Core Insights - The article discusses the ongoing "debasement trade," where investors are moving away from traditional currencies and sovereign debt into alternative assets like gold and cryptocurrencies due to concerns over government fiscal policies and inflation [6][8][17]. Group 1: Market Reactions - Cryptocurrencies, particularly Bitcoin, have seen significant volatility but remain up over 20% this year, reaching an all-time high despite recent tariff threats [1][12]. - Precious metals are benefiting from their status as safe-haven assets, with gold rising over 50% this year and surpassing $4,000 per ounce, while silver has also reached an all-time high [2]. Group 2: Economic Context - The US dollar has experienced fluctuations, rising recently but remaining weaker overall this year due to trade wars and tax cuts, which have led to concerns about the future of Treasuries as a risk-free asset [3][19]. - Central banks are under increasing political pressure to maintain low interest rates, which could lead to inflation and further erosion of currency value as governments struggle with massive debt burdens [5][16]. Group 3: Investor Sentiment - There is a notable shift among investors away from traditional assets like US Treasuries, with some experts suggesting this could be just the beginning of a larger trend [7][8]. - The concept of "debasement" is being discussed as a potential explanation for the current market dynamics, with some strategists warning that this could lead to increased volatility [15][18]. Group 4: Global Political Climate - Political instability in countries like Japan and France is contributing to market uncertainty, with changes in leadership raising concerns about fiscal policies and economic stability [4][20][21]. - The freezing of Russian assets has highlighted vulnerabilities in foreign currency holdings, increasing the appeal of gold as a more stable investment [11].

Group 1 - The expectation is that bond yields, particularly the ten-year yield, may continue to decline due to attractive real yields in the bond markets and a decrease in inflation [1][2] - A formal announcement regarding a new inflation target could lead to further declines in bond yields, currency appreciation, and a reduction in the inflation rate [2][3] - There have been significant capital inflows into the South African bond markets, exceeding 409 billion rand in recent months, which is a crucial factor for the bond market's performance [4] Group 2 - The yield differential between the U.S. Treasury ten-year yield and the South African government bond yield is favorable for South Africa, contributing to the positive sentiment in the bond market [5] - The inflation differential between South Africa and the U.S. has narrowed, indicating a faster dis-inflation rate in South Africa, which is important for investors [5] - There is a renewed positive sentiment towards emerging markets, with South Africa being a notable player in this category [5] Group 3 - Central banks globally are increasing their gold holdings, with the price of gold recently spiking to a record $4,000, which may influence the South African Central Bank's strategy [6] - South Africa maintains significant gold reserves and has the capacity to extract more gold if necessary, indicating a strong position in terms of gold assets [7] - Concerns about rising debt levels are prevalent, but emerging market debt has not increased as significantly as that of advanced economies, suggesting a different risk profile [8][9]

Meanwhile, the New York Federal Reserve revealing this morning the amount of US treasuries held by global central banks hit its lowest in more than a decade. The drop of about $130 billion just since August, raising fears that global ddollarization is accelerating. For more, let's bring in BK Asset Management, managing director of FX Strategy, Kathy Lean.Kathy, great to have you with us. It's not just this drop held in treasuries held at the New York Federal uh Reserve Bank, but it's also the rise in gold. ...

This morning. It seems that markets globally in defiance of any kind of U.S. shutdown wobble. Let us bring into the conversation pulled off and our executive editor for Asia markets and the move.Things have been quite positive through the Asia session, perhaps driven by some of the technology news as well. Record stock rally, extending them. Paul, what's to worry about.Nothing, it appears. Hi there. Good morning, Anna.Well, the biggest worry is are we in a bubble. And if we are in a bubble, what do you do a ...

Tokenizing the real world. Bridging TradFi and Web3. Join us on October 1 for an AMA with @jeremyng777, Founder and CEO of @OpenEden_X, to learn how they’re setting the gold standard for tokenized US Treasuries, stablecoins, and beyond.🕜 12:00 pm EST[Brought to you by @OpenEden_X] ...

For 3 minutes on the markets. Mark, good morning to you. So let's start with the impact of shot down and in particular on the US dollar.ICC sitting talking about how this is something that's going to weigh on the dollar. And I think from reading your notes, you think that that's the sort of path of least resistance for the dollar right now. Absolutely.I think that's probably the easiest way to kind of play this kind of theme. I think overall, what government shutdown means is not major economic impact unles ...

Core Viewpoint - The market is closely monitoring Federal Reserve officials' speeches, particularly Jerome Powell's, for insights on future interest rate movements as Treasury yields experience fluctuations [1][3]. Group 1: Market Reactions - Treasury yields decreased by one basis point, with the 10-year bond rate falling to 4.13% [2]. - The market has faced pressure following last week's cautious comments from Fed officials regarding future rate cuts [2][3]. Group 2: Federal Reserve Insights - Jerome Powell is expected to clarify the rationale behind last week's rate cut, which he described as a "risk management" strategy, balancing job market concerns against inflation risks [3][4]. - Fed Governor Michelle Bowman emphasized the need for decisive action to lower rates to support the struggling labor market [7]. Group 3: Investor Sentiment - High uncertainty regarding the Fed's future path has led investors to engage in diverse bets on potential policy outcomes, as reflected in options trades linked to the Secured Overnight Financing Rate [5]. - Some investors are adjusting their expectations for rate cuts, targeting fewer cuts than currently priced in the market, while others are betting on significant cuts in upcoming meetings [6]. Group 4: Upcoming Treasury Auctions - A significant test of demand for US bonds is anticipated with the Treasury's upcoming sale of $69 billion in two-year notes, which is expected to perform well [4].

Core Viewpoint - Gold prices are experiencing a significant rally, nearing $3,800 per ounce, driven by strong demand and economic uncertainty, with potential for further increases as institutional investors remain cautious [1][3]. Demand and Market Sentiment - A recent Bank of America Global Fund Manager Survey indicates that 39% of fund managers have no allocation to gold, down from 47% in August, highlighting untapped investment potential [2][3]. - Robust physical demand is noted, particularly from China, which imported 104 tonnes of non-monetary gold in July, exceeding the five-year average [3]. - Anticipated demand in India is expected to rise with the festival season, providing additional support for gold prices [4]. Price Projections and Investment Strategies - Market experts predict gold prices could reach $4,000 per ounce, with notable shifts in investment strategies, including Morgan Stanley's revision of the "60/40" portfolio to include gold [5][6]. - Gold spot prices rose 1.07% to approximately $3,724.39 per ounce, with a 23.13% increase over the last six months and a 41.99% increase over the past year [7]. ETF Performance - Several gold ETFs have shown strong year-to-date and one-year performance, with Franklin Responsibly Sourced Gold ETF FGDL at 38.74% YTD and 40.01% over one year, while Goldman Sachs Physical Gold ETF AAAU is at 38.40% YTD and 40.05% over one year [8][9]. - Gold miner ETFs have also performed well, with VanEck Gold Miners ETF GDX up 104.75% YTD and 79.42% over one year [9].

Investment Rating - The report indicates a neutral investment rating with the BofA Bull & Bear Indicator at 6.0, suggesting a balanced market sentiment [54][56]. Core Insights - The report highlights significant inflows into equities, with $68.4 billion directed towards stocks, marking the largest inflow since December 2024 [13][32]. - The report notes a substantial increase in US household equity wealth, which has risen by $6 trillion year-to-date, contributing to asset price inflation [4][23]. - The report discusses the implications of US monetary policy, including rate cuts and their effects on various asset classes, particularly small-cap stocks and REITs [2][3]. Summary by Sections Market Performance - Year-to-date performance shows gold at 35.4%, bitcoin at 17.2%, and stocks at 14.3%, while commodities and cash lag behind at 4.5% and 2.9% respectively [1]. - Small-cap stocks in the US have increased by 8% year-to-date, while small-cap stocks in China have surged by 51% [2]. Asset Flows - Weekly flows indicate $68.4 billion into stocks, $14.3 billion into bonds, and $3.8 billion into crypto, with a notable outflow of $4.8 billion from cash [13][32]. - Cumulative year-to-date flows show significant inflows into equities, particularly in ETFs, which have seen $799.9 billion, representing 6.5% of total assets under management [32]. Economic Indicators - The report emphasizes the correlation between asset price inflation and consumer price inflation, with a focus on the political risks associated with inflation ahead of the 2026 midterms [4]. - The report also notes that the US dollar is expected to remain in a bearish trend, while international stocks are projected to perform positively [3][4]. Investment Strategies - The report suggests that the best equity trade for growth is to focus on long bond-sensitive sectors, including small-cap stocks, REITs, and biotech [2][3]. - It also discusses the historical context of market bubbles and the potential for further gains in the current market environment, particularly in tech stocks [19][20].

Group 1 - The total holdings of US Treasuries by overseas investors reached a record high of $9.16 trillion in July, increasing by $31.9 billion from June [1] - The significant increase in holdings was primarily driven by the UK, which added $41.3 billion to reach $899.3 billion, marking a historical record [1] - France also recorded notable growth in its US Treasury holdings during the same period [1] Group 2 - China, the third-largest holder of US Treasuries, saw its holdings drop by $25.7 billion to $730.7 billion, the lowest level since 2009 [1] - Japan, the largest foreign holder of US Treasuries, slightly increased its holdings by $3.8 billion to $1.15 trillion [1] - Canada experienced a significant decline in its holdings, decreasing by $57.1 billion to $381.4 billion, the lowest level since April of this year [1] Group 3 - The demand for US Treasuries among overseas investors has been under scrutiny, particularly in light of increased tariffs imposed by President Trump, raising concerns about international capital flows [2] - Over 30% of the total US Treasury stock is held by foreign investors and governments [2] - Recent indicators suggest a potential weakening interest from overseas investors in US assets, coinciding with a decline in the US Treasury index in July [2]