability. China maintains a cautious distance from the conflict, and Trump's visit to China is unlikely to be affected [53][55][57]. 3.5.3 Other Overseas News - Regarding the Russia - Ukraine situation, the Ukraine - Russia talks may be rescheduled due to the escalation of the Middle East situation. The EU will strengthen support for Ukraine's reform and accession process. Russia launched large - scale missile and drone attacks on Ukraine. - In terms of tariffs, multiple US states sued the Trump administration over new global tariff measures, and the US trade court ordered the government to refund tariffs [60]. 3.6 Future One - Week Important Agenda - Domestically, key data to be focused on include CPI/PPI, import and export, and money supply/social financing/deposit and loan data. Overseas, key data include US CPI, import and export, and PCE data. There are also some events with undetermined specific times, such as the continuous fermentation of the Iran war, the G7 finance ministers' meeting to discuss the economic impact of the Middle East situation, and a possible meeting between Bezant and Vice - Premier He [63].