I just saw a recent analysis from CITIC Securities, which mentioned some quite interesting market signals. The easing of the Iran situation has provided some breathing room for U.S. stock valuations, but the overall situation remains full of uncertainties. Especially the shipping risks at the Strait of Hormuz, which still need to be closely watched for their impact on the global supply chain.

What’s more worth paying attention to is the Federal Reserve’s policy expectations. CITIC Securities’ view is somewhat more dovish than the market consensus; they expect the Fed to cut interest rates by 25 basis points in the second half of the year. If this expectation of a rate cut materializes, it could significantly influence market sentiment. However, the resilience of the U.S. economic fundamentals remains, supporting the level of real yields on U.S. Treasuries, making it difficult for long-term yields to decline sharply.

In terms of asset performance, the expectation of a rate cut in the U.S. might create some opportunities for gold, as liquidity-driven rebounds tend to attract attention. The dollar may continue to stay weak and volatile, depending on changes in market sentiment. Overall, the story of the rate cut is still unfolding, but the fundamental support should not be underestimated. We need to keep a close eye on various external shocks moving forward.