From the current perspective, the market is in a vulnerable state but has the potential for a strong explosion if there is a positive push. Previously, the market reflected expectations that not only China but also the EU and many other countries would be subjected to tariffs. However, at present, only China remains the target, and more importantly, an agreement with China has not yet been priced in by the market. This means that if there are signs of a thaw or a clear step forward from Beijing, the market could potentially soar.
Trump is signaling to China, but also leaving the door open for negotiations. If today the Yuan strengthens against the USD, it could be an indicator that China wants to start dialogue, and if this is the case, the current market is undervalued.
Tonight there will be another auction of US government bonds, and there is a high likelihood that more foreign capital will flow in - further reinforcing the scenario of a market rebound.
However, it is important to note that the current market is also facing several significant risks: expectations may outpace reality, the possibility of a shift in stance from the US, unclear exchange rate signals, and pressure from the bond market if yields rise sharply. In this context, investors need to stay close to the information and maintain a flexible posture.