Inflation Data - June CPI year-on-year growth rate is 0.1%, an improvement from the previous value of -0.1%, exceeding market expectations of 0%[3] - June PPI year-on-year growth rate recorded at -3.6%, lower than market expectations of -3.2%[7] - Core CPI, excluding food and energy, increased by 0.7% year-on-year, marking a 14-month high[5] Price Movements - Industrial consumer goods prices saw a narrowing decline from -1.0% in May to -0.5% in June, contributing less to CPI decline by approximately 0.18 percentage points[3] - Gasoline prices shifted from a 3.8% decline to a 0.4% increase in June, influenced by international oil price movements[4] - Platinum jewelry prices surged by 12.6% in June, the largest monthly increase in nearly a decade[3] Economic Outlook - The market is expected to exhibit a dual bull structure in stocks and bonds in the second half of the year, supported by improving US-China trade relations and risk-averse funds[2] - Fixed income yields, particularly the 10-year government bond rate, are projected to decline to around 1.5% amid low domestic demand stimulus probability[2] Consumer Demand - Consumer demand is in a critical recovery phase, with incremental counter-cyclical policies expected to enhance demand and gradually improve CPI levels[7] - The demand for high-quality living is increasing, leading to price recoveries in related industries[9]

1. Report Industry Investment Rating - No information provided regarding the report industry investment rating 2. Core Viewpoints - For stock index futures, the policy helps promote enterprise technological innovation, industrial upgrading of new - quality productivity, and long - term profitability repair of enterprises, but relevant sectors may face pressure during the elimination of backward production capacity, and the basis discount of stock index futures may widen. The overall view is that the market will be volatile [1] - For treasury bond futures, the bond market is in an environment of loose funds, stable economy, and low short - term interest rate cut expectations, with insufficient upward and downward momentum, and is expected to continue a volatile trend in the short term [1] 3. Summary by Relevant Catalogs 3.1 Research Viewpoints - **Stock Index Futures**: On July 1st, policies such as the sixth meeting of the Central Financial and Economic Commission and the release of an article in Qiushi magazine were introduced. These policies are beneficial for long - term corporate profitability and A - share investment returns, but relevant sectors may face short - term pressure, and the basis discount of stock index futures may widen. The market is expected to be volatile [1] - **Treasury Bond Futures**: On July 8th, treasury bond futures closed with some declines. The central bank conducted 1065 billion yuan of 7 - day reverse repurchase operations, with a net withdrawal of 225 billion yuan. The capital market is loose, and the economy is stable. The bond market is expected to be volatile in the short term [1] 3.2 Daily Price Changes - **Stock Index Futures**: From July 4th to July 7th, IH decreased by 9.2 points (- 0.34%), IF decreased by 18.0 points (- 0.46%), IC decreased by 15.0 points (- 0.26%), and IM decreased by 0.6 points (- 0.01%) [2] - **Stock Indexes**: From July 4th to July 7th, the Shanghai Composite 50 decreased by 8.9 points (- 0.33%), the CSI 300 decreased by 17.0 points (- 0.43%), the CSI 500 decreased by 11.0 points (- 0.19%), and the CSI 1000 increased by 14.9 points (0.24%) [2] - **Treasury Bond Futures**: From July 4th to July 7th, TS decreased by 0.006 points (- 0.01%), TF decreased by 0.03 points (- 0.03%), T increased by 0.005 points (0.00%), and TL decreased by 0.05 points (- 0.04%) [2] 3.3 Market News - China's foreign exchange reserves in June were 3.317422 trillion US dollars, higher than the expected 3.3 trillion US dollars and the previous value of 3.28526 trillion US dollars [3] - As of the end of June, China's gold reserves were 73.9 million ounces (about 2298.55 tons), an increase of 70,000 ounces (about 2.18 tons) from the previous month, and it was the 8th consecutive month of gold purchases [4] 3.4 Chart Analysis - **Stock Index Futures**: There are charts showing the trends of IH, IF, IM, IC main contracts, and their respective monthly basis trends [6][7][9] - **Treasury Bond Futures**: There are charts showing the trends of treasury bond futures main contracts, treasury bond spot yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates [13][15][17] - **Exchange Rates**: There are charts showing the central parity rates of the US dollar, euro against the RMB, forward exchange rates, the US dollar index, euro - US dollar, pound - US dollar, and US dollar - yen exchange rates [20][21][24] 4. Member Introduction - Zhu Jintao, a master of economics from Jilin University, is the director of macro - financial research at Everbright Futures Research Institute, with futures qualification number F3060829 and consulting qualification number Z0015271 [27] - Wang Dongying, an index analyst with a master's degree from Columbia University, focuses on stock index futures, and is responsible for macro - fundamental quantification, key industry research, index financial report analysis, and market capital tracking, with futures qualification number F03087149 and consulting qualification number Z0019537 [27]

Core Viewpoint - A new round of anti-"involution" competition has been initiated, affecting both traditional industries like steel and cement, as well as emerging sectors such as photovoltaics, new energy vehicles, and lithium batteries. The central government has signaled a commitment to address low-price disorderly competition and promote the orderly exit of backward production capacity [1][4][6]. Group 1: Government Initiatives - The Central Economic Committee's recent meeting emphasized the need to govern low-price disorderly competition legally and systematically, aiming to enhance product quality and facilitate the exit of outdated production capacity [1][6]. - The Ministry of Industry and Information Technology (MIIT) has held discussions with photovoltaic industry leaders to address the challenges posed by low-price competition and to promote high-quality development within the sector [11][12]. - The revised Anti-Unfair Competition Law, effective from October 15, 2025, aims to provide legal tools to combat "involution" competition, particularly targeting platform operators who enforce below-cost pricing [9][10]. Group 2: Industry Responses - Various industry associations, including those in steel, cement, and battery sectors, have called for a collective response against "involution" competition, advocating for quality over price in market competition [3][16][19]. - The photovoltaic industry is experiencing significant pressure, with upstream silicon material prices plummeting, leading to a collective financial strain across the entire supply chain [12][14]. - Industry leaders have highlighted the necessity for consolidation and stricter control of production capacity to overcome the challenges posed by "involution" competition, suggesting that cooperation is essential for long-term sustainability [14][19]. Group 3: Economic Context - The current "involution" phenomenon is attributed to two main factors: a cyclical economic adjustment leading to heightened price sensitivity among consumers, and external pressures from a de-globalizing environment that compel companies to compete primarily on price [7][8]. - The imbalance between supply and demand in various sectors, particularly in the steel industry, has resulted in increased production despite declining consumption, exacerbating the "involution" issue [18][19].

Group 1 - The core viewpoint emphasizes that comprehensive rectification of "involutionary" competition is a key measure to address current economic development contradictions, affecting both traditional and emerging industries [1][4][5] - The new round of anti-involution policies includes not only traditional industries like steel and cement but also emerging sectors such as photovoltaics, new energy vehicles, and lithium batteries, which have a higher proportion of private enterprises [1][4][5] - The recent Central Economic Committee meeting highlighted the need to legally govern low-price disorderly competition and promote the orderly exit of backward production capacity, signaling a national-level response to involution [2][5] Group 2 - The Ministry of Industry and Information Technology (MIIT) has initiated discussions with photovoltaic industry leaders to address production, innovation, and market competition challenges, aiming to support high-quality development in the sector [10] - The photovoltaic industry has faced significant pressure, with prices for silicon materials and components dropping below cash costs, leading to a substantial decline in profit margins [11][12] - Various industry associations, including those in steel, cement, and battery sectors, have called for a collective response to involution, advocating for quality over price competition and industry cooperation [13][15] Group 3 - The revised Anti-Unfair Competition Law, effective from October 15, 2025, aims to provide institutional tools to curb "involutionary" competition, particularly targeting platform operators to prevent forced low-cost sales [9] - Experts have identified two main causes of the current involution phenomenon: domestic economic adjustments leading to price sensitivity and external pressures on Chinese enterprises due to de-globalization [6][7] - The steel industry is particularly affected by involution, with a significant increase in crude steel production despite declining apparent consumption, indicating a supply-demand imbalance [15]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In the stock index futures market, the concept of "anti - involution competition" is emerging, boosting policy expectations. The market is in the first stage of trading policy expectations, and the "policy bottom" of commodity prices may have appeared, which is beneficial to the inflation chain. There is a potential risk of market - capitalization style shifting to large - cap stocks. It is recommended to take profits on IM long positions at high prices and consider arbitrage opportunities [1][6]. - In the stock index options market, due to low liquidity, low volatility, and ineffective sentiment indicators, the market trend is likely to be volatile, and a covered - call defensive strategy is recommended [2][6]. - In the treasury bond futures market, bond market sentiment is warming up. The easing of the capital market at the beginning of the month and the reduction in the issuance scale of some treasury bonds are positive factors. However, the central bank's cautious liquidity injection and the potential high supply of new local bonds in July may limit the decline in interest rates, and the bond market is expected to continue to fluctuate [3][7][8]. Summary by Relevant Catalogs Market Views Stock Index Futures - **Market Situation**: The concept of "anti - involution competition" has emerged, with a focus on industries such as cement, polysilicon, and coal. Commodity futures have risen first, driving up related sectors in the stock market, and funds have flowed out of small - cap growth sectors. The IF, IH, IC, and IM contracts have shown changes in basis, inter - delivery spreads, and positions [1][6]. - **Logic**: The current supply - demand pattern remains loose, and supply has not been substantially cleared. The "policy bottom" of commodity prices may have appeared, and there is a potential risk of market - capitalization style shifting to large - cap stocks [1][6]. - **Operation Suggestion**: Take profits on IM long positions at high prices and consider long - far - month and short - near - month arbitrage opportunities. The overall suggestion is to wait and see [1][6]. Stock Index Options - **Market Situation**: The trading volume of the options market has continued to decline, and trading liquidity is lower than expected. The average implied volatility of each option variety has decreased by 0.05%, and sentiment indicators are not guiding [2][6]. - **Logic**: Low liquidity and volatility, along with ineffective sentiment indicators, suggest that the index has resistance above, and the market trend is likely to be volatile [2][6]. - **Operation Suggestion**: Adopt a covered - call defensive strategy [2][6]. Treasury Bond Futures - **Market Situation**: Treasury bond futures rose collectively. There were changes in trading volume, positions, inter - delivery spreads, inter - variety spreads, and basis of T, TF, TS, and TL contracts. The central bank conducted 985 billion yuan of 7 - day reverse repurchases, with 3653 billion yuan of reverse repurchases maturing [7]. - **Logic**: At the beginning of the month, the capital market continued to ease, and the issuance scale of some treasury bonds decreased, which improved bond market sentiment. However, the central bank's cautious attitude towards liquidity injection and the potential high supply of new local bonds in July limit the decline in interest rates [3][7][8]. - **Operation Suggestion**: Maintain a volatile trend strategy. For hedging, pay attention to short - hedging at low basis levels. For basis trading, appropriately pay attention to basis widening. For the yield curve, the odds of steepening the curve in the medium term are higher [8]. Economic Calendar - On June 30, 2025, China's official manufacturing PMI for June was 49.7, up from the previous value of 49.5 [9]. - On July 1, 2025, the final value of the US Markit manufacturing PMI for June was 52.9, higher than the previous value and the forecast value of 52 [9]. - On July 3, 2025, the US will release data on the unemployment rate and non - farm payrolls for June, with forecast values of 4.30% and 11.3 million respectively [9]. Important Information and News Tracking - **Domestic Macroeconomics**: The National Development and Reform Commission has allocated over 300 billion yuan to support the third - batch of "two major" construction projects in 2025, and the 800 - billion - yuan project list for this year has been fully released, covering multiple key areas [9]. - **Commodities**: The Silicon Industry Branch of the China Nonferrous Metals Industry Association stated that the polysilicon market showed signs of recovery this week, with the average market price rising slightly [10]. Derivatives Market Monitoring No specific content for in - depth analysis is provided in the text for stock index futures, stock index options, and treasury bond futures market monitoring.

Core Viewpoint - The article discusses the issue of "involution" in the e-commerce sector, particularly focusing on the ineffective and vicious competition that leads to low-quality products and a negative cycle among platforms, merchants, and consumers. It highlights how Taobao Flash Sale is taking significant steps to break this cycle and promote a healthier competitive environment [1][4]. Group 1: Involution in E-commerce - Involution refers to excessive and disordered competition that contradicts economic principles, leading to low-quality and homogenized products [1]. - The current state of e-commerce in China is characterized by high platform commissions, resulting in a deadlock for delivery riders, merchants, and consumers [1]. - The article emphasizes the need for a shift from a "multi-loss cycle" to a "multi-win cycle" in the e-commerce landscape [1]. Group 2: Taobao Flash Sale's Strategies - Taobao Flash Sale is implementing two main strategies to combat involution: resource integration and substantial financial subsidies [2]. - The first strategy involves integrating resources from platforms like Fliggy, Ele.me, and Taotian to achieve economies of scale, which will lead to a geometric increase in order volume [2]. - The second strategy includes a 500 billion yuan subsidy for merchants over the next 12 months, aimed at improving profit margins and alleviating competitive pressure [2][3]. Group 3: Impact on Merchants and Consumers - The 500 billion yuan investment will provide various subsidies to merchants, including store, product, and delivery subsidies, which will help restore their profit margins [3]. - Consumers will also benefit from significant discounts and promotional offers, which will drive more traffic to merchants and enhance their sales performance [3]. - The article suggests that this initiative will enable merchants to focus on improving product quality, thereby enhancing consumer experience and confidence, ultimately stimulating domestic demand [2][3]. Group 4: Broader Implications for the Industry - Taobao Flash Sale's approach is seen as a potential model for addressing the challenges of involution in the Chinese e-commerce market [4]. - The article posits that the goal is for every Chinese merchant to achieve reasonable profits through differentiation, moving from low-end to high-end supply chains, and contributing to high-quality development in China [4]. - The actions taken by Taobao Flash Sale are viewed as a significant step towards rectifying the issues of involution and fostering a healthier competitive ecosystem in the e-commerce sector [4].

Core Viewpoint - Major Chinese automotive companies have committed to a maximum supplier payment term of 60 days, effective from June 1, 2025, as part of a new regulation aimed at improving cash flow for small and medium-sized enterprises [1][7]. Group 1: Supplier Payment Terms - 17 key automotive manufacturers have pledged to adhere to a 60-day payment term for suppliers, which is a response to the new regulation from the State Council [1]. - The average payment cycle for major companies is significantly longer, with BYD at 127 days, Chery at 143 days, Great Wall at 163 days, NIO at 195 days, and Changan exceeding 200 days [3][5]. Group 2: Financial Impact on Suppliers - Extended payment terms lead to increased financial costs for upstream suppliers, resulting in reduced profits [3]. - The ratio of accounts payable to revenue is a critical indicator of a company's operational health, with NIO at 52%, Changan at 49%, Great Wall at 39%, SAIC at 38%, and BYD at 31% [3][5]. Group 3: Industry Competition and Profitability - Intense competition has caused component procurement prices to decline by 10%-15% annually, putting additional pressure on profitability and supply chains [6]. - The automotive industry's profit margin was reported at 4.3% in 2024, decreasing to 3.9% in the first quarter of 2025 [6]. Group 4: Future Considerations - The commitment to a 60-day payment term is seen as a positive step towards reducing risks in the automotive supply chain and promoting sustainable development [7]. - There are still many operational details that need clarification, such as the calculation methods for payment terms and the types of payment instruments used [7][8].