Debt restructuring for real estate enterprises is expected to enter the "debt reduction era." Recently, Sunac China announced that holders of approximately 74% of the total outstanding principal amount of its existing debts had submitted letters to join the offshore debt restructuring support agreement. Country Garden also announced that it had reached a consensus with over 70% of its creditors on high-yield bonds in terms of offshore debt, aiming to complete the overall restructuring of offshore debt within this year. With Sunac and Country Garden successively announcing the progress of their offshore debt restructuring, the debt restructuring or reorganization of troubled real estate enterprises is accelerating. Since June, offshore debt restructuring plans of real estate enterprises such as CIFI and Golden Wheel Tiandi have basically been approved by creditors and will proceed to court hearings. Logan Group has released a debt restructuring plan, aiming to advance debt optimization efforts. At the same time, the debt restructuring model for real estate enterprises is shifting from extension to substantive debt reduction. Among them, Sunac's offshore debt restructuring plan is expected to reduce debt by approximately RMB 60 billion. Country Garden's offshore debt restructuring proposal is expected to reduce debt by up to $11.6 billion. CIFI's offshore debt restructuring is expected to reduce offshore debt by approximately $5.27 billion, equivalent to approximately RMB 37.9 billion. "If enterprises and investors can reach a consensus on the terms of debt restructuring involving 'debt reduction,' we believe that the short-term liquidity pressure on real estate enterprises will be alleviated, allowing them to devote more energy to asset revitalization and sales, which will have a positive impact on the stabilization of the entire industry," Shi Lulu, Director of Corporate Ratings, Asia Pacific at Fitch Ratings, told reporters. However, while reaching a restructuring agreement can alleviate external financing pressure, real estate enterprises still face challenges in internal operating cash flow. Shi Lulu believes that in the short term, the quality of existing projects and the ability to revitalize assets are important considerations for determining a real estate enterprise's endogenous cash flow and investor decisions. "Despite the continuous optimization and adjustment of policies by the central and local governments, the recovery of the real estate market may primarily be concentrated in first-tier cities and some strong second-tier cities. However, competition in these cities is intensifying, as most national state-owned real estate enterprises are also repositioning and focusing on developing in these cities," Shi Lulu said. "Whether restructuring real estate enterprises can replenish land in these cities will have a significant impact on their medium and long-term development." Acceleration of Debt Restructuring for Real Estate Enterprises Recently, leading real estate enterprises such as Sunac and Country Garden have successively announced the progress of their restructuring, with debt reductions often amounting to billions of dollars, signaling that the industry's debt resolution process has entered a critical stage. "Currently, Sunac has secured support from approximately 74% of all creditors, indicating that the offshore debt restructuring is substantially completed," a debt restructuring analyst said. When the court rules on a debt restructuring case, it is deemed approved if 75% of the creditors who participate in the vote cast affirmative votes. A source close to Sunac told reporters that once the offshore debt restructuring is successful, Sunac will become the first large-scale real estate enterprise in the industry to have its offshore debt basically cleared to "zero," significantly mitigating debt risks at the publicly listed firm level, with an estimated debt resolution of approximately 60 billion yuan. Sunac's offshore debt restructuring receiving a high level of support is not an isolated case. On June 5, Wu Bijun, Chief Financial Officer and Executive Director of Country Garden, stated at an online shareholders' meeting that consensus had been reached with over 70% of creditors on high-yield debt. In addition, CIFI Holdings has also made progress in its offshore debt restructuring. The company announced that it had secured the required statutory majority support from plan creditors at a plan meeting held on June 3, and it is expected that offshore debt will be reduced by approximately $5.27 billion after the restructuring. The next step is to seek court approval for the plan on June 26. On the same day, Logan Group announced the optimization and adjustment of its debt restructuring plan. Under the new restructuring plan, the 29 original credit enhancement assets of the underlying bonds will be used for the full conversion of the specific asset option, the asset-for-debt settlement mode (including in-kind debt settlement and trust debt settlement) under the asset-for-debt option, and the full debt retention option, maximizing the revitalization of credit enhancement assets. Meanwhile, the company's shareholders will raise additional cash and equity resources for the new restructuring plan. Liu Shui, Director of Corporate Research at the China Index Academy, told reporters that the acceleration of debt restructuring among real estate enterprises is attributed to two factors. First, distressed real estate enterprises are offering diversified restructuring methods, such as combining debt-to-equity swaps, debt maturity extensions, asset settlements, and cash payments, which can meet the needs of different creditors and improve the acceptability of the plans. Second, creditors' attitudes have shifted under the current market conditions. "The real estate market has been adjusting for a long time, and creditors are aware of the difficulty real estate enterprises face in repaying debts. Compared to bankruptcy liquidation and the continuous depreciation of assets, they are more inclined to accept restructuring plans to improve the debt repayment rate. Additionally, some creditors, after the continuous transfer of debts of distressed real estate enterprises, have lower holding costs. If the cash recovery value of the restructuring plan is more attractive, they are more willing to accept it." Debt-to-Equity Swaps and Debt Reduction Become Mainstream It is worth noting that this year, the debt restructuring of real estate enterprises has moved from maturity extensions and deferred payments into the deep waters of debt reduction and burden alleviation. According to the offshore debt restructuring plans of Sunac, Country Garden, and CIFI Holdings, a significant reduction in debt principal has become a core feature. This shift may be driven by severe debt pressures. Data from CRIC shows that the scale of debt maturities for real estate enterprises in 2025 will reach 525.7 billion yuan, further climbing from 482.8 billion yuan in 2024. "The scale of debt maturities for real estate enterprises this year is higher than that in 2024, posing greater debt repayment pressures. As multiple real estate enterprises advance their debt restructuring, the trend of increasing debt reduction ratios is gradually emerging," pointed out a research report by Orient Securities. "This year, the debt reduction ratios in the debt restructuring of many real estate enterprises are significantly higher than the levels in 2023," Zhang Bo, President of the 58 Anjuke Research Institute, told reporters. In the first five months of this year, the total sales of the top 100 real estate enterprises declined on a YoY basis, while the sales decline of distressed real estate enterprises was even more pronounced, directly leading to changes in the original cash flow forecasting models for these enterprises. "Under the new model, the future cash inflows of distressed real estate enterprises are expected to continue to decrease. This cash flow gap renders extension strategies ineffective. Only by reducing debt through debt reduction can the interests of creditors be maximized," Zhang Bo said. Liu Shui further explained that considering the decline in the absolute scale of the new home market over the long term and the fact that the market is still bottoming out in the short term, with asset depreciation pressures remaining, simply extending the repayment period may lead to issues of repeated overdue payments and secondary extensions, and cannot thoroughly resolve the debt crisis. "Therefore, debt-to-equity swaps and principal reductions can achieve a reduction in the company's debt scale, delay the overall debt repayment pressure, and debt-to-equity swaps also simultaneously increase net assets, which is conducive to repairing the company's balance sheet and creating conditions for an improvement in the company's fundamental business performance," Liu Shui said. Multiple industry analysts have pointed out that in the future, under the pressure of unstable new home sales and asset depreciation, real estate enterprises with greater debt repayment pressures will accelerate their debt restructuring processes, and increasing debt reduction ratios may become a widespread trend. Policy Environment Provides Support for Real Estate Enterprises' Debt Restructuring Behind the acceleration of real estate enterprises' debt restructuring lies the simultaneous improvement of the policy environment and market financing conditions. At the policy level, Li Yunze, Director of the National Financial Regulatory Administration, stated at a State Council Information Office press conference on May 7 that the government will expedite the introduction of a series of financing systems tailored to the new model of real estate development to help sustain and consolidate the stability of the real estate market. "This means that more supporting policies will be continuously implemented in the future, and loan support for enterprises will be continuously increased," Liu Shui said. It is expected that the "white list" policy for real estate project financing will continue to be refined to facilitate the substantial allocation of funds and improve the financial positions of enterprises. At the same time, the urban real estate financing coordination mechanism plays a positive role in ensuring the smooth construction and delivery of projects, stabilizing the confidence of financial institutions, alleviating the financial pressure on enterprises, promoting risk isolation and resolution, and driving improvements in market expectations, which is conducive to the smooth progress of debt restructuring work. A real estate industry analyst pointed out that it is expected that the role of policy support will become increasingly apparent. For example, the 4 trillion yuan financing white list and the acquisition and storage of existing housing and idle land by real estate enterprises will play a certain role in promoting the asset liquidation and debt repayment of distressed real estate enterprises. At the market level, financing costs for real estate enterprises have declined. Data from the China Index Academy shows that in May this year, the total bond financing of real estate enterprises was 28.88 billion yuan, up 23.5% YoY. The average interest rate for bond financing was 2.35%, down 0.43 percentage points YoY and 0.41 percentage points MoM. "In terms of institutional innovation in the future, tools such as tiered design of convertible bonds, service trusts, and optimization of M&A financing will be used to reshape the logic of debt restructuring for real estate enterprises. However, challenges such as the sustainability of sales recovery and slow credit repair still need to be addressed," said Zhang Bo. In fact, although the debt restructuring of real estate enterprises has accelerated, industry risks have not yet been fully cleared. Liu Shui believes that the success of a real estate enterprise's restructuring does not mean it is out of the woods. Successful debt restructuring will help mitigate risks, but for enterprises to truly emerge from the crisis, they still need the support of a market recovery. Only after their fundamentals improve can they avoid repeated extensions or restructuring.

On Friday, Eastern Time, the US May non-farm payrolls data came in better than expected, easing market concerns about an economic slowdown and triggering a sharp rally in US stocks. All three major indices rose more than 1%, with the S&P 500 closing above 6,000 for the first time since February, though still more than 2% below its all-time high set in February. At the close, the Dow Jones Industrial Average rose 1.05% to 42,762.87; the S&P 500 rose 1.03% to 6,000.36; and the Nasdaq Composite rose 1.20% to 19,529.95. (Minute-by-minute charts of the three major indices, source: TradingView) All three major indices posted gains for the week, with the S&P 500 up 1.5%, the Dow up 1.2%, and the Nasdaq up 2.2%. Thanks to the recent rebound, all three major indices have turned positive for the year. Data released by the US Bureau of Labor Statistics on Friday showed that non-farm payrolls increased by 139,000 in May, a slowdown from the previous month's figure but higher than market expectations. The unemployment rate remained unchanged at 4.2%. The jobs report was released as other data suggested that US job growth may be slowing amid uncertainty over trade policy. The latest non-farm payrolls data provided a basis for the US Fed to maintain interest rates unchanged this summer. As a result, traders lowered their expectations for interest rate cuts in the coming months. "The non-farm payrolls data came in better than expected, suggesting that the labour market remains healthy despite a slowing growth trend," said Anthony Saglimbene, chief market strategist at Ameriprise. "There is still uncertainty about the inflationary impact of tariffs, which are expected to start showing up in economic data this summer. The market is now waiting to see the real impact of these factors on growth and earnings in the coming quarters. We're essentially back to where we were in February," Saglimbene said. Circle, the "first stablecoin stock," extended its rally, closing up more than 29% on its second day of trading, with cumulative gains of over 247% in two trading days. Performance of Popular Stocks Major tech stocks rose across the board, with Apple up 1.64%, Microsoft up 0.58%, Nvidia up 1.24%, Google up 3.25%, Amazon up 2.72%, Meta up 1.91%, and Tesla up 3.67%. Among popular Chinese ADRs, gains and losses were mixed. The Nasdaq Golden Dragon China Index fell 0.06%, with Alibaba down 0.48%, JD.com up 0.09%, Pinduoduo up 1.28%, NIO up 0.28%, XPeng Motors down 2.40%, Li Auto up 0.85%, Bilibili up 1.46%, Baidu down 0.05%, NetEase down 1.25%, and Tencent Music up 1.01%. Company News [Tesla Produces 8 Millionth EV at Giga Berlin] On June 6, Tesla announced that its 8 millionth electric vehicle (EV) rolled off the production line at Giga Berlin, with the vehicle being a Model Y. [Lululemon Plunges 20%, Lowers Full-Year Profit Forecast] Athletic apparel brand Lululemon (LULU) closed down 19.80% on Friday, marking its worst single-day performance since March 2020. Lululemon had previously lowered its full-year outlook, projecting Q2 net revenue to be between $2.54 billion and $2.56 billion, falling short of analysts' consensus estimate of $2.57 billion. [Virgin Galactic Announces Potential Resumption of Commercial Spaceflight Services] Virgin Galactic's shares surged over 16% intraday but closed up 2.88%. The company announced that its commercial spaceflight services are expected to resume, signaling a new phase in the restart of its space tourism business. [Fitch Upgrades Uber's Rating to BBB+] Fitch Ratings upgraded Uber's (UBER) long-term issuer default rating (IDR) to "BBB+" and assigned a commercial paper rating of "F1." [Deutsche Bank: Exploring Stablecoin or Tokenized Deposits] In a recent report on Friday, Sabih Behzad, Head of Digital Assets and Currency Transformation at Deutsche Bank, stated that the bank is exploring stablecoins and various forms of tokenized deposits. It is understood that the options being evaluated by Germany's largest bank include issuing its own token or joining industry consortium initiatives, while also exploring the development of its own tokenized deposit solutions for payment purposes. [Switzerland Unveils Banking Reform Proposal; UBS Faces $26 Billion in Additional Capital Requirements] According to the banking reform proposal put forward by the Swiss government, UBS Group will face up to $26 billion in new capital requirements over the next decade. Following months of uncertainty that weighed on the share price of the Zurich-based bank, the Swiss Federal Council announced on Friday that it will require UBS's parent company to fully capitalize its foreign subsidiaries. The Swiss government estimates that this will force UBS to increase capital for its main Swiss operations by up to $23 billion, with the remaining capital to be raised through other measures.

SMM News on June 6: Metal Market: As of the daytime close, domestic market base metals collectively rose. SHFE copper and SHFE tin both surged over 1%, with SHFE copper up 1.04% and SHFE tin up 1.79%. The remaining metals all rose less than 1%, while the main alumina contract fell 2.91%, recording two consecutive days of decline. In addition, the main lithium carbonate contract rose 0.23%, the main silicon metal contract rose 2.1%, and the main polysilicon contract rose 0.35%. The main European container shipping contract fell 4.35%. The ferrous metals series generally rose, with only stainless steel declining by 0.16%. Iron ore rose 0.86%, rebar rose 0.57%, and HRC rose 0.55%. In the coking coal and coke sector, coking coal rose 3.18%, and coke rose 0.67%. In the overseas market, as of 15:08, overseas market base metals showed mixed performance. LME copper rose 0.09%, LME lead rose 0.58%, and LME zinc rose 0.54%. The remaining metals all dropped slightly. In the precious metals sector, as of 15:08, COMEX gold rose 0.26%, and COMEX silver rose 1.38%. Domestically, SHFE gold fell 0.15%, and SHFE silver rose 4.49%. The SHFE silver price surged to a record high of 8,855 yuan/kg during the session, marking a new all-time high since its listing. 》8,834! SHFE silver hits new high since listing! Precious metals sector rises over 3%, with Hunan Silver hitting daily limit [SMM Flash News] Market conditions as of 15:08 today 》Click to view SMM Market Dashboard Macro Front Domestic Aspect: [China's Warehousing Index for May was 50.5%, Operating in Expansion Territory for 7 Consecutive Months] The China Federation of Logistics and Purchasing (CFLP) released China's warehousing index for May today (the 6th). The data changes indicated that warehousing business activities were active, demand maintained growth, and the warehousing industry maintained a stable and improving operational trend. China's warehousing index for May was 50.5%, pulling back 0.2 percentage points MoM, and operating in expansion territory for seven consecutive months. [Cailian Press C50 Wind Vane Index Survey: New Social Financing in May May Increase YoY, M2 YoY Growth Rate Expected to Continue Rebounding] The latest results of Cailian Press's "C50 Wind Vane Index" showed that the median forecast of market institutions for new RMB loans in May was 600 billion yuan, a decrease of 350 billion yuan YoY. The median forecast for new social financing in May was 2.32 trillion yuan, an increase of 260 billion yuan YoY. Meanwhile, the market expects that with improved liquidity and a low base effect, the M2 YoY growth rate in May may continue to rebound. In terms of prices, the CPI in May may remain relatively stable, while the decline in PPI may continue to widen. On a YoY basis, the median forecast for CPI YoY growth rate in May by market institutions was -0.2%, and the median forecast for PPI YoY growth rate in May was -3.3%. (Cailian Press) ► The central parity rate of the RMB exchange rate in the interbank foreign exchange market on June 6 was 7.1845 yuan per US dollar. US dollar: As of 15:08, the US dollar index rose 0.14% to 98.89. US economic data has repeatedly fallen short of expectations, leading to increased expectations for US Fed interest rate cuts in H2. The number of initial jobless claims in the US, seasonally adjusted, for the week ending May 31 was 247,000, significantly higher than the expected 235,000, reaching the highest level since the week ending October 5 last year. The number of continuing jobless claims in the US for the week ending May 24 was 1.904 million, slightly lower than the previous week, remaining above 1.9 million for the second consecutive week. Federal Reserve Governor Cook said on Thursday that she supports maintaining US short-term borrowing costs at the current "moderately restrictive" level as long as the threat of tariffs driving up inflation persists. Kansas City Fed President Schmid said that while the extent to which tariffs will drag on economic growth and employment remains unclear, he is more concerned about the short-term impact of tariffs on inflation. Macro side: [Global manufacturing PMI below 50% for three consecutive months, global economy hovering at low levels] The China Federation of Logistics and Purchasing released the global manufacturing PMI for May today (6th). The global manufacturing PMI for May was 49.2%, up 0.1 percentage point MoM, remaining below 50% for three consecutive months. By region, the manufacturing PMI for the Americas in May was 48.4%, unchanged from the previous month and below 49% for three consecutive months, indicating that the manufacturing sector in the Americas continues to be in contraction territory. From the data of major countries, the manufacturing PMI for the US in May was 48.5%, down 0.2 percentage point MoM, declining MoM for four consecutive months. The data changes indicate that under the influence of US tariff hikes, the US manufacturing sector continues to weaken. Today, data such as Germany's seasonally adjusted industrial production MoM for April, Germany's working-day adjusted industrial production YoY for April, Germany's seasonally adjusted exports MoM for April, France's trade balance for April, the final value of the eurozone's seasonally adjusted QoQ GDP growth rate for Q1, the final value of the eurozone's seasonally adjusted YoY GDP growth rate for Q1, the eurozone's retail sales MoM for April, the eurozone's retail sales YoY for April, Canada's leading indicators MoM for May, the seasonally adjusted change in US non-farm payrolls for May, the US average hourly earnings YoY for May, the change in US private non-farm payrolls for May, the US labor force participation rate for May, the seasonally adjusted change in US manufacturing employment for May, the US unemployment rate for May, the change in Canadian employment for May, and the Canadian unemployment rate for May will be released. In addition, it is noteworthy that Federal Reserve Governor Adriana Kugler delivered a speech at the Economic Club of New York, and Patrick Harker, the 2026 FOMC voter and President of the Federal Reserve Bank of Philadelphia, spoke about the economic outlook. Crude oil: As of 15:08, oil prices in both markets fell simultaneously, with WTI crude down 0.24% and Brent crude down 0.18%. After two consecutive weeks of decline, both benchmark crude oils are expected to record weekly gains this week. According to a report by Xinhua News Agency, on the evening of June 5, Chinese President Xi Jinping had a scheduled phone call with US President Donald Trump. The two heads of state agreed that their respective teams should continue to implement the Geneva consensus and hold a new round of talks as soon as possible. This has deepened the market's optimistic expectations for economic growth and increased oil demand. Canadian Minister of Industry Mélanie Joly stated that Prime Minister Mark Carney and US President Donald Trump are in direct communication. News related to tariff negotiations, as well as data showing the impact of trade uncertainties and US tariffs on the global economy, continue to influence oil price trends. Analysts from BMI, a research arm of Fitch, said in a report on Friday, "The US may increase sanctions on Venezuela to limit its crude oil exports, and the Israel-Palestine situation also poses an upside risk to oil prices. However, weakening oil demand and increased supply from OPEC and non-OPEC producers will deepen the downward pressure on oil prices in the coming quarters." Saudi Arabia, the world's largest oil exporter, has cut the price of its crude oil for Asian buyers in July to the lowest level in nearly two months, but the reduction was smaller than expected. This follows an agreement by eight OPEC+ oil-producing countries to increase July production by 411,000 barrels per day. Saudi Arabia has been pushing for a larger production increase as part of a broader strategy to regain market share and discipline OPEC+ members whose production exceeds their quotas. (Webstock Inc.) SMM Daily Review ► The off-season in June starts with sluggish demand and high stainless steel inventory, with weak trading activity. [SMM Stainless Steel Daily Review] ► The eurozone's interest rate cut has driven a new upward trend in silver prices, but downstream demand for spot silver remains weak, with limited just-in-time procurement and sluggish trading in the spot market. [SMM Daily Review] SMM Weekly Review ► As the contract rollover approaches, Shanghai spot copper prices are stuck at parity, with caution advised against a further widening of the price spread between futures contracts. [SMM Shanghai Spot Copper Weekly Review] ► Post-holiday, downstream procurement enthusiasm remains weak, and spot prices are in the doldrums. [SMM SiMn Weekly Review] ► The operating rate of copper wire and cable enterprises continues to decline, with gradually weakening downstream demand. [SMM Wire and Cable Market Weekly Review]

For well-known institutional investors in the US bond market, such as DoubleLine Capital, there seem to be only two attitudes towards 30-year US Treasuries at present: either avoid them as much as possible or short them directly... Due to concerns about the swelling US government budget deficit and the worsening debt burden, this investment company, led by "new bond king" Gundlach, as well as other well-known fixed-income market investment institutions such as Pacific Investment Management Company (Pimco) and TCW Group Inc., have adopted similar strategies: avoiding the longest-dated US government bonds and instead favouring shorter-term bonds with lower interest rate risks that still offer considerable returns. As government spending has increased globally—from Japan to the UK and then to the US—confidence in long-term bonds has been eroded. This portfolio adjustment, shifting from long-term to short-term bonds, has performed well this year. Last month, following S&P and Fitch, Moody's, the last of the world's three major rating agencies, also stripped the US of its Aaa sovereign credit rating. In fact, from the perspective of the yield curve structure of US Treasuries, the steepening of the yield curve this year has become particularly evident—the yield on 30-year US Treasuries has continued to climb sharply, while the yields on medium- and short-term Treasuries, such as 2-year and 5-year notes, have instead declined. As investors worry about the possibility of the US government issuing more bonds to cover the deficit, the yield on 30-year US Treasuries reached 5.15% last month, approaching its highest level since 2007. Meanwhile, the spread between the yield on 30-year US Treasuries and that on 5-year US Treasuries rose above 100 basis points for the first time since 2021. This discrepancy is extremely rare—the last time it occurred throughout the year was in 2001, undoubtedly highlighting the pressure on long-term bonds, as investors demand additional compensation to be willing to lend to the US government for such a long period. The decline in long-term bonds has been so severe that some have even begun to speculate that the US Treasury Department may reduce or halt the auction of the longest-dated bonds. Avoiding long-term bonds, Richard McGuire, a strategist at Rabobank, said, "We can certainly see why the long end of the US Treasury curve is unpopular. The US policy outlook is too bleak to attract buyers of long-term US Treasuries." Bill Campbell, a portfolio manager at DoubleLine Capital, pointed out, " When we can short directly, we are betting on the steepening of the yield curve, expecting long-term yields to rise relative to short-term yields. In other purely long-only strategies, we are essentially staging a 'buyer's strike' and instead investing more in the middle part of the yield curve." " In fact, the US fiscal situation had already prompted Pimco to call for caution on 30-year Treasuries as early as the end of last year, and the firm still maintains an underweight position on long-term bonds. Mohit Mittal, chief investment officer of core strategies at the bond giant, said Pimco currently favours the 5-year and 10-year segments of the US Treasury yield curve and is looking at non-US bonds. "If there is a rebound in the bond market, we believe it will be led by the 5-year to 10-year segment, not long-term bonds," Mittal said. Given that the US Treasury has long sought stability in its debt auction schedule, the growing chatter on Wall Street about scaling back 30-year Treasury auctions seems unusual. Bob Michele, global head of fixed income at JPMorgan Asset Management, said last week, that long-term bonds are not currently trading as the risk-free assets that Wall Street has long considered them to be, and that the possibility of scaling back or cancelling auctions is real. "I don't want to be the guy standing in front of the steamroller right now," Michele said in an interview. "I'll let others help stabilise the long end. I'm worried things will get worse before they get better." TD Securities strategists, in a report last week, forecast that the US Treasury could signal a move to scale back long-end auctions as early as in its August refinancing announcement. However, a US Treasury spokesperson recently said that auction demand for bonds of all maturities has been strong, and the government will adhere to its long-standing policy of issuing bonds in a "regular and predictable manner." In a statement on April 30, the US Treasury also pledged to keep auction sizes for long-term bonds and other maturities stable—at least for the next few quarters. Looking ahead, it is foreseeable that a key test will come on June 12, when the next 30-year Treasury auction takes place. Long-term bond auctions in major economies have recently become a significant "storm centre" for global markets. In Japan last month, long-term bond auctions showed worrying signs of weakening confidence in the country's longest-dated bonds, with demand for a 40-year Japanese government bond issue hitting its weakest level since last July, increasing pressure on officials to reduce issuance of such long-term bonds. Similarly, the auction results for 20-year US Treasuries in the US last month were also sluggish, further exacerbating concerns about demand for long-term US Treasuries.

Despite numerous challenges in the market, the overall real estate market continued to stabilize and recover, driven by sustained policy efforts and proactive strategic adjustments by enterprises. According to CRIC statistics, the top 100 real estate enterprises achieved sales operating revenue of 294.58 billion yuan in May this year, up 3.5% MoM. Data showed that over half of the top 100 real estate enterprises saw a MoM increase in their monthly performance in May, with 22 enterprises experiencing a MoM growth of over 30% in their monthly performance. Real estate enterprises such as Greentown China, CNOOC Real Estate, China Jinmao, Greenland Holdings, and PowerChina Real Estate all achieved significant MoM and YoY improvements in their monthly performance. "Driven by sales promotions by real estate enterprises and the supply of high-quality housing, new home sales in key cities increased MoM in May." Analysts from China Index Academy predicted that the policy environment for the real estate market in June would remain accommodative. Coupled with the arrival of the mid-year sales period, the pace of property launches and the intensity of sales promotions by real estate enterprises may increase, and the market in core cities is expected to continue its recovery. From a cumulative sales performance perspective, data from China Index Academy showed that from January to May 2025, the total sales of the top 100 real estate enterprises reached 1.44364 trillion yuan, down 10.8% YoY. There were 33 real estate enterprises with total sales exceeding 10 billion yuan, the same as the previous year. There were 64 real estate enterprises with sales between 5 billion and 10 billion yuan, a decrease of 6 from the previous year. Among them, Poly Developments and Holdings ranked first in the industry with sales of 116.1 billion yuan in the first five months, followed by Greentown China with 96.4 billion yuan, CNOOC Real Estate with 90.4 billion yuan in third place, China Resources Land with 86.85 billion yuan in fourth place, and China Merchants Shekou with 67.1 billion yuan in fifth place. The sixth to tenth places in the industry were occupied by Vanke, C&D Real Estate, Yuexiu Property, Binjiang Group, and Huafa Industrial, with sales of 57 billion yuan, 56.1 billion yuan, 50.8 billion yuan, 43.36 billion yuan, and 43.26 billion yuan, respectively. As the sales market gradually stabilizes, significant changes have also occurred in the land acquisition strategies of real estate enterprises. In terms of land acquisition, from January to May 2025, the total land acquisition amount of the TOP 100 enterprises reached 405.19 billion yuan, up 28.8% YoY. In terms of new inventory value, Poly Developments and Holdings, Greentown China, and China Jinmao ranked among the top three. From January to May 2025, Poly Developments and Holdings topped the list with a new inventory value of 72.8 billion yuan, followed by Greentown China with 72.3 billion yuan, and China Jinmao with a new inventory value of 60.3 billion yuan, ranking third. "When acquiring land, real estate enterprises are increasingly focusing on core first- and second-tier cities," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. Since Q4 last year, well-performing real estate enterprises have mainly been those state-owned enterprises with substantial land reserves in core first- and second-tier cities. However, real estate enterprises with large land reserves in third- and fourth-tier cities have not significantly benefited from the housing market recovery due to a lack of high-grade sellable resources. Meanwhile, weak sales have led to a continuous decline in operating cash flow, further constraining these enterprises' ability to acquire land in core areas of key cities. At the policy level, promoting the sustained recovery of the market remains an important policy goal for the real estate sector this year. Analysts from the China Index Academy believe that various policies are expected to continue to be implemented at an accelerated pace, with specific policies mainly focusing on urban village renovation, the supply of high-grade housing, and the acquisition of existing commercial housing inventory. "High-quality housing" has also become an important factor in driving market recovery. In recent years, the central government has repeatedly set the direction for the construction of "high-quality housing." In 2025, "high-quality housing" was included in the Government Work Report for the first time, proposing to "adapt to the people's high-grade living needs, improve standards and specifications, and promote the construction of safe, comfortable, green, and intelligent 'high-quality housing'," reflecting the government's high emphasis on the construction of "high-quality housing." On March 31, the Ministry of Housing and Urban-Rural Development issued the national standard "Code for Residential Projects," which sets clear regulations on aspects such as the floor height of residential buildings, sound insulation performance of walls and floor slabs, elevator configuration requirements, and the net height of balcony railings. The code was officially implemented on May 1. At the same time, many localities have issued guidelines or relevant technical regulations for high-grade residential design over the past two years, with some implementation standards higher than the new version of the "Code for Residential Projects" to meet residents' demand for high-grade housing. In early May, the Beijing Municipal Commission of Housing and Urban-Rural Development issued the "2025 Beijing Annual Housing Development Plan," emphasizing the continuous promotion of the stabilization and improvement of the real estate market, vigorously constructing "high-quality housing," and better meeting diversified housing needs. Against the backdrop of policies advocating for "high-quality housing," real estate enterprises have also launched "high-quality housing" product systems. As a representative of the first batch of "high-quality housing" projects in Daxing District, Beijing, Xingchuang proposed the concept of "climate adaptability," considering Beijing's geographical factors to redesign supporting facilities necessary for livability. Its Muchun Villa project in Daxing adopts multiple high technologies to construct the Muchun series of high-quality housing products. "From the perspective of transaction structure, improvement-oriented demand has become an important support for the new housing market, with the proportion of transactions for units above 120 m² in key cities increasing in the first four months," said Wang Ying, Managing Director of Corporate Ratings, Asia Pacific, at Fitch Ratings. The aforementioned analyst from the China Index Academy stated that for enterprises, comprehensively enhancing their overall strength in areas such as cost control, product design, technological adaptation, and market positioning has become an important factor in improving their product competitiveness.

Goldman Sachs analysts noted in a Monday report that the Chinese yuan has demonstrated resilience amid the China-US trade dispute, and its further appreciation is expected to benefit China's stock market. In its latest report, Goldman Sachs wrote that a 1% appreciation of the Chinese yuan against the US dollar could boost Chinese stocks by 3%, driven by factors such as improved corporate earnings prospects and increased foreign capital inflows. The report stated that the outlook for the yuan supports Goldman Sachs' overweight stance on Chinese stocks, and under a scenario of a stronger yuan, consumer discretionary, real estate, and brokerage stocks typically perform well. Goldman Sachs pointed out that the reasons for the yuan's stability during this tariff war include interventions by the People's Bank of China, the enhanced competitiveness and diversification of China's export sector, the undervaluation of the yuan, and the demand for asset diversification following the broad weakness of the US dollar. During the 2018 tariff war in Trump's first term, the yuan depreciated by up to 13% against the US dollar, a stark contrast to its current appreciation. As of press time, the US dollar-yuan exchange rate stood at 7.16804. Goldman Sachs forecasts that the US dollar-yuan exchange rate could reach 7 within the next 12 months. The institution also noted that yuan-denominated assets will continue to attract foreign capital, but the pace of net southbound purchases may slow down in the coming months. The wealthy are taking action As of last Friday, the Hang Seng Index had achieved seven consecutive weeks of gains. Although tariff uncertainties in early April triggered a significant market sell-off, investors' optimism towards Chinese stocks remained unchanged and was further strengthened after China and the US reached a mutual concession agreement. In April, Goldman Sachs twice lowered its forecast for the MSCI China Index, but raised it again in May after tariff risks were contained, increasing its earnings growth forecasts for the index in 2025 and 2026 from 6% and 7% to 9%, and raising the target price for the MSCI China Index over the next 12 months from 78 to 84. Note: Trend of iShares MSCI China ETF Meanwhile, a senior executive at Standard Chartered Bank stated that wealthy investors have not halted their investments due to tariff threats, believing that now is an excellent time to buy Hong Kong and mainland Chinese stocks. Raymond Ang, Global Head of Private Banking and Wealthy Clients for Greater China and North Asia at the bank, told the media that his private banking and wealthy clients are highly active in investing, and have redeemed their long-term fund positions linked to macroeconomic themes or specific sector funds, reallocating funds into Hong Kong and mainland Chinese stocks, as well as high-quality Chinese government bonds.

Class 1 Nickel and Technologies has released an updated mineral resource estimate for the Dundonald North nickel sulphide deposit, part of the broader 3,093-hectare Alexo-Dundonald project near Timmins, Ontario. The updated estimate shows a 31.4% increase in out-of-pit inferred resources, totaling 2.5 million tonnes at 0.75% nickel, along with significant gains in contained copper and cobalt. Across the four deposits in the project, total mineral resources now stand at 3.4 Mt indicated and 6.6 Mt inferred, using various NSR cut-offs. The Dundonald North and South deposits remain unmined, offering strong exploration potential, with further drilling planned to upgrade resources. CEO David Fitch emphasized the strategic importance of these deposits and highlighted additional exploration targets from untested EM anomalies and historical nickel sulphide occurrences. The company plans to launch an exploration program supported by airborne geophysics, historical drilling, and new remote sensing surveys to further define and expand the project’s resource base.

On Friday (May 16) local time, Moody's, one of the three major international credit rating agencies, announced on its official website that it had decided to downgrade the US sovereign credit rating from Aaa to Aa1 due to the increase in the US government's debt and interest payment ratios. Moody's stated that for over a decade, the growth levels of the US government's debt and interest payment ratios have been significantly higher than those of other countries with similar ratings. The press release stated, "While we acknowledge the US's significant strengths in economic and financial terms, these strengths are not enough to fully offset the deterioration in fiscal indicators." In recent years, the US annual fiscal deficit has approached $2 trillion, accounting for over 6% of GDP. Against the backdrop of a potential economic slowdown caused by the ongoing global tariff war, the softening of US growth may further push up the federal government's deficit, as government spending typically rises during economic slowdowns. High interest rates in the past few years have also significantly increased the government's debt servicing costs. Since the COVID-19 pandemic, the US government has over-borrowed, leading to an overall debt level that has exceeded the size of the economy. Earlier, US Treasury Secretary Bentsen also admitted in Congress that "the US is on an unsustainable path, and the debt figures are truly concerning." Bentsen stated that the crisis would lead to "a complete disappearance of credit and a sudden economic stagnation," emphasizing that he would "do everything possible to prevent this from happening." Meanwhile, the Yale Budget Lab estimates that the new tax bill drafted by the Republicans will increase government debt by $3.4 trillion over the next decade; if all temporary provisions in the bill that were originally scheduled to phase out are extended to 2035, it could result in government debt of up to $5 trillion. The Yale Budget Lab stated that if these provisions are made permanent, the US debt-to-GDP ratio will reach 200% by 2055. It should be noted that Moody's is the last of the three major rating agencies to strip the US of its AAA rating. Standard & Poor's had already downgraded the US long-term sovereign credit rating from "AAA" to "AA+" in 2011, a move that was sharply criticized by the US Treasury Department at the time. Fitch Ratings, on the other hand, removed the US's AAA rating in August 2023, attributing the reason to "frequent debt ceiling negotiation deadlocks in Congress." Fitch had predicted at the time that the US fiscal situation would deteriorate, with federal government debt remaining high and continuing to climb.

In April, the US Consumer Price Index (CPI) increased by 2.3% YoY, marking the third consecutive month of slower-than-expected growth and reaching its lowest level since February 2021. Despite this, the impact of tariffs has yet to fully materialize, and businesses may be digesting inventories. On Tuesday, May 13, the US Bureau of Labor Statistics released the April CPI data: CPI increased by 2.3% YoY (expected: 2.4%, previous: 2.4%); CPI increased by 0.2% MoM (expected: 0.3%, previous: -0.4%); Core CPI increased by 2.8% YoY, the slowest pace since the inflation surge in spring 2021 (expected: 2.8%, previous: 2.8%); Core CPI increased by 0.2% MoM (expected: 0.3%, previous: 0.1%). From a structural perspective, goods prices have just returned to the inflation zone (up 0.1% YoY), while services inflation continues to decline. However, core services inflation increased on a MoM basis. Breaking it down further, the so-called "supercore CPI" (services excluding housing) fell to 3.01% YoY, the lowest level since December 2021. Housing costs remain a key driver of inflation, while food prices have declined significantly. According to the CPI report, housing costs once again accounted for more than half of the increase, with the index rising by 0.3% in April. Despite a sharp decline in oil prices, the energy index still increased by 0.7%, primarily due to rising natural gas and electricity costs. Among other common inflation expectations, motor vehicle insurance increased by 0.6% MoM and 6.4% YoY in April. The household furnishings and operations index increased by 1%. However, prices for major imported goods such as furniture and appliances have risen. Airline tickets, used cars, and clothing prices have declined. Airline ticket prices were among the biggest decliners, falling by 2.8% from March, possibly reflecting the demand slowdown that airline executives have been warning about. Overall clothing prices fell by 0.2%, with men's shirts and sweaters dropping by 2.8%. Food prices fell by 0.1%, with food at home (groceries) declining by 0.4%, the largest drop since September 2020. Items contributing to the decline included meat/poultry/fish and eggs, breakfast cereal, rice, and bakery products. Among these, egg prices recorded their largest decline since 1984. Recently, an avian influenza outbreak in the US has caused egg prices to surge. The decline in frozen fruits and vegetables was the largest on record, with a 3% drop in the month. New car prices remained unchanged, which differed from the previously anticipated price increases due to tariff impacts. Traders continued to bet that the US Fed would cut interest rates twice by the end of 2025. Tariff Shadow: Potential Risks Amid Short-Term Calm Although the Trump administration's tariff policies were widely expected to drive up inflation, companies may still be digesting large inventories and have not yet started to raise prices across the board. According to the Ministry of Commerce , China and the US each canceled additional tariffs totaling 91% and suspended the implementation of 24% retaliatory tariffs. However, US importers still face high trade costs and are concerned that tariffs may rise again after the suspension period ends. Analysts believe that this 90-day grace period may imply that price increases will be relatively mild. However, according to Bloomberg research, if congestion occurs at ports during the restocking period, it could actually lead to a faster rise in CPI. Ali Jaffery of CIBC Capital Markets warned that even if the tariff policy is suspended, it may still affect prices in a timely manner: "Tariffs are unlikely to have a significant impact this month, as it is the first month of the government's global tariff regime. Companies also have ways to remain patient with healthy inventories and high profit margins. Current tariff levels are still a significant step up from where they were before, and there may be some pass-through, although it may be spread out over a longer period." Brian Coulton, chief economist at Fitch Ratings, believes that core inflation is currently at its best: "Core goods prices have not yet reflected the impact of tariff hikes since February, while service inflation continues to ease gradually. The retrospective three-month core inflation rate has fallen below 3%. However, service inflation still looks quite stubborn, and car prices have started to rise again. As inventories of imported goods before the tariff hikes are depleted, core goods inflation may rebound in the coming months." Market Reaction Following the data release, the US dollar index fell by about 10 points in the short term and is now at 101.45; US stock futures rose in the short term, with the Nasdaq 100 index futures up 0.4%; the yield on the 10-year US Treasury note fell in the short term and is now at 4.455%; spot gold showed relatively little fluctuation in the short term and is now at $3,240 per ounce.

The latest non-farm payrolls data released by the US Bureau of Labor Statistics (BLS) indicate robust employment growth and stable unemployment in the US in April, suggesting that uncertainties surrounding President Donald Trump's trade policies have yet to have a substantial impact on the labour market. The BLS reported that non-farm payrolls in the US increased by 177,000 in April, significantly exceeding the estimated increase of 138,000, with the prior reading being an increase of 228,000. The data reflect a gradual cooling of the job market, indicating that businesses facing heightened tariff uncertainties and financial market volatility have not significantly altered their hiring plans. However, most economists still anticipate that the impact of the Trump administration's tariffs will become evident in the coming months. In a report, Olu Sonola, Head of US Economics at Fitch Ratings, stated, "Overall, this is a good jobs report. It shows that the labour market remains resilient, but for now, given the trade policies that could drag down the economy, we should temper our enthusiasm for the future." Released alongside the non-farm payrolls data was the US unemployment rate for April, which stood at 4.2%, in line with market estimates and unchanged from the previous month. Following the data release, the three major US index futures and Treasury yields rose, while the US dollar initially recouped losses before resuming its decline. Pressure on Employment Outlook A breakdown of the employment data reveals that growth in the healthcare sector led the gains, with transportation and warehousing employment posting its largest increase since December last year, indicating that businesses are rushing to expand imports ahead of tariff policy implementation, a move that has boosted labour demand. In contrast, the manufacturing sector experienced its most severe output contraction since 2020 last month, leading to job losses. Meanwhile, the federal government has cut jobs for the third consecutive month—the longest streak of job cuts since 2022—reflecting efforts by Elon Musk-led Department of Government Efficiency (DOGE) to reduce the federal workforce and government spending. Employment placement firm Challenger, Gray & Christmas noted in a report on Thursday (May 1) that the government has led all US industries in announced job cuts so far in 2025. Economists believe that as federal spending cuts ripple through to contractors, universities, and other institutions reliant on government funding, at least 500,000 US jobs could be at risk in the future. Economists generally expect job cuts to increase in the coming months as economic uncertainties lead businesses to stall expansion plans. Other data points show that job openings in March fell to their lowest level since September, while another private hiring report indicates that employers added the fewest jobs in nine months in April. What's Next for the US Fed? Furthermore, regarding the future policy direction of the US Fed, traders still maintain expectations that the Fed will cut interest rates nearly four times this year following the release of the non-farm payrolls data. Fed officials have stated that they will not rush to cut interest rates until there is greater clarity on the impact of government policies on the economy. It is widely expected that the Fed will keep benchmark interest rates unchanged at its next meeting in May. On Friday, US President Trump reiterated on social media that the Fed should lower interest rates, stating, "There is no inflation in the US, and the Fed should lower interest rates." He also noted, "Gasoline just fell below $1.98 per gallon, the lowest in years, grocery prices are down, energy prices are down, and tariffs are bringing in billions of dollars in revenue."