Group 1 - The report indicates that local government debt risk prevention and resolution have been effectively implemented in the first half of the year [1] - A total of 2 trillion yuan of local government debt limit was arranged to replace hidden debts, with 1.8 trillion yuan of related replacement bonds issued, completing 90% of the 2025 quota [1] - The average interest cost of the replaced debt has decreased by over 2.5 percentage points [1] Group 2 - The report emphasizes the need to strengthen budget constraints and prohibits the addition of hidden debts as a strict discipline [2] - It calls for a comprehensive management mechanism for hidden debt accountability, utilizing various methods such as auditing and inspections to identify and address new hidden debts [2] - The report advocates for a lifelong accountability system for government borrowing and a mechanism for tracing debt issues [2]

Group 1 - The Japanese Finance Minister, Shunichi Suzuki, expressed uncertainty about achieving a primary budget surplus by 2025, indicating a complex fiscal situation [1] - Japan's government is caught between the commitment to "responsible active fiscal policy" and a national debt that has reached 260% of GDP, with the Finance Minister emphasizing the need to gradually reduce the net debt-to-GDP ratio without providing a clear path [3] - The core CPI in Japan has risen for 49 consecutive months, with a 2.9% increase in September, while social security expenditures are increasing by approximately 1 trillion yen annually due to an aging population [3] Group 2 - The U.S. Treasury Secretary's praise for Japan's expansionary fiscal policy complicates the situation, as it contrasts with the Finance Minister's call for stable exchange rates amid a depreciating yen [5] - The Bank of Japan's decision to maintain a 0.5% benchmark interest rate highlights the structural challenges in the Japanese economy, where fiscal policy requires coordination with monetary policy to avoid significant exchange rate fluctuations [5] - The fragile nature of the ruling coalition, described as a "vase held together with tape," makes reform efforts difficult, with predictions suggesting a potential interest rate hike in January 2026, or earlier if the yen continues to depreciate [7]

Core Viewpoint - The global market trading focus will shift from Trump's election victory to preparations for the midterm elections, with the outcome of the 2026 midterm elections directly impacting the political landscape for Trump and the Republican Party [2]. Group 1: Midterm Elections - Trump's 2026 Policy Line - The midterm elections are crucial for Trump, as they may represent the last significant electoral battle of his political career, with a high likelihood of increased political resistance if he loses [4][22]. - Historical data shows that the president's party typically loses seats in midterm elections, with an average loss of 25.7 seats in the House and 3.3 seats in the Senate over the last 20 elections [16][20]. - The significance of the midterm elections is heightened for Trump, as a defeat could severely limit his political ambitions during the final years of his presidency [21][22]. Group 2: Trade Policy - Continued Uncertainty and Conflict - Trump's trade policy is expected to remain unpredictable, with potential for renewed tariff conflicts as a means to rally voter support and shift internal political pressures outward [4][33]. - The Supreme Court's upcoming decision on Trump's use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs may lead to alternative legal strategies for implementing tariffs if the ruling is unfavorable [34][38]. - The anticipated increase in tariff revenue could help alleviate fiscal pressures and support Trump's broader economic agenda leading up to the midterm elections [47]. Group 3: Monetary Policy - More Rate Cuts and Lower Credit Quality - The new Federal Reserve chair, expected to take office in May 2026, is likely to implement more aggressive rate cuts than the market anticipates, with projections of at least four rate cuts by the end of next year [5][61]. - Lower interest rates are seen as essential for stimulating economic growth and supporting stock markets, particularly in light of the negative impacts of tariffs [49][51]. - The anticipated shift in monetary policy could lead to a weaker dollar and increased credit challenges, impacting overall market sentiment [48][56]. Group 4: Fiscal Policy - Necessity and Feasibility of Expansion - There is a pressing need for expanded fiscal policies to stimulate demand and counteract the negative effects of tariffs as the midterm elections approach [66][68]. - Increased tariff revenues and reduced fiscal pressure from lower interest rates could provide the necessary funding for expanded fiscal measures without resorting to excessive borrowing [68]. - The experience from the 2018 midterm elections suggests that failure to maintain fiscal expansion could lead to adverse market reactions [68]. Group 5: Foreign Policy - Return to "America First" and Strong Geopolitical Stance - Trump's foreign policy is expected to focus on pragmatic interest exchanges, emphasizing "America First" while managing geopolitical conflicts with limited intervention [69][79]. - Efforts to mediate conflicts such as the Russia-Ukraine situation and the Middle East will continue, with a strong emphasis on leveraging economic and military pressure to achieve peace [70][73]. - The approach to foreign policy will likely involve a mix of negotiation and coercion, potentially increasing geopolitical tensions and impacting market risk appetite [79].

Group 1: Policy Overview - The "14th Five-Year Plan" proposal has been approved by the Fourth Plenary Session of the Central Committee[6] - The plan emphasizes addressing the North-South economic disparity for the first time[5] - The guiding principles of the "14th Five-Year Plan" include "1 guarantee," "2 promotions," "5 focuses," and "6 persistences"[20] Group 2: Fiscal Policy - From January to September 2025, fiscal revenue growth turned positive for the first time this year, with a growth rate of 0.3%[45] - Expenditure growth is stabilizing at a high level, with a rate of 7.9%[45] Group 3: Monetary Policy - The central bank continues to maintain a moderately loose monetary policy[4] - The Loan Prime Rate (LPR) remains unchanged as of July 2025[4] Group 4: Economic Indicators - The GDP growth target for 2025 is set at 5.0%[9] - The report indicates a steady recovery in fiscal operations, with balanced expenditure rhythms[4]

Group 1 - The core viewpoint indicates that the clarity of U.S. President Trump's trade and fiscal policies is increasing, prompting investors to assess the impact of these policies on inflation, the economy, and monetary policy [1] - The actual tariff rates between the U.S. and its major trading partners are projected to be between 10% and 20%, a significant increase from 2.5% at the beginning of 2025 [1] - Although tariff increases have not yet significantly impacted the U.S. economy, they may dampen consumer spending, economic growth, and corporate profits [1] - Inflationary pressures from tariffs are expected to ease next year, while economic activity remains robust with only slight declines in real-time economic indicators [1] - AI-related spending is strong, offsetting the ongoing weakness in the manufacturing and real estate sectors [1] - Factors such as tariff increases, corporate tax rate cuts, and strict immigration policies are keeping inflation expectations high, raising concerns about rising prices affecting corporate earnings and consumer sentiment [1] - The job market is a point of concern, particularly for small businesses that account for over 70% of U.S. employment but have weaker pricing power and are sensitive to economic and interest rate changes, potentially facing layoffs [1] Group 2 - Investment opportunities are focused on international value stocks and small-cap stocks, especially in regions with increased fiscal spending and accommodative monetary policies [2] - European and UK stock markets appear attractive, while U.S. growth stocks may benefit from the AI boom, providing a buffer if the economy weakens due to their solid fundamentals [2] - Stocks linked to real assets, such as energy and metals, have historically served as effective hedges against inflation [2] - The development of AI and rising electricity demand may stimulate industrial metal demand, with some metals facing supply constraints [2] - The issuance of U.S. Treasury bonds to address deficit spending may put upward pressure on yields [2] - Due to inflation concerns and the level of U.S. public debt, there is a cautious stance on long-duration U.S. Treasuries as a hedge during economic downturns [2] - In fixed income investments, there is a preference for shorter-duration assets and short-term Treasury Inflation-Protected Securities (TIPS) [2]

Report Industry Investment Rating No relevant content provided. Core View of the Report The bond market is oscillating between stable growth and easing expectations. It is affected by the stock market, the continued expectation of a Fed rate cut, and the increased uncertainty of foreign capital inflows due to rising global trade uncertainties. Short - term attention should be paid to the policy signals at the end of the month [3]. Summary by Directory 1. Interest Rate Pricing Tracking Indicators - **Price Indicators**: China's monthly CPI increased by 0.20% both month - on - month and year - on - year, while the monthly PPI rose 0.10% month - on - month and decreased 2.10% year - on - year [9]. - **Monthly Economic Indicators**: The social financing scale was 437.08 trillion yuan, with a month - on - month increase of 3.42 trillion yuan (+0.79%); M2 year - on - year was 8.40%, down 0.40% (-4.55%); the manufacturing PMI was 49.00%, down 0.80% (-1.61%) [9]. - **Daily Economic Indicators**: The US dollar index was 99.62, up 0.05 (+0.05%); the offshore US dollar to RMB exchange rate was 7.1203, down 0.004 (-0.05%); SHIBOR 7 - day was 1.48, up 0.06 (+3.94%); DR007 was 1.50, up 0.09 (+6.11%); R007 was 1.51, down 0.02 (-1.24%); the 3 - month interbank certificate of deposit (AAA) was 1.57, up 0.00 (-0.24%); the AA - AAA credit spread (1Y) was 0.08, up 0.00 (-0.24%) [9]. 2. Overview of the Treasury Bond and Treasury Bond Futures Market No specific content provided other than the title. 3. Overview of the Money Market Funding Situation The main term repo rates (1D, 7D, 14D, and 1M) were 1.479%, 1.478%, 1.492%, and 1.525% respectively, and the repo rates have recently rebounded. On November 10, 2025, the central bank conducted a 7 - day reverse repurchase operation of 119.9 billion yuan at a fixed rate of 1.4% [2]. 4. Spread Overview No specific content provided other than the title. 5. Two - Year Treasury Bond Futures No specific content provided other than the title and related chart descriptions. 6. Five - Year Treasury Bond Futures No specific content provided other than the title and related chart descriptions. 7. Ten - Year Treasury Bond Futures No specific content provided other than the title and related chart descriptions. 8. Thirty - Year Treasury Bond Futures No specific content provided other than the title and related chart descriptions. Market Analysis - **Macroeconomic Policy**: In October, there were multiple events including the US adding Chinese entities to the export control list, China's response on ship special port fees, Trump's tariff threat, the central bank's open - market treasury bond trading operation, and the consensus reached by the China - US economic and trade teams on three aspects. The State Council Tariff Commission announced to continue suspending the 24% additional tariff on the US for one year and retain the 10% tariff [1]. - **Inflation**: In October, the CPI increased by 0.2% year - on - year [1]. - **Fiscal Policy**: In the first half of the year, the fiscal operation was generally stable, with revenue gradually recovering and key expenditures effectively guaranteed. Super - long - term special treasury bonds and special bonds were accelerating their implementation. Policies such as consumer goods replacement, effective investment, and technological innovation had a synergistic amplification effect, and people's livelihood inputs continued to increase. In the next stage, active fiscal tools will continue to be used to balance stable growth, people's livelihood protection, and risk prevention [2]. - **Central Bank Operation**: On November 10, 2025, the central bank conducted a 7 - day reverse repurchase operation of 119.9 billion yuan at a fixed rate of 1.4% [2]. - **Market Conditions**: On November 10, 2025, the closing prices of TS, TF, T, and TL were 102.47 yuan, 105.94 yuan, 108.49 yuan, and 116.28 yuan respectively, with price changes of 0.00%, 0.02%, 0.01%, and 0.22% respectively. The average net basis of TS, TF, T, and TL was - 0.008 yuan, - 0.015 yuan, - 0.044 yuan, and - 0.275 yuan respectively [2]. Strategy - **Unilateral Strategy**: With the rebound of the repo rate and the oscillation of treasury bond futures prices, the 2512 contract is neutral [4]. - **Arbitrage Strategy**: Pay attention to the decline of the 2512 basis [4]. - **Hedging Strategy**: There is medium - term adjustment pressure, and short - side investors can use far - month contracts for appropriate hedging [4].

Core Viewpoint - The Chinese Ministry of Finance released a report on the execution of fiscal policy for the first half of 2025, outlining six key areas of focus for future fiscal policy implementation [1]. Group 1: Fiscal Policy Implementation - The report emphasizes the need for a more proactive fiscal policy, including actions to boost consumer spending through targeted financial subsidies for personal loans in key sectors [3]. - Support for employment and foreign trade is prioritized, with measures to promote job creation and assist businesses in maintaining operations and expanding markets [4]. - The report highlights the importance of fostering new growth drivers by advancing core technologies and promoting emerging industries, while ensuring equal treatment for all business entities [4]. Group 2: Consumer Trends - High-end consumption is showing signs of recovery, with notable improvements in sectors such as Macau gaming and luxury goods, driven by wealth effects and supply optimization [6]. - The luxury market is experiencing growth, with companies like LVMH and Hermès reporting improved sales in China, indicating a positive trend in consumer sentiment [6]. - New consumption sectors, particularly in the tea beverage industry, are expected to see significant profit growth, with leading brands benefiting from strong market positions [8]. Group 3: Policy Support for Consumption - The government is taking steps to enhance service consumption by relaxing entry barriers and removing unreasonable restrictions, which is expected to boost consumer willingness to spend [7]. - Recent policy changes in the duty-free sector aim to improve shopping experiences and increase consumer engagement in duty-free shopping [7].

1. Report Industry Investment Rating The provided content does not mention the report industry investment rating. 2. Core Views of the Report - In the short - term, supported by risk - aversion sentiment, loose capital, and policy expectations, Treasury bond futures are expected to remain strong. However, attention should be paid to the subsequent progress of Sino - US games and the possible fluctuations caused by the release of important domestic economic data [9]. - In the medium - to - long - term, the lack of effective demand is the main challenge for China's economic development. With the new normal of the marginal decline in the economic pulling effect of land finance and debt - driven models, and the potential impact of trade frictions in the Trump 2.0 era, total demand is unlikely to fundamentally recover in the short term, and deflation is likely to continue. Therefore, the fundamentals are favorable for bond futures, and the logic of a bond bull market is expected to continue under the support of a loose monetary cycle [9]. 3. Summary by Relevant Catalogs Part One: Main Views - **Weekly Market Review**: Early in the week, market sentiment was relatively stable, with the main contracts of Treasury bond futures showing mixed gains and losses and small fluctuations. On Thursday and Friday, the market was weaker, and contracts of all maturities generally closed down. In general, long - term contracts (such as 30 - year and 10 - year) performed slightly weaker than short - term contracts [4]. - **Incremental Information**: In October 2025, the central bank resumed open - market operations of buying and selling Treasury bonds, achieving a net investment of 20 billion yuan, which increased market demand and smoothed market fluctuations. To address the liquidity gap of about 2 trillion yuan in November, the central bank conducted equivalent roll - overs of 70 billion yuan in 3 - month repurchase agreements and may increase the roll - over of 6 - month repurchase agreements. In October 2025, in US dollar terms, exports were $305.353 billion, a year - on - year decrease of 1.1% and a month - on - month decrease of 7%; imports were $215.279 billion, a year - on - year increase of 1.0% with a growth slowdown of 6.4 percentage points compared to September and a month - on - month decrease of 9.5%; the trade surplus was $90.07 billion, a year - on - year decrease of 5.9%, and the surplus was lower than market expectations [4]. Part Two: Liquidity Tracking The content mainly presents various charts related to liquidity, including open - market operations (volume and price), medium - term lending facilities (volume and price), reverse repurchase rates, capital prices (deposit - type pledged repurchase, SHIBOR, etc.), R007&DR007 trading volume and spreads, inter - bank certificate of deposit issuance rates, excess reserve ratios, LPR, deposit reserve ratios, Treasury bond yields, Treasury bond term spreads, US Treasury bond yields, and US Treasury bond term spreads, but no specific text analysis is provided [10][11][13]. Part Three: Treasury Bond Futures Arbitrage Indicator Tracking The content shows various charts of Treasury bond futures arbitrage indicators, including basis, net basis, internal rate of return (IRR), and implied interest rates for 2 - year, 5 - year, 10 - year, and 30 - year Treasury bond futures, but no specific text analysis is provided [42][45][54].

Hot News - The Ministry of Finance released the report on the implementation of China's fiscal policy in the first half of 2025. It will make full use of a more proactive fiscal policy, compact the budget execution responsibility chain, combine improving the efficiency of fund use with ensuring fund safety, and promote the implementation of funds and policies [2] - The National Energy Administration issued the guiding opinions on promoting the integrated development of coal and new energy. By the end of the 15th Five - Year Plan, significant achievements are expected in the integrated development of coal and new energy, with a basically mature development model for the photovoltaic and wind power industries in coal mining areas, a substantial increase in electricity substitution and new energy penetration, and the construction of a number of clean and low - carbon mining areas [2] - On November 7 local time, the U.S. Senate failed to pass the motion to advance the Specific Federal Employees Appropriations Act, with 53 votes in favor and 43 against, falling short of the 60 - vote threshold. The government shutdown is difficult to lift for the time being [2] - The General Administration of Customs decided to revoke the 2025 No. 30 announcement on suspending the soybean export qualifications of three U.S. enterprises including CHS Inc., and resume their soybean export qualifications to China from November 10, 2025 [2] - The China Securities Regulatory Commission approved the registration of platinum, palladium futures and options at the Guangzhou Futures Exchange and will supervise the exchange to ensure the smooth launch and stable operation of these products [2] Plate Performance - Key focus: Pulp, crude oil, coking coal, Shanghai copper, Shanghai gold [3] - Night session performance: Non - metallic building materials rose 3.13%, precious metals 28.56%, oilseeds 9.61%, non - ferrous metals 23.20%, soft commodities 2.77%, coal, coke, steel and ore 13.36%, energy 2.90%, chemicals 11.33%, grains 1.21%, and agricultural and sideline products 3.93% [3] Big Asset Performance | Category | Name | Daily % Change | Monthly % Change | Year - to - Date % Change | | --- | --- | --- | --- | --- | | Equity | Shanghai Composite Index | - 0.25 | 1.08 | 19.27 | | Equity | SSE 50 | - 0.21 | 0.89 | 13.17 | | Equity | CSI 300 | - 0.31 | 0.82 | 18.90 | | Equity | CSI 500 | - 0.24 | - 0.04 | 27.98 | | Equity | S&P 500 | 0.13 | - 1.63 | 14.40 | | Equity | Hang Seng Index | - 0.92 | 1.29 | 30.82 | | Equity | German DAX | - 0.69 | - 1.62 | 18.39 | | Equity | Nikkei 225 | - 1.19 | - 4.07 | 26.02 | | Equity | UK FTSE 100 | - 0.55 | - 0.36 | 18.47 | | Fixed Income | 10 - year Treasury Bond Futures | - 0.09 | - 0.22 | - 0.44 | | Fixed Income | 5 - year Treasury Bond Futures | - 0.05 | - 0.15 | - 0.59 | | Fixed Income | 2 - year Treasury Bond Futures | - 0.02 | - 0.07 | - 0.49 | | Commodity | CRB Commodity Index | 0.01 | - 0.54 | 1.41 | | Commodity | WTI Crude Oil | 0.66 | - 1.72 | - 16.82 | | Commodity | London Spot Gold | 0.59 | - 0.06 | 52.44 | | Commodity | LME Copper | 0.12 | - 1.80 | 21.79 | | Commodity | Wind Commodity Index | 0.20 | - 1.90 | 28.15 | | Other | US Dollar Index | - 0.15 | - 0.18 | - 8.24 | | Other | CBOE Volatility Index | - 2.15 | 9.40 | 9.97 | [5]

Core Viewpoint - The Ministry of Finance has released the "2025 Mid-Year Report on China's Fiscal Policy Execution," indicating a recovery in fiscal revenue and an increase in expenditure to support key areas of the economy [1] Group 1: Fiscal Revenue and Expenditure - Fiscal revenue is recovering, with tax revenue gradually increasing [1] - National general public budget expenditure reached 14.13 trillion yuan, a growth of 3.4% [1] - Central government transfers to local governments amounted to 9.29 trillion yuan, accounting for 89.8% of the annual budget [1] Group 2: Domestic Demand and Consumption - Fiscal policy focuses on boosting consumption, with 300 billion yuan in special bonds allocated for consumer upgrades [2] - The "old for new" program has driven sales of 1.6 trillion yuan in related categories [2] - Emphasis on improving social security to enhance consumer capacity and willingness [2] Group 3: Strategic Development and Innovation - Central government technology expenditure for 2025 is set at 398.12 billion yuan, a 10% increase from the previous year [3] - Support for high-quality development in key manufacturing industries and rural revitalization efforts [3] - Initiatives to promote regional coordinated development and ecological protection [3] Group 4: Social Welfare and Employment - Policies to stabilize and expand employment through tax reductions and subsidies [4] - Increased funding for public health services and social security measures [4] - Implementation of a childcare subsidy system and improvements in elderly care services [4] Group 5: Risk Management - Measures to mitigate risks in key areas, including a focus on local government debt management [5] - High-pressure regulatory stance to curb new hidden debts [5] - Support for the real estate market to stabilize [5] Group 6: Fiscal Management and Reform - Comprehensive reforms in the fiscal and tax system to enhance budget management [6] - Emphasis on scientific fiscal management and strict oversight of financial resources [6] - Plans for higher quality fiscal policy implementation and macroeconomic regulation [6] Group 7: Future Directions - Continued implementation of proactive fiscal policies to ensure effective fund utilization [7] - Support for employment stability and foreign trade [7] - Focus on nurturing new growth drivers and improving living standards [7] - Ongoing efforts to prevent and resolve financial risks [7] - Enhancement of fiscal governance effectiveness [7]