The Iran conflict enters its second month, with two key signals emerging!

Ask AI · What does the decoupling of U.S. Treasury yields and oil prices indicate about economic trends?

As regional conflicts between the U.S. and Iran enter their second month, two key signals emerge: First, on the 31st, Iranian President made a statement: if concrete guarantees are provided to ensure no further attacks, Iran is ready to end its current counterattack against U.S. and Israeli aggression;

The White House also revealed: an “important update” will be issued regarding Iran; Second, as oil prices break $100, U.S. Treasury yields are moving inversely downward, indicating a “decoupling” in bond-oil pricing.

Market pricing logic is also shifting from short-term energy price concerns to medium-term recession fears, thereby preemptively expecting the U.S. to launch a new round of QE fiscal stimulus. Goldman Sachs predicts: bond yields will eventually decline, and long-term stock volatility will rise; Morgan Stanley further points out: the U.S. interest rate market may increasingly reflect an expectation that after energy-driven demand destruction, fiscal stimulus will follow.

Whether the Iran conflict concludes or the Federal Reserve enters a QE easing cycle, both will benefit Chinese asset valuation: on one hand, global liquidity release favors undervalued Hong Kong and A-shares; on the other hand, it opens up domestic debt policy space, and as residents’ balance sheets rapidly recover, the Chinese economy is expected to return to the prosperity of 2019-2021, and Chinese assets will usher in a new core asset bull market.

Buy Chinese core assets on dips — the CSI 300, which gathers high-quality blue-chip stocks with stable fundamentals and high dividend yields, is not only a long-term holding tool for domestic and foreign institutions but also the preferred asset for “quasi-levelling” funds to support in extreme market conditions. The related ETF, CSI 300 ETF (510330.SH), has good liquidity and the lowest management fee tier at 0.15% per year. Off-market fund investors can also make systematic investments in Huaxia CSI 300 ETF Connect C (005658.OF) on dips, with no subscription fee, and no redemption fee after holding for more than 7 days.