Core Viewpoint - The European Central Bank (ECB) is expected to lower deposit rates in response to a more dovish stance from the Federal Reserve under its new chairman, with predictions of a decrease from the current 2% to below 1.5% by the second half of next year [1] Group 1 - Salman Ahmed, the head of global macro and strategic asset allocation at Fidelity International, anticipates that the ECB will cut rates two to three times [1] - The current Federal Reserve Chairman Jerome Powell's term ends in May next year, and his successor is expected to lead a shift towards looser monetary policy [1] - Ahmed maintains a bullish outlook on the euro, predicting it could rise to 1.25 against the dollar, significantly higher than the current level of approximately 1.1545 [1]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The domestic fundamental situation has been weakening marginally since mid - year, especially the accelerated decline in the investment sector, which still poses a significant drag on credit expansion. Monetary policy has begun to send signals of easing, and the bullish factors for the bond market are accumulating. However, it is difficult for the easing to materialize in the short term, and it is unlikely for the bond market to start a new round of rapid upward movement. It is still in the stage of oscillating and accumulating energy. Attention should be paid to the opportunity of laying out at low levels. In the short term, it is currently in a data vacuum period, and with important meetings in December approaching, the market is highly cautious. The bond market may show a slight recovery, mainly depending on the capital situation and risk - aversion sentiment. After the tax payment period this week, the capital situation may further ease, and the central bank's bond - buying may boost market sentiment. Coupled with the adjustment of risk assets, it is expected to boost risk - aversion sentiment [11][12] 3. Summary by Related Catalogs 3.1 Market Review and Operation Suggestions - **Market Conditions**: After the tax payment period, the capital situation has loosened. With the short - term news being calm, the market may be waiting for policy guidance from the December meetings. Treasury bond futures showed narrow - range fluctuations across the board and closed slightly higher [8] - **Interest Rate Bonds**: The yields of major inter - bank interest rate bonds across all maturities showed narrow - range fluctuations. By 16:30 in the afternoon, the yield of the 10 - year active treasury bond 250016 was reported at 1.813%, up 0.05bp [9] - **Funding Market**: After the impact of the tax payment period ended, the inter - bank capital situation loosened. There were 283 billion yuan of maturities in the open market today, and the central bank injected 538.7 billion yuan, achieving a net injection of 255.7 billion yuan. The inter - bank capital sentiment index dropped significantly, indicating a further alleviation of capital pressure. The weighted overnight rate of inter - bank deposits fluctuated narrowly around 1.32%, the 7 - day rate rose 2.96bp to 1.47%, the medium - and long - term funds were stable, and the 1 - year AAA certificate of deposit rate fluctuated narrowly around 1.61% - 1.62% [10] 3.2 Industry News - **Domestic News**: The issuance of treasury bonds has entered a dense period. On November 24, the Ministry of Finance tendered and issued 97 billion yuan of book - entry coupon - bearing treasury bonds and 60 billion yuan of book - entry discounted treasury bonds. On November 26, two short - term treasury bonds will be issued. The Ministry of Finance will continue to pre - issue the new local government debt quota for 2026. As of November 23, the total scale of new special bonds issued by local governments this year has reached approximately 4.2315 trillion yuan, and the issuance progress of new special bonds has reached 96% [13] - **International News**: Multiple Federal Reserve officials have signaled interest rate cuts, and the market's bet on a December interest rate cut by the Federal Reserve has exceeded 50%. The cabinet of Japanese Prime Minister Hayasuna Sanae has approved the largest - scale additional expenditure since the pandemic, with a general account expenditure of 17.7 trillion yen (112 billion US dollars) and a total stimulus package worth 21.3 trillion yen [14] 3.3 Data Overview - **Treasury Bond Futures Market**: The report presents data on treasury bond futures, including trading data such as opening price, closing price, settlement price, price change, and trading volume of different contracts on November 24, as well as information on the spread between main contracts of treasury bond futures across different maturities and varieties [6] - **Money Market**: The report mentions the term structure change and trend of SHIBOR, as well as the change in the weighted inter - bank pledged repurchase rate and the inter - bank deposit pledged repurchase rate [29][33] - **Derivatives Market**: The report shows the average Shibor3M interest rate swap fixing curve and the average FR007 interest rate swap fixing curve [35]

Market Overview - The three major indices in the A-share market experienced a rebound, with total trading volume slightly increasing to 1.82 trillion yuan compared to the previous day [1] - The U.S. government has resumed operations, but the spending release from the TGA account will take time, and there are internal disagreements within the Federal Reserve regarding potential interest rate cuts in December [1] - The market lacks strong catalysts for further upward movement in the short term, with a potential acceleration in rotation speed [1] U.S.-China Relations - President Xi Jinping and President Trump had a phone call on November 24, indicating a stable and positive trend in U.S.-China relations since the Busan meeting [2] - The call reflects a shift towards a more normalized communication mechanism between the two countries, with a willingness to translate consensus into practical cooperation [2] Monetary Policy - The People's Bank of China announced a 1 trillion yuan MLF operation to maintain liquidity in the banking system, with a net injection of 100 billion yuan for November [2] - This marks the ninth consecutive month of increased MLF operations, supporting credit growth and economic stability [2] Energy Sector - As of the end of October, China's total installed power generation capacity reached 3.75 billion kilowatts, a year-on-year increase of 17.3% [3] - Solar power capacity grew by 43.8% year-on-year, while wind power capacity increased by 21.4%, indicating accelerated progress in renewable energy adoption [3] - However, the average utilization hours of power generation equipment decreased by 260 hours year-on-year, suggesting a continued loose power supply-demand balance [3] Stock Market Performance - On November 25, the A-share indices rose, with the Shanghai Composite Index up 0.87% and the Shenzhen Component Index up 1.53% [4] - The communication, media, and non-ferrous metals sectors led the gains, while defense and transportation sectors saw slight declines [4] Fund Tracking - The market turnover reached 1.826 trillion yuan, showing an increase from the previous trading day, while the margin trading balance decreased [5]

Fiscal Policy Insights - In October, general public budget revenue growth was 3.2% year-on-year, a slight increase of 0.6 percentage points from the previous month[4] - Tax revenue grew by 8.6% year-on-year, remaining stable compared to last month, while non-tax revenue plummeted by 33%, a significant drop of 21.5 percentage points[4] - General public budget expenditure fell by 3% year-on-year, marking a decline of 0.8 percentage points from the previous month, the lowest in nearly a year[6] - Government fund revenue decreased by 18.3% year-on-year, a sharp decline of 23.7 percentage points from the previous month, with land transfer revenue down by 27.5%[6] Market Trends - The equity market is expected to remain in a volatile pattern until the Central Economic Work Conference in December, with limited risk of a significant downturn due to favorable risk appetite and a loose liquidity environment[2] - Recent dovish statements from Federal Reserve officials have alleviated concerns about a rate hike in December, leading to a slight recovery in market risk appetite[2] - The bond market is anticipated to enter a phase of fluctuation in the short term, influenced by changes in market risk preferences and inflation expectations[12] Labor Market Analysis - The U.S. added 119,000 non-farm jobs in September, a significant increase from the previous month's initial value of 97,000[15] - The unemployment rate rose to 4.4%, a slight increase of 0.1 percentage points from the previous month, indicating a weakening labor market[16] - Wage growth showed a month-on-month increase of 0.3%, down 0.1 percentage points from the previous month, with year-on-year growth remaining stable at 3.8%[16]

Summary of the 2026 Asia Economics Outlook Conference Call Industry Overview - The report focuses on the economic outlook for Asia, particularly the recovery from technology to non-technology sectors, highlighting the expansion of recovery across various industries [3][4][13]. Key Points and Arguments 1. **Recovery Expansion**: The recovery is broadening, with non-technology exports rebounding, leading to improved capital expenditure momentum and better labor market conditions, which in turn boosts consumption [3][4]. 2. **GDP Growth Projections**: - Asia's real GDP growth is expected to rise from 4.3% in Q4 2025 to 4.7% in Q4 2026 [3][35]. - Nominal GDP growth for Asia (excluding China) is projected to rebound from 5.5% in Q4 2025 to 7.2% in Q4 2026 [3][35]. 3. **Inflation Trends**: - Inflation pressures are expected to ease in 2026, with overall inflation in Asia (excluding Japan) projected to rise slightly but remain within central banks' comfort zones [3][4][49]. - In China, inflation is anticipated to improve moderately, with a complete exit from deflation expected by 2027 [3][4][51]. 4. **Monetary Policy Outlook**: Central banks are nearing the end of the rate-cutting cycle, with most expected to maintain rates steady in 2026, except for Australia, which may need further easing [4][35]. 5. **Risks to Growth**: - Upside risks include stronger private sector spending in the U.S. and faster-than-expected adoption of AI, which could enhance productivity [4]. - Downside risks involve a potential mild recession in the U.S. that could negatively impact non-technology exports in Asia [4]. Additional Important Insights 1. **Technology vs. Non-Technology Exports**: - While technology exports have been strong, they account for only about 25% of total exports, limiting their spillover effects on the broader economy [3][13]. - Non-technology exports, which make up 75% of total exports, are expected to benefit from easing trade tensions and monetary easing effects [3][4][13]. 2. **Capital Expenditure**: - The improvement in non-technology exports is anticipated to positively influence capital expenditure, with growth expected to rise to 3.7% in H1 2026 and further accelerate to 4.4% in H2 2026 [27][29]. 3. **Consumer Spending**: - A dual recovery in exports and capital spending is expected to enhance labor market conditions, leading to a rebound in previously weak disposable income consumption [31][33]. 4. **Country-Specific Insights**: - **China**: Expected to see real GDP growth improve but nominal GDP growth remains subdued due to ongoing real estate weakness [45]. - **India**: Projected to have the strongest nominal GDP growth in Asia, driven by tax cuts and improved consumer sentiment [45]. - **Japan**: Expected to maintain strong nominal GDP growth supported by expansionary fiscal policies [46]. - **Korea**: Anticipated recovery in consumption driven by improved real income and fiscal support [46]. - **ASEAN**: Economic performance is expected to be mixed, with Malaysia and Singapore benefiting from non-tech export recovery, while Indonesia and Thailand face challenges [47]. Conclusion The 2026 Asia Economics Outlook presents a cautiously optimistic view of the region's economic recovery, driven by a shift from technology to non-technology sectors, with significant implications for GDP growth, inflation, and consumer spending across various Asian economies [3][4][35].

Core Viewpoint - The Bank of Israel has lowered its interest rate by 25 basis points to 4.25%, marking the first rate cut since January 2024, indicating a shift towards a more accommodative monetary policy [1][5]. Economic Indicators - The decision to cut rates aligns with market expectations, as 13 out of 14 economists predicted a reduction to 4.25% [5]. - The annual inflation rate in Israel has eased, stabilizing at 2.5% in October, with expectations for a slight increase by year-end before stabilizing within target ranges [5]. - The labor market remains tight, with a high ratio of job vacancies to unemployment and ongoing wage growth [5]. Market Reactions - The Israeli stock market has shown positive performance, with indices rising and risk premiums slightly above pre-war levels [5]. - The New Israeli Shekel has appreciated against the US dollar by 1.3% and against the euro by 2.9% since the last rate decision [6]. Economic Growth - Israel's GDP grew by 12.4% year-on-year in Q3 2025, significantly surpassing the expected 7.3%, driven by strong private consumption, exports, and fixed asset investment [6]. - Private consumption increased by 23%, fixed asset investment rose by 36.9%, and exports of goods and services grew by 23.3% in Q3 [6]. Future Outlook - The Bank of Israel's monetary policy will focus on price stability, supporting economic activity, and maintaining market stability, with future rate decisions influenced by inflation, economic activity, and geopolitical uncertainties [5].

Core Viewpoint - The Bank of Israel has lowered its interest rate by 25 basis points to 4.25%, marking the first rate cut since January 2024, indicating a shift towards a more accommodative monetary policy [2][4]. Group 1: Monetary Policy and Economic Indicators - The rate cut aligns with market expectations, as 13 out of 14 economists predicted a reduction to 4.25% [4]. - The primary drivers for the rate cut include the easing of geopolitical risks following the Gaza ceasefire agreement and a reduction in inflationary pressures [4]. - The annual inflation rate in Israel has stabilized at 2.5% as of October, with expectations for a slight increase by year-end before returning to the target range [4]. - The labor market remains tight, with a high ratio of job vacancies to unemployment and ongoing wage growth [4]. - The Israeli stock market has shown positive performance compared to international indices, and the risk premium has decreased slightly above pre-war levels [4][5]. Group 2: Economic Growth - Israel's economy experienced a significant acceleration in Q3 2025, with GDP growing by 12.4% year-on-year, surpassing the expected 7.3% [6]. - The strong GDP rebound is attributed to substantial increases in private consumption (23%), fixed asset investment (36.9%), and goods and services exports (23.3%) [6]. - Current indicators for Q4 suggest active economic activity, with an increase in the overall balance of the business trend survey, although still below pre-war levels [6]. - Consumer confidence saw a notable rise in October, and the high-tech sector continues to attract significant capital [6].

Core Viewpoint - The recent surge in precious metals is primarily driven by cyclical demand for gold, with silver prices outpacing gold [1] Group 1: Price Projections - By 2026, COMEX gold prices are expected to reach $4,500 per ounce, while silver prices are projected to rise to $55 per ounce, indicating further upside potential from current levels [1] Group 2: Investment Demand - The cyclical investment demand for precious metals has not peaked, as the U.S. monetary policy may shift towards easing in the short term, and long-term inflation expectations could remain unanchored [1] Group 3: Structural Support - The unique value of physical gold and the strategic nature of silver are expected to provide structural support for global central bank gold purchases, private physical investments, and regional stockpiling [1]

Core Viewpoint - The overall outlook for the US stock market indicates a slight downward trend until the Federal Reserve's meeting on December 10-11, with a potential rebound expected in the latter half of December due to anticipated changes in monetary policy and tax cuts starting January 1 [1][9]. Market Trends - The US stock market experienced a decline, particularly in technology stocks, with the Nasdaq 100 and Philadelphia Semiconductor Index dropping by 2.4% and 4.8% respectively [2]. - Despite the downturn, the drop is attributed more to macroeconomic factors rather than panic selling related to an "AI bubble" [2]. Employment Data and Monetary Policy - The US added 119,000 non-farm jobs in September, exceeding market expectations of 51,000, which has raised tightening expectations for monetary policy [3]. - Hawkish statements from Federal Reserve officials have further fueled market expectations for a tightening of monetary policy, with indications that the Fed may maintain current interest rates in December [3][4]. Labor Market Insights - The unemployment rate increased from 4.3% in August to 4.4% in September, while the broader U6 unemployment rate decreased slightly to 8.0% [4]. - The labor market shows signs of marginal weakening, with potential future downward revisions of employment data for July and August [4]. AI Market Dynamics - The narrative of an "AI bubble" bursting is unlikely to manifest in the short term, as demand continues to grow amid competitive pressures and technological advancements [5][6]. - The commercial landscape for AI is evolving, with significant investments from major tech companies expected to drive growth in the sector [5]. Earnings Expectations - Earnings expectations for the US stock market have been revised upward, particularly in the information technology and healthcare sectors [7][8]. - The upward revisions in revenue and earnings growth are occurring despite a decline in stock prices, indicating a contraction in valuation multiples rather than a deterioration in earnings expectations [8]. Investment Recommendations - The company suggests focusing on sectors that are expected to benefit from the economic environment, including technology, manufacturing, military, healthcare, and financial services [1][9].

Core Viewpoint - The bond market is expected to experience low volatility and a stable trend in 2024, primarily due to weak demand and a slow improvement in household income, indicating a longer-than-expected economic structural transition [1] Group 1: Economic Environment - The central government is expected to support structural demand during the transition, with fiscal measures increasing the deficit to stimulate economic demand [1] - The reliance on issuing long-term or ultra-long-term government bonds is highlighted, as significant increases in long-term interest rates would raise interest expenses for the fiscal department [1] - The risk of a substantial rise in bond yields is considered low under the current macroeconomic environment [1] Group 2: Interest Rate Outlook - A neutral judgment suggests a potential for around 20 basis points (BP) of interest rate cuts and 50-100 BP of reserve requirement ratio (RRR) cuts in 2024 [2] - The central tendency of interest rates is expected to decrease by 20 BP from the current 1.7%-1.8%, leading to a projected range of 1.5%-1.6% for the ten-year government bond yield [2] - The volatility in the bond market is anticipated to be lower in 2024 compared to 2023, with yields gradually declining as broader market interest rates decrease [2][3] Group 3: Fiscal Policy and Market Dynamics - The fiscal spending rhythm has shown significant differences year-on-year, with 2023 seeing a late surge in spending, while 2024 is expected to have a more proactive fiscal approach [3] - The effectiveness of fiscal measures in supporting the transition to a consumption-driven economy is under scrutiny, particularly regarding the implementation of consumer subsidies [3] - The bond market's performance will be closely tied to the pace of fiscal stimulus and inflation expectations, with two critical periods to monitor: significant fiscal spending and inflation trading phases [2][3] Group 4: Investment Opportunities - The introduction of the ten-year government bond ETF (511260) allows investors to easily access government bonds, with a duration of approximately 6.5-10 years [4] - The ETF offers high trading flexibility and is recommended for inclusion in investment portfolios during the current and upcoming favorable market conditions [4] - The bond market is seen as entering a period of low risk and high allocation value, with the ten-year government bond being particularly attractive for investors [4]