Report Summary 1. Report Industry Investment Rating No information provided on the report industry investment rating. 2. Core View - Weekend economic data showed exports turned negative year-on-year due to holidays, high base effects, and a temporary decline in external demand. In terms of price data, CPI turned positive year-on-year, core CPI rebounded, service consumption contribution increased, and the year-on-year drag of food CPI eased, reflecting marginal repair of domestic consumption demand. PPI continued to rise year-on-year, and the decline narrowed further compared to September, mainly due to the continuous rise in upstream industry prices, indicating initial results of anti-involution policies, waiting for price transmission to spread downstream. Positive price data boosted market confidence in economic repair, leading to gains in large consumption sectors such as liquor, beauty care, and retail, and the index was generally strong with increased volume. However, the basis of stock index futures deepened for all contracts except IH, and the dividend index led the gains, indicating that market sentiment had not fully improved and remained cautious. This week, financial data, industrial added value, and social retail data will be released to further verify the economic repair situation. In addition, the concentrated issuance of US Treasury bonds overseas this week will test market liquidity, and overseas market fluctuations may affect the risk appetite of the A-share market. However, the support below is relatively stable based on policy expectations, and it is expected that the stock index will remain in a volatile pattern [4]. 3. Summary by Related Catalogs Market Review - Today, the stock index fluctuated strongly. Taking the CSI 300 Index as an example, it closed up 0.35%. In terms of capital, the trading volume of the two markets rebounded by 1.75401 billion yuan. In the futures index market, IM rose with reduced volume, while the other varieties rose with increased volume [3]. Important Information - Trump said the government shutdown was nearing an end. - China's exports denominated in US dollars decreased by 1.1% year-on-year in October, and imports increased by 1.0% year-on-year. - China's CPI rose 0.2% year-on-year in October, and PPI decreased 2.1% year-on-year [4]. Strategy Recommendation - Hold and wait and see [5]. Stock Index Futures Market Observation | | IF | IH | IC | IM | | --- | --- | --- | --- | --- | | Main contract intraday change (%) | 0.28 | 0.45 | 0.07 | 0.13 | | Trading volume (10,000 lots) | 10.6785 | 4.591 | 12.2736 | 19.4473 | | Trading volume MoM (10,000 lots) | 2.0335 | 0.8106 | 1.5775 | 0.6856 | | Open interest (10,000 lots) | 26.8313 | 9.6711 | 24.9333 | 35.4677 | | Open interest MoM (10,000 lots) | 1.0827 | 0.5768 | 0.8841 | -0.1747 | [5] Spot Market Observation | Name | Value | | --- | --- | | Shanghai Composite Index change (%) | 0.53 | | Shenzhen Component Index change (%) | 0.18 | | Ratio of rising to falling stocks | 1.73 | | Trading volume of the two markets (100 million yuan) | 21744.54 | | Trading volume MoM (100 million yuan) | 1754.01 | [6]

1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Report's Core View - In October, foreign trade fell short of expectations, while prices showed some improvement. The economic downward pressure in Q4 may increase. The year - on - year growth of economic data in Q3 slowed down compared to Q1 and Q2, with cumulative year - on - year negative growth in fixed investment, indicating that the traditional investment - driven economic model may face challenges. Consumption and exports may face pressure. Consumer willingness remains weak, and the slow price recovery in October reflects weak domestic economic recovery momentum. Exports may face year - on - year growth pressure in Q4 2025 due to good performance in Q4 2024. The year - on - year foreign trade data in October dropped significantly compared to September. However, the cancellation of fentanyl tariffs and the extension of the reciprocal tariff suspension period between China and the US on October 30 may support foreign trade in November and December. With the start of the Fed's interest - rate cut cycle, the inverted Sino - US interest rate spread has significantly eased, and the cost rate of banks' interest - bearing liabilities has steadily declined, suggesting that the conditions for a further reduction in policy interest rates may be initially met [2][76]. 3. Summary by Relevant Catalogs 3.1 Macro News - **Price Index**: In October, the price index improved. CPI increased by 0.2% year - on - year, up 0.5 percentage points from the previous month. PPI's year - on - year decline narrowed to 2.1%, up 0.2 percentage points from the previous month, and its month - on - month change turned positive. Looking ahead, food prices in Q4 may see a slower decline due to the low base last year, service prices may maintain steady growth, and the prices of daily necessities and services may continue to perform well. PPI's year - on - year decline has narrowed for three consecutive months. From a breakdown perspective, the year - on - year decline in production materials remained flat at - 2.4%, while that in living materials narrowed to - 1.4%, up 0.3 percentage points from September [10][11][16]. - **Foreign Trade**: In October, the year - on - year growth of imports and exports decreased significantly compared to the previous month, falling short of market expectations. In the first ten months of 2025, China's total goods trade value reached 37.3 trillion yuan, a year - on - year increase of 3.6%. In October, the total value of goods trade was 3.7 trillion yuan, a year - on - year increase of 0.1%. Exports were 2.17 trillion yuan, a year - on - year decrease of 0.8%, and imports were 1.53 trillion yuan, a year - on - year increase of 1.4%, marking the fifth consecutive month of growth [20]. 3.2 Meso - level High - frequency Data - **Consumption**: As of October 31, the daily average retail volume of passenger vehicle manufacturers was 155,000 units, a year - on - year increase of 47.2%, and the daily average wholesale volume was 210,000 units, a year - on - year increase of 23.9%. As of November 7, the total box office revenue of national movies in the past 7 days was 207.183 million yuan, a year - on - year decrease of 52.5%. As of October 17, the total retail volume of three major household appliances was 1.724 million units, a year - on - year decrease of 32.4%, and the total retail sales were 4.79 billion yuan, a year - on - year decrease of 35.9% [23][28]. - **Transportation**: As of November 2, the weekly container throughput at ports was 6.718 million twenty - foot equivalent units, a year - on - year increase of 18.4%. As of November 6, the average daily subway passenger volume in first - tier cities in the past 7 days was 4.0606 million person - times, a year - on - year increase of 5.5%. As of November 2, the weekly postal express pick - up volume was 4.28 billion pieces, a year - on - year increase of 8.2%, and the delivery volume was 4.31 billion pieces, a year - on - year increase of 10.0%. The weekly railway freight volume was 78.562 million tons, a year - on - year decrease of 2.7%, and the number of highway truck passages was 57.572 million vehicles, a year - on - year increase of 4.4% [33][36]. - **Industrial Operating Rates**: As of November 5, the operating rate of blast furnaces in major steel enterprises was 77.8%, a year - on - year increase of 1.4 percentage points. As of November 6, the average operating rate of asphalt was 22.0%, a year - on - year decrease of 3.0 percentage points. The operating rate of soda ash was 85.5%, a year - on - year decrease of 0.2 percentage points, and the operating rate of PVC was 80.6%, a year - on - year increase of 4.0 percentage points. As of November 7, the average operating rate of PX was 90.2%, and that of PTA was 77.0% [39][41]. - **Real Estate**: As of November 7, the total commercial housing transaction area in 30 large - and medium - sized cities in the past 7 days was 1.527 million square meters, a year - on - year decrease of 37.9%. As of October 31, the transaction area of second - hand housing in 9 sample cities was 1.599 million square meters, a year - on - year decrease of 27.3% [46][48]. - **Prices**: As of November 7, the average weekly pork wholesale price was 18.1 yuan/kg, a year - on - year decrease of 25.7% and a 4.6% decrease from 4 weeks ago. The average vegetable wholesale price was 5.8 yuan/kg, a year - on - year increase of 9.9% and a 16.6% increase from 4 weeks ago. The average wholesale price of 6 key fruits was 7.1 yuan/kg, a year - on - year decrease of 1.8% and a 0.6% increase from 4 weeks ago. The average weekly price of thermal coal at northern ports was 778 yuan/ton, a year - on - year decrease of 8.8% and an 11.1% increase from 4 weeks ago. The average weekly spot price of WTI crude oil was 60.3 US dollars/barrel, a year - on - year decrease of 15.5% and a 4.1% decrease from 4 weeks ago. The average weekly spot price of rebar was 3149.9 yuan/ton, a year - on - year decrease of 9.2% and a 0.9% decrease from 4 weeks ago. The average weekly spot price of iron ore was 799 yuan/ton, a year - on - year increase of 1.2% and a 0.1% increase from 4 weeks ago [52][56]. 3.3 Bond and Foreign Exchange Markets - Most bond yields increased. On November 7, the overnight Shibor was 1.33%, up 1.40 BP from November 3. R001 was 1.39%, up 2.54 BP; R007 was 1.47%, up 0.73 BP. DR001 was 1.33%, up 1.73 BP; DR007 was 1.41%, down 0.57 BP. IBO001 was 1.38%, up 2.10 BP; IBO007 was 1.46%, down 0.22 BP. The yields of 1 - year/5 - year/10 - year/30 - year treasury bonds were 1.40%/1.59%/1.82%/2.16% respectively, up 1.8 BP/1.9 BP/1.9 BP/1.6 BP compared to October 31. The yields of 1 - year/5 - year/10 - year local government bonds were 1.48%/1.76%/2.00% respectively, down 0.7 BP/1.3 BP/3.8 BP compared to October 31. The yields of AAA 1 - month/1 - year and AA+ 1 - month/1 - year inter - bank certificates of deposit were 1.47%/1.64%/1.49%/1.67% respectively, up 6.1 BP/0.5 BP/6.1 BP/0.5 BP compared to October 31. As of November 7, the 10 - year treasury bond yields of the US, Japan, the UK, and Germany were 4.1%, 1.7%, 4.5%, and 2.8% respectively, unchanged/+2 BP/+5 BP/+4 BP compared to October 31. The central parity rate and spot exchange rate of the US dollar against the RMB were 7.08/7.12 respectively, down 44/+90 pips compared to October 31 [58][62][71]. 3.4 Institutional Behavior - Since the beginning of 2025, the duration of medium - and long - term pure bond funds for interest - rate bonds has shown a trend of first decreasing, then increasing, and then decreasing. It has been decreasing overall in the past two months and increased this week. On November 7, 2025, the estimated average duration was around 5.0 years, and the estimated median duration was around 4.4 years, an increase of about 0.01 years compared to October 31. The duration of medium - and long - term pure bond funds for credit bonds has shown a volatile trend. It increased and then rapidly decreased in the past month and continued to decline rapidly this week. On November 7, 2025, the estimated average and median durations were around 2.1 years, a decrease of about 0.1 years compared to October [73][75]. 3.5 Investment Suggestion - The bond market trend may deviate from the fundamentals in the short term but cannot do so in the long term. Currently, the bond market has significant allocation value, and bond yields may decline fluctuantly. According to seasonal patterns, treasury bond yields usually decline significantly in November and December. Due to weak domestic consumption willingness and the start of the Fed's interest - rate cut cycle, the policy interest rate may be cut by 20 BP in the next six months. The central bank's resumption of treasury bond trading may have set the upper limit for bond yields, and future pricing may reflect the expected policy - rate cut. The report continues to be bullish on the bond market, predicting that the yield of 10Y treasury bonds will return to around 1.65%, the yield of 30Y treasury bonds will reach 1.9%, and the yield of 5Y secondary capital bonds of large banks will reach 1.9% (all referring to bonds without VAT) by the end of the year [76][79].

Report Summary 1) Report Industry Investment Rating The document does not mention the report industry investment rating. 2) Core View of the Report The report analyzes the October 2025 PMI data, indicating that the manufacturing industry is under pressure and the economy still needs policy support. The manufacturing PMI has declined, with structural pressures intensifying, while the service industry has a mild uptick and the construction industry remains sluggish. Future economic improvement requires the implementation of policies such as anti - involution and expanding domestic demand [1][6]. 3) Summary by Related Catalogs Manufacturing Industry - **Overall Situation**: In October, the manufacturing PMI was 49.0%, down 0.8 percentage points from the previous month, falling below the boom - bust line for seven consecutive months, showing a weakening overall manufacturing industry due to factors like reduced working days, trade frictions, and high inventory [1]. - **Structural Pressures**: All four major sub - indicators of the manufacturing PMI declined. The production index dropped to 49.7%, the new order index to 48.8%, the raw material inventory to 47.3%, and the employment index to 48.3%, indicating weakness in production, demand, and employment [2]. - **Enterprise Scale**: The PMIs of large, medium, and small enterprises were 49.9%, 48.7%, and 47.1% respectively, all in the contraction range. Large enterprises entered the contraction range for the first time in the second half of the year, and small and medium - sized enterprises have been below the boom - bust line for many months [2]. - **Demand Side**: External demand contracted significantly, with the new export order index dropping 1.9 percentage points to 45.9% and the import index falling 1.3 percentage points to 46.8%. Domestic demand was relatively stable, and the domestic market's support for demand increased [3]. - **Industry Categories**: New - energy - related industries had better prosperity, while basic raw material industries were weak. The production index of equipment manufacturing, high - tech manufacturing, and consumer goods manufacturing decreased but remained in the expansion range, while the production index of basic raw material industries dropped below 48% [3]. - **PMI Quantity - Price Sub - Index**: The PMI quantity - price (ex - factory price index) sub - index weakened, reflecting the pressure of demand contraction and poor cost transmission. It may continue the contraction trend in the short term [5]. Service Industry - The service industry PMI was 50.2%, up 0.1 percentage points from the previous month, hovering around the boom - bust line for many months. Consumer service industries recovered significantly, while production - related service industries fell into the contraction range [5]. Construction Industry - The construction industry PMI was 49.1%, down 0.2 percentage points from the previous value, remaining in the contraction range for three consecutive months. The decline of the real estate market and the slowdown of infrastructure investment were the main reasons for the industry's downturn, but infrastructure - related construction activities showed signs of acceleration [5]. Future Outlook - Economic recovery requires policy support. The implementation of anti - involution and domestic - demand - expansion policies in the fourth quarter will help improve the economy. The injection of new policy - based financial tools, the early use of part of the 2026 fiscal budget, and the "15th Five - Year Plan" will provide impetus for the manufacturing industry [6].

Core Viewpoint - The article discusses the recent performance and outlook of fixed income products, highlighting a recovery in the bond market and the varying performance of different types of fixed income investments amid changing economic conditions and market sentiment [1][2]. Summary by Sections Fixed Income Product Performance - In the past month, the bond market has shown signs of recovery, with net values of fixed income products increasing. The leading performers include rights-embedded fixed income products, followed by short-duration assets like interbank certificates of deposit and short-term bond funds [3][10]. - As of October 17, the monthly returns for various products were as follows: rights-embedded bond funds at 0.21% (previously 0.54%), high-grade interbank certificates at 0.15% (previously 0.13%), short-term bond funds at 0.12% (previously 0.05%), and medium to long-term bond funds at 0.12% (previously -0.07%) [3][8]. Bond Market Review - The bond market experienced a phase of warming, with short-duration bonds outperforming long-duration ones. The yield curve initially steepened before flattening, influenced by factors such as the escalation of the US-China trade conflict and a weak economic backdrop [10][11]. - Key observations include: - The one-year government bond yield rose by 5 basis points to 1.44%, while the ten-year yield fell by 1 basis point to 1.83% [16][20]. - The average rates for three-month and one-year AAA interbank certificates increased slightly, indicating a stable liquidity environment [11][20]. Market Outlook - Short-term expectations suggest a stable interbank rate with potential for slight decreases, while medium-term projections indicate a continuation of a range-bound market for bonds, with a possible mild widening of yield spreads [1][32]. - The anticipated range for the ten-year government bond yield is between 1.6% and 2.0% [1][32]. Investment Strategies - For investors focused on liquidity management, maintaining cash-like products and considering stable low-volatility investments such as short-term bond funds is recommended. Long-term trends indicate a decline in cash product yields [39][42]. - For conservative investors, holding pure bond products while cautiously extending duration is advised, with a focus on high-grade long-duration bonds when yields exceed 1.8% [43][44]. - For more aggressive investors, a strategic allocation to fixed income plus products, including convertible bonds and equity assets, is suggested, leveraging the current favorable liquidity conditions [44][45].

Key Insights - The report highlights significant global events, including the U.S. government shutdown, which began on October 1 due to the Senate's rejection of a temporary funding bill, affecting approximately 750,000 federal employees [8] - Japan's ruling Liberal Democratic Party elected its first female president, who is likely to become Japan's first female prime minister, marking a historic political shift [8] - Geopolitical risks in the Middle East have decreased, with indications of a potential ceasefire between Israel and Hamas following U.S. diplomatic efforts [8] - Gold prices have reached a new high, surpassing $4,000 per ounce, as investors reassess their asset allocations amid the U.S. government shutdown, with China's central bank increasing its gold reserves for the 11th consecutive month [9] - The National Day and Mid-Autumn Festival holiday saw over 2.432 billion cross-regional trips in China, setting a record for the same period [9] Market Overview - Global markets experienced a bullish trend during the holiday period, with Hong Kong and overseas stock markets rising, particularly driven by Japan's political developments [10] - The bond market is expected to maintain a volatile trend, with potential easing of pressure post-quarter, although the current interest rate cut expectations remain weak [12] - The A-share market is anticipated to remain positive post-holiday, supported by high global risk appetite and favorable conditions in technology, materials, and renewable energy sectors [12] Focus Areas Post-Holiday - Attention will be on China's financial data for September, scheduled for release in the week of October 10 [13]

Economic Overview - The GDP deflator index has experienced negative growth for 9 consecutive quarters since Q2 2023, marking the longest period of decline since the Asian financial crisis and the global financial crisis, which lasted 6 and 3 quarters respectively[1][11][24]. - The current deflation is structurally different from past instances, lacking external shocks and characterized by prolonged duration and complex structural features[2][24]. Structural Causes of Weak Domestic Demand - The current deflation is not merely due to "insufficient demand," but is a result of a chain reaction involving real estate, debt, and fiscal policies, leading to weakened wealth effects and corporate profits[2][31]. - The decline in real estate prices and sales has adversely affected household wealth and corporate profits, further compressing credit supply and investment[2][31]. International Comparisons and Lessons - Japan's experience with deflation highlights the importance of timely policy responses and the risks of premature tightening, which can lead to a downward spiral in the "nominal-profit-credit" chain[3][48]. - The Eurozone's recovery from deflation relied on coordinated monetary and fiscal policies, emphasizing the need for a combination of measures rather than relying solely on price-driven tools[3][48]. Policy Recommendations - Short-term re-inflation pressures are significant, necessitating fiscal support, monetary easing, and structural reforms to stabilize nominal growth[4][30]. - The fiscal strategy should involve higher deficit rates and long-term bonds to support public investment, while monetary policy should focus on yield curve management and structural tools to enhance credit transmission[4][30].

Market Overview - The three major indices in the A-share market experienced fluctuations and closed higher, with the Shanghai Composite Index at 3828.58 points, up 0.22% [4] - The total market turnover decreased to 2.1 trillion yuan, indicating cautious trading behavior as the holiday approaches [1] - Margin trading balances decreased by 4.2 billion yuan, reflecting a marginal contraction in leveraged fund sentiment [1] Economic Policy and Monetary Environment - The People's Bank of China announced that the Loan Prime Rate (LPR) remained unchanged at 3.0% for the one-year term and 3.5% for the five-year term, consistent with market expectations [2] - The stability of the LPR is intended to maintain continuity in the interest rate environment, as the macroeconomic policy is currently in an observation phase [2] - The central bank conducted a 240.5 billion yuan reverse repurchase operation at a rate of 1.40%, indicating efforts to manage liquidity ahead of the quarter-end and holiday [3] Steel Industry Developments - The Ministry of Industry and Information Technology released a plan for the steel industry aiming for an average annual growth of around 4% in value-added output from 2025 to 2026 [3] - The plan addresses the imbalance of excessive supply and insufficient effective demand, focusing on precise capacity control and enhancing high-end product supply capabilities [3] - The initiative aims to stabilize the industrial base and promote the transformation and upgrading of traditional industries, potentially benefiting leading steel enterprises through resource concentration and industry consolidation [3] Sector Performance - In the stock market, sectors such as electronics, computers, and non-ferrous metals showed strong performance, with increases of 3.71%, 1.70%, and 0.98% respectively [4] - Conversely, sectors like social services, beauty care, and retail experienced declines, with drops of 2.04%, 1.36%, and 1.31% respectively [4] - A total of 2132 stocks rose while 2990 stocks fell, indicating a mixed market sentiment [4]

1. Report Industry Investment Rating - The report does not explicitly state the industry investment rating. 2. Report's Core View - The bond market adjusted significantly this week. The narrowing year - on - year decline in August's CPI and the four - month consecutive rise in core CPI indicate marginal improvement in domestic demand, but food prices still drag. The narrowing year - on - year decline in PPI and the end of eight - month consecutive decline in the month - on - month data are mainly supported by policy - driven industrial product price repairs. The export growth rate in the first eight months dropped to 6.9%, and the import decline narrowed to - 1.2%, reflecting the resilience of external demand but uneven domestic demand repair. The main reasons for the bond market adjustment this week may include policy expectation disturbances and the continuous disturbance of the stock - bond seesaw effect. The short - term bond market may be suppressed by sentiment, but the report is bullish on the bond market in the long run, expecting the 10Y Treasury yield to be between 1.6% - 1.8% in the second half of the year [2][10][82]. 3. Summary by Related Catalogs 3.1 Macro News - In August, CPI decreased by 0.4% year - on - year, with the same month - on - month figure as last month, and core CPI rose to 0.9%. PPI's year - on - year decline narrowed to - 2.9%, the first narrowing since February this year, and the month - on - month change turned flat, ending eight - month consecutive decline. - In the first eight months, the total value of China's goods trade imports and exports was 29.6 trillion yuan, a year - on - year increase of 3.5%. The export growth rate dropped by 0.4 pct to 6.9%, and the import decline narrowed by 0.4 pct to - 1.2%. - At the end of August, M2 balance was 332.0 trillion yuan, a year - on - year increase of 8.8%; M1 balance was 111.2 trillion yuan, a year - on - year increase of 6%. The cumulative increase in social financing scale in the first eight months was 26.6 trillion yuan, 4.7 trillion yuan more than the same period last year. - The US CPI in August increased by 2.9% year - on - year, a new high since January, and 0.4% month - on - month, higher than expected. Core CPI increased by 3.1% year - on - year and 0.3% month - on - month in August, both in line with market expectations [12][17][19][21]. 3.2 Medium - term High - frequency Data 3.2.1 Consumption - As of September 7, the daily average retail volume of passenger car manufacturers was 4.3 million vehicles, a year - on - year decrease of 10.3%, and the daily average wholesale volume was 4.4 million vehicles, a year - on - year decrease of 5.1%. - As of September 12, the total box office revenue of national movies in the past 7 days was 35782.6 million yuan, a year - on - year increase of 41.0%. - As of August 29, the total retail volume of three major household appliances was 1.337 million units, a year - on - year decrease of 9.9%, and the total retail sales were 2.13 billion yuan, a year - on - year decrease of 33.5% [24][28]. 3.2.2 Transportation - As of September 7, the weekly container throughput of ports was 6.646 million twenty - foot equivalent units, a year - on - year increase of 13.4%. - As of September 11, the average daily subway passenger volume in first - tier cities in the past 7 days was 37.473 million person - times, a year - on - year increase of 2.0%. - As of September 7, the weekly postal express pick - up volume was 3.86 billion pieces, a year - on - year increase of 9.2%. - As of September 7, the weekly railway freight volume was 79.043 million tons, a year - on - year increase of 4.1%, and the weekly highway truck traffic volume was 5.436 million vehicles, a year - on - year decrease of 0.6% [34][36][39]. 3.2.3 Industrial Operating Rates - As of September 10, the blast furnace operating rate of major steel enterprises nationwide was 77.3%, a year - on - year increase of 1.8 pct. - As of September 11, the average asphalt operating rate was 26.0%, a year - on - year increase of 5.0 pct. - As of September 11, the soda ash operating rate was 87.5%, a year - on - year increase of 12.9 pct, and the PVC operating rate was 79.8%, a year - on - year increase of 3.8 pct. - As of September 12, the average PX operating rate was 87.0%, and the average PTA operating rate was 74.7% [42][44]. 3.2.4 Real Estate - As of September 12, the total commercial housing transaction area in 30 large and medium - sized cities in the past 7 days was 1.488 million square meters, a year - on - year increase of 6.2%. - As of September 5, the second - hand housing transaction area in 9 sample cities was 1.234 million square meters, a year - on - year decrease of 5.5% [47]. 3.2.5 Prices - As of September 12, the average weekly pork wholesale price was 19.9 yuan/kg, a year - on - year decrease of 26.3% and a 1.3% decrease compared to four weeks ago; the average vegetable wholesale price was 5.1 yuan/kg, a year - on - year decrease of 16.0% and an 8.7% increase compared to four weeks ago; the average wholesale price of 6 key fruits was 6.9 yuan/kg, a year - on - year decrease of 4.4% and a 1.0% decrease compared to four weeks ago. - As of September 12, the average weekly price of thermal coal at northern ports was 682.0 yuan/ton, a year - on - year decrease of 19.8% and a 1.0% decrease compared to four weeks ago; the average weekly WTI crude oil spot price was 62.6 US dollars/barrel, a year - on - year decrease of 7.6% and a 1.5% decrease compared to four weeks ago. - As of September 12, the average weekly spot price of rebar was 3138.0 yuan/ton, a year - on - year decrease of 1.7% and a 5.5% decrease compared to four weeks ago; the average weekly spot price of iron ore was 804.9 yuan/ton, a year - on - year increase of 14.2% and a 1.5% increase compared to four weeks ago [48][53][55]. 3.3 Bond and Foreign Exchange Markets - On September 12, overnight Shibor was 1.37%, up 1.40 BP from September 8. R001 was 1.40%, down 1.01 BP from September 8; R007 was 1.47%, down 0.53 BP from September 8. DR001 was 1.36%, up 0.76 BP from September 8; DR007 was 1.46%, up 0.52 BP from September 8. IBO001 was 1.40%, up 0.84 BP from September 8; IBO007 was 1.50%, up 0.37 BP from September 8. - Most Treasury yields rose. On September 12, the 1 - year/5 - year/10 - year/30 - year Treasury yields were 1.40%/1.61%/1.87%/2.18%, up 0.2 BP/0.3 BP/4.1 BP/7.3 BP respectively from September 5. The 1 - year/5 - year/10 - year/30 - year yields of China Development Bank bonds were 1.58%/1.82%/2.03%/2.26%, up 4.1 BP/6.3 BP/15.8 BP/6.8 BP respectively from September 5. - On September 12, the 1 - year/5 - year/10 - year yields of local government bonds were 1.54%/1.84%/2.03%, up 8.7 BP/0.5 BP/2.1 BP respectively from September 5. The yields of AAA 1 - month/1 - year and AA+ 1 - month/1 - year inter - bank certificates of deposit were 1.55%/1.68%/1.57%/1.71%, up 12.1 BP/1.1 BP/12.1 BP/0.1 BP respectively from September 5. - As of September 12, 2025, the 10 - year Treasury yields of the US, Japan, the UK, and Germany were 4.1%, 1.6%, 4.7%, and 2.8%, down 4 BP/up 3 BP/up 3 BP/down 2 BP respectively from September 5. - On September 12, the central parity rate and spot exchange rate of the US dollar against the Chinese yuan were 7.10/7.12, down 45/154 pips respectively from September 5 [58][63][65][71][74]. 3.4 Institutional Behavior - Since the beginning of 2025, the duration of medium - and long - term pure bond funds investing in interest - rate bonds has shown a trend of first decreasing, then increasing, and then decreasing. As of September 12, 2025, the estimated median duration was about 4.7 years, a decrease of about 0.1 years compared to last week (September 5). - Since the beginning of 2025, the duration of medium - and long - term pure bond funds investing in credit bonds has shown a volatile trend. In the past month, the duration has risen rapidly and then fluctuated. As of September 12, 2025, the estimated average duration was about 3.1 years, and the estimated median duration was about 3.0 years, an increase of about 0.2 years compared to last week (September 5) [77][79]. 3.5 Investment Advice - The short - term bond market may be suppressed by sentiment, but the report remains bullish on the bond market. The year - on - year growth rate of prices in August was generally lower than expected, and this may be a stage of economic growth momentum transformation and income distribution structure adjustment. The year - on - year growth rates of exports and imports in August both declined. Coupled with the strong performance of consumption policies in the first half of the year, there may be some pressure on consumption and exports in the second half of the year. It is necessary to continuously monitor the continuation of incremental policies and price improvements. The report believes that the economic downward pressure may increase in the second half of the year, the capital market will remain loose, the central bank may restart Treasury bond purchases, and the self - operating allocation demand of banks will support the decline of bond market interest rates. The recent unexpected rise of the stock market has led to a significant adjustment in the bond market, but the bond market will ultimately return to fundamental and capital - based pricing. When the stock market adjusts, bond yields may decline rapidly. The report continues to expect the 10Y Treasury yield to be between 1.6% - 1.8% in the second half of the year, and the current 10Y Treasury yield of about 1.8% is highly cost - effective [80][82].

Core Viewpoints - The U.S. labor market continues to weaken, but not in a comprehensive manner, with high-frequency indicators showing no significant decline yet [4] - Inflation in the U.S. remains manageable, with the OPI in July rising by 2.7%, indicating a trend of overall inflation easing [4] - The Federal Reserve is likely to cut interest rates twice in the near future, reflecting a cautious approach to economic recovery [4] Macro Analysis - The U.S. economy is experiencing marginal weakening, with pressures on investment, consumption, and real estate increasing [4] - Domestic policies are currently in an observation phase, focusing on implementing existing policies while addressing weaknesses in investment and consumption [4] - The policy structure is shifting towards long-term strategic goals, emphasizing high-quality economic development and sustainable growth mechanisms [4] A-share Strategy and Views - The A-share market is expected to continue a trend of upward fluctuations, with core assets regaining profitability [4] - The market is characterized by high trading volumes and increased investor participation, indicating a strong market sentiment [4] - The upcoming key events, such as the 20th National Congress and U.S.-China trade negotiations, are anticipated to influence market performance positively [4] Asset Allocation Views - The overall asset allocation remains relatively optimistic for A-shares and U.S. bonds, while maintaining a neutral stance on other asset classes [6] - The focus is on balanced holdings, with an emphasis on technology and growth sectors, which are expected to show higher elasticity [4][6] - Continuous attention is given to global diversification opportunities, including investments in Japanese and European stocks, as well as gold [4][6]

Market Overview - The three major indices in the A-share market opened lower but turned positive, with the Shanghai Composite Index rising over 1% and trading volume slightly decreasing to 2.4 trillion yuan [1] - The margin financing balance exceeded 2.1 trillion yuan, with an increase of nearly 30 billion yuan yesterday, indicating high leverage sentiment among investors [1] Monetary Policy Insights - The People's Bank of China (PBOC) maintained the Loan Prime Rate (LPR) at 3.0% for the one-year term and 3.5% for the five-year term, signaling a continuation of the "moderately loose" monetary policy [2] - The recent monetary policy report emphasizes the need to focus on domestic demand and support for technological innovation and consumption expansion [1][2] Fiscal Policy Developments - In the first seven months of the year, China's general public budget revenue reached 1.35839 trillion yuan, a year-on-year increase of 0.1%, marking the first positive growth this year [2][3] - Fiscal expenditure for the same period was 1.60737 trillion yuan, up 3.4% year-on-year, with a strong focus on key expenditures [2][3] Industry-Specific Updates - The Ministry of Industry and Information Technology held a meeting on the photovoltaic industry, emphasizing the importance of regulating competition to promote high-quality development [3] - The meeting aims to address the issue of "involution" in the photovoltaic sector, encouraging a shift from blind expansion to sustainable growth [3] Stock Market Performance - On August 20, the A-share market saw all three major indices rise, with the Shanghai Composite Index closing at 3,766.21 points, up 1.04% [4] - Among the sectors, only the pharmaceutical and biological sector saw a decline, while beauty care, oil and petrochemicals, and electronics led the gains [4] Capital Flow Trends - The market turnover was approximately 24.49 billion yuan, showing a decrease from the previous trading day, while the margin financing balance rose to 21.32 billion yuan [6]