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[Buy the rumor, sell the fact: ECB and BOJ rate hikes in June usher in a new tightening cycle; US Treasury yields unlikely to have peaked] ⑴ The market faces the risk of buying the rumor and selling the fact. The progress towards a 60-day framework between the US and Iran appears more like a tactical move to buy time than a final solution. The key issue of Iran's highly enriched uranium stockpile means that crude oil prices may be anchored in the $80-$90 range or higher. ⑵ Accelerated European defense spending, massive sovereign bond issuance, and continued tightening by the ECB and BOJ should keep global yields high. Combined with persistent inflationary pressures and core inflation indicators far above the Fed's target path, this supports further increases in US Treasury yields and reinforces the belief that the Fed under Warsh will favor tightening rather than returning to easing. ⑶ The ECB's June rate hike was widely anticipated, but more importantly, Eurozone inflation is far above target and fiscal policy is shifting towards expansion. Trillions of euros in new spending will push up German and broader Eurozone government bond yields. The BOJ faces similar pressure, with continued wage growth and sticky inflation supporting further tightening after the June rate hike. (4) The Bank of England will find it increasingly difficult to remain on hold as interest rates continue to rise at the hands of the ECB and the Bank of Japan, facing pressure from higher imported inflation and energy costs. Canada also faces the challenge of strong commodity prices and inflation that is more persistent than expected. (5) The three-month and six-month annualized core PCE trends are 3.7% and 3.3% respectively, 1% higher than the Fed's year-end inflation target. In the current environment, a timely return to the target is mathematically impossible. The global interest rate environment will be less accommodative in the coming quarters, with a gradual acknowledgment that policy rates may need to remain restrictive for a much longer period than the market expects. (6) The Kansas City Fed President warned that the Iranian oil shock will not be temporary, and that inflation is overheated and has been above target for too long. It cannot be assumed that the recent price increases are transitional within an acceptable timeframe, and the Fed must continue to signal its commitment to price stability. (7) On Friday, attention will be focused on the April advance economic indicators report released at 20:30 Beijing time. The impact of the Iranian war on international commodity trade and inventories may trigger significant volatility. Also pay attention to the Chicago PMI and speeches by several Fed officials. Trading is biased towards range trading, but with a preference for selling on rallies.