Shen Wan Hongyuan Research recently released a research report stating that the US dollar index is positively correlated with oil prices in the short term, and that risk aversion and relative fundamental advantages during the supply shock phase often strengthen the US dollar with oil prices; if the US-Iran conflict expands, the US dollar index will still have upward pressure to ease the core fluctuation range or return to 97-103. The trend strengthening of the US dollar index usually occurs during the period when the Federal Reserve continues to raise interest rates. The September rate hike has already been implemented, but if the future is just a cycle of spot interest rate hikes rather than trend contraction, the risk of dollar trend appreciation is still relatively manageable. Looking ahead to the second half of the year, the core fluctuation range of 10-year US Treasury yields may be 4.5% to 5%. The linkage between inflation expectations and oil prices is the core variable in short-term interest rates; under an optimistic scenario, it may fall back to 4.3%, and in a pessimistic scenario, it may break through to 5% or more. In the medium term, US debt maturity premiums tend to rise and fall. The risk of US debt has escalated from cyclical fluctuations to a “gray rhino” of concerns about US fiscal sustainability, the Federal Reserve's triple dilemma of “inflationary stickiness, weak employment, and automatic tightening of long-term debt”, and imbalances in the global savings cycle. Currently, the valuation rating of US stocks is not low; the stronger the impact and the longer it lasts, the greater the damage to stock prices.

Shen Wan Hongyuan Research recently released a research report stating that the US dollar index is positively correlated with oil prices in the short term, and that risk aversion and relative fundamental advantages during the supply shock phase often strengthen the US dollar with oil prices; if the US-Iran conflict expands, the US dollar index will still have upward pressure to ease the core fluctuation range or return to 97-103. The trend strengthening of the US dollar index usually occurs during the period when the Federal Reserve continues to raise interest rates. The September rate hike has already been implemented, but if the future is just a cycle of spot interest rate hikes rather than trend contraction, the risk of dollar trend appreciation is still relatively manageable. Looking ahead to the second half of the year, the core fluctuation range of 10-year US Treasury yields may be 4.5% to 5%. The linkage between inflation expectations and oil prices is the core variable of short-term interest rates; under an optimistic scenario, it may fall back to 4.3%, and in a pessimistic scenario, it may break through to 5% or more. In the medium term, US debt maturity premiums tend to rise and fall. The risk of US debt has escalated from cyclical fluctuations to a “gray rhino” of concerns about US fiscal sustainability, the Federal Reserve's triple dilemma of “inflationary stickiness, weak employment, and automatic tightening of long-term debt”, and imbalances in the global savings cycle. Currently, the valuation rating of US stocks is not low; the stronger the impact and the longer it lasts, the greater the damage to stock prices.