Economic Outlook & Uncertainty - Trade negotiations are a relevant factor influencing the European economy, with predictions varying based on different outcomes [1] - High levels of uncertainty persist due to geopolitical risks and the unknown final outcome of trade negotiations [4][5] - The Euro area's growth rate is expected to be below 1% in 2025 and slightly above that in 2026, with risks tilted to the downside [9] - Investment is flat, and consumption is not recovering, indicating a weak economic situation [9][10] Monetary Policy - The ECB has reduced interest rates eight times, from 4% to 2%, and is in a good place to deal with the future [3] - Further interest rate cuts are unlikely to significantly improve the economy, and the focus should be on certainty in trade and fiscal policies [10][11] - The evolution of inflation is expected to be positive, with the possibility of undershooting the target being limited [6][7] - The ECB does not target any concrete level for the exchange rate but monitors its level and evolution, considering its impact on inflation [16] Inflation & Exchange Rate - The ECB is confident that inflation will reach 2%, with favorable factors including the exchange rate and the evolution of energy prices [17][18][19] - An exchange rate of 1.17 or even 1.20 is considered acceptable, but overshooting beyond that would be more complicated [14] Fiscal Policy & Market Risks - Increased defensive spending is supported, but fiscal sustainability is needed, as markets may not continue to overlook fiscal policy [21][22] - Concerns exist about a market event linked to perceived unsustainable fiscal policy, which could lead to higher yields and impact valuations [23][24]

Report Date - The report was released on June 4, 2025 [2] Global Asset Market Performance 10 - Year Treasury Yields of Major Economies - On June 3, 2025, yields in the US, UK, France, etc. were 4.456%, 4.637%, 3.189% respectively. Latest changes ranged from -0.031% (Switzerland) to 0.053% (US). One - month changes were between -0.069% (Italy and Switzerland) and 0.348% (Japan). One - year changes were from -0.984% (Japan) to 0.378% (UK) [3] 2 - Year Treasury Yields of Major Economies - On June 3, 2025, yields in the US, UK, Germany were 3.920%, 4.021%, 1.781% respectively. Latest changes were from -0.040% (US) to 0.017% (Japan). One - month changes were between -0.040% (US) and 0.224% (UK). One - year changes were from -1.559% (Italy) to 0.410% (Japan) [3] Dollar Exchange Rates Against Major Emerging - Market Currencies - On June 3, 2025, exchange rates against the Brazilian real, Russian ruble, etc. were 5.638, 108.000 respectively. Latest changes were from -1.48% (Brazil) to 0.00% (Russia and Thai baht). One - month changes were between -4.00% (South Africa) and 0.00% (Russia). One - year changes were from -10.12% (Thailand) to 9.59% (Brazil) [3] Exchange Rates of the Renminbi - On June 3, 2025, on - shore, off - shore, and mid - price were 7.188, 7.192, 7.187 respectively. Latest changes were from -0.19% (off - shore) to 0.03% (mid - price). One - month changes were between -1.24% (12 - month NDF) and -0.20% (mid - price). One - year changes were from -0.91% (off - shore) to 1.08% (mid - price) [3] Stock Indices of Major Economies - On June 3, 2025, the S&P 500, Dow Jones Industrial Average, and Nasdaq were 5970.370, 42519.640, 19398.960 respectively. Latest changes were from -0.35% (Mexico) to 1.49% (Nasdaq). One - month changes were between -4.40% (Japan) and 11.19% (Nasdaq). One - year changes were from -7.73% (Malaysia) to 28.89% (Germany's DAX) [3] Credit Bond Indices - Latest changes were from -0.16% (US investment - grade) to 0.30% (emerging - market high - yield). One - month changes were between -0.17% (US investment - grade) and 2.08% (emerging - market high - yield). One - year changes were from 5.61% (US investment - grade) to 12.64% (emerging - market high - yield) [3] Stock Index Futures Trading Data Index Performance - On June 3, 2025, the A - share, CSI 300, SSE 50, ChiNext, and CSI 500 closed at 3361.98, 3852.01, 2687.30, 2002.70, 5694.84 respectively, with daily changes of 0.43%, 0.31%, 0.32%, 0.48%, 0.42% [4] Valuation - PE (TTM) of the CSI 300, SSE 50, and CSI 500 were 12.50, 10.89, 28.78 respectively, with环比 changes of 0.04, 0.03, 0.13 [4] Risk Premium - Risk premiums of the CSI 300, SSE 50, and CSI 500 were 3.70, 5.77, -0.38 respectively, with环比 changes of 0.00, 0.00, 0.00 [4] Fund Flows - Latest values of A - shares, main board, SME board, ChiNext, and CSI 300 were -52.19, -92.88, -56.21, 27.04, 3.71 respectively. Five - day average values were -314.36, -258.20, -56.21, -50.29, -27.17 [4] Trading Volume - Latest trading volumes of the Shanghai and Shenzhen stock markets, CSI 300, SSE 50, SME board, and ChiNext were 11414.09, 2267.83, 590.77, 2513.97, 3071.27 respectively, with环比 changes of 22.30, 273.93, 14.34, -76.51, -139.14 [4] Main Contract Premiums and Discounts - Basis of IF, IH, and IC were -27.21, -18.70, -56.44 respectively, with amplitudes of -0.71%, -0.70%, -0.99% [4] Treasury Bond Futures Trading Data - On June 3, 2025, T00, TF00, T01, TF01 closed at 108.460, 105.690, 108.685, 105.960 respectively, with no daily changes [5] - R001, R007, and SHIBOR - 3M were 1.4641%, 1.5877%, 1.6520% respectively, with daily changes of -24.00 BP, -11.00 BP, 0.00 BP [5]