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After discussing the numerical changes in Brent and the probability of a rate hike in October, we need to talk about the issue of U.S. Treasury yields. Currently, we can see that the 2-year, 10-year, and 30-year U.S. Treasury yields are temporarily moving in sync with crude oil prices, which is a good thing. Regarding the most dangerous yield curve states for the bond market this week: a) Brent diverges from bond yields, repricing the risk of a second rate hike, causing the 2-year, 10-year, and 30-year yields to rise collectively. In this scenario, the 2-year yield increases faster than the 10-year and 30-year yields, with the 10-year yield rising next, and the 30-year yield increasing the slowest. b) A typical bear steepening yield curve, where the 30-year yield leads the rise, the 10-year yield follows, and the 2-year yield remains stagnant. This implies continued uncontrolled selling of long-term U.S. Treasuries, shifting the trading logic from whether to hike rates to concerns about long-term inflation, fiscal supply, term premium, and high yield compensation, representing bond market risk. c) Bear flattening movement, where the 2-year, 10-year, and 30-year yields all accelerate upward. This means it’s not just a single rate hike in October, but the Fed raising the neutral rate and entering a rate hike cycle, which is among the most adverse scenarios for risk assets. d) Bear flattening pro version, where the 2-year yield rises, the 10-year yield remains flat, and the 30-year yield declines. This indicates the market is starting to worry that Fed rate hikes will cause economic damage, representing a short-term policy risk deterioration plus long-term growth expectation deterioration, which is also unfavorable for risk assets and unfriendly to blue-chip stocks in the equity market, such as banks, cyclical stocks, small caps, and highly leveraged companies. e) Extreme bear steepening, where the 2-year yield plummets while the 30-year yield rises. The market’s concern shifts from fearing rate hike risk to...