Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Current price data remains weak, and domestic demand recovery is limited after excluding seasonal summer effects. The increase in July's core CPI is mainly supported by the summer travel boom and high gold prices. The divergence between PPI production and living materials shows that the policy effects of the national unified market construction are concentrated in upstream industries, and the ineffective recovery of domestic demand restricts PPI's year - on - year recovery. The sustainability of the industrial price increase and its price transmission to downstream industries depend on the improvement of terminal demand. Given the uncertainty in the trade environment, a loose monetary environment is needed to stabilize domestic demand [4][29]. - After the implementation of the VAT policy, the bond market adjustment is limited. With relatively loose funds, the central bank's net injection of 300 billion yuan in 3 - month repurchase agreements on the 8th may help the market recovery. The first - stage interest rate will return to the pre - adjustment level. Whether it can break through the previous low depends on other market performances and fundamental pressures. The recent rise in commodities and the stock market is mainly based on expectations, and the unchanged year - on - year decline in July's PPI indicates slowing demand. For the bond market, the overall pattern of asset shortage remains unchanged. It is expected that the yields of 10 - year and 30 - year treasury bonds may return to around 1.65% and 1.85% in the short term, and may break through the previous low if other markets rise moderately and demand continues to slow [5][30]. Summary by Related Catalogs CPI Analysis - **Overall CPI Situation**: In July, CPI continued to be low, with the year - on - year growth rate slowing down by 0.1 percentage points to 0%. The month - on - month growth rate was 0.4%, an increase of 0.5 percentage points from the previous month. Core CPI increased by 0.8% year - on - year, an increase of 0.1 percentage points from the previous month, and 0.4% month - on - month. The growth of core CPI was mainly due to the summer travel demand and high gold prices. After excluding the "other goods and services" item affected by gold prices, the overall price level was still weak [1][2]. - **Non - food CPI**: In July, non - food CPI increased by 0.3% year - on - year, an increase of 0.2 percentage points from the previous month, and 0.5% month - on - month. The rise in summer service prices was the main reason, with service prices increasing by 0.6% month - on - month, contributing more than 60% to the CPI increase [2]. - **Food CPI**: In July, food CPI decreased by 1.6% year - on - year, with the decline expanding by 1.3 percentage points from the previous month, and decreased by 0.2% month - on - month, with the decline narrowing by 0.2 percentage points. The year - on - year decline in pork prices was the main reason for the expanding decline in food CPI. Affected by high - temperature and rainy weather, the prices of fresh vegetables and aquatic products increased month - on - month [13]. PPI Analysis - **Overall PPI Situation**: In July, PPI showed a lagging performance, with a year - on - year decline of 3.6%, the same as the previous month. The decline in the year - on - year and month - on - month production materials PPI narrowed slightly. The prices of most domestic manufacturing raw materials decreased month - on - month, mainly affected by seasonal factors and international trade uncertainties. The prices of industries with high export proportions were under increasing downward pressure, but the month - on - month decline in many industries' prices converged under the influence of the national unified market construction [1][3][23]. - **Production and Living Materials PPI**: In July, the production materials PPI decreased by 4.3% year - on - year, with the decline narrowing by 0.1 percentage points from the previous month, and decreased by 0.2% month - on - month, with the decline narrowing by 0.4 percentage points. The living materials PPI decreased by 1.6% year - on - year, with the decline expanding by 0.2 percentage points from the previous month [23][24]. Bond Market Analysis - After the implementation of the VAT policy, the bond market adjustment was limited. With relatively loose funds, the central bank's net injection of 300 billion yuan in 3 - month repurchase agreements on the 8th may help the market recovery. The first - stage interest rate will return to the pre - adjustment level. The recent rise in commodities and the stock market was mainly based on expectations, and the unchanged year - on - year decline in July's PPI indicated slowing demand. For the bond market, the overall pattern of asset shortage remained unchanged. It is expected that the yields of 10 - year and 30 - year treasury bonds may return to around 1.65% and 1.85% in the short term, and may break through the previous low if other markets rise moderately and demand continues to slow [5][30].

Group 1 - The construction of a unified national market has achieved positive results over the past three years, with a basic framework established and market infrastructure continuously improved, leading to smoother factor flow [1] - The recent Central Financial Committee meeting emphasized the need to deepen the construction of the unified national market, shifting from "five unifications and one elimination" to "five unifications and one openness," indicating a new phase of development [1] - The relationship between breaking down barriers and establishing a unified market system is crucial, requiring simultaneous efforts to dismantle restrictive barriers while building foundational institutional rules [1][2] Group 2 - The relationship between government and market is central to the construction of a unified national market, where the market should play a decisive role in resource allocation while the government focuses on regulation and public service [2] - The balance between autonomy and openness is essential, with an emphasis on enhancing domestic technological innovation capabilities while also utilizing global resources and markets [2] - Fairness and efficiency must be balanced in the unified market, ensuring that rules promote both competitive fairness and resource allocation efficiency [3] Group 3 - The construction of a unified national market is necessary for establishing a new development pattern and promoting high-quality growth, which can enhance domestic circulation and counteract uncertainties in international circulation [4] - Clarifying the relationships among various stakeholders is vital for addressing complex interest adjustments and overcoming deeper institutional barriers, thereby supporting high-quality development [4]

Group 1 - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline of 0.1%, while the year-on-year change remained flat [1] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the third consecutive month of growth [1] - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month, and the year-on-year drop remained at 3.6% [1] Group 2 - The increase in CPI is attributed to the effectiveness of policies aimed at boosting domestic demand and consumption, alongside a reduction in disorderly competition among enterprises [1] - The rise in non-food prices year-on-year indicates a gradual improvement in consumption structure, while food prices have been a drag due to falling vegetable prices and a slowdown in fruit price increases [1] - The PPI's month-on-month decline has narrowed for the first time since March, suggesting signs of stabilization in some industrial prices [2] Group 3 - Future CPI is expected to rise steadily due to ongoing consumption recovery and supportive policies, with service prices likely to remain high during peak seasons [2] - The impact of food price fluctuations is anticipated to decrease, while industrial consumption prices are expected to rebound due to rising household income and consumer confidence [2] - The ongoing construction of a unified national market is expected to optimize market competition and support the gradual recovery of PPI [3]

Group 1: CPI and PPI Trends - In July, the Consumer Price Index (CPI) turned from a decrease of 0.1% in the previous month to an increase of 0.4%, exceeding seasonal levels by 0.1 percentage points [1] - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was narrowed by 0.2 percentage points compared to the previous month, marking the first contraction reduction since March [1] - Service prices rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase, with significant price hikes in air tickets (17.9%), tourism (9.1%), hotel accommodation (6.9%), and vehicle rentals (4.4%) [1] Group 2: Impact of Consumption Policies - The "trade-in" policy for old vehicles has stabilized prices for fuel and new energy vehicles, which had been declining for over five months [2] - The prices of household appliances have also shown a significant increase, indicating that consumption promotion policies are effectively supporting the overall price level [2] - The central government's emphasis on regulating low-price competition in the automotive sector is expected to further stabilize prices and support the overall price level [2] Group 3: Industry Competition and Price Adjustments - The construction of a unified national market has led to improved competition in industries such as coal, steel, photovoltaic, cement, and lithium batteries, with price declines in these sectors narrowing [3] - The month-on-month price declines in coal mining, black metal smelting, photovoltaic equipment manufacturing, cement manufacturing, and lithium-ion battery manufacturing have decreased by 1.9, 1.5, 0.8, 0.3, and 0.1 percentage points respectively, reducing the overall downward pressure on PPI [3] - The overall trend indicates a narrowing of PPI declines, with the year-on-year decline remaining stable due to changes in the previous year's base [3]

Core Viewpoint - The "anti-involution" policy has shown effects, contributing to the improvement of the PPI month-on-month in July, addressing the core issue of low-price competition caused by supply-demand imbalance [1][3]. Group 1: PPI Data and Trends - In July, the PPI decreased by 0.2% month-on-month, with the decline narrowing by 0.2 percentage points compared to the previous month, marking the first month-on-month narrowing since March this year [2]. - Key industries such as coal mining, black metal smelting, photovoltaic equipment manufacturing, cement manufacturing, and lithium-ion battery manufacturing saw a reduction in price decline, contributing less to the PPI drop [2]. - Year-on-year, the PPI fell by 3.6% in July, maintaining the same decline as the previous month, with the PPI growth rate remaining in negative territory for 34 consecutive months [3]. Group 2: Impact of Policies - The "anti-involution" policies are believed to have driven the price recovery in cyclical industries, as indicated by the price trends in futures markets for coal, steel, and cement [2][3]. - The central government's emphasis on promoting a unified national market and optimizing market competition order is expected to continue influencing PPI trends positively [3][4]. - The ongoing "anti-involution" policies are likely to favor leading enterprises, while the exit of outdated and excess capacities may cause short-term market pain [4]. Group 3: Future Outlook - Continuous observation is needed to assess the extent of PPI improvement and whether the year-on-year growth rate can turn positive, as the balance of supply and demand requires time to correct [4]. - The need for effective counter-cyclical policies to stimulate domestic demand is highlighted as crucial for sustaining the effects of the "anti-involution" policies and alleviating competitive pressures among enterprises [5].

Group 1 - The Consumer Price Index (CPI) in July increased by 0.4% month-on-month, reversing a 0.1% decline in June, indicating a recovery in domestic demand [2][4] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, and has expanded for three consecutive months [2][5] - The Producer Price Index (PPI) saw a month-on-month decline of 0.2%, but this was a narrowing of the decline for the first time since March, suggesting stabilization in some industrial sectors [6][7] Group 2 - The rise in CPI was primarily driven by increases in service prices, which rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the overall CPI increase [4][5] - Key contributors to the service price increase included airfare, tourism, hotel accommodation, and vehicle rental, which saw significant month-on-month increases of 17.9%, 9.1%, 6.9%, and 4.4% respectively [4] - Industrial consumer goods prices also showed improvement, with a month-on-month increase of 0.5%, influenced by policies aimed at boosting consumption [4][6] Group 3 - The government has implemented a series of macroeconomic policies aimed at enhancing consumption capacity and optimizing the consumption environment, with 19 key measures proposed [2][3] - The ongoing efforts to build a unified national market and regulate low-price competition among enterprises are expected to further stabilize prices [3][6] - The PPI's year-on-year decline remained at -3.6%, but the stabilization indicates a potential turning point for industrial prices, aided by policy measures [6][7]

Group 1: Consumer Price Index (CPI) Trends - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing the previous month's decline and exceeding seasonal levels by 0.1 percentage points, indicating positive changes in consumer prices [3] - Service prices rose by 0.6% month-on-month, contributing over 60% to the total CPI increase, driven by the peak travel season with significant price hikes in airfare (17.9%), tourism (9.1%), and hotel accommodation (6.9%) [3] - The core CPI, excluding food and energy, increased by 0.8% year-on-year, marking the highest growth since March 2024, reflecting a stable demand environment [9] Group 2: Producer Price Index (PPI) Developments - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline was less severe than in previous months, marking the first narrowing of the decline since March [10][11] - The improvement in PPI was attributed to enhanced market competition and supply-demand relationships in various industries, particularly in coal, steel, and photovoltaic sectors, which saw reduced price declines [13] - Positive price changes in industrial products were noted, driven by macroeconomic policies and increased demand for upgraded consumer goods, with notable price recoveries in aircraft manufacturing and wearable technology [15]

Core Viewpoint - The Producer Price Index (PPI) in July showed a month-on-month decline of 0.2%, marking the first narrowing of the decline since March this year, indicating a potential stabilization in industrial prices driven by improved market competition and "anti-involution" policies [1][2]. Group 1: PPI Trends - In July, the prices in coal mining, black metal smelting, photovoltaic equipment manufacturing, cement manufacturing, and lithium-ion battery manufacturing saw a reduced month-on-month decline, contributing less to the overall PPI drop [1]. - The year-on-year PPI decreased by 3.6% in July, maintaining a negative growth rate for 34 consecutive months, highlighting ongoing issues of overcapacity and insufficient demand in the economy [2][3]. Group 2: Policy Impact - The "anti-involution" policies are seen as a significant factor in the month-on-month improvement of the PPI, aiming to correct the low-price competition that has suppressed PPI growth [2][3]. - Continuous emphasis on optimizing market competition and addressing disorderly competition through policy measures is expected to support price recovery in cyclical industries [1][2]. Group 3: Future Outlook - The ongoing "anti-involution" policies are anticipated to benefit leading enterprises, while the exit of outdated capacities may cause short-term market disruptions [3]. - To further solidify the effects of "anti-involution" policies, it is crucial to restore domestic demand, as excessive competition pressures may increase without effective counter-cyclical measures [4].

Group 1: Consumer Price Index (CPI) Insights - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline, while year-on-year it remained flat [2][6] - The core CPI, excluding food and energy prices, rose by 0.8% year-on-year, marking the highest increase since March 2024 and continuing a trend of expansion for three consecutive months [2][6] - The rise in CPI was primarily driven by increases in service and industrial consumer goods prices, with notable price hikes in airfares, tourism, hotel accommodations, and vehicle rentals [2][4] Group 2: Producer Price Index (PPI) Insights - The Producer Price Index (PPI) decreased by 0.2% month-on-month, with the decline narrowing by 0.2 percentage points compared to the previous month, while year-on-year it fell by 3.6% [6][8] - The construction of a unified national market is improving market competition in industries such as coal, steel, photovoltaic, cement, and lithium batteries, leading to positive price changes in these sectors [6][8] Group 3: Agricultural Products Price Trends - In July, the wholesale price of pork increased by 1.3% month-on-month, influenced by tight supply due to low market release from farmers, although prices later stabilized as supply improved [8][10] - The average wholesale price of pork in Beijing was reported at 18.16 yuan per kilogram, reflecting a month-on-month increase of 4.37% but a year-on-year decrease of 20.18% [12] - The wholesale price of eggs decreased by 1.8% month-on-month and 25% year-on-year, attributed to increased supply and weak demand, although prices are expected to rise due to seasonal demand factors [15][17]

Group 1 - The core viewpoint is that the effects of domestic demand expansion policies are becoming increasingly evident, with the Consumer Price Index (CPI) showing a month-on-month increase of 0.4% in July, reversing a previous decline of 0.1% [1][2] - The core CPI, excluding food and energy prices, rose by 0.8% year-on-year in July, marking the highest increase since March 2024, and the growth rate has expanded for three consecutive months [5][6] - The increase in CPI is primarily driven by rising prices in the service sector and industrial consumer goods, with service prices up 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase [4][5] Group 2 - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline has narrowed by 0.2 percentage points compared to the previous month, marking the first contraction in the rate of decline since March [6][8] - Seasonal factors and uncertainties in the international trade environment have led to price declines in certain industries, while domestic market competition continues to improve, resulting in a reduced downward impact on PPI [8][9] - Year-on-year, the PPI fell by 3.6% in July, with the decline remaining consistent with the previous month, indicating some improvement in supply-demand relationships in certain sectors due to ongoing macroeconomic policies [8][9]