China Galaxy Securities: Overall performance of commodities is good, with most global equity markets gaining positive returns.

Recently, China Galaxy Securities published a research report stating that from January 13th to January 17th, 2025, the overall performance of commodities was good, with precious metals and crude oil recording gains; the yield trends of bonds in the United States and China showed differentiation, with a sharp decline in US bond yields and a slight increase in Chinese bond yields; the US dollar index fell from its high point, while other currencies strengthened; most global equity markets achieved positive returns. Commodity market: (1) Gold: Gold prices fluctuated and rose last week. US Treasury Secretary Yellen's warning about the debt ceiling and the uncertainty of the Trump administration heightened market cautious sentiment, leading to funds flowing into gold. The US Supreme Court allowed the implementation of the TikTok ban, and with the slowdown of the European economy, further supported the demand for gold as a safe haven asset. Increasing global economic uncertainty, particularly in terms of trade and geopolitical risks, strengthened the demand for gold. Looking ahead, if US economic data strengthens, gold prices may face some pressure. (2) Crude oil: Crude oil prices fluctuated and rose last week, mainly influenced by the US sanctions on Russian energy, as market concerns about oil supply disruptions pushed up oil prices. In addition, the cooling of US inflation data enhanced expectations of interest rate cuts, boosting economic CKH HOLDINGS demand for oil. In the future, oil prices may continue to be influenced by sanctions and maintain current levels or rise, so attention should be paid to the response of related countries to the sanctions. Bond market: (1) US bonds: US bond yields fell sharply last week, influenced by the drop in the US core CPI to 3.2% in December, leading to increased market expectations of a Fed interest rate cut. Treasury Secretary Yellen's warning about the debt ceiling intensified market uncertainty, driving increased demand for safe havens. Although the Treasury Department has promised to take measures to avoid default, market concerns have not been completely eliminated. In the future, if economic data strengthens and the Fed maintains a hawkish stance, US bond yields may remain volatile; if the economy slows down or inflation eases, yields may further decline. (2) Chinese bonds: The central bank suspended open market purchases of government bonds, breaking the situation of low pricing for short-term government bonds and pushing yields up. Last week, funding was tight, and the risk of funding volatility increased before the Spring Festival, affecting the rise of long-term interest rates due to seasonal trends in savings certificates. In addition, the concentrated issuance of government and local government bonds improved supply and demand, driving yields up. Looking ahead, economic recovery or enhanced market confidence may exert upward pressure on government bond yields, but global economic uncertainty may lead to further downward pressures. Foreign exchange market: (1) US dollar index: The US dollar index fluctuated and fell last week, despite improvements in US economic data and inflation falling to 3.2%, leading to market reactions to the Fed's interest rate cut expectations, resulting in a weaker US dollar. At the same time, risk appetite rose, investors were optimistic about the global economic outlook, leading to funds flowing into risk assets and reducing demand for the US dollar. Looking ahead, if the global economy improves or the Fed maintains expectations for easing, the US dollar may face downward pressure; but if the US economy strengthens and the Fed maintains a hawkish stance, the US dollar index may remain volatile at high levels. (2) USD/JPY: The growth rate of US retail sales in December was lower than expected, weakening the support for the US dollar due to a slowdown in consumption momentum; at the same time, expectations of a rate hike by the Bank of Japan increased, pushing up the yen; the overall weakness of the US dollar index also dragged down the USD/JPY. Looking ahead, if the Bank of Japan raises interest rates, the weakness of the yen may improve; if the Fed pauses interest rate cuts and the US economy remains strong, the USD/JPY may still have upside potential. Equity market: Most global equity markets performed well. US financial companies' earnings far exceeded market expectations, enhancing investor confidence in the economic outlook. Secondly, the cooling of US inflation data, with core CPI falling to 3.2%, strengthened market expectations of a Fed interest rate cut, leading to a rise in investor risk appetite, prompting funds to flow into equity markets and further boosting stock indices. Risk warning Risks of domestic policy measures falling short of expectations; risks of policy uncertainties after the dust settles on global elections; risks of unstable market sentiment; risks of geopolitical disturbances.