Sheng Songcheng: The RMB may be at a favorable juncture to play a role as an international financing currency.

Sheng Songcheng believes that China's foreign trade achieved an unexpected growth in the first quarter of this year. The market breadth and operational depth of Chinese enterprises' international operations have been continuously strengthened. The RMB may have a favorable opportunity to play the role of an international financing currency. Sheng Songcheng suggests that China should improve the construction of its offshore financial system and maintain the basic stability of the exchange rate. First, increase the supply of safe assets denominated in RMB in the offshore market, make the regular issuance of RMB treasury bonds and central bank bills abroad, and improve the RMB interest rate curve in the offshore market. Third, we will adhere to the decisive role of the market in determining the exchange rate, maintain exchange rate flexibility, and at the same time strengthen expectations management to keep the RMB exchange rate basically stable at a reasonable and balanced level. This will be conducive to expanding the space for two-way investment cooperation. Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any specific user. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at your own risk.

More than 500 companies are queuing up for IPOs in Hong Kong, and sponsors are in short supply.

In the situation where the number of sponsors was seriously insufficient, some securities companies had experienced a situation where one sponsor served as the main signatory for 10 IPO projects simultaneously. Public information shows that on January 30, the Hong Kong Securities and Futures Commission publicly issued a letter, pointing out the problems existing among sponsors during the period of a sharp increase in the number of PO applications in 2025, including serious deficiencies in the preparation of some listing documents, possible misconduct by sponsors, and serious mismanagement of their resources, etc. At the same time, it was pointed out that each sponsor could represent a maximum of six enterprises. Tencent News' "First Line" has learned that since March this year, the Commission has further reduced the number of enterprises that a sponsor can represent to five. He pointed out on the spot that in the past few months, the CSRC, on the one hand, has tightened the screening standards for IPOs and further strengthened the review process; on the other hand, it has also been working to enhance policy coordination to maintain the positive momentum of the Hong Kong IPO market. Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any specific user. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at the user's own risk.

Morgan Stanley's Wilson: Market correction is nearing its end, but there will still be some pain in the final stage.

Wilson believes that the current market sentiment remains fragile. He clearly stated that this round of adjustment began in October last year, with the forward price-to-earnings ratio of the S&P 500 having dropped by 18% from its peak - a decline that historically has typically only occurred during economic recessions or when the Federal Reserve actively tightens its monetary policy cycle. "But neither of these scenarios exists in our base forecast." Wilson insists that this is a normal adjustment within the new bull market that began in April last year after the bottoming out of the "rolling recession from 2022 to 2025", rather than a trend reversal. The core data supporting this judgment is that the current median company EPS growth rate has reached double digits, the fastest since 2021. He also compared the historical oil shock cycles: at that time, profits were already deteriorating, while currently profits are still growing rapidly from a high base, and the increase in oil prices in this round is relatively moderate when measured in real terms. Wilson also directly addressed the other two major concerns of the market. In terms of AI disruption, Wilson believes that the narrative has outpaced reality. "The enterprise application layer is still in its early stages, and in the short term, AI is more likely to support profit margins rather than compress them," he added. AI also provides companies with a reason to hold back on hiring, which in turn brings an upside surprise in operating leverage - one of the reasons for the current acceleration in EPS growth. Wilson made it clear that the biggest source of uncertainty in the current market is interest rates and policies, rather than geopolitical or credit risks. Last week's partial rebound in the market coincided with the release of a more neutral stance by Federal Reserve Chair Powell and the decline in bond volatility. But he also emphasized that such fluctuations are part of the bottoming process rather than the start of a new bear market. "Markets usually don't give investors multiple chances, which is why we encourage early positioning." In terms of specific strategies, Wilson maintains a "dumbbell" configuration framework: His final judgment is: "Most of the pricing adjustments for geopolitical risks, private credit concerns and AI disruptions have been completed. What remains are mainly interest rate and policy issues, and these will be resolved as the leadership transition at the Federal Reserve is completed." Risk Warning and Disclaimer Clause

On the eve of its IPO, SpaceX invited top Wall Street fund managers for an "on-site research visit".

With just a few weeks left until SpaceX's expected record-breaking IPO, the Musk-owned space and AI giant is making a full-scale push to woo institutional investors. According to The Information's report on Friday, several top Wall Street fund managers plan to visit SpaceX facilities in the southernmost tip of Texas and Memphis, Tennessee, during the week of April 20 for exclusive on-site tours. This event is a key part of the company's intense investor roadshow in recent weeks. Meanwhile, SpaceX is focusing on rectifying its xAI business, which has been continuously burning through cash. Anthony Armstrong, the chief financial officer of xAI, has left the company, and it has also indefinitely put on hold a Memphis wastewater treatment facility project that cost over 80 million US dollars. The above actions indicate that SpaceX is making the final financial and image adjustments for its IPO. However, the valuation discrepancy remains the biggest variable standing in the way of the deal - some investors have already informed the underwriting banks that the previously reported valuation of up to $2 trillion is unacceptable and urged the company to consider lowering the pricing. The roadshow kicks off, and investors will travel to Starbase and Colossus data centers in person. According to three people familiar with the matter, the two-day site visit will take institutional investors to Starbase in Texas, where SpaceX is building the world's largest fully reusable rocket, as well as to Colossus 1 and Colossus 2 in Memphis, the two large data centers owned by xAI. According to informed sources, the core narrative of investor communication currently centers on SpaceX's strategic vision: integrating its unique satellite R&D capabilities with plans to deploy high-end chips in space over the next few years, while simultaneously advancing the construction of ground data centers. This "space-ground integrated" AI infrastructure narrative is the core story that SpaceX is telling to the public market. The valuation dispute remains unresolved, and the pricing will depend on the market response. The size and valuation of the IPO will ultimately depend on how investors receive the above-mentioned roadshow. According to The Information, some investors have expressed concerns to the underwriting banks that the reported valuation of up to $2 trillion sought by SpaceX is hard to digest and suggested considering a lower pricing range. Musk himself previously denied the related reports on X, stating that the company would not seek such a high valuation. SpaceX's initial public offering (IPO) is currently expected to proceed in June this year. If successful, it is likely to become one of the largest new share offerings in history. The exodus of executives at xAI continues, with a SpaceX veteran taking over the integration. During the IPO sprint stage, the executive team of xAI is experiencing a major shake-up. According to two informed sources, xAI's Chief Financial Officer, Anthony Armstrong, has left the company. Armstrong, a former Morgan Stanley banker, joined xAI last autumn and led the construction of the company's data center and the $20 billion financing round announced in January this year. After SpaceX completed its acquisition of xAI in February this year, Armstrong was placed under the leadership of SpaceX's Chief Financial Officer Bret Johnsen, who is currently leading the IPO process of the merged company. Before joining xAI, Armstrong was involved in the transaction advisory work for Musk's acquisition of Twitter in 2022 and served in Musk's government efficiency department in 2025. Armstrong's departure is not an isolated case. According to The Information, since SpaceX completed its acquisition of xAI (valuing xAI at $250 billion), several top executives at xAI, including multiple co-founders, have left one after another. Currently, Michael Nicolls, a senior executive at SpaceX and the head of the Starlink team, has taken over the majority of xAI's operations and reports to Gwynne Shotwell, the president and chief operating officer. According to Business Insider, Nicolls has brought in engineering leadership from SpaceX and in an internal memo, directly stated that xAI is "significantly behind". To cut costs, xAI has put on hold the wastewater treatment project in Memphis. To align with the financial streamlining ahead of its IPO, SpaceX is pushing xAI to cut all non-revenue-generating expenditures. According to a person familiar with the matter, Musk recently asked xAI to accelerate its new AI model plans while also cutting costs. The most direct manifestation is that xAI has indefinitely postponed the construction of a wastewater recycling facility in Memphis that was expected to cost over 80 million US dollars. The facility was originally planned to provide recycled water for the Colossus data center and other industrial sites. xAI officially broke ground on the project last October. According to the local media Daily Memphian, the engineer in charge of the project has confirmed that it is in an "indefinite suspension" state. Musk later responded on X, saying: "We need to focus on completing Colossus 2 and ensuring its extreme stability before building the water recycling plant." However, this decision poses a political backlash risk in Memphis. The Colossus data center of xAI has become a significant political issue in the local area. The wastewater treatment facility was originally an important measure for xAI to demonstrate its commitment to reducing environmental impact to the outside world. The suspension of the project is expected to trigger a strong reaction in the local community. Risk Warning and Disclaimer Clause Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any specific user. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at the user's own risk.

The first stock of the "Six Little Dragons of Hangzhou" is here!

According to the offering plan, this IPO intends to globally issue approximately 161 million shares, with an additional 15% over-allotment option. Among them, 16.062 million shares will be offered in Hong Kong and 145 million shares will be offered internationally, accounting for 10% and 90% of the total number of shares issued globally, respectively. JPMorgan and CCB International will serve as joint sponsors. The offering price is set at a maximum of HK$7.62 per share, with an expected total fundraising amount not exceeding HK$1.227 billion. As a result, Qunke Technology will become the "world's first spatial intelligence stock" and will also be the first company among the "Six Little Dragons of Hangzhou" to enter the capital market. The announcement shows that this global offering has introduced Taikang Life Insurance, Sunshine Life Insurance, GF Fund, Redwood, Mirae Asset, Wusong Capital, Hesai HK, Guohui Hong Kong, and Huaying Construction as cornerstone investors. The cornerstone investor lineup covers top long-term insurance funds, leading public funds, professional private equity investment institutions, international asset management institutions, and industry leaders, with a total subscription of approximately HK$455 million by diversified institutions. Previously, Qunke Technology has received investments from renowned institutions such as GGV Capital, Shunwei Capital, IDG Capital, Hillhouse Capital, Matrix Partners, Coatue, Hearst, Pavilion Capital, Yunqi Capital, and Linear Capital. In terms of finance, Qunhe Technology has maintained a steady growth in revenue over the past three years. By 2025, the company is expected to achieve a revenue of 820 million yuan, with a gross profit margin rising to 82.2%. From 2023 to 2025, Qunhe Technology's cumulative R&D investment will exceed 1 billion yuan. The announcement indicates that the net proceeds from the IPO will primarily be used to implement international expansion strategies; enhance the functionality of existing products and launch new products and/or features to meet the demands of both the real-world space and virtual environments; invest in core technologies and infrastructure; domestic sales and marketing activities, and enhance brand awareness, as well as for working capital and general corporate purposes. Due to their significant influence in the field of cutting-edge technology, Qunke Technology, DeepSeek, Unitree Robotics, Game Science, CloudMinds Technology, and BrainCo are collectively known as the "Six Little Dragons of Hangzhou", and are regarded as a microcosm of Hangzhou's innovative technological strength. It is widely believed in the industry that AI is extending from the flat interaction mainly based on text and images to three-dimensional space scenarios, and spatial intelligence is at the core of this trend. In recent years, Groutine has further upgraded from a cloud-native space design software provider to a spatial intelligence service provider, forming a business flywheel system of "space editing tools - spatial data - spatial large models", and its business scope has also expanded from assisting humans in completing three-dimensional space creation to helping intelligent entities improve the intelligence level of three-dimensional environments. At the product level, in 2025, Qunke Technology also launched the Aholo Spatial Intelligence Open Platform, integrating various capabilities of spatial intelligence such as spatial reconstruction, spatial generation, spatial editing, and spatial understanding, and gradually opening it up in the form of a bottom-level infrastructure. Through the combination of products and open platforms, it further promotes the integration of AI and the physical world. In addition, the company also released the cloud-native industrial AI twin platform SpatialTwin for the era of embodied intelligence, supporting real-time simulation of dynamic real industrial environments and large-scale operation of intelligent agents; for the creative content creation fields such as e-commerce and film and television, the company launched the 3D AI content creation tool LuxReal. Risk Warning and Disclaimer Clause

The New York Fed: Inflation expectations are rising sharply, driven by oil prices.

The latest consumer survey by the New York Fed shows that inflation expectations in the United States rose significantly in March, with expectations of oil prices surging to a four-year high being the main driver. Meanwhile, confidence in the labor market continued to deteriorate, and expectations of household financial conditions also weakened simultaneously. The New York Fed's March 2026 Survey of Consumer Expectations, released on Monday, showed that one-year inflation expectations rose 0.4 percentage points to 3.4% from 3.0% in February, matching the high point in April 2025. Three-year inflation expectations edged up 0.1 percentage point to 3.1%, while five-year expectations remained unchanged at 3.0%. The recent sharp rise in short-term inflation expectations was mainly driven by a significant increase in the expected price of gasoline - respondents' expectations for the increase in gasoline prices over the next year soared by 5.3 percentage points to 9.4%, the highest level since March 2022. The release of the above data came just before the Friday CPI report, which was a sensitive timing for the market. The simultaneous rise in inflation expectations and the deterioration of labor market confidence have made the outlook for the Federal Reserve's monetary policy more complex - on the one hand, inflationary pressures are reigniting, while on the other hand, concerns about the job market are deepening. Discussions on the risk of stagflation may heat up. The expected surge in oil prices has driven up inflation expectations for a number of commodities. In this survey, the jump in the expected gasoline price was particularly prominent, becoming the core factor driving the overall short-term inflation expectations upward. The respondents' forecast for the increase in gasoline prices over the next year rose sharply by 5.3 percentage points from the previous level to 9.4%, the highest reading since March 2022. Price expectations for other major commodities and living costs have also generally risen, but the increase has been relatively moderate. The expected increase in food prices has risen by 0.7 percentage points to 6.0%; the expected increase in rental prices has risen by 1.2 percentage points to 7.1%; the expected increase in medical expenses remains unchanged at 9.7%; and the expected increase in university education costs has slightly decreased by 0.1 percentage points to 9.0%. At the same time, the uncertainty of respondents regarding the inflation outlook is also on the rise. The survey shows that the indicators of inflation uncertainty for all terms have increased, indicating that the divergence in consumers' judgments on future price trends is expanding. Confidence in the labor market continues to deteriorate. While inflation expectations are rising, respondents' pessimism about the labor market is also intensifying. The survey shows that the average probability expected by respondents that the US unemployment rate will rise in the coming year has increased by 3.6 percentage points to 43.5%, the highest level since April 2025. At the individual employment level, respondents believe that the average probability of losing their jobs within the next 12 months has risen by 0.6 percentage points to 14.4%, although it remains below the 12-month rolling average of 14.6%. Notably, the willingness to leave voluntarily (expected resignation rate) has risen significantly by 2.4 percentage points to 18.3%. On the other hand, respondents' confidence in finding a new job after unemployment has rebounded, with the probability expectation rising by 1.9 percentage points to 45.9%. This improvement was observed across different age groups, educational levels, and income brackets, but the reading still remains below the 12-month rolling average of 47.5%. In terms of salary expectations, the median expected growth in income for the next year among respondents dropped by 0.1 percentage point to 2.4%, not only lower than the 12-month rolling average of 2.6%, but also at the lower end of the range (2.4% to 3.0%) since May 2021. Household financial conditions are expected to weaken across the board. Consumers' assessment of their own financial situation is also deteriorating simultaneously. Surveys show that compared with a year ago, the proportion of households reporting a decline in their financial situation has risen, while the proportion reporting an improvement has dropped; expectations for their financial situation in the coming year are equally pessimistic, with the proportion of households expecting a deterioration reaching the highest level since April 2025. In terms of spending and debt, the median expectation for household spending growth over the next year rose slightly by 0.2 percentage points to 5.1%, while the expectation for household income growth remained unchanged at 2.9%. The average probability of being unable to repay the minimum debt within the next three months increased by 0.7 percentage points to 12.3%, with this pressure being most pronounced among those aged over 60, those with some college education, and those with an annual income of less than $50,000. In terms of credit and asset expectations, respondents' perception of the current difficulty in obtaining credit has improved, but their expectations for future credit availability have slightly deteriorated. The average probability that respondents believe the US stock market will rise in the next 12 months has dropped by 1.6 percentage points to 36.3%. Additionally, the median expectation for government debt growth in the coming year has risen by 0.6 percentage points to 9.8%, which is much higher than the 12-month rolling average of 7.4%. Risk Warning and Disclaimer Clause Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any specific user. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at your own risk.

Report: SpaceX has finalized the details of its IPO and plans to start the roadshow in June.

According to a report by Reuters on April 7, SpaceX convened its underwriting team on Monday evening to officially disclose key details of its IPO: the roadshow is set to start the week of June 8, with a target of raising $75 billion and a maximum valuation of $1.75 trillion. A source disclosed that one of the lead underwriters among the 21 underwriting banks informed the entire banking team that the retail demand and the size of the placement would be "unprecedented". According to the information obtained by the media, the IPO process will proceed at the following pace: Week of June 8: Officially launch the roadshow, with executives and bankers presenting to institutional investors. Retail participation is not limited to the United States. Ordinary investors in the United Kingdom, the European Union, Australia, Canada, Japan and South Korea all have the opportunity to subscribe. Valuation Surge: From 800 Billion to 1.75 Trillion In December 2025, SpaceX's latest employee stock offer (tender offer) valued the company at $800 billion. In February this year, after SpaceX merged with xAI, an AI startup owned by Musk, the combined entity was valued at $1.25 trillion. The underwriting team is equally star-studded: Morgan Stanley, Bank of America, Citigroup, JPMorgan Chase, and Goldman Sachs serve as active bookrunners, with another 16 banks handling institutional, retail, and international channels respectively. While SpaceX is racing towards its initial public offering (IPO), the IPO competition among Silicon Valley's AI unicorns is also picking up speed simultaneously. However, OpenAI's path to going public is not smooth. According to financial documents obtained by The Wall Street Journal, the company is projected to spend as much as $121 billion on computing power in 2028. Even if its revenue nearly doubles by then, it is still expected to suffer a loss of $85 billion that year. It is not until 2030 that it is likely to achieve overall break-even. If the IPOs of the two companies go ahead, both are expected to rank among the largest in history. For this reason, Wall Street bankers are lobbying major index providers to relax their inclusion criteria. Nasdaq recently announced that it would allow new listed companies to join its index more quickly. Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any particular user. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Any investment made based on this article is at your own risk.

Will the Fed raise interest rates due to high oil prices? Goldman Sachs doesn't believe so.

The report emphasizes that if the economy falls into recession, the Federal Reserve is highly likely to cut interest rates, and an oil price shock will not prevent it from taking easing actions. This is mainly based on four reasons: Different economic starting points make inflation hard to spread: The labor market is softening, and wage growth has fallen below the level consistent with a 2% inflation target. Long-term inflation expectations are stable, which is different from the situation in the 1970s when expectations got out of control. The Federal Reserve usually does not respond to a mere oil shock: Historical analysis shows that there is no significant correlation between the mention of oil price shocks in the speeches of Federal Reserve officials and the release of signals for tightening policy. In contrast, there is a stronger correlation among the officials of the European Central Bank. The scale and breadth of the current oil price shock are far less than those of historical crises. More importantly, the current U.S. economy is far less dependent on oil than it was in the 1970s. Data shows that both the energy intensity of GDP and the share of gasoline in personal consumption expenditures (PCE) have dropped significantly since then. From the perspective of the inflation transmission path, the rise in oil prices will significantly boost overall inflation, but its impact on core inflation will be relatively limited. Moreover, this shock will fade over time as oil prices will not keep climbing year after year. The mainstream view in previous economic research also held that central banks should "turn a blind eye" to short-term energy price shocks, for reasons similar to those for tariff shocks. As oil price shocks are temporary and simultaneously suppress demand, monetary policy tightening would only exacerbate damage to the labor market and do little to curb inflation. The economic fundamentals lack the conditions to "fan the flames", and the probability of a secondary spread of inflation is low. Looking back at history, there is a common feature in the severe inflation periods of the 1970s and 2021-2022: the labor market was extremely tight and wage growth accelerated. In contrast, the US labor market is currently weakening, with wage growth falling below the level consistent with a 2% inflation target, while medium- and long-term inflation expectations remain well anchored. The starting point of monetary policy is more neutral, and the threshold for raising interest rates is higher. Currently, the Federal Reserve's federal funds rate is 50 to 75 basis points above the median estimate of the neutral rate in the Summary of Economic Projections (SEP) and is roughly in line with the recommendations of standard policy rules. In addition, since the conflict broke out, financial conditions have tightened by about 80 basis points, which further reduces the necessity of actively tightening monetary policy. Goldman Sachs' historical analysis shows that there is no significant correlation between the mention of oil price shocks in the speeches of Federal Reserve officials and the signals of tightening monetary policy, while there is a stronger correlation for the officials of the European Central Bank. At the same time, neither FOMC members nor the chair of the Federal Reserve have historically systematically raised policy rate projections in response to oil price shocks. Overall, Goldman Sachs believes that the current situation is fundamentally different from the "high-risk" backdrop of the 1970s and 2021-2022. Risk Warning and Disclaimer Clause

It's not US Treasuries! Amidst the flames of war, the only safe haven in the world turns out to be Chinese government bonds!

Global central banks are selling off US Treasuries at a frantic pace, with $82 billion worth of US debt being divested in a single month. Middle Eastern oil-producing countries are also cashing in their US bonds for hard currency.

The war in Iran has led to a sharp increase in energy prices. Central banks around the world are selling US Treasury bonds at the fastest pace in over a decade to stabilize their domestic economies and currencies. Data from the Federal Reserve shows that the scale of U.S. Treasury bonds held in custody by foreign official institutions at the New York Fed has dropped sharply by $82 billion to $2.7 trillion since February 25, hitting the lowest level since 2012. Meanwhile, the yields on two-year and ten-year U.S. Treasury bonds have risen by the most this month since 2024, with borrowing costs across the board on the rise. Meghan Swiber, a US interest rate strategist at Bank of America, said, "Foreign official sectors are selling US Treasuries." Middle Eastern oil-exporting countries, which hold about $300 billion in US Treasuries, could be a source of this decline. The shrinking of foreign exchange reserves and the selling of bonds have compounded the already pressured US bond market, and investors' concerns over the inflationary impact of the Middle East conflict have further intensified. This round of selling spree also reflects a deeper trend - global reserve management institutions have been continuously diversifying their dollar asset allocation for many years, and the status of US Treasuries as the world's leading reserve asset is being eroded more and more obviously. Oil-importing countries are the first to be hit, while oil-producing countries also join in the sell-off. Middle Eastern oil-exporting countries hold about 300 billion US dollars of US Treasury bonds, accounting for approximately 3.5% of the total holdings of foreign investors. Bank of America strategists believe that the reduction in holdings by these countries may have contributed to the recent decline in holdings. Saudi Arabia is one of the countries with a relatively large holding of US Treasury bonds. Meanwhile, as Iran blocked the Strait of Hormuz, global oil prices rose sharply, and oil-importing countries suffered the most direct impact. The passive shrinkage of foreign exchange reserves, coupled with the demand for intervention in the foreign exchange market, prompted many central banks to accelerate the liquidation of US Treasury bonds. Brad Setser, a senior fellow at the Council on Foreign Relations in the United States, said that oil-importing countries such as Turkey, India and Thailand are likely to be the main participants in this round of selling, as these countries have to pay higher oil prices in US dollars. Official data shows that since February 27, the day before Iran was attacked, the Central Bank of Turkey has sold $22 billion worth of foreign government bonds from its foreign exchange reserves. Setser believes that a considerable portion of these were US Treasuries. Independent data from the central banks of Thailand and India also show that the foreign exchange reserves of both countries have declined since the outbreak of the war, but it is not yet clear whether the reduction is in US Treasury holdings or in US dollar deposits. Setser said, "Many countries do not want their currencies to depreciate further because this would push up oil prices denominated in their own currencies, either meaning more fiscal subsidies or greater pain for residents. Therefore, countries generally decided to intervene in the foreign exchange market to limit the depreciation of their currencies and the rise in oil prices denominated in their own currencies." The US bond market is under pressure, with yields posting the biggest monthly increase in more than a year. At present, the US Treasury bond market is already under multiple pressures, and the concentrated selling by foreign official institutions has made the situation even more complicated. The scale of the sell-off reflected in the Fed's data is particularly notable. Swiber pointed out that since the Fed last recorded a similar-sized sell-off in 2012, the size of the US Treasury market has approximately tripled, making the current sell-off proportionally more significant. The yields on two-year and ten-year US Treasuries have both risen by the most this month since 2024, leading to a comprehensive increase in borrowing costs for the government, businesses, and households. Some investors believe that the strengthening of the US dollar itself will prompt central banks to rebalance their asset portfolios and sell US Treasuries to defend their own currencies, so there is a certain passive factor in the decline in holdings. However, there are also views that the current data more reflect the demand of various countries to actively use reserve funds during market turmoil. Stephen Jones, chief investment officer of Aegon Asset Management, described this behavior as countries "raising war chest funds", saying, "They are drawing on emergency reserves." Liquidity demand as the core driver Thomas Simons, a money market economist at Jefferies, believes that the core driver of the recent surge in US Treasury yields lies in "the high uncertainty in the risk market and the strong demand for liquidity." He said that some market participants, after liquidating risky assets, had to sell high-quality assets to hold cash, and US Treasuries are such assets. Simons added that "the market is extremely sensitive to the risk of foreign demand." He pointed out that in the past few years, the repeated wavering of confidence in the sustainability of foreign demand has triggered multiple sell-offs of US Treasuries. But for now, the reduced demand from foreign investors "is not helpful, but it is not the main driving force." It is worth noting that US Treasuries have traditionally been regarded as a safe-haven asset during uncertain times. However, for most of this month, investors have continued to reduce their holdings - this unusual phenomenon highlights the strong suppression of traditional safe-haven logic by inflation expectations. The trend of diversified allocation is accelerating, and the long-term reserve status of US Treasuries is under pressure. This round of selling is not an isolated incident but a microcosm of a longer-term structural shift. In recent years, the holdings of US Treasuries by foreign official institutions at the New York Fed have continued to decline, and global reserve management institutions are systematically reducing their exposure to dollar assets. As the proportion of official holdings drops, the importance of foreign private investors in the US Treasury market is rising, becoming a key force in supporting market liquidity. Swiber said that the recent sell-off "confirms a broader narrative - that foreign reserve management institutions and official accounts are diversifying out of US Treasuries." It is worth noting that analysts also caution that some of the US Treasury holdings may have been transferred to custodians other than the New York Fed rather than being directly sold in the market, which means the actual scale of the sell-off may be lower than the figures presented by the Fed. Nevertheless, the scale and trend reflected in the data have still drawn widespread attention from the market. Risk Warning and Disclaimer Clause Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account the individual investment objectives, financial situation or needs of any specific user. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at your own risk.