Economic Indicators - The January 2026 PMI index is at 49.3%, down 0.8 percentage points from the end of 2025, indicating a shift from expansion to contraction in manufacturing[3] - The new orders index is at 49.2%, a decrease of 1.6 percentage points, reflecting insufficient total market demand[3] - The new export orders index stands at 47.8%, down 1.2 percentage points, signaling a further slowdown in external demand[3] Supply and Production Dynamics - The production index is at 48.7%, a decline of 2.4 percentage points, while the business activity expectation index is at 52.6%, down 2.9 percentage points[3] - The "production index - new orders index" spread increased by 0.5 percentage points, indicating an expanding supply-demand gap[3] - Finished goods inventory rose from 48.2% to 48.6%, suggesting passive inventory accumulation by firms[3] Price Pressures - The raw material purchase price index is at 56.1%, up 3.0 percentage points, indicating significant cost pressure on businesses[4] - The factory price index is at 50.6%, an increase of 1.7 percentage points, but it lags behind the rise in raw material costs, compressing profit margins[4] Non-Manufacturing Sector - The non-manufacturing PMI for the construction sector is at 48.8%, down 4 percentage points, indicating contraction and nearing historical lower limits[4] - The service sector PMI is at 49.5%, a slight decrease of 0.2 percentage points, reflecting ongoing economic pressures[7] Macro Economic Outlook - There is a risk of evolving into a "stagflation-like" structure due to inflation being driven more by upstream costs rather than demand[5] - The urgency for demand stabilization policies is highlighted to alleviate structural pressures and improve economic expectations[5]

Group 1 - The UK business confidence index has risen to its highest level in eight months, indicating a potential recovery in economic growth following the budget announcement [1] - The Institute of Directors (IoD) reported that the business confidence index increased from -66% in December 2025 to -48% in January 2026, showing a rebound trend from near historical lows [1] - CEOs' confidence in their own companies rose to +14% in January from -4% in December, reflecting improved expectations for investment, hiring, and sales [1] Group 2 - Despite plans to increase taxes by £26 billion ($36 billion), businesses are largely exempt from these measures, while households are feeling the impact of increased taxation [2] - The hospitality sector, including pubs and live music venues, is receiving support from the Chancellor, which is crucial given the previous backlash against rising business tax rates [2] - The IoD noted that revenue expectations reached their highest point since September 2024, with key indicators tracking employee numbers and investment intentions also showing significant increases [2] Group 3 - The rise in business confidence and PMI is seen as a strong signal of economic recovery, while rising inflation indicators set a higher threshold for interest rate cuts by the Bank of England [3] - Economists expect the Bank of England to maintain interest rates at 3.75% in the upcoming meeting, with only one more rate cut anticipated this year [3] - The Monetary Policy Committee has been cautious since August 2024, having previously lowered rates from 5.25%, and there is a consensus to slow down the pace of rate cuts unless unexpected circumstances arise [3]

1. Report Industry Investment Rating - No information provided in the report 2. Core Viewpoints of the Report - This week, domestic commodities in China first rose and then fell. Industrial products slightly declined after the rise, while agricultural products slightly increased. At the beginning of the week, supported by multiple positive factors, precious metals and non - ferrous metals rose significantly, driving the collective rise of commodities. However, with the confirmation of the nominee for the Fed Chair (the final candidate is more hawkish than expected), the market adjusted significantly, with precious metals crashing and non - ferrous metals falling sharply [3]. - The Fed suspended rate cuts as scheduled on January 28, maintaining the federal funds rate in the 3.50% - 3.75% range. The market expects a more than 60% probability of two 25 - basis - point rate cuts by the end of 2026. The new Fed Chair nominee may affect future rate - cut expectations. Trump nominated Kevin Warsh as the next Fed Chair, whose "hawkish" background may support the US dollar and put pressure on stocks, bonds, and precious metals [4]. - Japan's Prime Minister warned against currency speculation, and the yen continued to rise. The market speculated about US - Japan joint intervention in the foreign exchange market, and the Japanese bond market also fluctuated [4]. - In January, China's manufacturing and non - manufacturing PMIs both declined, and economic activities slowed down compared with the previous month. However, production remained in expansion, and positive demand - side policies provided a foundation for the economy in the first quarter. In 2025, the total profit of industrial enterprises above a designated size increased by 0.6% year - on - year, reversing the three - year decline. The 2026 tax reform aims to balance the central - local fiscal relationship and optimize the tax structure, which may relieve local debt risks [5]. - Commodity volatility is rising, and the strength of different sectors may change. The confirmation of the Fed Chair nominee may lead to a rebound in the US dollar index, suppressing precious metals and non - ferrous metals. China's policies to expand domestic demand may benefit some commodities, and geopolitical and weather factors may support energy prices [6]. 3. Summary by Relevant Catalogs PART ONE: Main Views - **Market Performance**: This week, domestic commodities first rose and then fell. Industrial products slightly declined, and agricultural products slightly increased. The market adjusted after the confirmation of the Fed Chair nominee [3]. - **Overseas Factors**: The Fed suspended rate cuts, and the market expects rate cuts by the end of 2026. Trump nominated Kevin Warsh as the next Fed Chair, and Japan's currency and bond markets fluctuated [4]. - **Domestic Factors**: In January, China's manufacturing and non - manufacturing PMIs declined. In 2025, industrial profits increased, and the 2026 tax reform may relieve local debt risks [5]. - **Commodity Views**: Commodity volatility is rising, and sector strength may change due to factors such as the Fed Chair nominee, China's policies, and geopolitical and weather factors [6] PART TWO: Overseas Situation Analysis - **US Fed Policy**: The Fed suspended rate cuts on January 28, maintaining the federal funds rate in the 3.50% - 3.75% range. The market expects a more than 60% probability of two 25 - basis - point rate cuts by the end of 2026 [4]. - **Nominee for Fed Chair**: Trump nominated Kevin Warsh as the next Fed Chair. Warsh has a "hawkish" background, and his policies may support the US dollar and put pressure on stocks, bonds, and precious metals [4]. - **Japan's Situation**: Japan's Prime Minister warned against currency speculation, and the yen continued to rise. The market speculated about US - Japan joint intervention in the foreign exchange market, and the Japanese bond market also fluctuated [4] PART THREE: Domestic Situation Analysis - **PMI Data**: In January, China's manufacturing PMI was 49.3%, a 0.8 - percentage - point decrease from the previous month, and the non - manufacturing PMI was 49.4%, also a 0.8 - percentage - point decrease. Economic activities slowed down, but production remained in expansion [5][26]. - **Industrial Profits**: In 2025, the total profit of industrial enterprises above a designated size was 73982 billion yuan, a 0.6% year - on - year increase, reversing the three - year decline [5][29]. - **Tax Reform**: The 2026 tax reform aims to balance the central - local fiscal relationship and optimize the tax structure, which may relieve local debt risks [5] PART FOUR: High - Frequency Data Tracking - **Industrial开工率**: The report shows the开工率 data of the polyester industry chain and the blast furnace开工率 in China, but specific trends and analyses are not detailed in the summary [36]. - **Commodity Prices**: The report shows the price data of fruits, agricultural products, and pork, but specific trends and analyses are not detailed in the summary [49]

Market Performance - The Hang Seng Index (HSI) fell by 580 points or 2.08%, closing at 27,387 points[1] - The National Index dropped by 235 points or 2.5%, closing at 9,317 points[1] - The Hang Seng Tech Index decreased by 122 points or 2.1%, closing at 5,718 points[1] - Total market turnover was 301.612 billion HKD[1] Currency and Economic Indicators - The RMB/USD central parity rate was adjusted up by 93 pips to 6.9678, the highest since May 16, 2023[1] - The People's Bank of China conducted a 477.5 billion RMB reverse repo operation at a rate of 1.4%[1] - The manufacturing PMI for January 2026 fell to 49.3, below the market expectation of 50, indicating a decline of 0.8 percentage points from the previous month[2] Sector Performance - The Shanghai Composite Index closed down 40 points or 1%, at 4,117 points, with a turnover of 1.27 trillion RMB[2] - The Shenzhen Component Index fell by 94 points or 0.7%, closing at 14,205 points, with a turnover of 1.57 trillion RMB[2] - The ChiNext Index rose by 41 points or 1.3%, closing at 3,346 points, with a turnover of 726.1 billion RMB[2] Corporate Earnings Forecasts - China National Building Material (03323.HK) expects a loss of 2.3 to 4 billion RMB for the year ending December 31, 2025, compared to a profit of 2.387 billion RMB in 2024[4] - China Shenhua Energy (01088.HK) anticipates a net profit of 50.8 to 55.8 billion RMB for 2025, a decrease of 10.6% to 18.6% year-on-year[4] - CICC (03908.HK) projects a net profit of 8.542 to 10.535 billion RMB for 2025, representing a year-on-year increase of 50% to 85%[6]

Core Viewpoint - The significant decline in January PMI is attributed to the early return of workers for the Spring Festival and weak domestic demand, with manufacturing PMI dropping to 49.3% from 50.1% and non-manufacturing PMI falling to 49.4% from 50.2% [1][6][7] Group 1: Manufacturing PMI Analysis - The manufacturing PMI fell below the growth threshold, decreasing by 0.8 percentage points to 49.3%, influenced by statistical factors and the early return of workers for the Spring Festival [1][7] - The production index decreased by 1.1 percentage points to 50.6%, while the new orders index fell by 1.6 percentage points to 49.2%, indicating a decline in manufacturing activity [4][38] - The purchasing index dropped significantly by 2.4 percentage points to 48.7%, reflecting a weaker supply side due to the early return of workers [2][16] Group 2: Sector-Specific Insights - Labor-intensive sectors such as consumer goods and high-energy industries experienced a more pronounced decline in PMI, with consumer goods PMI down 2.1 percentage points to 48.3% and high-energy PMI down 1 percentage point to 47.9% [2][22] - In contrast, capital-intensive sectors like high-tech and equipment manufacturing saw smaller declines, with PMIs of 52% and 50.1%, respectively, remaining above the growth threshold [2][22] Group 3: Non-Manufacturing PMI Insights - The non-manufacturing PMI also showed a decline, dropping by 0.8 percentage points to 49.4%, primarily due to a significant decrease in the construction sector, which fell by 4 percentage points to 48.8% [4][43] - The service sector PMI remained relatively resilient, only decreasing by 0.2 percentage points to 49.5%, with certain areas like railway transport showing strong performance [3][25] Group 4: Economic Outlook - The early Spring Festival may distort PMI readings for January and February, but the overall economic recovery trend is expected to continue, supported by consumer demand and service sector policies [3][32] - Despite short-term weaknesses in manufacturing and construction, the average PMI over the next two months is anticipated to reflect ongoing economic recovery [3][32]

Core Viewpoint - The significant decline in January PMI is primarily attributed to the early return of workers for the 2026 Spring Festival and weak domestic demand, with manufacturing PMI dropping to 49.3% from 50.1% and non-manufacturing PMI falling to 49.4% from 50.2% [2][8][61] Group 1: Manufacturing PMI Analysis - The manufacturing PMI fell below the neutral line, decreasing by 0.8 percentage points to 49.3%, influenced by statistical factors and the early return of workers [2][8][61] - The manufacturing production index declined by 1.1 percentage points to 50.6%, while the new orders index decreased by 1.6 percentage points to 49.2% [5][41] - The purchasing index for manufacturing dropped significantly by 2.4 percentage points to 48.7%, indicating a notable contraction in supply [3][15][62] Group 2: Sector-Specific Insights - Labor-intensive sectors such as consumer goods and high-energy industries experienced a more pronounced decline in PMI, with consumer goods PMI falling by 2.1 percentage points to 48.3% and high-energy PMI down by 1 percentage point to 47.9% [3][22][62] - In contrast, capital-intensive sectors like high-tech and equipment manufacturing saw smaller declines, with PMIs of 52% and 50.1%, respectively [3][22][62] Group 3: Non-Manufacturing PMI Insights - The non-manufacturing PMI showed asymmetric characteristics, with the construction PMI dropping to 48.8%, a decline of 4 percentage points, while the service sector PMI only slightly decreased by 0.2 percentage points to 49.5% [4][25][62] - The construction sector's decline is more significant than historical averages, indicating a substantial impact from the early return of workers [4][25][62] Group 4: Economic Outlook - The early Spring Festival may disrupt PMI readings for January and February, but the overall economic outlook remains positive, with expectations of recovery in the coming months [4][34][63] - Recent trends in service consumption and travel during the Spring Festival are expected to support service sector growth, highlighting the importance of monitoring consumer demand [4][34][63]

Core Viewpoint - The manufacturing Purchasing Managers' Index (PMI) fell back below the expansion threshold in January 2026, indicating ongoing economic challenges despite previous signs of recovery [2][3]. Group 1: PMI and Economic Indicators - The manufacturing PMI for January 2026 is reported at 49.3%, a decrease of 0.8 percentage points from the previous month [2]. - The construction business activity index dropped significantly to 48.8% from 52.8%, while the services business activity index slightly decreased to 49.5% from 49.7% [2]. - The production index stands at 50.6%, although it has declined by 1.1 percentage points compared to the previous month, indicating a marginal contraction in production activity [4]. Group 2: Demand and Orders - The new orders index is at 49.2%, down by 1.6 percentage points, while the new export orders index is at 47.8%, a decrease of 1.2 percentage points [4]. - The significant drop in the orders index suggests that the current economic recovery is not firmly established, with weak demand particularly in real estate sales and durable goods consumption [3][5]. Group 3: Structural Issues and Policy Implications - There is a notable divergence between large and small enterprises, with large enterprises maintaining a PMI in the expansion zone while small enterprises are in contraction [4]. - The construction PMI's decline to 48.8% reflects not only seasonal factors but also a slowdown in local project construction and investment willingness [6]. - Analysts emphasize the need for stronger fiscal and monetary policies to stimulate domestic demand, as the current economic recovery foundation remains unstable [7].

Core Viewpoint - The significant decline in January PMI is primarily attributed to the early return of workers for the 2026 Spring Festival and weak domestic demand, with manufacturing PMI dropping to 49.3% from 50.1% and non-manufacturing PMI falling to 49.4% from 50.2% [2][7][61] Group 1: Manufacturing PMI Analysis - The manufacturing PMI fell below the neutral line, decreasing by 0.8 percentage points to 49.3%, influenced by statistical factors and the early return of workers [2][8][61] - The manufacturing production index declined by 1.1 percentage points to 50.6%, while the new orders index decreased by 1.6 percentage points to 49.2% [5][41][64] - The purchasing index for manufacturing dropped significantly by 2.4 percentage points to 48.7%, indicating a notable contraction in supply [3][15][62] Group 2: Sector-Specific Insights - Labor-intensive sectors such as consumer goods and high-energy industries experienced a more pronounced decline in PMI, with consumer goods PMI falling by 2.1 percentage points to 48.3% and high-energy PMI down by 1 percentage point to 47.9% [3][22][62] - In contrast, capital-intensive sectors like high-tech and equipment manufacturing saw smaller declines, with PMIs of 52% and 50.1%, respectively [3][22][62] Group 3: Non-Manufacturing PMI Insights - The non-manufacturing sector showed asymmetric effects from the early return of workers, with the construction PMI dropping to 48.8%, a decline of 4 percentage points, while the service sector PMI only slightly decreased by 0.2 percentage points to 49.5% [4][25][62] - The construction sector's decline is more significant than the average historical drop of 1.4 percentage points for January since 2017 [4][25][62] Group 4: Economic Outlook - The early Spring Festival may disrupt PMI readings for January and February, but the overall economic recovery trend is expected to continue, supported by travel and consumption during the holiday [4][34][63] - Recent policies aimed at boosting service consumption are anticipated to support the service sector's recovery, with a focus on changes in consumer demand [4][34][63]

Group 1 - The SPDR Gold Trust, the world's largest gold ETF, reported a holding of 1,086.53 tons of gold as of January 26, remaining unchanged from the previous trading day [1] - As of January 26, the spot gold price closed at $5,110.25 per ounce, with a daily increase of 0.47%, reaching a high of $5,110.25 and a low of $4,989.15 during the day [1] Group 2 - In January, U.S. business activity remained stable, with new orders improving, but concerns over a weak labor market and rising costs due to tariffs offset this [3] - The preliminary composite PMI for the U.S. in January was reported at 52.8, with service and manufacturing PMIs showing little change [3] - The new orders sub-index rose to 52.2, while exports fell to a nine-month low [3] - The output price index decreased to 57.2 in January but remains within a high range seen over the past three years [3] - The input price index fell to 59.7, still at a high level [3] - The final consumer confidence index from the University of Michigan for January increased to 56.4, with one-year inflation expectations dropping to 4.0%, the lowest since January 2025 [3] - Five-year inflation expectations were reported at 3.3%, a decrease from the preliminary value but higher than December's 3.2% [3]

Group 1 - The core viewpoint of the article highlights that the UK economy is experiencing a significant rebound in January, with the PMI rising to 53.9, the highest in 21 months, driven by strong performance in the technology and financial services sectors [1][2] - The PMI increase indicates a quarterly growth rate of approximately 0.4%, with any reading above 50 signaling economic expansion [1] - Following the release of the PMI data, the British pound appreciated by 0.2% against the US dollar, reflecting a shift in market expectations regarding interest rate cuts by the Bank of England [1] Group 2 - The survey indicates that the UK economy has regained growth momentum after a slowdown in the second half of 2025, with the January PMI suggesting potential acceleration in GDP growth for the first quarter [2] - The services sector continues to outperform manufacturing, with the services activity index reaching a 21-month high, while manufacturing output has expanded for the fourth consecutive month [2] - Despite the positive outlook, companies are still reducing staff and facing rising input costs at the fastest rate in eight months [3]