Core Viewpoint - The article discusses the contrasting performance of global markets in early 2023, highlighting a broad rise in international stock markets while the U.S. market, particularly large-cap stocks, lagged behind, indicating a preference for small-cap stocks amidst a backdrop of liquidity and sentiment recovery [3][20]. Group 1: Market Trends - Global stock markets, including Japan, South Korea, and Singapore, have reached historical highs, while the Shanghai Composite Index has hit a 10-year peak [3][20]. - The U.S. market has shown a notable divergence, with large-cap stocks underperforming compared to small-cap stocks, suggesting a selective investment approach despite overall liquidity [3][20]. Group 2: Liquidity and Sentiment - The article emphasizes the importance of distinguishing between "big expectations" and "small certainties" regarding market liquidity and sentiment recovery [5][22]. - A significant drop in market trading activity was observed after the "Quadruple Witching Day" in December, marking the fastest decline in five years, which coincided with liquidity risk events [5][22]. - Following the year-end holidays, trading activity rebounded, leading to a notable market recovery [23]. Group 3: Fiscal and Monetary Policy - Fiscal expansion remains a key theme across major economies, driven by election-year dynamics in the U.S. and new leadership in Japan, alongside a revival in European fiscal efforts [7][25]. - The Federal Reserve's monetary policy adjustments, including the initiation of Reserve Management Purchases (RMP), are expected to enhance liquidity in the market [9][27]. - The anticipated scale of net purchases by the Federal Reserve over the next 12 months is projected to be $220 billion, with a monthly average of around $40 billion from January to April [9][27][28]. Group 4: Market Expectations and Risks - The market's expectations for fiscal and monetary stimulus are likely to be a significant source of volatility throughout the year [12][32]. - There is a cautious outlook on unconventional fiscal policies, such as direct payments to residents, due to potential legislative hurdles [12][32]. - The article outlines four potential scenarios for market dynamics based on the interplay of Federal Reserve policies and the strength of the U.S. dollar, indicating varying impacts on global assets [14][34].

Core Viewpoint - The cyclical commodities industry is at a turning point, with supply constraints and global demand expected to drive price increases significantly by 2026 [1] Group 1: Market Trends - The global metal futures market has seen a strong start in 2026, with LME copper prices reaching historical highs and LME tin hitting $54,760 per ton, reflecting an over 18% increase year-to-date [1] - The prices of aluminum and copper have also reached new highs, with domestic aluminum futures peaking at ¥250,700 per ton and copper at ¥105,600 per ton [2] Group 2: Supply and Demand Dynamics - The copper, aluminum, and lithium markets are entering a "tight supply" phase, with projected supply-demand gaps for copper, aluminum, and lithium expected to reach 670,000 tons, 990,000 tons, and 120,000 tons respectively by 2026 [2] - The supply of copper is expected to transition from a surplus of 11,000 tons in 2024 to a deficit of 340,000 tons in 2026, influenced by AI demand [2][3] Group 3: Investment Insights - The industrial metal market has been primarily driven by supply-side disruptions over the past three years, with a lack of new large-scale projects contributing to price support [3] - The domestic industrial enterprise inventory cycle is at a bottoming phase, with expectations for replenishment rising, driven by new production capabilities and energy structure transitions [3] Group 4: Global Macro Perspective - The combination of U.S. fiscal expansion and a low-interest-rate environment is expected to lead to a revaluation of major assets globally, with traditional safe-haven assets like gold gaining renewed attention [4] Group 5: AI and Infrastructure Demand - AI is rapidly increasing copper consumption through upgrades to old power grids and new data centers, with significant copper requirements projected for these developments [5][6] - The overall demand for copper, aluminum, and other metals is expected to be supported by traditional infrastructure, new energy vehicles, and energy storage developments [6] Group 6: Price Volatility and Risks - Short-term volatility risks in industrial metals have been highlighted, with predictions of copper prices potentially falling to $11,200 per ton by Q4 2026 [6] - Concerns over potential high tariffs on copper could exacerbate short-term shortages and lead to extreme price fluctuations [7]

Core Viewpoint - The 2026 Bond Market Annual Forum highlighted expectations for a gradual fiscal expansion in 2026-2027, with a focus on supply-side policies in 2026 and a shift towards consumption-side policies in 2027 [1] Group 1 - The forum was co-hosted by First Capital and the National Financial and Development Laboratory, with the Shenzhen First Capital Bond Research Institute as the organizer [1] - Morgan Stanley's Chief Economist for China, Xing Ziqiang, provided insights on the anticipated fiscal policies for the upcoming years [1]

Group 1: Macro Overview - The report indicates that in 2025, credit expansion showed marginal improvement, with a notable reliance on fiscal expansion, as the proportion of government bonds in social financing reached a historical high [3] - Monthly data reveals that new credit has decreased year-on-year for six consecutive months, with corporate credit performing better than household credit, driven mainly by the implementation of policy financial tools [3] - Looking ahead, the report suggests that the economy remains in a "weak reality," with significant downward pressure, and anticipates proactive policy measures in 2026 to stimulate economic growth [3] Group 2: Fixed Income Analysis - The report discusses the recent volatility in 30-year government bonds, which rose from approximately 1.85% in early July to around 2.3%, an increase of 45 basis points, while local government bonds remained stable [4] - The fitted model indicates that the current 10-year and 30-year local government bond to government bond spreads are at 16 basis points, with upper limits of approximately 23 and 21 basis points, respectively, suggesting limited room for further increases in spreads [4] Group 3: Industry Performance - The report highlights the top-performing industries in January, with Media leading at 25.5%, followed by Non-ferrous Metals at 23.2%, and Defense Industry at 20.5%, while the bottom performers included Banks at -2.5% and Food & Beverage at -1.8% [1] - Over the past year, Non-ferrous Metals showed a remarkable increase of 112.4%, indicating strong sector performance [1] Group 4: Company Insights - The report emphasizes that SenDa Group is a leading player in China's overseas expansion into Africa, leveraging its capabilities to empower the brand LeShuShi through channel, product, and market structure enhancements [5] - Key success factors for SenDa Group include early identification of the direction for industrial and trade integration, local factory establishment, product localization, and deep channel development [5] - The report draws parallels with the operations of Charoen Pokphand Group in China, suggesting that there are valuable lessons to be learned from their century-long operational history [5] Group 5: Strategic Partnerships - The report details a strategic cross-holding agreement between SF Express and J&T Express, where SF will acquire 10% of J&T's shares, while J&T will hold approximately 4.29% of SF's shares, enhancing long-term cooperation [7] - This partnership aims to leverage both companies' strengths in logistics networks and operational capabilities, facilitating better resource allocation and market coverage in key regions [8]

Market Overview - On January 13, the Japanese stock market experienced a significant rise, with the Nikkei average index surpassing 53,000 points, driven by expectations of a potential election and stable governance under Prime Minister Fumio Kishida [2][4] - The Japanese yen depreciated to approximately 159 yen against the US dollar, marking a low not seen in over a year and a half, while long-term interest rates reached their highest level in 27 years [2][5] Stock Market Outlook - Analysts predict that if the ruling Liberal Democratic Party (LDP) wins the upcoming election, the Nikkei average could stabilize between 50,000 and 55,000 points, with potential for further growth to 60,000 points in the next fiscal year [3][4] - Historical trends indicate that the Japanese stock market tends to rise before elections, with the Nikkei average showing consistent gains in the lead-up to voting days from 1963 to 2021 [4] Currency and Bond Market Insights - The yen is expected to weaken further, with forecasts suggesting it could reach 150 to 160 yen per dollar, prompting concerns about potential currency intervention by the government if it approaches 160 yen [3][6] - Long-term interest rates are anticipated to rise by 0.1% to 0.2% if the House of Representatives is dissolved and elections are called, potentially reaching 2.5% if new economic measures are introduced [3][6] Economic Policy Expectations - The market is optimistic about the ruling party's ability to implement fiscal expansion policies, which could lead to further economic stimulus measures [4][5] - Key sectors such as shipbuilding and artificial intelligence are identified as priority investment areas, with companies like Mitsubishi Heavy Industries seeing stock price increases [4]

Report Overview - The report is a financial futures early morning newsletter released by China Merchants Futures Co., Ltd. on January 14, 2026, covering stock index futures and treasury bond futures [1][2][3] 1. Stock Index Futures Market Performance - On January 13, the four major A - share stock indices pulled back. The Shanghai Composite Index fell 0.64% to 4138.76 points, the Shenzhen Component Index dropped 1.37% to 14169.4 points, the ChiNext Index declined 1.96% to 3321.89 points, and the Science and Technology Innovation 50 Index decreased 2.8% to 1469.57 points. Market turnover was 36,988 billion yuan, an increase of 542 billion yuan from the previous day [2] - In terms of industry sectors, petroleum and petrochemicals (+1.62%), pharmaceutical biology (+1.21%), and non - ferrous metals (+0.91%) led the gains; national defense and military industry (-5.5%), electronics (-3.3%), and communications (-2.88%) led the losses [2] - In terms of market strength, IH > IF > IC > IM. The number of rising/flat/falling stocks was 1,619/119/3,726 respectively. The net inflows of institutional, main, large - scale, and retail investors in the Shanghai and Shenzhen stock markets were -718, -568, 256, and 1030 billion yuan respectively, with changes of -772, -302, +341, and +733 billion yuan respectively [2] Basis and Basis Annualized Yield - The basis of IM, IC, IF, and IH next - month contracts were 2.73, -7.32, -1.97, and 0.53 points respectively, and the basis annualized yields were -0.33%, 0.9%, 0.41%, and -0.17% respectively. The three - year historical quantiles were 93%, 92%, 67%, and 46% respectively [2] Trading Strategy - In the medium - to - long term, maintain the judgment of going long on the economy. Currently, using stock index futures as a long - position substitute has certain excess returns. It is recommended to allocate long - term contracts of each variety on dips [2] 2. Treasury Bond Futures Market Performance - On January 13, interest - rate bonds strengthened slightly. Among the active contracts, TS remained flat, TF rose 0.04%, T rose 0.06%, and TL rose 0.28% [2] Cash Bond Situation - The current active contract is the 2603 contract. For the 2 - year treasury bond futures, the CTD bond is 250017.IB, with a yield change of +0.5 bps, a corresponding net basis of 0.033, and an IRR of 1.36%; for the 5 - year treasury bond futures, the CTD bond is 2500801.IB, with a yield change of +0.25 bps, a corresponding net basis of -0.014, and an IRR of 1.63%; for the 10 - year treasury bond futures, the CTD bond is 250018.IB, with a yield change of -0.1 bps, a corresponding net basis of 0.047, and an IRR of 1.28%; for the 30 - year treasury bond futures, the CTD bond is 210005.IB, with a yield change of -0.75 bps, a corresponding net basis of 0.091, and an IRR of 1.14% [3] Fundamentals - In open - market operations, the central bank injected 3,586 billion yuan and withdrew 162 billion yuan, with a net injection of 3,424 billion yuan [3] Trading Strategy - In the medium - to - long term, with the upward shift of risk appetite and the expectation of economic recovery, it is recommended to hedge T and TL contracts on rallies [3] 3. Economic Data - High - frequency data shows that the prosperity of manufacturing, imports and exports, and social activities is temporarily lower than in previous periods, while the prosperity of infrastructure and real estate is similar to previous periods [11]

Stock Market Overview - In December, the Federal Reserve's interest rate cut was implemented as expected, leading to fluctuations in future rate cut expectations, while the Nasdaq index experienced volatility [1] - The A-share market showed overall fluctuations, with the Shanghai Composite Index achieving 11 consecutive gains by the end of the month, driven by a positive tone from the Central Economic Work Conference and a declining US dollar index [1] - The Wind All A index recorded a +3.3% increase for the month, with 60% of the Shenwan first-level industries rising, particularly strong performances in defense and military (+17.22%) and non-ferrous metals (+13.68%) [1] Bond Market Overview - The bond market continued to experience wide fluctuations in December, with increased yield volatility and a steeper curve [2] - Despite relatively ample liquidity and the central bank's resumption of bond purchases providing some support, concerns over long-term bond supply and other factors kept the market in a weak oscillation pattern [2] - The 10-year government bond yield ended the month at 1.85%, reflecting an N-shaped trend throughout December [2] Commodity Market Overview - The commodity market showed a bullish atmosphere in December, with precious metals and non-ferrous sectors being the strongest performers [3] - Gold prices fluctuated, with London gold closing at $4318.25 per ounce, up 2.36% from the previous month, while copper prices also saw significant increases [3] - The oil market experienced a downward trend, with Brent crude oil closing at $60.91 per barrel, down 2.26% for the month [3] Macroeconomic Performance - In November, China's exports demonstrated strong resilience, growing by 5.9% year-on-year, driven by a significant increase in machinery and high-tech product exports [5] - However, domestic consumption remained weak, with retail sales growth slowing to 0.3% year-on-year, indicating structural constraints on internal demand [5] - Fixed asset investment continued to decline, with real estate investment adjustments dragging down overall figures, highlighting the challenges in achieving self-sustaining growth [5] Policy Outlook - The Central Economic Work Conference set the tone for macroeconomic policy in 2026, focusing on addressing the structural imbalance of "strong supply and weak demand" [9] - The strategic shift will prioritize investment in human capital and social welfare, aiming to enhance income levels and consumer demand [9] - Fiscal policy is expected to maintain a more active stance, with a nominal deficit rate targeted around 4.0%, while monetary policy will shift focus from total volume to price stability [10][11] Asset Allocation Analysis - In December, net buying in the stock market rebounded to over 2.5 trillion yuan, with significant inflows into equity ETFs [14] - The manufacturing PMI showed a seasonal rebound, indicating improved trade conditions and proactive inventory preparations by companies [15] - Looking ahead to 2026, the market is expected to experience structural trends, with a focus on sectors that demonstrate sustainable performance and profitability [16]

Report Summary 1. Report Industry Investment Rating No information regarding the industry investment rating is provided in the report. 2. Core Viewpoints - For stock index futures, the report maintains a long - term bullish view on the economy. It suggests that using stock indices as a long - position substitute can yield certain excess returns, and recommends buying long - term contracts of various varieties on dips [2]. - For treasury bond futures, considering the upward trend in risk appetite and the expectation of economic recovery in the medium and long term, it is advised to conduct hedging operations on T and TL contracts when prices are high [2]. 3. Summary by Relevant Catalogs (1) Stock Index Futures Spot and Futures Market Performance - **Market Performance**: On January 9, A - share major indices rose. The Shanghai Composite Index rose 0.92%, the Shenzhen Component Index rose 1.15%, the ChiNext Index rose 0.77%, and the STAR 50 Index rose 1.43%. Market turnover was 31,524 billion yuan, an increase of 3,261 billion yuan from the previous day. In terms of sectors, media, comprehensive, and national defense and military industries led the gains, while banks, non - bank finance, and building materials led the losses. In terms of market strength, IC>IM>IF>IH, with 3,918 stocks rising, 201 flat, and 1,344 falling. Institutional, main force, large - scale, and retail investors' net capital inflows were - 17 billion, - 281 billion, - 97 billion, and 395 billion yuan respectively, with changes of + 128 billion, - 52 billion, - 120 billion, and + 43 billion yuan respectively [2]. - **Basis and Annualized Yield**: The basis of IM, IC, IF, and IH next - month contracts were 30.38, - 1.51, 5.72, and 1.52 points respectively, with annualized basis yields of - 3.46%, 0.17%, - 1.11%, and - 0.45%, and three - year historical quantiles of 79%, 88%, 54%, and 44% respectively [2]. - **Contract - Specific Data**: Details of various stock index futures contracts (such as IC2601 - IC2606, IF2601 - IF2606, IH2601 - IH2606, IM2601 - IM2606) including their names, price changes, current prices, trading volumes, open interests, basis, and annualized basis yields are provided [4]. (2) Treasury Bond Futures Spot and Futures Market Performance - **Market Performance**: On January 9, interest - rate bonds weakened slightly. Among active contracts, TS fell 0.03%, TF fell 0.03%, T fell 0.02%, and TL fell 0.07% [2]. - **Cash Bond Data**: For the current active 2603 contract, the CTD bonds, yield changes, corresponding net basis, and IRR for 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are provided. The central bank's open - market operations had a net injection of 340 billion yuan [2]. - **Contract - Specific Data**: Details of various treasury bond futures contracts (such as TS2603 - TS2609, TF2603 - TF2609, T2603 - T2609, TL2603 - TL2609) including their names, price changes, current prices, trading volumes, open interests, net basis, and CTD bond implicit interest rates are provided [5]. (3) Economic Data High - frequency data shows that the prosperity of manufacturing, import and export, and social activities is currently lower than in previous periods, while the prosperity of infrastructure and real estate is similar to previous levels [8].

Core Viewpoint - The report indicates that the European economy is expected to show unexpected resilience in 2025, with a continued recovery in domestic demand driven by policy support in 2026, particularly focusing on the effects of fiscal expansion in Germany [2][4]. Group 1: Economic Indicators and Fiscal Policy - In 2025, Germany's government initiated a crucial fiscal transformation amid a backdrop of low growth, with GDP significantly lagging behind other developed economies due to structural challenges like energy costs [4]. - Private consumption and fixed capital formation have seen a decline in their contributions to GDP growth, dropping from pre-pandemic averages of 0.8% and 0.6% to recent figures of 0.2% and -0.5% respectively [4]. - Industrial production has been on a downward trend since peaking in 2018, with significant declines in sectors such as automotive, basic metals, and machinery [4][8]. Group 2: Recent Economic Performance - In the first three quarters of 2025, fiscal policy outcomes were below expectations, leading to weak economic momentum, with Q2 showing negative growth and Q3 stagnating [13]. - The IFO business climate index weakened post-Q3, while the ZEW economic expectations index showed slight recovery but remained below Q2 levels [13]. - Private consumption weakened in Q3, although government consumption accelerated, and fixed capital formation began contributing positively to GDP growth [13][19]. Group 3: Industrial Production and Orders - By November 2025, industrial production showed signs of improvement, particularly in construction, with a 1% year-on-year increase, exceeding market expectations [23]. - Domestic orders saw significant recovery, with year-on-year growth of 14% and 17% in October and November respectively, marking the highest levels since January 2022 [30]. - The increase in domestic orders was primarily driven by sectors such as other transport equipment and metal products, reflecting ongoing defense spending [30]. Group 4: Future Economic Outlook - Market expectations for Germany's growth in 2026 remain cautious, with Bloomberg forecasting a real GDP growth of around 1%, similar to pre-fiscal shift levels [34]. - The German government has initiated structural reforms aimed at boosting potential growth, although the actual impact of these reforms is still to be observed [34].

Core Insights - The Consumer Price Index (CPI) in December increased year-on-year from 0.7% in November to 0.8%, while the annual CPI for the year slightly decreased from 0.2% in 2024 to 0% [1] - Food prices continued to improve in December, with the core CPI rising month-on-month to 0.2%, maintaining the same year-on-year rate of 1.2% as in November, supported by industrial consumer goods including gold jewelry [1] - High-frequency indicators in January show accelerated price increases for industrial goods, likely driven by supply-side constraints, credit expansion, and expectations of fiscal spending in the new year [1] Price Trends - The increase in travel during the New Year holiday, with a significant rise in the number of travelers and expanded travel radius, is expected to boost service sector prices, although the sustainability of overall price increases will depend on the actual effects of fiscal expansion in the first quarter of this year [1] - The 2026 policy for trade-in subsidies on consumer goods will continue and be optimized, potentially providing additional support for service consumption and bolstering demand [1]