1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The inflection point of the long - term supply cycle has arrived. On the demand side, interest rate cuts support demand, policies and replacement cycles are beneficial for heavy - truck demand, while the real estate sector is the main drag. The supply - demand contradiction is not significant, and the current valuation is not high. Inflation and the inflection point of the production - capacity cycle have raised the lower limit. It is predicted that the center of the rubber price will increase. Investors are advised to buy at an appropriate time, with the reference trading range of ru being 14,000 - 18,000 yuan/ton, and the short - to - medium - term support for nr being 12,400 - 12,600. The position of the arbitrage strategy of going long on ru and short on nr should be reduced [6]. 3. Summary by Relevant Catalogs 3.1 Macro - environment - There are policy expectations for the real estate market, which is yet to stabilize. Domestically, there is a trend of anti - involution. Externally, the Fed's interest rate cuts are beneficial for the capital market, but the spill - over effect of a potential U.S. recession should be guarded against. The U.S. aims to increase its GDP to $40 trillion by 2030, implying an average annual nominal GDP growth rate of about 5.5% in the next five years, which will be supported by inflation [6]. 3.2 Supply - The long - term inflection point has arrived. Raw materials are prone to price increases and difficult to decline. Rubber farmers' inventories were cleared at a high level in 2024 - 2025. High prices will stimulate output with high elasticity, while low prices may lead to inaction or hoarding. Price has the greatest impact on output, followed by weather. The strength of raw materials and basis reflects the current market strength, but the weak spread between latex and cup lump reflects the relative weakness. The enthusiasm for rubber tapping is acceptable at the current price. This year's natural rubber growing areas have average weather conditions with more rainfall, and there were floods in southern Thailand in November, making raw materials relatively firm, but the processing sector is in the red. The global production is expected to increase by 0.75% this year. Crude oil is relatively sluggish, synthetic rubber is at a medium - low level relative to crude oil, and natural rubber is relatively high compared to synthetic rubber. The substitution space of synthetic rubber for natural rubber is approaching the top [6]. 3.3 Inventory - Qingdao's inventory is around the median level, having increased significantly compared to 2016, and the inventory - to - sales ratio is not low. However, considering the significant increase in imports this year and the high proportion of exports from producing areas to China, the inventory is not considered high overall, with a neutral evaluation. Attention should be paid to the seasonal peak of inventory accumulation. Due to the diversion of concentrated latex and production - capacity issues in Thailand, Vietnam, and China, the output of full - latex rubber is squeezed, and the exchange warehouse receipts are at a ten - year low. The inventory of butadiene rubber is relatively high. The inventory of full - steel truck tires is lower than last year; the inventory of semi - steel tires is marginally decreasing from a high level, but considering the market expansion, it is evaluated as neutral [6]. 3.4 Demand - In 2025, real estate data continued to deteriorate, dragging down the market. The current new construction area is less than one - third of the peak. Given the long real - estate cycle and the unfavorable population situation, it will take time for a turnaround. Affected by the sharp decline in physical construction work in the real - estate sector, the recovery of road freight volume is difficult. It caught up with the 2019 level in 2024 and continued to grow in 2025. However, heavy - truck sales are still supported by policies and replacement cycles. Domestic passenger - car sales (including exports) performed well under policy stimulus, domestic substitution, and overseas market penetration, but the marginal growth rate has shown signs of fatigue. Overseas automobile sales are oscillating weakly, and overseas markets rely more on tire replacement demand. The Fed's interest rate cuts are conducive to stimulating demand. Rubber demand follows the macro - environment, and it is expected that the global demand will grow by about 2% in 2026 [6]. 3.5 Strategy - The supply - side long - term inflection point has arrived. On the demand side, interest - rate cuts support demand, and policies and replacement cycles are beneficial for heavy - truck demand, with real estate being the main drag. The supply - demand contradiction is not large, and the current valuation is not high. Inflation and the inflection point of the production - capacity cycle have raised the lower limit. It is predicted that the center of the rubber price will increase. Investors should buy at an appropriate time, with the reference trading range of ru being 14,000 - 18,000 yuan/ton, and the short - to - medium - term support for nr being 12,400 - 12,600. The position of the arbitrage strategy of going long on ru and short on nr should be reduced [6].

Core Viewpoint - The article highlights the upcoming significant economic events and data releases that could impact market dynamics, including U.S. inflation data, corporate earnings reports, and geopolitical developments, particularly concerning the U.S. government funding and G7 discussions on rare earth issues [3][16][20]. Economic Data - The U.S. is expected to release the December CPI data on January 13, with predictions of a significant rebound, influenced by government shutdown-related statistical distortions. Morgan Stanley forecasts a core CPI increase of 0.36% [5][6]. - China's December import and export data will be released on January 14, with expectations of a 3.0% year-on-year increase in exports and a 2.9% decline in imports [4]. Corporate Earnings - Major U.S. banks, including JPMorgan Chase, will kick off the earnings season, with a focus on the health of the financial system amid high interest rates. The earnings reports from these banks will be critical for assessing market sentiment [11]. - Taiwan Semiconductor Manufacturing Company (TSMC) is set to release its Q4 2025 earnings on January 15, with anticipated revenue of approximately NT$1.011 trillion and earnings per share of NT$2.72. The report will be crucial for understanding the demand for advanced chip manufacturing, particularly in AI [10]. Geopolitical and Industry Developments - The risk of a U.S. government shutdown is rising, with funding bills being expedited through Congress. The outcome of these discussions will significantly influence market sentiment [16]. - The G7 finance ministers will meet to discuss rare earth issues, which could have implications for global supply chains and technology sectors [20]. - The 2026 Nuclear Fusion Technology and Industry Conference will take place on January 16-17, indicating a growing focus on nuclear fusion as a future energy source, with significant investments expected in the coming years [21].

Market Overview - The US labor market remains resilient, with the unemployment rate marginally decreasing to 4.4% in December 2025[4] - The 10-year US Treasury yield recorded 4.18%, down 1 basis point this week, while the US dollar index rose by 0.69% to 99.1[15] - Gold prices increased by 3.68% and oil prices surged by 3.74% due to geopolitical tensions and sanctions on Russian oil[4] Asset Correlation and Inflation - The long-term correlation between US stocks and bonds has slightly declined since 2025, with expectations of continued low inflation in 2026[10] - If geopolitical factors lead to a significant rise in oil prices, the correlation may remain high, undermining the hedging effectiveness of US bonds against stocks[10] Global Fund Flows - Global funds saw a significant outflow of $12.07 billion from US equity funds and a substantial inflow of $14.18 billion into US fixed-income funds[4] - Chinese stock markets attracted capital inflows, particularly in materials, communications, and healthcare sectors[4] Valuation Metrics - As of January 9, 2026, the Shanghai Composite Index's valuation exceeded that of the S&P 500 and CAC 40, reaching 93.2% of its historical percentile[4] - The risk-adjusted return percentile for the S&P 500 rose to 60%, while the Nasdaq's increased from 37% to 46%[4] Economic Indicators - The market is pricing in a 95.60% probability that the Federal Reserve will not cut interest rates in January 2026[4] - Upcoming key economic indicators include the US inflation data for December 2025[4] Risk Considerations - Short-term asset price fluctuations may not reflect long-term trends, and there is a risk of deeper-than-expected economic recession in Europe and the US[4]

Economic Overview - The U.S. unemployment rate unexpectedly fell to 4.38%, better than the expected 4.5%, with a downward revision of the previous month's rate from 4.56% to 4.54%[14] - December's non-farm payrolls added 50,000 jobs, lower than the expected 70,000, with previous months revised down by 76,000, indicating a weak labor market[14] - The Bloomberg Economic Surprise Index for the U.S. improved from 0.115 on December 31 to 0.124 on January 9, indicating a slight positive surprise in economic data[7] Inflation and CPI Expectations - Analysts predict December's U.S. CPI to show a month-on-month increase of 0.3% and a year-on-year increase of 2.7%[5] - The Federal Reserve's model forecasts a month-on-month CPI increase of 0.2% and a core CPI increase of 0.22%[22] - Inflation swaps indicate a significant upside risk for December's CPI, with expectations of a month-on-month increase of 0.45%[20] Market Sentiment and Asset Performance - U.S. equities experienced volatility but ended the week positively, driven by improved expectations for AI technology companies and a rebound in risk sentiment following the unemployment rate drop[1] - Commodities initially dipped but continued to rise, with silver prices increasing by 9.67% during the week[4] - The Nasdaq index outperformed the S&P 500, reflecting stronger sentiment in tech stocks[4] Political and Policy Uncertainty - The market is awaiting the U.S. Supreme Court's decision on the legality of Trump's IEEPA tariffs, with expectations that the ruling will not cause significant market disruption[25] - The uncertainty surrounding the tariff case has contributed to increased market volatility, particularly affecting equity performance[4] Future Economic Outlook - The report anticipates a potential economic rebound in Q1 2026, driven by the end of government shutdowns and a fiscal impulse contributing approximately 2.8% to GDP growth[5] - The combination of monetary easing (75 basis points cut since Q3 2025) and seasonal economic strength in Q1 is expected to favor risk assets such as equities and commodities[6]

Group 1: Market Overview - Oil prices and gold prices have been pushed up due to geopolitical tensions in oil-producing countries like Venezuela and Iran [1][5] - US stock markets saw significant gains, with the Dow Jones up 2.32%, Nasdaq up 1.88%, and S&P 500 up 1.57% for the week [1] - European indices also performed well, with the UK FTSE 100 up 1.74%, Germany's DAX 30 up 2.94%, and France's CAC 40 up 2.04% [1] Group 2: Economic Data and Federal Reserve - Upcoming economic data releases include the US Consumer Price Index (CPI) and GDP data from Germany and the UK, which are expected to influence market sentiment [1][4] - The US unemployment rate has decreased more than expected, alleviating concerns about a sharp deterioration in the job market, although analysts caution that this data may be affected by the government shutdown [3] - The market anticipates at least two interest rate cuts by the Federal Reserve in 2026, with expectations that inflation will decline to around 2% by the end of the year [3] Group 3: Commodity Prices - WTI crude oil near-month contract rose by 3.14% to $59.12 per barrel, while Brent crude oil increased by 4.26% to $63.34 per barrel [5] - Gold prices surged, with COMEX gold futures for January delivery rising by 4.08% to $4,490.30 per ounce [5][6] - HSBC predicts that gold prices may reach $5,000 per ounce in the first half of 2026 due to geopolitical risks [6] Group 4: UK Economic Outlook - The UK is expected to show economic improvement in November, with a projected monthly growth of 0.2%, the fastest since June of the previous year [7] - Upcoming bond auctions in the UK and other European countries are expected to maintain high levels of government debt issuance [7]

Market Overview - The U.S. stock market has shown positive performance with the Dow Jones increasing by 2.32%, the Nasdaq rising by 1.88%, and the S&P 500 up by 1.57% over the week [1] - European indices also performed well, with the FTSE 100 up by 1.74%, the DAX 30 increasing by 2.94%, and the CAC 40 rising by 2.04% [1] Economic Data and Federal Reserve - Upcoming economic data releases include the U.S. Consumer Price Index (CPI) and GDP data from Germany and the UK, which are expected to influence market sentiment [1][4] - The Federal Reserve officials are expected to increase their public appearances as the next meeting approaches, with a focus on hawkish voting members [4] Earnings Season - The fourth quarter earnings season for U.S. stocks will commence next week, with major financial institutions such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Morgan Stanley, and Goldman Sachs set to report their earnings [5] Commodity Prices - International oil prices have stabilized, with WTI crude oil increasing by 3.14% to $59.12 per barrel and Brent crude oil rising by 4.26% to $63.34 per barrel [6] - Gold prices have surged, with COMEX gold futures rising by 4.08% to $4,490.30 per ounce [6] Geopolitical Factors - Geopolitical tensions, particularly involving Venezuela and Iran, are influencing commodity markets, with concerns over oil supply disruptions contributing to price increases [6][7] - The Bloomberg Commodity Index is undergoing annual rebalancing, which may impact gold and silver prices in the short term [7] UK Economic Outlook - The UK is expected to show economic improvement in November, with forecasts suggesting a monthly GDP growth of 0.2%, the fastest since June of the previous year [8]

Core Viewpoint - The upcoming week is characterized as a "super week" for global capital markets, with significant macroeconomic data and corporate earnings reports expected to heighten market volatility. Key focus areas include inflation dynamics, corporate earnings validation, and geopolitical developments [3]. Economic Indicators - The U.S. is set to release the December CPI data on January 13, with expectations of a notable rebound, attributed to statistical distortions from the government shutdown rather than genuine inflationary pressures [5][6]. - China's December import and export data will be released on January 14, with forecasts indicating a 3.0% year-on-year increase in exports (down from 5.9% in November) and a 2.9% decline in imports (down from a 1.9% decrease in November) [4]. Corporate Earnings - Major U.S. banks, including JPMorgan Chase, will kick off the earnings season, with a focus on the health of the financial system amid high interest rates. Additionally, TSMC's earnings report is anticipated to serve as a bellwether for the global AI supply chain [3][9]. - TSMC is expected to report revenues of approximately NT$1.011 trillion for Q4 2025, with earnings per share projected at NT$2.72, highlighting its role as a key player in AI chip manufacturing [8]. Geopolitical and Industry Developments - The U.S. government faces an increased risk of shutdown as funding runs low, with a critical funding bill set to be reviewed by the Senate. This situation could significantly impact market sentiment and economic stability [13]. - The G7 finance ministers will meet to discuss rare earth issues, reflecting ongoing geopolitical tensions and industry dynamics [13]. - Canadian Prime Minister is scheduled to visit China from January 13 to 17, marking a significant diplomatic engagement focused on trade and energy discussions [13].

Group 1: Inflation Overview - In December 2025, CPI increased year-on-year from 0.7% to 0.8%, while core CPI remained stable at 1.2%[2] - PPI narrowed its year-on-year decline from -2.2% to -1.9%[2] - The GDP deflator index for Q4 2025 is expected to be around -0.4%, with earlier quarters at -0.8%, -1.2%, and -1%[2] Group 2: CPI Analysis - The cumulative CPI increase for 2025 is 0.8%, a significant recovery compared to the average -0.1% in 2023-24[5] - Food prices rose by 1.1% in 2025, driven by increases in fruits, vegetables, and beef[5] - Gold jewelry prices surged by 68.5%, contributing to the overall CPI improvement[5] Group 3: PPI Trends - In the first half of 2025, PPI experienced a monthly average decline of -0.3%, compared to -0.2% in 2023 and 2024[6] - The second half of 2025 saw PPI stabilize with a monthly average of 0%, indicating a recovery in various industry chains[6] - Factors influencing PPI include global recession fears due to U.S. tariff policies and ongoing adjustments in the domestic real estate market[6] Group 4: 2026 Outlook - CPI is projected to rise by approximately 0.8% in 2026, with a technical adjustment of 0.1 percentage points due to base effects[10] - PPI is expected to decline by about -1%, with an upward adjustment of 0.4 percentage points due to price increases in the non-ferrous sector[10] - Potential upward risks for CPI include increased consumer subsidies and improved service supply in the economy[10]

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - In 2025, CPI increased by 0.8% year - on - year, with core consumer goods, services, and fresh produce prices improving. PPI's year - on - year decline narrowed to - 1.9%, and prices gradually recovered from upstream to mid - downstream after the "anti - involution" policy [2][3]. - In December 2025, due to the decline in vegetable price growth and the seasonal recovery of consumer goods, CPI's year - on - year increase rebounded to 0.8% under the low - base effect. PPI's month - on - month increase rebounded to 0.2% due to the heating season and the impact of imported non - ferrous metals [29][45]. 3. Summary According to the Directory 2025 Inflation Review CPI - In 2025, CPI increased by 0.8% year - on - year. The factors contributing to the CPI increase from high to low were core consumer goods (0.63 pct), fresh produce (0.4 pct), services (0.25 pct), while livestock and meat (- 0.19 pct) and energy (- 0.3 pct) dragged it down [2][9]. - Core consumer goods: Gold prices contributed half of the increase, and prices of household appliances and daily necessities improved under consumption - promoting policies. Services: Service consumption scenarios mainly related to travel still supported prices, with significant price fluctuations between peak and off - peak seasons. Livestock and meat: Pig production capacity reduction was slow under "large - scale" farming, and terminal demand was weak, leading to a slow decline in prices. Fresh produce: Extreme weather affected production and transportation, tightening supply and driving up prices. Energy: Trade frictions led to weak demand and a downward price trend [2][14][15]. PPI - In 2025, the year - on - year decline of PPI narrowed to - 1.9%. After the "anti - involution" policy in July, mid - stream production materials industries showed positive signals, but the durable consumer goods manufacturing industry related to long - term income expectations and closer to terminal demand was still weak [24]. - Industries with continuous price increases included the imported non - ferrous metal industry chain, which had six consecutive months of price increases. Domestically, industries generally saw price recovery from upstream to mid - downstream, such as coal and black mining in the upstream, the paper - making industry, and then lithium - ion battery manufacturing and non - metallic mineral products industries [27]. December CPI Food Items - CPI food prices increased by 0.3% month - on - month, slightly weaker than the seasonal average, driving CPI up by about 0.05 percentage points. Pork prices decreased slightly due to oversupply, and fresh produce prices were weaker than the seasonal level, with fresh fruit prices rising seasonally and fresh vegetable prices rising less than expected [31]. Non - food Items - The non - food item of CPI increased by 0.1% month - on - month, stronger than the seasonal average, driving CPI up by about 0.12 percentage points. Energy prices decreased slightly, core consumer goods drove CPI up by about 0.16 percentage points (21% contributed by gold price increases), and service prices had limited impact on CPI during the off - travel season [32][37][38]. December PPI Overall - In December, PPI's month - on - month increase rebounded to 0.2% after 19 months, with price increases spreading from the mining industry to raw material and processing industries. Production material prices increased by 0.2%, while downstream living material prices remained flat [45]. By Industry - The number of industries with rising prices among industrial producers remained at 9. Supportive factors included the seasonal increase in demand and prices of coal, gas, and the non - ferrous metal industry chain, as well as the continuous price recovery of the paper - making industry. The drag factor was the imported crude oil industry chain [47][51][59].

Group 1 - The latest US non-farm payroll report did not alter market expectations regarding monetary policy, with a continued trend of slowing job growth but an unexpected drop in the unemployment rate [1][2] - December saw the addition of 50,000 non-farm jobs, below the market expectation of 60,000 and slightly lower than the revised previous value of 56,000, indicating a cooling in hiring momentum [1] - The unemployment rate fell from 4.6% to 4.4%, better than market expectations, which somewhat alleviated concerns about a rapid weakening of the labor market [1][2] Group 2 - The average hourly wage growth met expectations and did not indicate new inflationary pressures, suggesting an orderly cooling rather than structural imbalance in the labor market [1] - Despite some economic indicators showing resilience, the non-farm data did not shake the market's core pricing of the policy direction for the year, with the rate market still betting on about 50 basis points of cumulative rate cuts by the Federal Reserve by 2026 [2] - Richmond Fed President Barkin noted that the labor market remains stable overall, with job growth concentrated in healthcare and AI-related fields, and emphasized that the inflation decline process will take time [2] Group 3 - Geopolitical factors are providing marginal support for gold, with recent comments from Trump regarding Greenland raising international concerns and increasing the demand for safe-haven assets [3] - The combination of stable policy pricing and ongoing geopolitical risks has allowed gold to maintain its strength and continue to pressure historical high price levels [3] - Market focus will shift to upcoming US inflation, retail sales data, and statements from Federal Reserve officials, which will be crucial for determining whether gold can further open up space within high price ranges [3]