Group 1 - The Federal Reserve is closely monitoring the conditions of the money market and assessing how far bank reserves are from "ample" levels, while continuing to reduce its large securities portfolio [1][4] - The U.S. Treasury's increased borrowing to rebuild cash balances after raising the debt ceiling is consuming liquidity from the Fed's balance sheet, leading to higher yields on various instruments [4] - Bank reserves have fallen below $3 trillion, marking the lowest level since January, as the Fed continues its quantitative tightening process initiated in 2022 [4][5] Group 2 - Some Federal Reserve participants believe that the Standing Repo Facility (SRF) will help maintain the federal funds rate within its target range and ensure that temporary pressures in the money market do not disrupt the ongoing balance sheet reduction [1] - There is a divergence among Fed officials regarding how much to reduce the balance sheet, with some advocating for a smaller balance sheet to bring reserves closer to scarcity rather than ample levels [5] - Fed officials have indicated that once reserves approach ample levels, likely by the end of this year, the balance sheet reduction should cease [5]

Group 1 - The Federal Reserve is experiencing a division among governors regarding the direction of interest rates, with a slim majority expecting two more cuts this year [1][3] - There is a lack of data due to the government shutdown, which is complicating the Fed's decision-making process [1][3] - The 10-year yield has remained relatively stable over the past 18 months, indicating a sideways trading pattern, which may suggest uncertainty in the market [4][5][6] Group 2 - The Japanese yen has been weakening significantly, leading to higher yields on Japanese Government Bonds (JGBs), which may impact the U.S. bond and equity markets [7][8] - The Bank of Japan faces pressure to raise rates due to high inflation, creating a complex relationship with global bond markets [8] - The Fed's balance sheet is at a critical level just below $3 trillion, raising concerns about the potential impact on the banking system if reserves become too low [10][11] Group 3 - The Fed's cautious stance may lead to a more dovish approach in future meetings, which could positively influence the stock market [12][13] - Faster rate cuts could push yields higher, reflecting increased stimulus in the economy, especially with the stock market reaching record highs [13]

美国货币市场持续出现的资金压力，以及美联储银行准备金的逐步减少，表明美联储可能即将结束其大 规模的资产负债表缩减计划。 自9月初以来，美国担保隔夜融资利率(SOFR)与美联储基准利率之间的利差已接近2024年底以来的最高 水平，该利差是衡量短期融资成本的关键指标。 此外华尔街见闻曾提及，美国银行准备金也已跌破3万亿美元，创1月以来新低。这些迹象均表明美国金 融体系中的过剩流动性正在被快速吸收。 然而，在何时停止缩表的问题上，美联储内部似乎存在分歧。本周四即将公布的美联储9月会议纪要， 或将为外界提供更多关于决策者在此问题上立场的线索。 资金市场压力持续显现 当前金融体系流动性的持续流失，主要源于两大因素的叠加。 首先，美联储继续其量化紧缩进程，允许其持有的债券到期而不进行再投资，这直接从金融系统中抽走 了资金。由于QT可能加剧流动性限制并导致市场动荡，美联储已在今年早些时候放慢了其缩表步伐。 这直接导致担保隔夜融资利率（SOFR）等一系列与美国国债抵押回购协议相关的利率基准，持续徘徊 在美联储的准备金利率（IORB）附近，表明较高的融资成本或将持续。 随着流动性紧张的压力正越来越集中地体现在商业银行的准备金账 ...

Group 1 - The core observation is the apparent contradiction between the tightening liquidity indicated by the Federal Reserve's reduction in bank reserves below $3 trillion and the strong performance of the A-share market, which has surpassed 3400 points with increasing trading volume [1][4] - The A-share market's resilience is highlighted by the fact that while the market appears vibrant, less than 50% of stocks have risen more than 6%, indicating a significant disparity between the index performance and individual stock movements [1][4] - The concept of "locking" by institutional investors is emphasized, where they reduce trading frequency during periods of apparent market calm, suggesting strategic positioning rather than withdrawal [2][5] Group 2 - A specific case study illustrates that a stock can rise by 30% over a period while experiencing a 20% correction, showcasing the misleading nature of market signals such as "waiting for a rebound" and "false prosperity" created by rapid sector rotations [4][7] - The behavior of retail investors is analyzed, noting that they often panic and sell during downturns, missing subsequent gains, while institutions capitalize on these moments to accumulate shares at lower prices [7][9] - The complexity of capital markets is underscored, where macroeconomic tightening and strong market performance coexist, reflecting the multifaceted nature of market dynamics [4][8] Group 3 - Investors are advised to not be misled by superficial market exuberance, as underlying disparities can be severe [9] - Understanding the operational strategies of institutional investors is crucial, as their actions often contradict retail investor instincts [9] - Emphasis is placed on the importance of data-driven analysis over emotional responses, as quantitative analysis can reveal the true market conditions [9]

Market Overview - US stock index futures are all up, with Dow futures rising by 0.24%, S&P 500 futures up by 0.18%, and Nasdaq 100 futures also increasing by 0.18% [1] - European indices show mixed results, with Germany's DAX down by 0.24%, UK's FTSE 100 up by 0.52%, and France's CAC40 down by 0.08% [2] - WTI crude oil prices increased by 0.35% to $60.69 per barrel, while Brent crude rose by 0.37% to $64.35 per barrel [3] Economic Data and Events - The non-farm payroll report scheduled for release is likely to be postponed due to the government shutdown, affecting the publication of economic data [4] - The US banking system's reserves have dropped for eight consecutive weeks, falling below $3 trillion for the first time, raising concerns about the Federal Reserve's balance sheet reduction [5] - Federal Reserve's Williams emphasized the need for central banks to prepare for unexpected changes and maintain stable inflation expectations [6] Company News - Hedge funds are adjusting strategies ahead of Japan's ruling party election, betting on yen appreciation and reducing risk assets [7] - Bank of America reported a record inflow of $9.3 billion into tech stocks, driven by the AI investment boom, despite the government shutdown [8] - Chevron's refinery in California experienced a fire, impacting over 16% of the state's refining capacity [10] - Applied Materials anticipates a $600 million revenue loss due to expanded export restrictions on its products to China [10] - Tesla has begun selling its Cybertruck in Qatar, expanding its international presence amid slowing demand in core markets [11] - Boeing's 777X commercial flight plan has been delayed until early 2027, potentially leading to a non-cash accounting charge of $2.5 billion to $4 billion [12]

Market Overview - US stock index futures are all up, with Dow futures rising by 0.24%, S&P 500 futures up by 0.18%, and Nasdaq 100 futures also increasing by 0.18% [1] - European indices show mixed results, with Germany's DAX down by 0.24%, UK's FTSE 100 up by 0.52%, and France's CAC40 down by 0.08% [2] - WTI crude oil prices increased by 0.35% to $60.69 per barrel, while Brent crude rose by 0.37% to $64.35 per barrel [3] Economic Data and Events - The US non-farm payroll report scheduled for release is likely to be delayed due to the government shutdown, affecting the publication of economic data [4] - The US banking system's reserves have dropped for eight consecutive weeks, falling below $3 trillion for the first time, raising concerns about the Federal Reserve's balance sheet reduction [5] - Federal Reserve's Williams emphasized the need for central banks to prepare for unexpected changes and maintain stable inflation expectations [6] Company News - Hedge funds are adjusting strategies ahead of Japan's ruling party election, betting on yen appreciation and reducing risk assets [7] - Bank of America reported a record inflow of $9.3 billion into tech stocks, driven by the AI investment boom, despite the government shutdown [8] - Goldman Sachs predicts that the US economy will accelerate by 2026, but expects a market pullback in the next 1-2 years due to various factors [9] - Chevron's refinery in California experienced a fire, impacting over 16% of the state's refining capacity [10] - Applied Materials anticipates a $600 million revenue loss due to expanded export restrictions to China [10] - Tesla has begun selling its Cybertruck in Qatar, expanding its international presence amid slowing demand in core markets [11] - Boeing's 777X commercial flight plan has been delayed until early 2027, potentially leading to a non-cash accounting charge of $2.5 billion to $4 billion [12]

Core Points - The U.S. banking system's reserves have declined for eight consecutive weeks, falling below $3 trillion for the first time, raising concerns about the Federal Reserve's potential early end to balance sheet reduction [1] - As of the week ending October 1, bank reserves decreased by $20.1 billion to $2.98 trillion, marking the lowest level since January of this year [1] Group 1 - The decline in reserves is closely linked to the U.S. Treasury's increased debt issuance, which has accelerated since the debt ceiling was raised in July, absorbing market liquidity [4] - This situation directly impacts the liabilities on the Federal Reserve's balance sheet, including the overnight reverse repurchase (RRP) tool and commercial bank reserves [4] - As RRP gradually depletes, commercial bank reserves at the Federal Reserve have become the primary source of liquidity outflow, with foreign banks experiencing a more significant decline in cash assets compared to domestic banks [4] Group 2 - The changes occur while the Federal Reserve continues its quantitative tightening (QT) policy, which involves reducing its holdings of Treasury and MBS to tighten financial system liquidity [4] - Earlier this year, the Federal Reserve slowed the pace of balance sheet reduction to avoid market disruptions, despite Chairman Powell stating that bank reserves remain "ample" [4] - Recent signs in the funding market suggest that the Federal Reserve may be approaching a critical point regarding reserve levels [4] Group 3 - There is inconsistency within the Federal Reserve regarding the definition of "ample" reserves, with Vice Chair Bowman emphasizing the need to shrink the balance sheet as much as possible to bring reserves closer to "scarce" levels [4] - Governor Waller estimated that the minimum reserve level is approximately $2.7 trillion [4]

Group 1 - The global long-term bond market is experiencing a rebound as investors seek buying opportunities after a sell-off, with U.S. and Japanese 30-year bond yields dropping approximately 20 basis points since early September, and UK yields falling over 10 basis points [1] - The recent decline in long-term bond yields is partly driven by reduced supply, as some countries shift their issuance focus to cheaper short-term bonds, with Japan proposing to cut long-term bond issuance and the UK central bank reducing long-term bond sales in its quantitative tightening plan [1][2] - There is a growing optimism in the long-term bond market, highlighting the significant role of supply concerns in recent sell-offs, despite ongoing worries about rising fiscal deficits [2] Group 2 - Strong economic growth globally is alleviating concerns about fiscal deficits and prompting investors to reconsider long-term interest rate trends, with recommendations for Australian investors to adopt positions that benefit from a flattening yield curve [3] - The Bloomberg Global Aggregate Index indicates that bets on long-term bonds are starting to pay off, with 10-year and longer bonds returning 0.7% this month, outperforming shorter-term bonds [6] - Recent auctions show strong demand for long-term bonds, with Japan's 40-year bonds seeing enthusiastic buying and the strongest demand for 20-year bonds since 2020 [6]

1. Report Industry Investment Rating There is no information provided in the content about the report's industry investment rating. 2. Core Viewpoints of the Report In September 2025, multiple employment data in the US indicated a cooling labor market, and the cost - pressure transmission of tariff adjustments was still slow. The economic recovery momentum in the Eurozone, Japan, etc., increased. In terms of monetary policy, the Fed's restart of interest rate cuts was fulfilled as expected, which was defined as a "risk - management - style" cut by Powell and was somewhat hawkish. The European and British central banks remained on hold, waiting for the tariff impact to become clearer. In October, attention should be paid to the fundamental performance of major countries, and the intensification of capital market volatility risks should be vigilant [7]. 3. Summary by Relevant Catalogs 3.1 Overseas Economy: Divergent Monetary Policy Trends and Overall Controllable Inflation Pressure 3.1.1 Global Economy: Resilient Economy and Manufacturing PMI Back in Expansion Zone The global economy remained resilient, and the manufacturing PMI returned to the expansion zone. In August, the J.P. Morgan Global Manufacturing PMI index was 50.9%, up 1.2 percentage points from 49.7% in July. Only the Eurozone's manufacturing PMI was above the 50 boom - bust line among major overseas countries. The global services PMI index decreased by 0.1 percentage points to 53.4% in August, maintaining high - level prosperity. In trade, the Baltic Dry Index fluctuated upward, and South Korea's exports in the first 20 days of September increased by 13.5% year - on - year. The Fed cut interest rates as expected, the European and British central banks remained on hold, and the Bank of Japan sent hawkish signals. The US Treasury Secretary considered "all stabilization options" to support Argentina [8]. 3.1.2 Developed Economies: Resilient Economies in Major Countries and Potentially Controllable Inflation Pressure - **US: Slowing Fundamental Growth Momentum and Cooling Labor Market** - Economic growth showed a divergence in prosperity. Manufacturing continued to contract, while the service industry expanded faster. In August, the US ISM manufacturing PMI rose to 48.7%, and the non - manufacturing PMI rose to 52.0%. - Newly added employment was far below expectations, and the unemployment rate reached a new high. In August, the non - farm payrolls increased by 22,000, and the unemployment rate rose to 4.3%. - The inflation level was relatively moderate, and the pressure on commodity prices from tariffs was limited. In August, the US CPI increased by 2.9% year - on - year. - Retail sales remained resilient, and the sustainability of consumption momentum needed attention. In August, US retail sales increased by 0.62% month - on - month. - The real estate market was restricted by high mortgage rates and rising housing prices [21][22][23]. - **Eurozone: Strengthening Recovery Momentum, Divergent Prosperity in the UK and Japan, and Unstable Manufacturing Recovery Foundation** - The Eurozone's recovery momentum increased. In August, the composite PMI rose to 51.0%, and the manufacturing PMI rose to 50.7%. - The UK's manufacturing continued to contract, while business activities in the service industry accelerated expansion. In August, the UK's manufacturing PMI fell to 47.0%, and the service industry PMI rose to 54.2%. - Japan's economic prosperity was divergent. In August, the composite PMI rose to 52.0%, and the manufacturing PMI rose to 49.7%. - In terms of inflation, the Eurozone's inflation remained stable month - on - month, the UK faced greater pressure, and Japan's inflation remained high [35][37][39]. 3.2 Monetary Policy: US Restarts Rate Cuts, Europe and UK are Cautious, and Japan Sends More Hawkish Signals 3.2.1 Fed: "Risk - Management - Style" Rate Cut Implemented, Focus on Downward Employment Risks On September 18, the Fed cut interest rates for the first time this year, lowering the federal funds rate target range by 25BP to 4.0% - 4.25%. The policy balance shifted from focusing on inflation rebound to employment stall risks. The dot - plot predicted two more rate cuts in October and December. Whether to cut rates again in October depends on the performance of September's non - farm data, and the Fed's independence and the composition of the new council members have increased the uncertainty of future rate - cut prospects [54]. 3.2.2 ECB: ECB Continues to Hold Rates Steady, Inflation Risks are Roughly Balanced On September 11, the ECB held rates steady, maintaining the main refinancing rate at 2.15%. It believed that manufacturing and services were growing, and previous rate cuts would further boost consumption and investment. It raised inflation expectations for 2025 and 2026 and lowered those for 2027. In the future, it may continue to make data - dependent and meeting - by - meeting decisions [58]. 3.2.3 BoJ: Increased Probability of Interest Rate Hike, Planned Reduction of ETF and Other Assets On September 19, the BoJ kept the benchmark interest rate at 0.5% and decided to gradually sell ETF and J - REITs in the market. Two officials voted against and supported a 25 - basis - point rate hike. If economic and price forecasts are realized, the BoJ may continue to raise interest rates, increasing the possibility of restarting rate hikes this year [61]. 3.2.4 BoE: BoE Maintains Interest Rates, Slows Down Quantitative Tightening, and Reduces Expectations of Rate Cuts This Year On September 18, the Monetary Policy Committee voted to keep the policy rate at 4% and announced a reduction in the scale of central bank balance - sheet contraction from October. Concerns about inflation rebound made the market cautious about further rate cuts by the BoE this year [64]. 3.3 Financial Markets: US Treasury Yields First Declined and Then Rose, the US Dollar Index Weakened, and International Oil Prices Fluctuated 3.3.1 US Bond Market: Cooling Labor Market and Fed Rate Cut Implementation Led to Fluctuations in US Treasury Yields In September, the US bond market focused on the weakening labor market and the Fed's rate cut. In the first and middle of the month, the yield dropped from 4.28% to around 4%. In the late month, it rebounded to around 4.15%. Overall, the 2 - year US Treasury yield rose 2BP to 3.61%, and the 10 - year yield fell 8BP to 4.15% [67][68]. 3.3.2 Exchange - Rate Market: Weakening US Dollar Index, Fluctuating Japanese Yen, and Strengthening Euro and Pound - The US dollar index was overall weak. In early September, the downward risks in the labor market increased rate - cut expectations and pressured the US dollar. In the middle and late months, the Fed's rate cut was less dovish than expected, and the US dollar index rebounded. - The Japanese yen fluctuated in a narrow range between 146 - 148 due to the US dollar index and domestic political uncertainties. - The euro and pound strengthened overall. In the first and middle of the month, the Eurozone's economic indicators were positive, and the pound was supported by the UK's fiscal policy and the BoE's stance [69][70]. 3.3.3 International Crude Oil: Geopolitical Frictions and Oil - Demand Outlook Caused Volatility in Crude Oil Prices In September, international oil prices fluctuated around $63 per barrel. In early September, concerns about OPEC + production increases and US economic recession led to a price drop. Then, geopolitical tensions and reduced concerns about supply surpluses pushed prices up. In the middle and late months, the Fed's statement on employment risks and EU sanctions on Russia caused prices to fall again [74].

Core Insights - The demand for 30-year UK government bonds has unexpectedly dropped to its lowest level since 2022, highlighting a significant decline in market appetite for long-term gilt amid rising government budget deficits [1][4] - UK Chancellor Rachel Reeves is attempting to persuade the market to accept her fiscal spending plan, but concerns remain regarding the government's recent £18 billion overshoot in borrowing [1][4] Group 1: Demand and Auction Results - The UK Debt Management Office (DMO) auctioned £1.5 billion of long-term gilts maturing in 2056, receiving bids worth £4.6 billion (approximately $6.2 billion), indicating a threefold oversubscription, yet the auction size is the smallest in three years [1][4] - The "tail" measure, which reflects the difference between the weighted average and the lowest accepted bid, widened to 1.4 basis points, up from 0.8 basis points in July, indicating weakened demand [4] Group 2: Market Reactions and Future Outlook - Following the auction, the yield on 30-year UK government bonds fell by 4 basis points to 5.51%, after previously declining by more than 5 basis points before the auction [4] - Despite increased volatility in the secondary market, overall performance in recent auctions for various maturities of gilts has been robust, with demand for a recent 10-year gilt auction nearing record levels [4][5] Group 3: Policy Adjustments - The upcoming gilt issuance is the last long-term gilt auction of the year, with the Bank of England announcing a reduction in the proportion of certain long-term gilts sold under its quantitative tightening (QT) plan to 20% to help mitigate market volatility [5]