Inflation Data Summary - The U.S. July CPI increased by 0.2% month-on-month, and the core CPI rose by 0.32%, both meeting expectations[1] - Year-on-year, the CPI was expected to be 2.8% but came in at 2.7%, while the core CPI was expected at 3.0% and actual was 3.06%, with discrepancies attributed to seasonal adjustments and rounding issues[1] Inflation Structure - The rebound in used car prices, tariff impacts on furniture and auto parts, and fluctuations in airfare and hotel prices contributed to the inflation increase[1] - Core goods CPI month-on-month slightly increased from 0.20% to 0.21%, while transportation goods improved from -0.38% to 0.22%[1] - Housing services rose from 0.18% to 0.23%, with owner’s equivalent rent (OER) and rent price rent (RPR) at 0.28% and 0.26% respectively, returning to pre-pandemic levels[1] Market Reactions - Following the CPI release, the market narrative shifted to "moderate inflation → increased rate cut expectations → improved growth outlook," leading to a drop in 2-year Treasury yields to 3.72% and a rise in 10-year yields to 4.31%[1] - The dollar index fell below 98, while gold prices decreased, and U.S. stocks and silver prices increased[1] Rate Cut Expectations - Current market pricing suggests 2.4 rate cuts (61 basis points) for the year, but there is an anticipated adjustment of at least 11 basis points downward[1] - The optimistic scenario for rate cuts is two times (September and December), while the pessimistic scenario is one time (October)[1] Risks and Considerations - Risks include potential overreach in Trump’s policies, excessive rate cuts leading to inflation rebound, and prolonged high rates causing liquidity crises in the financial system[1]

Core Viewpoint - The article discusses the current state of the financial market, highlighting the impact of U.S.-China tariff negotiations and the introduction of new loan policies on market sentiment and investment strategies [3][6][8]. Group 1: Financial Market Conditions - The U.S.-China tariff truce has been extended for another 90 days, contributing to a continued rise in the stock market [6]. - The central bank conducted a 7-day reverse repurchase operation of 114.6 billion, with a net withdrawal of 46.1 billion due to 160.7 billion reverse repos maturing [3]. - The overall funding environment is described as balanced and slightly loose, with stable funding rates; DR001 is around 1.32% and DR007 is around 1.44% [4]. Group 2: Loan Policies and Market Reactions - New policies for interest subsidies on business loans and consumer loans were announced, leading to fluctuations in interest rates, which peaked at 1.7275% after the announcement [6][7]. - There is a notable concern regarding the use of loan funds, with warnings against using borrowed money for investment purposes [7]. Group 3: Employment and Industry Trends - The number of ride-hailing drivers in China has increased from 2.891 million in 2020 to 7.483 million in 2024, reflecting an annual growth rate of 26.8%, while the average daily orders have significantly dropped from 23.3 to 10 [7]. - The article expresses a sentiment of uncertainty regarding career paths in the current economic climate, indicating that traditional job security is diminishing [8].

Core Insights - CVS Health is set to announce its earnings on July 31, 2025, with historical stock behavior around earnings releases being a key focus for event-driven traders [2] - The consensus estimate for CVS's upcoming earnings is $1.46 per share on revenue of $94.59 billion, indicating a decline in profitability compared to the previous year [4][5] - CVS Health currently has a market capitalization of $76 billion and generated $379 billion in revenue over the last twelve months, with operating profits of $11 billion and net income of $5.3 billion [5] Historical Performance - Over the past five years, CVS stock has shown a tendency toward positive one-day returns post-earnings, with 55% of instances resulting in a positive return and a median gain of 4.4% [3][10] - There have been 20 earnings data points recorded in the last five years, with 11 positive and 9 negative one-day returns observed [6] - The percentage of positive returns increases to 58% when considering data from the last three years [10] Trading Strategies - Traders typically employ pre-earnings positioning, assessing historical probabilities before the earnings report, and post-earnings positioning, observing stock movements after the earnings release [7] - Understanding the correlation between short-term and medium-term returns post-earnings can inform trading strategies, particularly if 1D and 5D returns show high correlation [8][9]

Group 1 - eBay is scheduled to report its earnings on July 30, 2025, with analysts projecting earnings of $1.30 per share on revenues of $2.64 billion, an increase from the previous year's earnings of $1.18 per share on sales of $2.57 billion [2][3] - Over the past five years, eBay's stock has shown a tendency toward negative one-day returns following earnings releases, with 65% of instances resulting in a median decline of -7.5% and a maximum drop of -11.7% [3][5] - The company currently has a market capitalization of $38 billion, generating $10 billion in revenue over the last twelve months, with operating profits of $2.3 billion and net income of $2.0 billion [4] Group 2 - Historical data indicates that eBay has recorded 17 earnings data points over the last five years, with 6 positive and 11 negative one-day returns, resulting in positive returns approximately 35% of the time [5][9] - Pre-earnings positioning strategies involve analyzing historical odds to establish a position before the earnings report, while post-earnings strategies involve observing immediate stock performance to inform subsequent trading decisions [6] - Correlation data between 1-day, 5-day, and 21-day returns post-earnings can help traders execute appropriate trades based on the highest correlation observed [7][8]

Core Viewpoint - Stock index futures positions serve as a "certificate of strategy" for investors, transforming abstract strategies into concrete market participation [1][4] Group 1: Understanding Positions - For beginners, understanding positions is a crucial step in entering the market, involving cautious exploration during position building, dynamic observation during holding, and decisive execution during closing [1][3] - Experienced traders utilize positions to express nuanced market judgments, with different contracts reflecting short-term trends versus long-term views [1][3] - Adjusting positions reflects sensitivity to market changes, allowing for appropriate scaling of positions based on market alignment [1][3] Group 2: Risk Management and Strategy - A reasonable position size is central to risk management, balancing between excessive risk from over-leveraging and missed opportunities from under-leveraging [3] - The choice of holding period showcases the time dimension of strategies, with short-term focusing on intraday fluctuations and long-term on macro cycles [3] - Tracking historical performance of positions helps accumulate personalized operational experience, revealing individual strengths in trading styles [3] Group 3: Psychological Aspects - The process of holding positions also serves as a psychological training ground, fostering a stable trading mindset and rational judgment amidst market fluctuations [3][4] - Each position taken becomes a mark of growth, enhancing understanding of strategies and improving operational precision and stability [4]

Group 1 - The core viewpoint of the article indicates that the polyolefin market experienced slight fluctuations, with LLDPE and PP futures showing minor declines of 0.23% and 0.31% respectively, while the pure benzene market saw an increase of 4.80% [1] - LLDPE main contract closed at 7291 yuan/ton and PP main contract at 7069 yuan/ton, with the current spot prices for LLDPE ranging from 7170 to 7650 yuan/ton and PP prices between 7020 to 7220 yuan/ton across different regions [1] - Supply pressures eased slightly due to concentrated maintenance of production facilities, with PE and PP operating rates at 74.68% and 77.42% respectively as of July 10 [1] Group 2 - The article notes that the demand for polyolefins is currently weak due to seasonal factors, with various industries showing stable or declining operating rates [1] - As of July 10, the inventory levels for PE and PP were reported at 15.692 million tons and 5.604 million tons respectively, indicating a slight increase in trade inventory [1] - The cost side is influenced by OPEC+ production plans, which have led to a slight rebound in oil prices, providing some support to the market despite the overall supply-demand balance being loose [1] Group 3 - Pure benzene futures rose to 6183 yuan/ton, while styrene showed a slight increase to 7416 yuan/ton, with spot prices for pure benzene in East China at 5960 yuan/ton [1] - The operating rate for pure benzene was reported at 77.77%, with downstream weighted operating load at 80.73%, indicating a slight increase in production [1] - Inventory levels for pure benzene and styrene showed a decrease and increase respectively, with pure benzene port inventory at 15.9 million tons and styrene at 12.8 million tons as of July 9 [1]

Core Viewpoint - The natural rubber and synthetic rubber markets are experiencing inventory accumulation and cautious sentiment from downstream enterprises, leading to a bearish outlook in the short term [1] Natural Rubber Market Analysis - Qingdao port's total inventory of natural rubber continues to accumulate, with a slight decrease in bonded warehouse inventory and a significant increase in general trade [1] - The overall inventory is increasing, and there is significant pressure to deplete it, with seasonal supply expectations adding to the fundamental pressure [1] - Overseas weather improvements are aiding rubber tapping operations, while domestic rainfall in Hainan and Yunnan is causing slow increases in raw material supply, keeping procurement prices firm [1] - The market sentiment is pessimistic, with downstream enterprises primarily focused on inventory digestion, leading to a wait-and-see approach in the latter half of the week [1] Synthetic Rubber Market Analysis - The macro environment is slightly positive, boosting market sentiment, but the market is expected to return to supply-demand fundamentals after the news impact diminishes [1] - In the butadiene market, synthetic rubber strength is uplifting market sentiment, but external export prices are low, leading to cautious buying from downstream [1] - The supply side of synthetic rubber shows a slight increase in polybutadiene rubber production, while demand from tire manufacturers remains stable [1] - There are no significant positive indicators in the fundamentals, leading to insufficient rebound in futures prices, with expectations of continued range-bound trading [1] Trading Strategies - For natural rubber, the accumulation at Qingdao port is putting upward pressure on futures prices, with expectations of short-term fluctuations [1] - Suggested strategies include cautious short positions at highs, with support levels for RU at 13400 - 13500 and resistance levels at 14100 - 14200; for NR, support at 11700 - 11800 and resistance at 12300 - 12400 [1] - For synthetic rubber, the macro environment is supportive, but the lack of positive fundamentals suggests a continuation of range-bound trading, with BR support levels at 10700 - 10800 and resistance at 11600 - 11700 [1]

Report Overview - The report is a financial futures morning newsletter released by China Merchants Futures Co., Ltd. on June 20, 2025, covering the performance of A-share stock indexes, stock index futures, treasury bond futures, and related trading strategies [1][2] 1. Market Performance 1.1 A-share Stock Indexes - On June 19, the four major A-share stock indexes pulled back. The Shanghai Composite Index fell 0.79% to 3362.11 points, the Shenzhen Component Index dropped 1.21% to 10051.97 points, the ChiNext Index declined 1.36% to 2026.82 points, and the STAR 50 Index decreased 0.54% to 962.94 points. Market turnover was 1280.9 billion yuan, an increase of 59.1 billion yuan from the previous day. In terms of industry sectors, petroleum and petrochemicals (+0.86%) led the gains, while textile and apparel (-2.36%), beauty care (-2.28%), and light industry manufacturing (-1.96%) led the losses. From the perspective of market strength, IH > IF > IC > IM, and the numbers of rising, flat, and falling stocks were 716, 56, and 4643 respectively. In the Shanghai and Shenzhen stock markets, institutional, main, large - scale, and retail investors had net capital inflows of -19.6 billion, -19.8 billion, 4.4 billion, and 35 billion yuan respectively, with changes of -13.8 billion, -10.9 billion, +5.3 billion, and +19.5 billion yuan respectively [2] 1.2 Stock Index Futures - The basis of the next - month contracts of IM, IC, IF, and IH were 77.02, 59.43, 44.69, and 45.32 points respectively, with annualized basis yields of -14.47%, -11.9%, -13.21%, and -19.32% respectively, and three - year historical quantiles of 15%, 11%, 1%, and 0% respectively. As the delivery date approaches, attention should be paid to the convergence of the futures - spot price difference [2] 1.3 Treasury Bond Futures - On June 19, the yields of treasury bond futures showed mixed trends. Among the active contracts, the implied interest rate of the two - year bond was 1.293, up 1.06 bps from the previous day; the five - year bond was 1.442, up 0.61 bps; the ten - year bond was 1.557, down 0.24 bps; and the thirty - year bond was 1.907, down 0.88 bps [3] 1.4 Cash Bonds - The current active contract is the 2509 contract. The CTD bond of the two - year treasury bond futures is 250006.IB, with a yield change of +0.5 bps, a corresponding net basis of -0.074, and an IRR of 1.85%; the CTD bond of the five - year treasury bond futures is 220027.IB, with a yield change of +0.13 bps, a corresponding net basis of -0.08, and an IRR of 1.86%; the CTD bond of the ten - year treasury bond futures is 250007.IB, with a yield change of +0.2 bps, a corresponding net basis of -0.084, and an IRR of 1.88%; the CTD bond of the thirty - year treasury bond futures is 210014.IB, with a yield change of -0.5 bps, a corresponding net basis of -0.061, and an IRR of 1.72% [4] 1.5 Short - term Capital Interest Rates - Short - term capital interest rates have shown little change recently. SHIBOR overnight, DR001, SHIBOR one - week, and DR007 have remained relatively stable compared to the previous day, one week ago, and one month ago [12] 2. Trading Strategies 2.1 Stock Index Futures - In the short term, due to the deep discount of small - cap stock indexes, which is presumably due to the expansion of the scale of neutral products this year and the relatively high proportion of short positions in neutral products, the deep discount may continue, leading to market fluctuations. A short - cycle band strategy is recommended. In the medium - to - long term, a bullish view on the economy is maintained. It is recommended to allocate IF, IC, and IM forward contracts on dips. For near - month contracts, there is a risk of a decline in micro - caps, which may drag down the IC and IM indexes, so caution is advised [3] 2.2 Treasury Bond Futures - The cash bond market currently shows a pattern of strong supply and weak demand, but this pattern is expected to change. It is recommended to adopt a strategy of short - term long and long - term short. Short - term, buy T and TL on dips; long - term, hedge T and TL on rallies [5] 3. Economic Data - High - frequency data shows that recent social activities and real - estate market sentiment have contracted [12]

Group 1 - The core viewpoint emphasizes the importance of stop-loss strategies in trading, suggesting that holding onto losing positions is always a mistake [1] - Gold prices have been significantly influenced by geopolitical tensions, particularly regarding the situation in Iran, leading to a substantial increase in prices last week [1][3] - Current gold prices are fluctuating around the 3400 mark, with critical resistance and support levels identified at 3365 and 3450-55 respectively [3] Group 2 - Short-term trading strategies suggest focusing on the 3420-15 area, with potential for a rebound if this level holds [3] - If gold prices break below the 3400-05 range, further declines to 3385-75 and 3365-55 are anticipated before considering a bullish outlook [3] - The outlook for gold remains bullish as long as geopolitical tensions persist, with potential targets set at 3470-75 and 3500 if upward momentum continues [3]

Core Viewpoint - The soybean market is experiencing fluctuations, with domestic soybean meal prices showing a rebound after an initial decline, driven by concerns over future supply tightness [1] Group 1: Market Overview - U.S. soybean quality rating reached 68% as of June 5, with old crop export inspection volume at 547,000 tons, historically high for this period [1] - Brazilian soybean crushing volume decreased to 5.16 million tons in March, attributed to weak domestic crushing profits and increased Chinese buying [1] - Argentine oil mills are facing shutdowns, potentially slowing domestic crushing growth and stabilizing end product prices, with an expected increase in soybean exports [1] Group 2: Domestic Supply and Demand - Domestic soybean crushing volume was 2.2446 million tons as of June 6, with an operating rate of 63.1% and soybean inventory at 6.1029 million tons, up 4.7% from the previous week [1] - Soybean meal inventory increased to 382,500 tons, up 28.36% from the previous week, indicating a supply build-up [1] - Domestic rapeseed meal demand is weakening, with a decrease in oil mill operating rates, but supply remains sufficient, leading to expected price fluctuations [1] Group 3: Trading Strategies - The market lacks macro guidance post U.S.-China negotiations, with ongoing concerns about supply uncertainty [1] - The trading strategy suggests limited short positions and recommends an arbitrage strategy involving M11 - 1, along with selling call options [1]