Report Industry Investment Rating - No relevant information provided Core View of the Report - In October 2025, China's CPI and core CPI both rose 0.2% month-on-month, and PPI rose 0.1% month-on-month, indicating a mild recovery in the inflation level. Due to base effects, the year-on-year CPI data for November is expected to show a significant rebound, while the year-on-year PPI data will remain roughly flat. China's economic activity continues to be in a mild state [5][16][17] Summary According to Relevant Catalogs CPI Analysis Year-on-Year Data - In October, the national consumer price index (CPI) rose 0.2% year-on-year, against a market expectation of a 0.1% decline and a previous decline of 0.3%. From January to October, the average national consumer price decreased 0.1% compared with the same period of the previous year [2][6] - Food prices in October decreased 2.9% year-on-year, with the previous decrease being 4.4%, showing a significant narrowing of the year-on-year decline. Non-food prices rose 0.9% year-on-year, compared with a 0.7% increase in September [2][6] - Core CPI rose 1.2% year-on-year in October, compared with a 1.0% increase in September, and its year-on-year increase has been expanding for the past six months [2][6] - Consumer goods prices decreased 0.2% year-on-year in October, compared with a 0.8% decrease in September. Service prices rose 0.8% year-on-year, compared with a 0.6% increase in September [2][6] Month-on-Month Data - In October, CPI rose 0.2% month-on-month, compared with a 0.1% increase in the previous period. Food prices rose 0.3% month-on-month, rising for three consecutive months, with the previous increase being 0.7%. Non-food prices rose 0.2% month-on-month, compared with a 0.1% decrease in the previous period [3][7] - Consumer goods prices rose 0.2% month-on-month in October, compared with a 0.3% increase in the previous period. Affected by the National Day and Mid-Autumn Festival, service prices rose 0.2% month-on-month in October, compared with a 0.3% decrease in September [3][7] - Core CPI rose 0.2% month-on-month in October, compared with a flat level in September [3][7] Influencing Factors - The rapid rise of the agricultural product wholesale price 200 index in October this year promoted the month-on-month increase of CPI in October. The increase in agricultural product prices in November compared with the same period last year will help drive the year-on-year increase of CPI in November [9] - Domestic refined oil prices were reduced twice in October. The energy price in November is likely to have a downward impact on the month-on-month CPI [9] PPI Analysis Year-on-Year Data - In October, the national industrial producer price index (PPI) decreased 2.1% year-on-year, against a market expectation of a 2.3% decrease and a previous decrease of 2.3%. From January to October, the average PPI decreased 2.7% compared with the same period of the previous year [3][10] - Production material prices decreased 2.4% year-on-year in October, affecting the overall level of industrial producer prices to decrease by about 1.77 percentage points. Among them, mining industry prices decreased 7.8% year-on-year, raw material industry prices decreased 2.5% year-on-year, and processing industry prices decreased 1.9% year-on-year [10] - The year-on-year decline in ex-factory prices was relatively large in industries such as coal mining and washing, oil and gas extraction, chemical fiber manufacturing, etc. The year-on-year increase in ex-factory prices was relatively large in industries such as non-ferrous metal ore mining and dressing, non-ferrous metal smelting and rolling processing [10] Month-on-Month Data - In October, PPI rose 0.1% month-on-month, the first month-on-month positive growth this year, compared with a flat level in the previous period. Production material prices rose 0.1% month-on-month, compared with a flat level in the previous period [3][11] - The month-on-month increase in prices was relatively large in industries such as non-ferrous metal ore mining and dressing, non-ferrous metal smelting and rolling processing, coal mining and washing, etc. The month-on-month decline in prices was relatively large in industries such as oil and gas extraction, ferrous metal smelting and rolling processing, chemical fiber manufacturing, etc. [4][12] - In October, the month-on-month change in consumer goods prices was flat, compared with a 0.2% decrease in the previous period. Among them, food prices decreased 0.1% month-on-month, clothing prices decreased 0.1% month-on-month, general daily necessities prices rose 0.7% month-on-month, and durable consumer goods prices decreased 0.3% month-on-month [13] PMI and Service Industry Index - In October, China's manufacturing purchasing managers' index (PMI) was 49.0%, remaining below the boom-bust line for the seventh consecutive month, compared with 49.8% in the previous period. The new order index in October was 48.8%, compared with 49.7% in the previous period, indicating a decline in manufacturing market demand [5][16][17] - In October, the service industry business activity index was 50.2%, compared with 50.1% in the previous month. The service industry sales price index was 47.7%, compared with 47.2% in the previous period. The service industry new order index was 46.0%, compared with 46.7% in the previous period [5][17]

Core Insights - Japanese Prime Minister Fumio Kishida indicated that adjusting the sales tax rate requires time, and any decision will take into account future wage and inflation levels [1] Group 1 - The adjustment of the sales tax rate is under consideration but is not imminent [1] - Future economic indicators such as wages and inflation will play a crucial role in determining the timing of any tax changes [1]

Report Industry Investment Rating - Not provided Core Viewpoints of the Report - In October 2025, China's import growth rate declined and exports turned negative year-on-year, indicating that the foundation of China's economic recovery is not solid, domestic demand remains weak, and external demand is under increasing downward pressure. The export will face downward pressure in the future. The stock index should be cautiously viewed for short - term rebounds and the risk of a new decline should be watched out for. Gold may be under short - term pressure and has a risk of deep adjustment in the medium - long term [40]. Summary by Relevant Catalogs 1. Macroeconomic Data - In October 2025, China's imports increased by 1% year - on - year, with the growth rate dropping by 6.4 percentage points from the previous month, and exports decreased by 1.1% year - on - year, the first negative growth since March, reflecting weakening domestic demand and increasing downward pressure on external demand [3][4]. 2. Stock Index Fundamental Data - From January to September 2025, the profits of industrial enterprises above a designated size turned positive year - on - year, and the growth rate of finished product inventories rebounded. However, after removing the impact of the low base effect in the previous year, corporate profitability remained weak, and enterprises were still in the stage of active inventory reduction [16]. - The margin trading balance in the Shanghai and Shenzhen stock markets rose slightly to 24725.92 billion yuan. The central bank conducted 495.8 billion yuan of 7 - day reverse repurchase operations this week, achieving a net withdrawal of 1572.2 billion yuan [18]. 3. Gold Fundamental Data - Many Fed officials made hawkish remarks, believing that the US economy is still robust, the inflation risk has not been eliminated, and caution is needed regarding future interest rate cuts. The yield of the 10 - year US Treasury bond has returned above the 4% mark [28]. - The warehouse receipts and inventory of Shanghai gold futures are slowing down, and the inventory of New York COMEX gold is continuously decreasing, reflecting a cooling of the market's bullish sentiment [39]. 4. Strategy Recommendations - Short - term: Due to the marginal weakening of domestic economic data, the stock index should be cautiously viewed for short - term rebounds. Fed officials' hawkish remarks have further dampened the market's expectation of another interest rate cut in December, and gold may continue to adjust after a short - term rebound [40]. - Medium - long term: The valuation of the stock index will still be dragged down by the decline in corporate profit growth at the molecular end, and the support at the denominator end mainly comes from the recovery of risk appetite. Gold has a risk of deep adjustment due to factors such as the cooling of the expectation of another Fed interest rate cut in December [40].

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints of the Report - In the short - term, after the meeting between Chinese and US leaders and repeated digestion of domestic policy benefits, the stock index should be cautious about callback risks; the Fed's interest rate decision is hawkish, and the market's expectation of a December interest rate cut has decreased. Gold may continue to adjust after a short - term rebound [29]. - In the medium - to long - term, the valuation of the stock index is mainly dragged down by the decline in corporate profit growth at the molecular end, while the support at the denominator end mainly comes from the recovery of risk appetite. The stock index maintains a wide - range oscillation in the medium term; concerns about the uncertainty of US tariff policies have subsided, and gold may face a deep adjustment due to factors such as the easing of the geopolitical situation in the Middle East and the downward adjustment of the Fed's December interest rate cut expectation [29][30] 3. Summaries According to Relevant Catalogs 3.1 Macroeconomic Data - In October this year, the official manufacturing PMI dropped to 49, a decrease of 0.8 percentage points from the previous month, and it has been in the contraction range for 7 consecutive months. Industrial production has slowed down significantly, demand has declined again, external demand pressure has increased, and the business climate of small and medium - sized enterprises has weakened [2] 3.2 Stock Index Fundamental Data 3.2.1 Enterprise Profit - From January to September this year, the profits of industrial enterprises above a designated size increased by 3.2% year - on - year, rebounding for two consecutive months. However, there is a differentiation in business performance among different industries. The profits of high - end and equipment manufacturing industries maintain rapid growth, while the operating pressure on downstream enterprises remains high [11] 3.2.2 Capital Situation - The margin trading balance in the Shanghai and Shenzhen stock markets has risen to 2473.27 billion yuan. The central bank conducted 2068 billion yuan of 7 - day reverse repurchase operations and 900 billion yuan of one - year MLF operations this week, achieving a net injection of 1400.8 billion yuan [15] 3.3 Gold Fundamental Data 3.3.1 Risk - free Rate: Holding Cost and Inflation Level - The Fed cut interest rates by 25 basis points as expected at its October meeting, but the divergence among participants on future interest rate policies has increased. They believe that the lack of economic data may lead to a delay in interest rate cuts, and the 10 - year US Treasury yield has returned above the 4% mark [21] 3.3.2 US Consumer Confidence Index and Employment Situation - No specific data provided 3.3.3 Gold Inventory Situation - The warehouse receipts and inventory of Shanghai gold futures have slowed down, but the inventory of COMEX gold in New York has continued to decline, indicating a decrease in the risk of a short squeeze [28] 3.4 Strategy Recommendations - Short - term: After the end of the meeting between Chinese and US leaders and repeated digestion of domestic policy benefits, pay attention to the callback risk of the stock index in the short - term; the Fed's interest rate decision is hawkish, and the market's expectation of a December interest rate cut has decreased. Gold may continue to adjust after a short - term rebound [29] - Medium - to long - term: The valuation of the stock index is mainly dragged down by the decline in corporate profit growth at the molecular end, while the support at the denominator end mainly comes from the recovery of risk appetite. The stock index maintains a wide - range oscillation in the medium term; concerns about the uncertainty of US tariff policies have subsided, and gold may face a deep adjustment due to factors such as the easing of the geopolitical situation in the Middle East and the downward adjustment of the Fed's December interest rate cut expectation [29][30]

Economic Overview - Eurozone's fiscal deficit as a percentage of GDP for Germany, France, and Italy was 2.2% in H1 2025, down from 2.5% in Q4 2024, indicating a "tight fiscal & loose monetary" environment[4] - U.S. core CPI in September 2025 was 3%, below the expected 3.1%, showing a decrease in inflationary pressure[7] - U.S. durable goods consumption expenditure increased by $20 billion, from $5.56 trillion to $5.68 trillion, despite new tariffs[10] Market Valuation - The effective exchange rate index for the euro was at a historical high of 130 as of October 24, 2025, indicating overvaluation of euro assets[13] - The 10-year government bond yield spread between Italy and Germany fell to 79 basis points, and between Greece and Germany to 66 basis points, both at 15-year lows, reflecting low risk premiums in Southern European bonds[13] Commodity Insights - Gold prices reached a historical high of $4,336.4, exceeding the 200-day moving average by 32.5%, suggesting potential for a price correction[16] - The copper-to-gold price ratio fell to 2.7, indicating a divergence with the offshore RMB exchange rate, which rose to 7.1[27] Investment Metrics - The equity risk premium (ERP) for the CSI 300 index was 4.2%, significantly below the 16-year average, suggesting room for valuation increases[18] - The total return ratio of domestic stocks to bonds was 28.8, above the past 16-year average, indicating enhanced attractiveness of equities over fixed income[29]

Group 1 - The domestic macroeconomic data is gradually being disclosed, indicating a mixed market sentiment with inflation levels stabilizing due to the rebound in commodity prices, although the transmission to downstream sectors remains incomplete [1] - The market is currently in a phase of oscillation and consolidation, with the Shanghai Composite Index experiencing a horizontal adjustment since late August, showing strong support above previous high points [2] - The trading volume in the two markets has significantly shrunk, with a focus on value sectors such as coal and finance, while large-cap blue-chip stocks are yielding excess returns [1] Group 2 - The market is characterized by a divergence in performance among different indices, suggesting a rapid rotation and the presence of differing opinions among investors, indicating a need for patience in waiting for opportunities [2]

Core Viewpoint - The State Bank of Pakistan (SBP) has decided to maintain the policy rate at 11% to balance the current economic situation and address macroeconomic uncertainties caused by recent flooding [1][2] Group 1: Economic Indicators - Inflation in Pakistan is showing a relatively moderate trend from July to August 2025, despite a slowdown in the rate of decline [1] - Key economic indicators, such as large-scale manufacturing, are signaling a strengthening economic growth momentum [1] - The flooding has significantly impacted the economy, particularly affecting the agricultural sector on the supply side [1] Group 2: Future Projections - The SBP anticipates that the flooding will lead to a higher overall inflation level and current account deficit than previously expected for the fiscal year 2026 [1] - Economic growth is projected to slow down compared to earlier expectations due to the adverse effects of the flooding [1] - The SBP believes that the current policy rate of 11% is sufficient to stabilize inflation within the medium-term target range of 5%-7% [1] Group 3: Policy Rate History - In March 2023, the SBP raised the policy rate to a high of 20% due to increasing inflationary pressures, maintaining it above 20% for 15 months [2] - The policy rate was subsequently lowered to 11% in June 2025, marking the lowest level since 2022, and has remained unchanged since then [2] - The SBP plans to conduct two more policy rate adjustments in the fiscal year 2025, tentatively scheduled for October 27 and December 15 [2]

Group 1 - The People's Bank of China, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange, in collaboration with the Hong Kong Monetary Authority, have officially launched a cross-border bond repurchase business to support foreign institutions participating in the onshore bond market [1] - The Hong Kong Monetary Authority will introduce a new Renminbi business funding arrangement starting October 9, replacing the existing Renminbi trade financing liquidity arrangement and implementing several optimization measures [1] - The U.S. government funding is set to run out at midnight on September 30, raising concerns about a potential government shutdown if bipartisan negotiations fail [1] Group 2 - President Trump announced a new round of high tariffs on various imported products starting October 1, including a 50% tariff on kitchen cabinets and a 30% tariff on imported furniture [2] - The U.S. International Trade Commission ruled that corrosion-resistant steel products imported from several countries have harmed U.S. industries, leading to the issuance of anti-dumping and countervailing duty orders [2] - The Federal Reserve's Board member Bowman emphasized the need for rate cuts due to a "fragile" job market and inflation nearing the Fed's target [2] Group 3 - The Kansas City Fed President stated that the Fed may not need to lower interest rates again in the short term as inflation levels remain high [3] - The South Korean government plans to extend foreign exchange market trading hours to 24 hours to eliminate trading time restrictions for foreign investors [3] - The Bank of Indonesia is intervening in the financial market to stabilize the Indonesian Rupiah, which has fallen to record lows [3] Group 4 - The final consumer confidence index from the University of Michigan for September dropped to 55.1, the lowest in four months, with one-year inflation expectations at 4.7% [4] - The core CPI in Tokyo, Japan, rose by 2.5% year-on-year in September, unchanged from August [4] Group 5 - The Dow Jones Industrial Average rose by 0.65% to 46,247.29 points, while the S&P 500 and Nasdaq Composite also saw increases [4] - COMEX gold futures increased by 0.50% to $3,789.8 per ounce, and silver futures rose by 2.77% to $46.365 per ounce [4] - The 2-year U.S. Treasury yield fell by 1.43 basis points to 3.63%, while the 10-year yield rose by 1.16 basis points to 4.20% [4]

Core Viewpoint - The Federal Reserve acknowledged a slowdown in employment growth and a slight increase in the unemployment rate, while also indicating that inflation levels remain slightly elevated, leading to a decision to lower the federal funds rate by 25 basis points [1][3][6]. Summary by Sections Federal Reserve's Decision - On September 17, the Federal Reserve lowered the federal funds rate target range to 4.00% to 4.25% by 25 basis points [3]. - The decision reflects a more pessimistic view on the employment market compared to the previous meeting, with the acknowledgment of rising unemployment risks [3][6]. Changes in Statements - The Fed removed the phrase regarding the stability of the labor market and noted that employment growth has slowed [3][5]. - Inflation was mentioned as having increased, a change from the previous meeting where this trend was not highlighted [3][5]. Voting Dynamics - Stephen I. Miran was the only member to vote against the decision, advocating for a 50 basis point cut instead of 25 [3][7]. - Other members, including those appointed by President Trump, supported the 25 basis point reduction, contrary to some pre-meeting expectations [3][4][7]. Economic Outlook - The committee aims for maximum employment and a 2% inflation rate, while recognizing high levels of uncertainty in the economic outlook [6]. - The Fed will continue to monitor various factors, including labor market conditions and inflation pressures, to assess future monetary policy adjustments [6].

1. Report Industry Investment Rating - The rating for Treasury bonds is "Oscillation" [6] 2. Core Viewpoints of the Report - M1 is expected to peak and decline, and the inflation level will remain low. Although the PPI year - on - year reading will rise due to the low base, the overall inflation in Q4 will stay at a low level [1][19] - The main theme of the Q4 market is likely to return to reality. After the stock market gradually evaluates policies and fundamentals, the negative impact on the bond market will be cleared [2] - The impact of monetary policy is mild, and the bond market valuation is reasonable. Even with limited incremental monetary benefits, the bond market can strengthen as it returns to fundamental trading [3] - The Q4 bond market is expected to oscillate and recover. It is recommended to wait for market sentiment to stabilize, then take long positions on dips, continue to hold short - hedging strategies and close them after sentiment stabilizes, and consider curve - flattening strategies [4][82][83] 3. Summary According to the Table of Contents 3.1 2025 Q1 - Q3 Treasury Bond Trend Review - The first stage (early - March mid - late): The central bank guided the tightening of the capital market, and the bond market oscillated weakly [13] - The second stage (end of March - end of June): Monetary policy and the capital market gradually loosened, and the bond market gradually recovered. After the tariff implementation in early April, Treasury bond futures rose rapidly, and the bond market oscillated at a high level from April to May, then strengthened in June [13] - The third stage (July - September): Anti - involution policies led to a rise in market risk appetite, the stock and commodity markets rose rapidly, and Treasury bond futures fell [13] 3.2 M1 Peaks and Declines, Inflation Remains Low 3.2.1 The Current M1 Growth Recovery is Unique and May Lack Sustainability - The current M1 growth recovery is different from previous ones. It is mainly due to the low base, fiscal stimulus creating corporate deposits, improved SME payment cycles, increased corporate settlement willingness, and the revival of household deposit currentization [20][21] - The economic nature of the current M1 growth recovery is limited, and the M1 growth rate is likely to decline in Q4 due to the rising base and potential reduction in fiscal policy intensity [24][25] 3.2.2 The Year - on - Year Inflation Reading Rises, but the Month - on - Month Price Increase Momentum is Weak - The current M1 growth recovery has limited ability to drive inflation. The anti - involution policy has not been fully implemented, and the domestic supply - demand imbalance persists. The Q4 inflation will remain low, and the PPI year - on - year reading will rise due to the low base [19] - It is difficult to reduce supply in Q4 as the anti - involution policy is different from the supply - side structural reform, and the high - tech manufacturing production growth is relatively fast [28][29] - Domestic demand remains weak. The real estate market is difficult to stabilize, Q4 consumption growth is challenging, and although external demand has some resilience, it also faces downward pressure [31][32][36] 3.3 Q4 Market Main Theme Expected to Return to Reality 3.3.1 Capital Drives Stock Market Up, Bond Market Follows Down - The rise of the stock market in Q3 was mainly driven by capital. Factors include high stock - bond return ratios, increased global risk appetite, policy incentives, and increased corporate settlement willingness [39][43][51] - The stock market's bull run in Q3 significantly suppressed the bond market. As the bond market has priced in the existing monetary benefits, the stock market's rise became the key factor suppressing the bond market [53] 3.3.2 When Will the Negative Impact of the Stock Market be Cleared? - Overseas risk appetite may fluctuate in Q4 due to potential inflation risks in the US and geopolitical uncertainties [56] - The stock - bond return ratio approached its 10 - year average in mid - September, and the stock market's upward pace slowed down, indicating a possible return to fundamental trading [59] - Policy incentives are expected to fade away in mid - late October, and the stock market is likely to turn to real - world trading. The bond market and the stock market are expected to gradually return to fundamental trading in Q4 [60][63] 3.4 Monetary Impact is Mild, Bond Market Valuation is Reasonable 3.4.1 No Negative Monetary Factors, Limited Incremental Benefits - Monetary policy and the capital market are likely to remain unchanged. Although there is a need for interest rate cuts, the probability is low, and the market's expectation of continuous interest rate cuts is also low [64][71] - The central bank is not in a hurry to restart open - market bond trading. Even if the policy is implemented, its positive impact on the bond market will be weaker than last year [75] 3.4.2 Bond Market Valuation is Basically Reasonable with Room for Strengthening - The short - end and long - end interest rates in the bond market are gradually approaching reasonable levels. The bond market's sensitivity to negative news will gradually decrease as the valuation becomes more reasonable [76][77] 3.5 Treasury Bond Market Outlook and Strategies - The Q4 bond market is expected to oscillate and recover. It will start with low - level oscillations, then turn upward, and may face fluctuations at the end of the year [82][83] - Strategies include taking long positions on dips after market sentiment stabilizes, continuing to hold short - hedging strategies and closing them after sentiment stabilizes, and considering curve - flattening strategies when the bond market sentiment improves [83]