Economic Indicators - In August 2025, China's manufacturing PMI rose to 49.4%, an increase of 0.1 percentage points from July[1] - The non-manufacturing business activity index reached 50.3%, up 0.2 percentage points from July, with the services PMI at 50.5%, increasing by 0.5 percentage points[1] - The comprehensive PMI output index improved to 50.5%, up 0.3 percentage points from the previous month[1] Manufacturing Sector Insights - The new orders index for manufacturing increased by 0.1 percentage points to 49.5%, while the manufacturing production index rose by 0.3 percentage points to 50.8%[2] - The manufacturing production expectations index increased by 1.1 percentage points to 53.7%, indicating improved confidence[2] - The new export orders index rose by 0.1 percentage points to 47.2%, but remains below the 10-year average of 48.0%, suggesting potential risks for future export growth[2] Price Trends and Market Dynamics - The PPI is expected to turn positive month-on-month, with a year-on-year decline narrowing to approximately -2.8%[3] - The high-tech manufacturing PMI index reached 51.6%, a significant increase of 1.3 percentage points, reflecting strong demand and policy support[3] Service and Construction Sector Analysis - The services PMI index improved to 50.5%, driven by increased consumer activity during the summer and a strong stock market[4] - The construction PMI index fell to 49.1%, a decrease of 1.5 percentage points, influenced by adverse weather and a cooling real estate market[5] Future Outlook - The manufacturing PMI is projected to slightly decline to around 49.3% in September, influenced by external trade agreements and ongoing adjustments in the real estate market[6] - Anticipated government policies aimed at boosting consumption and stabilizing the real estate market may provide support in the fourth quarter, with potential monetary easing measures expected[6]

Economic Indicators - In August, the Manufacturing PMI rose to 49.4%, while the Non-Manufacturing Business Activity Index and Composite PMI Output Index increased to 50.3% and 50.5%, respectively, indicating overall economic expansion[3] - The central bank reported that 77,536.2 billion yuan in various bonds were issued in July, including 12,226.5 billion yuan in government bonds and 13,496.8 billion yuan in corporate credit bonds[3] Market Trends - The bond market showed a strong overall performance, with the 10-year government bond yield decreasing by 1.00 basis points to 1.7800%[12] - The convertible bond market experienced adjustments, with major indices declining by 0.36% to 0.51% on August 29, and trading volume decreasing by 237.44 billion yuan to 987.68 billion yuan[17] International Developments - The U.S. core PCE price index rose to 2.9% year-on-year in July, marking the highest level since February, driven by increased service costs[6] - In the U.S. Treasury market, the 10-year yield increased by 1 basis point to 4.23%, while the 2-year yield decreased by 3 basis points to 3.59%[22] Commodity Prices - WTI crude oil futures fell by 0.91% to $64.01 per barrel, with an approximate decline of 6.1% for August, while natural gas prices rose by 0.94% to $3.016 per MMBtu[7] Monetary Policy - On August 29, the central bank conducted a 7-day reverse repurchase operation of 7,829 billion yuan at an interest rate of 1.40%, resulting in a net cash injection of 4,217 billion yuan for the day[8][9]

Report Summary 1. Investment Rating - No investment rating for the industry is provided in the report. 2. Core View - On August 28, the overall capital market showed a complex trend with the stock market strongly rebounding, the bond market under pressure and weakening, the convertible bond market's main indexes rising collectively but most individual convertible bonds falling, and the yields of U.S. Treasury bonds at different maturities diverging while the 10 - year Treasury bond yields of major European economies generally declining [1]. 3. Summary by Directory 3.1 Bond Market News - **Domestic News** - The "Opinions of the CPC Central Committee and the State Council on Promoting High - quality Development of Cities" was released, aiming to establish a sustainable urban construction and operation investment and financing system by 2030 and basically build a modern people - centered city by 2035 [3]. - In July 2025, the total issuance of local government bonds was 1.2135 trillion yuan, and the balance of local government debt at the end of July was 52.7627 trillion yuan [4]. - The State Administration for Market Regulation promoted the return of market competition to a benign and orderly track [5]. - From January to July 2025, the total social logistics volume exceeded 200 trillion yuan, with a year - on - year increase of 5.2% [6]. - **International News** - The annualized quarterly - on - quarterly growth rate of the U.S. real GDP in the second quarter was revised up to 3.3%, mainly driven by business investment [7]. - **Commodities** - On August 28, international crude oil futures prices turned up, and international natural gas prices continued to rise [8]. 3.2 Capital Market - **Open Market Operations** - On August 28, the central bank conducted 416.1 billion yuan of 7 - day reverse repurchase operations, with a net capital injection of 163.1 billion yuan [9]. - **Funding Rates** - On August 28, the capital market was generally balanced and loose. DR001 decreased by 0.11bp to 1.313%, and DR007 increased by 2.72bp to 1.540% [10]. 3.3 Bond Market Dynamics - **Interest - rate Bonds** - On August 28, the bond market was under pressure and weakened. The yield of the 10 - year Treasury bond active bond 250011 rose by 2.50bp to 1.7900%, and the yield of the 10 - year CDB bond active bond 250215 rose by 3.35bp to 1.8875% [13]. - Information on bond tenders is provided, including the issuance scale, winning bid yield, and other data of multiple bonds [15]. - **Credit Bonds** - One industrial bond's trading price deviated by more than 10%, with "H1 Bidi 03" rising by more than 104% [15]. - Multiple companies, including Qingdao Beer Group, Weihai Thermal Power Group, and HeSteel Group, cancelled bond issuances due to market fluctuations [16]. - Huaxia Bank's operating income in the first half of the year was 45.522 billion yuan, a year - on - year decrease of 5.86%, and its net profit was 11.47 billion yuan, a year - on - year decrease of 7.95% [16]. - **Convertible Bonds** - On August 28, the three major A - share stock indexes rose collectively, and the main indexes of the convertible bond market also rose. The convertible bond market's trading volume was 122.512 billion yuan, an increase of 3.217 billion yuan from the previous trading day [17]. - Jinchengxin's convertible bond issuance obtained the CSRC's registration approval [18]. - **Overseas Bond Markets** - On August 28, the yields of U.S. Treasury bonds at different maturities diverged, with the 2 - year yield rising by 2bp to 3.62% and the 10 - year yield falling by 2bp to 4.22% [20]. - The 10 - year Treasury bond yields of major European economies generally declined, except for Germany's which rose by 1bp to 2.70% [23]. - Information on the daily price changes of Chinese - funded US dollar bonds is provided, including the price changes of bonds of multiple companies [25].

Group 1: Event Overview - Trump announced the dismissal of Federal Reserve Governor Lisa Cook on August 25, 2025, citing "sufficient reason" related to alleged fraudulent behavior[1] - Cook, a Democratic appointee, was the first Black woman to hold the position and was seen as a neutral dove in monetary policy[1] Group 2: Implications for Federal Reserve Independence - Trump's action challenges the long-standing tradition of respecting the Federal Reserve's independence, potentially leading to a more politicized monetary policy[2] - The dismissal may allow Trump to appoint a more dovish member, shifting the balance of the Federal Open Market Committee (FOMC) towards a majority favoring looser monetary policy[5] Group 3: Market Reactions - Short-term effects may include a depreciation of the dollar, increased volatility in risk assets, and a rise in demand for safe-haven assets[2] - Stock markets reacted negatively, with declines observed across major indices, reflecting concerns over the Federal Reserve's independence and future policy uncertainty[8] Group 4: Long-term Considerations - If Trump's control over the Federal Reserve strengthens, it could lead to a prolonged low-interest-rate environment, impacting stock valuations and increasing market volatility[10] - The weakening of the dollar may enhance U.S. export competitiveness but could also trigger global currency tensions and competitive devaluations[10]

Group 1: Report Summary - The State Council Executive Meeting on August 22 emphasized comprehensive measures to release domestic demand potential, and the central bank increased the volume of MLF renewals, with a net injection of 300 billion yuan in August. The bond market continued to face pressure, but short - term bonds showed signs of recovery. The convertible bond market followed the stock market's upward trend [1]. Group 2: Bond Market News Domestic News - The State Council Executive Meeting on August 22 aimed to better promote domestic demand through large - scale equipment renewal and consumer goods trade - in policies, and emphasized cracking down on subsidy fraud [3]. - The China Securities Regulatory Commission released the "Regulations on the Classification Evaluation of Securities Companies" on August 22, aiming to promote the function of securities companies and strengthen investor protection [4]. - The central bank announced on August 22 that it would conduct 600 billion yuan of MLF operations on August 25, with a net injection of 300 billion yuan in August, marking six consecutive months of increased volume renewals [4]. - The central bank and the State Administration of Foreign Exchange solicited opinions on the "Regulations on the Administration of the Inter - bank Foreign Exchange Market (Draft for Comment)" on August 22, allowing the provision of inter - bank foreign exchange market data services on a commercial basis [5]. - Personal consumer loan subsidy policies will be launched on September 1, which is expected to boost the consumer finance industry [6]. International News - On August 22, Fed Chairman Powell suggested at the Jackson Hole central bank symposium that the rising downside risks to employment may require interest rate cuts [7]. Commodities - On August 22, WTI October crude futures rose 0.22% to $63.66 per barrel, and Brent October crude futures rose 0.09% to $67.73 per barrel. COMEX gold futures rose 1.05% to $3417.00 per ounce, while NYMEX natural gas prices fell 4.10% to $2.692 per ounce [8]. Group 3: Capital Market Conditions Open - Market Operations - On August 22, the central bank conducted 361.2 billion yuan of 7 - day reverse repurchase operations, with a net injection of 123.2 billion yuan after deducting the maturity amount [9]. Capital Interest Rates - On August 22, with continuous net injections from the central bank, the capital market returned to a loose state, and major repurchase interest rates declined. For example, DR001 dropped 5.17bp to 1.412%, and DR007 dropped 4.71bp to 1.467% [10]. Group 4: Bond Market Dynamics Interest - Rate Bonds - On August 22, the strong stock market and weak primary bond issuance pressured the bond market, but the announcement of 600 billion yuan of MLF operations at the end of the session led to a recovery in short - term bonds. By 20:00, the yield of the 10 - year treasury bond active bond 250011 rose 2.40bp to 1.7850%, and the yield of the 10 - year CDB bond active bond 250210 rose 2.30bp to 1.8760% [13]. - Bond issuance information includes details such as the issuance scale, winning bid yield, and multiple of special funds for various bonds [15]. Credit Bonds - On August 22, most industrial bonds' trading prices were relatively stable, with 2 bonds having a trading price deviation of over 10%. "H9 Longkong 01" fell over 23%, and "15 Zhongchengjian MTN001" rose over 55900% [16]. - Multiple companies announced credit - related events, including bond payment issues, financial losses, regulatory penalties, and account freezes [19]. Convertible Bonds - On August 22, the A - share market rose, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index rising 1.45%, 2.07%, and 3.36% respectively. The convertible bond market also rose, with the CSI Convertible Bond, Shanghai Convertible Bond, and Shenzhen Convertible Bond indexes rising 0.95%, 1.05%, and 0.81% respectively [20]. - Some convertible bonds announced events such as proposed downward revisions of conversion prices, non - downward revisions, and early redemptions [25]. Overseas Bond Markets - On August 22, yields of US Treasury bonds across various maturities generally declined. The 2 - year yield dropped 11bp to 3.68%, and the 10 - year yield dropped 7bp to 4.26%. The 2/10 - year yield spread widened by 4bp to 58bp, and the 5/30 - year yield spread widened by 6bp to 112bp [26][27]. - On August 22, yields of 10 - year government bonds in major European economies generally declined. For example, the German 10 - year yield dropped 3bp to 2.72% [29]. - The daily price changes of Chinese - funded US - dollar bonds as of the close on August 22 showed varying degrees of increase and decrease for different bonds [31].

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report On August 21, the liquidity situation eased, the bond market rebounded, the main indices of the convertible bond market closed higher, most convertible bond issues rose, yields of US Treasuries across maturities generally declined, and yields of 10-year government bonds of major European economies generally increased [1]. 3. Summary by Relevant Catalogs I. Bond Market News - **Domestic News** - The State Administration of Foreign Exchange launched a pilot program for green foreign debt business in 16 provinces and municipalities, aiming to expand the cross - border financing scale of enterprises investing in green development or low - carbon transformation projects and improve the facilitation of green foreign debt business [3]. - The Ministry of Finance answered questions on regulating the construction and operation of government - social capital cooperation (PPP) stock projects, focusing on ensuring the completion of ongoing projects [3]. - The Hong Kong Monetary Authority announced that the Ministry of Finance will issue RMB government bonds in Hong Kong, with a total value of RMB 125 billion [4]. - **International News** - The preliminary value of the US Markit Manufacturing PMI in August was 53.3, reaching a three - year high, while the preliminary value of the Services PMI was 55.4, a two - month low. The preliminary value of the Composite PMI was 55.4, a nine - month high. The price index reached a three - year high [5]. - The US labor market cooled significantly, with the number of initial jobless claims unexpectedly increasing by 11,000 to 235,000, the highest since June 20 [6]. - Two Fed officials suggested that there may be no interest rate cut in September [7]. - **Commodities** - On August 21, international crude oil futures prices rose, with WTI October crude futures up 1.29% to $63.52 per barrel and Brent October crude futures up 1.24% to $67.67 per barrel. COMEX December gold futures fell 0.2% to $3381.6 per ounce, and NYMEX natural gas prices rose 1.59% to $2.807 per ounce [8]. II. Liquidity Situation - **Open Market Operations** - On August 21, the central bank conducted 7 - day reverse repurchase operations worth 253 billion yuan at a fixed interest rate of 1.40%. With 128.7 billion yuan of reverse repurchases maturing on the same day, the net capital injection was 124.3 billion yuan [10]. - **Funding Rates** - On August 21, the liquidity situation eased, and major repurchase rates declined. DR001 fell 0.99bp to 1.464%, and DR007 fell 5.40bp to 1.514% [11]. III. Bond Market Dynamics - **Interest - Bearing Bonds** - **Spot Bond Yield Trends** - On August 21, the bond market rebounded. As of 20:00, the yield of the 10 - year Treasury bond active issue 250011 fell 1.90bp to 1.7610%, and the yield of the 10 - year China Development Bank bond active issue 250210 fell 3.45bp to 1.8530% [14]. - **Bond Tendering** - Various bonds were tendered on August 21, with different issuance scales, winning yields, and multiples [16]. - **Credit Bonds** - **Secondary Market Transaction Anomalies** - On August 21, the transaction prices of 6 industrial bonds deviated by more than 10%. "H1 Bidi 03" fell more than 33%, while "21 Shanghai Shimao MTN002" rose more than 17% [17]. - **Credit Bond Events** - Multiple companies announced events such as being listed as被执行人, failing to repay loans, and delaying the disclosure of semi - annual reports [19]. - **Convertible Bonds** - **Equity and Convertible Bond Indices** - On August 21, the A - share market fluctuated, with the Shanghai Composite Index rising 0.13%, and the Shenzhen Component Index and the ChiNext Index falling 0.06% and 0.46% respectively. The main indices of the convertible bond market closed higher, with the CSI Convertible Bond Index, Shanghai Convertible Bond Index, and Shenzhen Convertible Bond Index rising 0.42%, 0.31%, and 0.58% respectively [19]. - **Convertible Bond Tracking** - Some convertible bonds announced events such as approaching the conditions for downward revision of conversion prices and early redemption [25]. - **Overseas Bond Markets** - **US Bond Market** - On August 21, yields of US Treasuries across maturities generally declined. The 2 - year US Treasury yield fell 1bp to 3.74%, and the 10 - year US Treasury yield fell 1bp to 4.29% [23]. - **European Bond Market** - On August 21, yields of 10 - year government bonds of major European economies generally increased. The yield of the 10 - year German government bond rose 3bp to 2.75%, and yields of 10 - year government bonds of France, Italy, Spain, and the UK rose 5bp, 6bp, 4bp, and 6bp respectively [27].

Revenue Insights - In July 2025, the national general public budget revenue increased by 2.7% year-on-year, improving from a decline of -0.3% in June[1] - Tax revenue grew by 5.0% in July, significantly higher than the previous month's growth of 1.0%, while non-tax revenue fell by 12.9%[5] - The cumulative general public budget revenue from January to July showed a slight increase of 0.1% year-on-year, compared to a decline of -0.3% previously[7] Expenditure Trends - General public budget expenditure in July rose by 3.0% year-on-year, accelerating by 2.6 percentage points from May[8] - Cumulative expenditure from January to July grew by 3.4%, slightly below the average progress of 54.4% over the past five years, completing 54.1% of the annual budget[9] Government Fund Performance - In July, government fund revenue increased by 8.9% year-on-year, although this was a decrease of 11.9 percentage points from the previous month[10] - Government fund expenditure in July surged by 42.4% year-on-year, despite a slowdown of 36.8 percentage points from the previous month[11] - From January to July, government fund expenditure grew by 31.7%, significantly outpacing the revenue growth due to accelerated issuance of local government special bonds, totaling 2.78 trillion yuan, an increase of 1 trillion yuan compared to the same period last year[11]

Employment and Economic Outlook - Powell's speech indicates rising downside risks in the labor market, suggesting a potential need for interest rate cuts[2] - July non-farm payrolls increased by only 73,000, significantly below the expected 115,000, with prior values revised down by 258,000[4] - The current labor market is described as a "peculiar balance," where both supply and demand have slowed, leading to increased unemployment risks[4] Inflation and Monetary Policy - Powell shifts to a "short-term shock" view on inflation, deeming tariff impacts as one-time increases rather than persistent inflation drivers[5] - The Federal Reserve's new policy framework removes previous commitments to an average inflation target of 2% and the quantitative assessment of full employment[6] - This framework adjustment allows the Fed to prioritize employment over inflation when conflicts arise, facilitating potential rate cuts[6] Market Reactions and Future Projections - Following Powell's remarks, the probability of a 25 basis point rate cut in September surged from approximately 75% to 91.3%[6] - The dollar index fell by 0.78% to 97.88, while the two-year Treasury yield rose by 8 basis points to 3.69%, and the S&P 500 index increased by 1.6%[8] - If the core PCE price index drops below 2.8% in October, further rate cuts may occur in November and December, totaling 50-75 basis points for the year[8]

Group 1: LPR Pricing and Market Expectations - The LPR rates for August remain unchanged at 3.0% for the 1-year term and 3.5% for the 5-year term, consistent with market expectations[1] - The stability in policy rates, particularly the central bank's 7-day reverse repurchase rate, indicates no changes in the pricing basis for LPR, leading to the unchanged rates[2] - The LPR has remained stable for three consecutive months, primarily due to a moderately strong macroeconomic environment in the first half of the year, reducing the necessity for immediate adjustments[2] Group 2: Future Economic Outlook and Policy Adjustments - Economic data from July shows downward volatility, suggesting increased downward pressure on the economy in the third quarter, with external demand likely to slow[3] - There is potential for a new round of interest rate cuts and reserve requirement ratio reductions by the central bank in early Q4, which could lead to lower LPR rates[3] - Lower LPR rates are expected to stimulate internal financing demand, crucial for promoting consumption and investment in the second half of the year[3] - The current low inflation levels provide ample room for monetary policy adjustments, including interest rate cuts, without immediate concerns over high inflation[3] - Strengthening policies for the real estate market in the second half of the year may involve guiding the 5-year LPR downwards to alleviate high mortgage rates and boost housing demand[3]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - Market risk sentiment and expectations of interest rate cuts fluctuated last week, causing the gold price to oscillate and decline. The prices of Shanghai gold futures, COMEX gold futures, Shanghai gold T+D, and London gold all decreased compared to the previous week. The unexpected rise in the US July PPI data and the significant rebound in retail sales data dampened expectations of interest rate cuts, while the meeting between Trump and Putin increased the expectation of a缓和 in the Russia-Ukraine conflict, jointly suppressing the gold price. This week, the gold price is expected to decline slightly, but in the long term, the overall upward trend of the gold price will not reverse without clear driving factors [1][2]. 3. Summary by Relevant Catalogs 3.1 Last Week's Market Review 3.1.1 Gold Spot and Futures Price Trends - On August 15, the closing price of Shanghai gold futures was 775.80 yuan/gram, a decrease of 12.00 yuan/gram from the previous week; the closing price of COMEX gold futures was 3381.70 US dollars/ounce, a decrease of 76.50 US dollars/ounce from the previous week. The closing price of Shanghai gold T+D was 773.09 yuan/gram, a decrease of 10.18 yuan/gram from the previous week; the closing price of London gold was 3335.28 US dollars/ounce, a decrease of 63.30 US dollars/ounce from the previous week [4]. 3.1.2 Gold Basis - On August 15, the international gold basis (spot - futures) was -0.70 US dollars/ounce, an increase of 8.65 US dollars/ounce from the previous week; the Shanghai gold basis was -3.37 yuan/gram, a decrease of 1.80 yuan/gram from the previous week [8]. 3.1.3 Gold Price Spread between Domestic and Foreign Markets - Last week, the decline of the foreign gold price was greater than that of the domestic market. On Friday, the gold price spread between domestic and foreign markets was -8.91 yuan/gram, an increase from -12.48 yuan/gram the previous week. The decline of the crude oil price was slightly greater than that of the gold price, causing the gold - oil ratio to decline slightly; the decline of the silver price was less than that of the gold price, causing the gold - silver ratio to continue to decline; the gold - copper ratio decreased significantly [10]. 3.1.4 Position Analysis - In terms of spot positions, the position of gold ETFs continued to increase slightly last week. As of August 15, the position of the world's largest SPDR gold ETF was 965.37 tons, an increase of 5.73 tons from the previous week. The cumulative trading volume of domestic gold T+D decreased slightly. In terms of futures positions, as of August 12, the long positions of gold CFTC asset management institutions decreased slightly, while the short positions increased significantly, resulting in a slight decline in the net long positions. In terms of inventory, the inventory of COMEX gold futures increased slightly last week, and the inventory of Shanghai Futures Exchange gold increased by 300 kilograms to 36,345 kilograms [13]. 3.2 Macroeconomic Fundamentals 3.2.1 Important Economic Data - US Treasury Secretary Besent said that most US trade negotiations will be completed by October. The US July CPI was lower than expected, but the core CPI growth rate reached the highest level since February. The US July PPI increased significantly, reaching a three - year high. The US July retail sales increased by 0.5% month - on - month, and the real retail sales increased for the tenth consecutive month [17][19][20][21]. 3.2.2 Federal Reserve Policy Tracking - Last week, Fed officials spoke intensively, and most of them were cautious about the path of interest rate cuts. Some officials supported maintaining the current interest rate level, while others believed that it was necessary to see more data before making a decision. Only a few officials supported starting to ease monetary policy next month [28][29][30]. 3.2.3 US Dollar Index Trend - Driven by the soaring service cost, the unexpected significant increase in the US July PPI data cooled the market's expectation of interest rate cuts, causing the US dollar index to fluctuate and decline. As of last Friday, the US dollar index decreased by 0.43% to 97.85 compared to the previous week [31]. 3.2.4 US 10 - Year TIPS Yield Trend - The US 10 - year TIPS yield fluctuated and increased last week. The mild US July CPI data at the beginning of the week increased the market's expectation of a September interest rate cut, causing the US 10 - year TIPS yield to continue to decline. However, the significant increase in the PPI data and the rebound in retail sales data in the second half of the week pushed the US 10 - year TIPS yield up. As of last Friday, the US 10 - year TIPS yield increased by 7bp to 1.95% compared to the previous week [33]. 3.2.5 International Important Event Tracking - Trump and Putin held talks, and there may be room for negotiation between Russia and Ukraine. European leaders will accompany Ukrainian President Zelensky to meet with Trump in Washington this week to seek security guarantees for Kiev. In the Middle East, Israel continues to attack Gaza [36].