Group 1 - The article discusses the four inflation decline cycles since 1993, with the current cycle (2022-2024) influenced by the real estate downturn, local government debt, and rapid supply growth in certain industries [1][10][45] - The current deflation index briefly touched bottom in Q1 2024 but remains weak, with Q2 2024 hitting a low of -1.2% [1][10][11] - The CRB index and the South China index show diverging trends, indicating that the current low inflation is primarily driven by domestic pricing of bulk commodities [1][13][54] Group 2 - The significant decline in domestic pricing of commodities in Q3 2024 is attributed to the pressure on construction demand due to debt issues, while the decline in Q2 2025 is linked to an oversupply of raw materials following a brief recovery in the real estate sector [2][16][17] - The economic "supply-demand ratio" simulated for Q3 2024 and Q2 2025 is 1.63 and 1.49, respectively, indicating mismatches in supply and demand in the construction and emerging industries [2][16][57] Group 3 - Looking ahead to the second half of the year, four key macroeconomic features are highlighted: continued moderate slowdown in the US and Europe, geopolitical disturbances affecting commodities, accelerated domestic infrastructure projects, and the potential for improved supply-demand relationships due to "anti-involution" policies [2][19][61] - The article suggests that the pressure on price levels may have peaked, with the Q2 2024 deflation index likely being the lowest point of this cycle [2][19][61] Group 4 - Specific indicators for PPI include favorable base effects in the second half of the year, leading indicators suggesting continued recovery in industrial prices, and key commodity prices remaining at relatively low historical levels [3][23][24] - The internal drivers of PPI have changed, with new materials and technologies gaining significance in influencing price movements since 2021 [3][28][29] Group 5 - The article emphasizes the importance of housing prices, noting that the national second-hand housing prices have not yet stabilized, which could constrain inflation and consumer spending [6][34][35] - The risk premium in the real estate market has reached a historical high, suggesting a potential for price stabilization in the short term [6][34][36] Group 6 - The comprehensive assessment of price data for the second half of the year indicates a potential mild increase in PPI and CPI, with optimistic scenarios suggesting a return to positive inflation levels by Q4 2024 [7][38][39] - Structural opportunities in the price domain include the expansion of the black industrial chain driven by construction demand, the impact of "anti-involution" policies on manufacturing prices, and supply constraints in key commodities due to global supply chain shifts [7][42][41]

Group 1 - The core point of the article is the adjustment of the value-added tax (VAT) policy on interest income from government bonds, which will be implemented starting August 8, 2025, affecting new issuances of national, local government, and financial bonds [1][2] - The VAT rate for financial institutions' proprietary trading will be 6%, while for public funds and other broad fund products, it will be 3% [1][2] - Existing bonds issued before August 8, 2025, will continue to enjoy the existing tax exemption until maturity, creating a distinction between old and new bonds [2] Group 2 - The adjustment aims to implement a tax system conducive to high-quality development, social equity, and market unification, as outlined in the Central Committee's decisions [3] - It seeks to improve the price formation mechanism in the bond market and enhance the benchmark interest rate role of government bonds [4][5] - The adjustment also aims to expand the tax base to maintain fiscal balance and support the real economy, especially given the negative growth rates in tax revenue in early 2024 [6] Group 3 - The impact on the financial market includes a potential widening of the yield spread between existing bonds (old bonds) and new bonds due to the tax advantages of old bonds [7] - The credit spread may slightly decrease as the tax premium on interest income from government bonds is eliminated, aligning it with that of credit bonds [7] - The attractiveness of bonds may diminish for financial institutions, leading to a relative increase in the appeal of equities and loans, although the overall impact is expected to be limited due to bonds' inherent advantages [8] Group 4 - Future attention should be given to the central bank's policy direction, particularly regarding liquidity provision in response to the decreased attractiveness of new bond issuances [9] - The potential for further changes in tax incentives for bond investments, especially concerning capital gains tax exemptions for public funds, should also be monitored [9]

gfchenjiali@gf.com.cn 广发宏观郭磊团队 摘要 第一， 根据美国劳工部 8 月 1 日公布数据 ， 7 月美国就业数据显著 走低 。 7 月新增非农 7.3 万人，低于预期的 10.4 万人。 此外，前两月数据显著下修， 5 月和 6 月数据共下修 25.8 万人， 5 月数据下修 12.5 万人至 1.9 万人， 6 月数据下修 13.3 万人至 1.4 万人。 由于几天前公布的美国二季度 GDP 数据、 7 月"小非农" ADP 就业数据均比较高，导致预期差就更明显。 第二， 为何 非农数据波动那么大 ？ 实际上，近年非农数据的波动变得非常频繁，修正幅度有时也比较大，我们理解其背后可能"一套已经存在技术问题的统计方 法 vs 越来越复杂的现实"。一则是企业生死模型（ NBD ）的技术性失真。 NBD 模型假定企业新成立与倒闭所带来的就业净增长是相对稳定的，但近年的复杂宏 观环境打破了这一假设；二是季节调整技术的落后也是部分月份数据偏差的另一个原因， 在经济发生结构性变化时，季节性调整模型可能无法立即适应，从而使得 初始就业数据偏离实际情况， 带来 后续 大幅 修正 ；三是 BLS 调查 ...

Core Viewpoint - The article highlights the current economic conditions in China, focusing on various sectors such as electricity generation, industrial production, infrastructure, real estate, and consumer goods, indicating a mixed recovery with some areas showing growth while others are experiencing declines. Group 1: Electricity Generation and Industrial Production - As of July 24, the cumulative electricity generation from coal-fired power plants increased by 3.3% year-on-year, reaching a high for the year, influenced by high temperatures and increased air conditioning usage [1][5]. - The operating rates of upstream industrial raw materials are generally better than previous values, with the operating rate of blast furnaces increasing by 1.2 percentage points year-on-year [6][7]. Group 2: Infrastructure and Construction - There has been a slight improvement in infrastructure physical workload, with the national cement shipment rate recorded at 39.9%, up 3.2 percentage points year-on-year [8]. - However, the funding availability rate for construction sites remains a concern, with a national average of 58.7%, showing a month-on-month decline of 0.4 percentage points [8]. Group 3: Real Estate Market - Real estate sales continue to show weakness, with the average daily transaction area in 30 major cities down 18.3% year-on-year [11][12]. - The number of second-hand housing transactions in 82 cities decreased by 18.7% year-on-year, indicating a significant slowdown in the market [12]. Group 4: Consumer Goods and Retail - Retail sales of passenger cars grew by 9% year-on-year from July 1 to 27, a slowdown compared to the previous month's 15% growth [12][14]. - Sales growth for major home appliances remains relatively high, although there is a noted slowdown in the latter half of July [14]. Group 5: Export and Shipping - Container throughput at domestic ports increased by 5.6% year-on-year, indicating a slight recovery in export activities [16][17]. - The data shows a gradual normalization of exports to the U.S., with container shipping numbers showing a small positive increase compared to previous months [16][17].

Core Viewpoint - The overall price signals in July show improvement, with upstream raw materials and some new industry products experiencing upward trends, indicating a positive cycle for enterprises' inventory replenishment [17] Group 1: Industrial Raw Material Prices - The BPI industrial raw material price index slightly rebounded in July, recording 869 points, a 1.4% increase compared to the end of June. Energy and non-ferrous metal prices increased by 0.1% and 3.1% month-on-month, respectively [1][4][5] - The domestic pricing of upstream commodities saw widespread increases, with rebar, coking coal, and glass futures prices rising significantly by 6.9%, 11.3%, and 21.3% month-on-month, respectively [7][8] Group 2: Real Estate Market - The trend of housing price adjustments continues, with only Shanghai's second-hand housing prices stabilizing slightly for two consecutive months, while other major cities saw declines. The second-hand housing price index for four major cities decreased by -0.9%, 0.1%, -1.1%, and -1.3% compared to the last week of June [10] Group 3: Emerging Industries - The emerging industry chain prices have rebounded from the bottom, with the photovoltaic industry composite index recording the largest monthly increase since 2021, rising by 18.9% month-on-month. The prices of carbon lithium and polysilicon futures also increased [11] Group 4: Downstream Prices - Downstream prices remain weak, with the Linyi Mall price index slightly declining by 0.27% compared to the end of June. Prices for daily necessities, clothing, and home appliances decreased, while hardware prices remained stable [12] Group 5: Food Prices - Food prices showed mixed trends, with pork and vegetable prices rising. The average wholesale price of pork increased by 1.2% month-on-month, while the prices of 28 key vegetables rose by 1.4% [16]

Core Viewpoint - The Federal Reserve maintained the federal funds rate target range at 4.25-4.5% during the July 2025 FOMC meeting, marking the fifth pause since the rate cut cycle began in September 2024. The decision to not lower rates was in line with market expectations, although two officials voted against it, advocating for a 25 basis point cut [1][8]. Summary by Sections FOMC Meeting Outcomes - The FOMC's decision to keep rates unchanged aligns with market expectations, with two officials dissenting for a rate cut [1][8]. - The Fed continues to reduce its balance sheet, indicating a cautious approach to monetary policy [1][8]. Economic Outlook - The July FOMC statement showed a slight weakening in the description of economic growth but did not indicate a dovish shift. Employment remains solid, inflation is still high, and the unemployment rate is low [2][9]. - The statement changed the description of economic growth from "solid expansion" to "moderate slowdown" for the first half of the year, consistent with GDP data released on July 30 [2][10]. Powell's Remarks - Powell's stance on future rate cuts remains cautious, emphasizing a "wait and see" approach. He noted that upcoming employment and inflation reports will inform the September meeting's decisions [3][11]. - Despite a low unemployment rate, Powell acknowledged that inflation is above target, suggesting a moderately restrictive monetary policy is appropriate [3][13]. Market Reactions - Following the FOMC meeting, market expectations for a September rate cut decreased significantly, with the probability dropping from 63.3% to 41.2% [6][18]. - The 10-year Treasury yield rose by 5 basis points to 4.37%, and the dollar index increased to 99.82, indicating a potential rebound in the dollar [6][18]. GDP Data Insights - The U.S. Q2 GDP showed a significant rebound with a quarter-over-quarter annualized growth rate of +3%, surpassing expectations of +2.4%. However, this rebound included technical factors due to a sharp decline in imports [5][15]. - Final sales to private domestic purchasers grew by only +1.2%, the lowest since late 2022, indicating a slowdown in domestic demand [5][16]. Investment Implications - The overall economic data suggests that while there is resilience in the labor market, underlying demand is weakening, which may affect future monetary policy decisions [4][14].

Core Viewpoint - The manufacturing and non-manufacturing PMI both showed a decline in July, indicating a seasonal slowdown that is slightly more pronounced than in previous years. The decline in orders is greater than that in production, suggesting a transmission of slowdown from demand to supply [1][4][5]. Group 1: Manufacturing and Non-Manufacturing PMI - In July, the manufacturing PMI was recorded at 49.3, down from 49.7, while the non-manufacturing PMI was at 50.1, down from 50.5. The historical average for July over the past 5 and 10 years was -0.3 and -0.2 respectively, indicating this year's decline is slightly above seasonal norms [5][4]. - The new orders index for manufacturing was 49.4, lower than the previous 50.2, and the new export orders index was 47.1, down from 47.7 [6]. Group 2: Demand Factors - The slowdown in orders is attributed to several factors: a decrease in durable goods demand, with automotive retail sales dropping 19% month-on-month and 9% year-on-year; a decline in real estate sales, with a 21.2% year-on-year drop in transactions across 30 cities; and a potential contraction in production activities in some industrial sectors due to rising "anti-involution" sentiments [1][5]. Group 3: Price Indicators - Despite the decline in quantity indicators, price indicators showed initial expansion, with the raw material purchase price index and factory price index rising by 3.1 and 2.1 points respectively. This suggests that the "anti-involution" policy is starting to take effect and that there is some effective transmission from upstream to downstream [2][7][8]. - The production activity expectation index for July reached its highest level in four months at 52.6, indicating a positive correlation with nominal GDP as long as the contraction in quantity remains manageable [8]. Group 4: Construction Sector - The construction sector showed a decline, with the construction PMI at 50.6, down from 52.8. This decline is attributed to adverse weather conditions and pressures from real estate sales and fiscal spending on infrastructure [9][10]. - The new orders index for construction was 42.7, down from 44.9, indicating a weakening in demand within the sector [11]. Group 5: Business Confidence Index (BCI) - The BCI fell by 1.6 points from June, with a current value of 47.7. The index reflects a trend of "sales declining, profits rising," which aligns with the logic of slowing real GDP and improving nominal GDP [12][13]. - The forward-looking indices for consumer goods and intermediate goods prices unexpectedly declined, indicating that while short-term prices may rebound, the medium-term expectations for price increases are not yet solidified [12][15].

Core Viewpoint - The meeting emphasizes the importance of the "15th Five-Year Plan" as a critical period for achieving socialist modernization, focusing on "consolidating the foundation and making comprehensive efforts" [1][6][7] - The overall economic outlook is positive, with key economic indicators performing well and a strong emphasis on maintaining economic recovery momentum [1][9][10] Economic Policy - The meeting highlights the need for macroeconomic policies to be "continuous, stable, flexible, and predictable," aiming for sustained growth and maximizing policy effects [2][10][11] - Emphasis is placed on implementing proactive fiscal policies and moderately loose monetary policies to support economic stability [11][12] Consumption and Investment - The meeting stresses the importance of expanding service consumption and stimulating effective investment, particularly in the context of weak fixed asset investment growth [3][12] - The "old-for-new" policy has already released some elasticity in durable goods consumption, and there is a call to cultivate new growth points in service consumption [3][12] Supply-Side Policies - The meeting calls for deepening the construction of a unified national market and optimizing market competition order, while also addressing issues of local government debt and hidden debts [4][13] - Policies will focus on promoting high-quality development and addressing overcapacity in key industries [4][12] Capital Market - The meeting emphasizes enhancing the attractiveness and inclusiveness of the domestic capital market, aiming to consolidate the positive momentum in capital market recovery [5][14] - There is a focus on ensuring that the capital market functions effectively and supports long-term investment [5][14] Transition from 14th to 15th Five-Year Plan - The meeting outlines the need for a smooth transition from the "14th Five-Year Plan" to the "15th Five-Year Plan," with a focus on urban renewal and managing hidden debts [5][14] - The importance of maintaining strategic determination and confidence in achieving long-term economic goals is highlighted [7][8]

Core Viewpoint - The article discusses the macroeconomic changes since the "924" policy, highlighting a recovery in actual growth followed by marginal slowdown, with GDP growth rates fluctuating above 5% in 2024 and 2025, driven by strong performance in manufacturing, retail, real estate, and IT services, while some sectors like construction and finance are lagging behind [1][16]. Group 1: Economic Growth and GDP Composition - Actual GDP growth has transitioned from "central repair to marginal slowdown," with GDP growth rates of 4.6% and 4.7% in Q2 and Q3 of 2024, respectively, and stabilizing at 5.4% in Q4 2024 and Q1 2025 [1][16]. - The manufacturing sector has seen a significant acceleration in growth, with a 1.0 percentage point increase compared to Q3 2024, while construction and finance sectors have experienced declines [17]. - The demand side shows differentiation, with strong exports and policy benefits in the manufacturing and real estate sectors, while construction and financial services are underperforming due to local debt issues and weak investment [1][16]. Group 2: Price Trends and PPI - Prices have undergone a "weak recovery followed by a retraction," with PPI showing a cumulative year-on-year decline of 2.8% in the first half of 2025, lower than the -2.2% average for 2024 [2][21]. - Traditional upstream industries like coal and steel have significantly contributed to the PPI decline, accounting for 66% of the drop, while emerging manufacturing sectors have shown reduced drag on PPI [22][24]. - The PPI has fluctuated, with a slight recovery expected in late 2024 and early 2025, but a subsequent decline in March 2025 indicates ongoing supply-demand imbalances [20][22]. Group 3: Corporate Profitability - Industrial profits for large-scale enterprises have seen a year-on-year decline of 1.1% in the first five months of 2025, marking the fourth consecutive year of negative growth [24][25]. - Profit growth is uneven across sectors, with equipment, non-ferrous metals, and essential consumer goods leading, while sectors like coal and automotive are struggling [24][26]. - The impact of pricing on costs is evident, with falling coal prices benefiting the electricity sector, while the overall profit margins remain constrained by weak demand and pricing pressures [24][25]. Group 4: Inventory Trends - Nominal finished goods inventory has shown weak trends since hitting a low in July 2023, with year-on-year growth rates of 2.1%, 3.3%, and 3.5% expected at the end of 2023, 2024, and May 2025, respectively [28][29]. - Certain industries, particularly upstream mining and non-ferrous metals, face potential inventory reduction pressures, while most other sectors are at historically low inventory levels [28][29]. Group 5: Investment and Policy Directions - The government is expected to stabilize household balance sheets and profits through policies supporting real estate, employment, and service consumption, with a focus on essential consumption sectors like agriculture and fisheries [40][41]. - Investment in infrastructure is projected to increase, particularly in water conservancy and urban renewal projects, with significant growth rates noted in central-led investments [44][45]. - The introduction of new policy financial tools aims to support technological innovation and consumption, with a focus on urban infrastructure and public safety projects [46][48].

Core Viewpoint - The industrial enterprises' revenue in the first half of 2025 showed a slight increase of 2.5% year-on-year, compared to 2.1% in 2024, indicating a marginal improvement in performance [1][5][6]. Revenue and Profit Analysis - The revenue growth exhibited a pattern of "accelerating first, then slowing down," with monthly growth rates peaking at 4.2% in March and declining to 1.0% in May and June [1][4]. - The profit of industrial enterprises decreased by 1.8% year-on-year in the first half of 2025, showing a slight narrowing of the decline compared to previous years [1][6][7]. - The profit structure was characterized by "increased volume, decreased prices, and declining profit margins," with a cumulative PPI decline of 2.8% [7][11]. Industry Performance - Profit growth was concentrated in sectors such as metals (non-ferrous and steel), equipment manufacturing, and certain consumer goods (tobacco, food, agricultural products), with some industries experiencing double-digit profit growth [11][14]. - Industries with significant profit declines included mining (coal and black mining), petrochemicals, and light manufacturing, attributed to commodity price adjustments and weak domestic construction demand [14][15]. Inventory and Financial Stability - Both nominal and actual inventories showed a downward trend, with nominal inventory decreasing for three consecutive months, indicating a shift towards destocking [3][17]. - The asset-liability ratio of industrial enterprises remained stable at 57.9%, with a slight year-on-year increase of 0.2 percentage points [18][19]. Future Outlook - Several favorable factors for profit growth in the second half of 2025 include a significant decrease in the base effect starting in August and potential improvements in prices and profit margins due to anti-involution measures [19].