June ninth, two thousand twenty-five to June tenth, two thousand twenty-five

I. Foundation 

resistance to change and hence greater dependability for the results shown in the past.

II. Insights 

Our Viewpoints and ideas on market...

London in Focus: Tactical Concessions, Not a Directional Trade (A Decision-Making Perspective)

The next key catalyst shaping the direction of risk-on trading is the outcome of the talks between China and the U.S. currently taking place in London... It should be noted that, The beta of trade-war-related headlines has fallen significantly, and the market largely no longer believes in purported agreements or threats, or in whether today’s tariff levels will still hold next month. This is highly consistent with the negotiation path we mentioned earlier:

Chart: Notes250509 before the trade negotiations

The harsh reality is that trade negotiations usually involve long and repeated rounds of back-and-forth, and the market does not have the patience to play along for the entire process.Therefore, whether the news concerns a ceasefire, a pause, reversals, or a policy U-turn, it is now viewed as temporary and subject to change at any time, and the market reaction is no longer as intense as it was over the past few months.

From the perspective of decision-makers in both East and West, this London meeting is also very different from the one a month ago...

1) Given that the S&P 500 index has returned to near its highs and volatility in U.S. Treasuries has eased, it is no surprise that the United States has the confidence to take a relatively hard line(With markets highly market-driven, market outcomes are a key reference point in U.S. decision-making)。

2) The May data are crucial because they reflect outcomes amid substantial tariff uncertainty. China’s exports in May continued to show exceptional resilience, still posting year-over-year growth of 4.8% despite a high base from the previous year, This means there is no longer urgent pressure to reach an agreement with the United States or stimulate the economy, Compared with a major directional deal, the likelihood of reaching a limited, transactional agreement has increased, and decision-makers can indeed make only cautious concessions.

Chart: Although exports to the United States fell further and sharply, exports to other countries grew, so total exports still increased

Chart: Strong trade outside the U.S. helps explain U.S. demand

Behind the strong exports, This means second-quarter GDP growth has been secured (actual GDP growth in the second quarter is likely to exceed 5%, and the third quarter will also benefit from a low base); this is the fundamental source of confidence....

We also share our reasoning on this distinction in this article. In fact, over the decades since reform and opening-up began, a decision-making system that sets out the key priorities and organizes everything around them has effectively determined the operating framework for the entire decision-making apparatus, Whether fiscal, central-bank, or trade-related, all actions are fundamentally constrained by the operating framework of the growth target.

Last year, we bet on the “had no choice” outcome of missing the target, and in the end, the payoff was fairly good. This year, the same framework will also constrain the “no.” Meeting the target matters most; neither too much nor too little is best. Those working within the system should understand what we mean. Exceeding the target is not necessarily a good thing. If someone’s actions stand out and something goes wrong, accountability will be pursued all the way.

This also means that we have no expectations of an adjustment before the third quarter, whether at the 7 meeting or as priced in by the market,

Let us make this clear once again.

Finally, returning to the title, A technical concession is much more likely to be the outcome than a directional deal, for example, a symbolic, straightforward concession on rare-earth exports (China controls approximately 70% to 90% of the world's key rare-earth resources and therefore has greater bargaining leverage in negotiations; rare-earth materials are one aspect), in exchange for easing controls (a concession on chip controls, with advanced technology being the other aspect) or tariff relief (the U.S. side may concede on fentanyl tariffs)..

Other outcomes are unlikely.

2025.06.09

A brief word on precious metals (gold and white precious metals)

The weekend Wrap has added silver to the watchlist alongside gold and platinum. Here are a few additional brief comments.

1/ White precious metals differ greatly from commodities in the traditional trading universe, such as gold, oil, and copper;

2/ For commodities such as silver and platinum, Once they break free of their long-term trading ranges (which they have not yet done), these metals can be especially volatile. On one hand, this means their price potential should not be underestimated; on the other, trading them requires more patience than other categories(We waited 3 weeks in the community for the breakout point in platinum 1100);

3/ For risk management, It is more appropriate to trade with smaller position sizes, because the stop-loss distance associated with large price swings is also much greater than in normal commodity trading.

4/ White precious metals are also the category best suited to trading through proxies in other markets, Compared with oil and gold, whose fundamentals constrain them, the combination of large price swings and speculative drivers means that white precious metals’ prices are reflected more broadly across other markets (gold and gold-mining stocks do not always perform in tandem and sometimes even follow opposite price paths, whereas this relationship is much more consistent for white precious metals).

5/ After two quiet months, the Wrap has reopened the discussion of re-entering gold, which has excited some readers. But there is no need to rush At present, the point at which silver and platinum, whose trading fluctuations follow gold, complete a full trading cycle (like gold: rally, peak, correction) may be when gold trading starts up again At that point, the breakout will be more likely to hold successfully and begin the next upward leg.

Finally, a brief reminder: holding a short-term gold position during the CPI/PPI data week is a very risky thing to do.

2025.06.10

III. Market Pulse 

Our latest Comments on the economic and market environment

Note: All content in this article is for reference only and does not constitute investment advice or serve as a basis for any laws, regulations, or regulatory policies. Investors should not use or rely on this information as a basis for their decisions.