CITIC Securities: Be vigilant about the renewed upward linkage of long-term interest rates in developed markets

On May 18, according to Jinshi, a research report from CITIC Securities stated that on May 15, the yield on 10-year US Treasury bonds broke through 4.5%, and the yield on 30-year US Treasury bonds stood above 5.0%, breaking two key psychological thresholds. At the same time, long-term interest rates in major developed markets such as the UK, Japan, and Germany rose in tandem, and global risk assets were generally under pressure. We believe that the recent rise in interest rates is driven by comprehensively rising inflation data in the United States, the muscle memory of the "Wash Shock," the stressed US Treasury supply, political turmoil in the UK, and concerns about capital repatriation triggered by rising Japanese government bond yields. As the anchor for global asset pricing, a significant rise in long-term US Treasury yields is expected to lead to a stronger dollar, setbacks in growth stock valuations, pressure on precious metals and long-duration credit assets, and liquidity shocks to emerging markets. We believe that the market has previously continuously ignored oil price and inflation risks, but in an environment where global crude oil inventories are continuously being depleted, high oil prices + inflation + high interest rates may be a persistent reality. Subsequent core attention should be paid to developments in the Strait of Hormuz and policy signals after Wash takes office.