1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The market's shock digestion may be nearing its end. With the positive factors such as policy support and incremental funds, the mid - term outlook for stock index is bullish. It is recommended to hold existing long positions, set stop - profits, and add positions opportunistically. Also, buy put options to protect long positions [9] 3. Summary According to Relevant Catalogs 3.1 Fundamental View - **Market Performance**: Last week, the broader market oscillated upwards to a new high, with all four major indices rising. Among the style indices, the growth style index had the largest increase, followed by the cyclical and financial indices. In the Shenwan industries, most sectors rose, with TMT sectors such as communication, electronics, electrical equipment, machinery, and media leading the gains, with the former's increase exceeding 11%. Only agriculture and food and beverage sectors closed down [4][16][19] - **Economic Data**: In September 2025, the manufacturing PMI was 49.8%, up 0.4 percentage points from the previous month; the non - manufacturing PMI was 50.0%, down 0.3 percentage points from the previous month. The economy showed a recovery trend but was still in the contraction phase. In terms of sub - items, both supply and demand of the manufacturing PMI continued to recover slightly in September, with production rising by 1.1% and new orders rising by 0.2%. However, raw material and finished product prices fell again after a sharp rise last month, down 0.9% and 0.1% respectively. The growth rate of medium - and long - term credit has been falling for 28 consecutive months to 6.30% as of September 2025 [4][28] - **Policy**: The Political Bureau set the tone for the real estate market to stop falling and stabilize, and boost the capital market. The central bank created two new monetary policy tools, cut the reserve requirement ratio, and reduced interest rates on existing mortgages. The CSRC proposed mergers, acquisitions, and market value management to enhance market activity. The implementation plan for promoting the entry of medium - and long - term funds into the market was officially released, which is expected to add 800 billion yuan of long - term funds to the A - share market annually [4] - **Performance**: A - share performance showed signs of stabilization in the first quarter. After the implementation of the reciprocal relationship with the US in April, which increased by 30%, the performance declined in the second quarter. After the rush to export in the second and third quarters, A - share performance is still under test. In the second quarter of 2025, the performance of the IH index slightly rebounded, while the performance of the other three major indices declined [4][58] - **Valuation**: The Shanghai Composite Index's valuation is 16.9474, with an upper - bound value of 15.58, at the 91.92 percentile since 2010, indicating a relatively high valuation. The ChiNext valuation is relatively low [5][70] 3.2 Capital Flow - **Margin Trading**: In 2024, the net inflow was 274.8 billion yuan. As of October 23, 2025, the net inflow in 2025 was 634.9 billion yuan, with a net outflow of 6.2 billion yuan in the previous five trading days [6][73] - **Private Funds**: The total scale of private funds increased by 718.2 billion yuan this year, with an increase of 325.4 billion yuan in July and 47 billion yuan in August. The newly registered scale this year was 306.2 billion yuan, with a registration scale of 79.2 billion yuan in July and 42.8 billion yuan in August [6][75] - **Insurance Funds**: In the second quarter of 2025, the market value of A - share stocks and funds held by insurance funds increased by 251.3 billion yuan, while the CSI 300 index rose by 1.28%. In the first half of 2025, the market value increased by 641.9 billion yuan, while the CSI 300 index rose by 0.03% [6][76] - **ETF**: From April 7 to October 24, 2025, the ETF scale increased by 97.9 billion yuan; last week, the ETF scale decreased by 30.7 billion yuan. As of October 24, the net inflow of ETF funds this year was 900 million yuan [6][81] - **Newly Established Funds**: As of September 30, 2025, the share of newly established stock - type funds was 323.3 billion yuan, with 137 billion yuan in the third quarter; the share of newly established hybrid funds was 103.6 billion yuan, with 53 billion yuan in the third quarter [6][84] 3.3 Index and Industry Trends Review - **Index Performance**: Last week, all four major indices rose. The Shanghai Composite Index, SSE 50, CSI 300, CSI 500, and CSI 1000 increased by 2.88%, 2.63%, 3.24%, 3.46%, and 3.25% respectively. Among international indices, the Dow Jones, Nasdaq, Nikkei, Hang Seng, and Hang Seng Tech increased by 2.20%, 2.31%, 3.61%, 3.62%, and 5.20% respectively [11][15] - **Industry Performance**: Most Shenwan industry sectors rose, with TMT sectors leading the gains, and only agriculture and food and beverage sectors closing down. Among the style indices, the growth style index had the largest increase, followed by the cyclical and financial indices [4][19] 3.4 Main Contract and Basis Trends - **Index and Basis**: The four major indices stabilized and rebounded. The IM basis fluctuated at a high level [22] - **Arbitrage of Main Contracts**: The ratios of IC/IF and IC/IH stopped falling and stabilized, IH/IF oscillated, and the ratios of IM/IF and IM/IH stopped falling [24] 3.5 Policy and Economy - **PMI**: In September 2025, the manufacturing PMI was 49.8%, up 0.4 percentage points from the previous month; the non - manufacturing PMI was 50.0%, down 0.3 percentage points from the previous month. The economy showed a recovery trend but was still in the contraction phase [28] - **PPI and Inventory Cycle**: Generally, PPI leads the inventory cycle. PPI bottomed out and rebounded in June 2023, weakened after two months, and has seen changes in its decline rate since then. In July, industrial enterprise revenue fell for five consecutive months to 2.3%, and inventory fell for five consecutive months to 2.4%, entering the active de - stocking phase [30] - **Social Financing and Credit**: In September 2025, China's social financing scale was 3.7635 trillion yuan, a year - on - year decrease of 229.7 billion yuan. Newly added RMB loans were 1.608 trillion yuan, a year - on - year decrease of 366.2 billion yuan [33] - **Medium - and Long - Term Credit Growth Rate**: The growth rate of medium - and long - term credit has been falling for 28 consecutive months to 6.30% as of September 2025 [36] - **Policy for Medium - and Long - Term Funds**: The implementation plan for promoting the entry of medium - and long - term funds into the market aims to increase the investment scale and proportion of medium - and long - term funds in A - shares, extend the assessment cycle, and form a joint force for policy implementation [38] - **Other Policies**: The central bank created new monetary policy tools, cut the reserve requirement ratio, reduced interest rates, and carried out debt - to - equity swaps to support the capital market and the real economy [42][44][46] 3.6 Revenue and Net Profit of Each Index - **Revenue Growth**: In the 2025 semi - annual report, the revenue growth rates of the Shenzhen Component Index, ChiNext, Science and Technology Innovation Board, and CSI 500 rebounded, while the growth rates of other indices declined or turned negative [55] - **Net Profit Growth**: Except for the SSE 50 index, the growth rates of the Shanghai Composite Index, Shenzhen Component Index, CSI 300, CSI 500, CSI 1000, ChiNext, and Science and Technology Innovation Board rebounded [55] 3.7 Other Aspects - **Technical Analysis**: Not provided in detail in the given content - **Restricted Stock Unlocking**: The unlocking volume was relatively large in mid - October [103] - **Secondary Market Shareholder Transactions**: Last week, major shareholders in the secondary market significantly net - sold 10.1 billion yuan [102]

Group 1 - The report from Guotai Junan highlights the increasing enthusiasm for China's technological breakthroughs and emerging industries, supported by stable policy expectations and capital market reforms that enhance market risk appetite [1] - The demand for quality assets in China is surging, particularly in the context of geopolitical uncertainties affecting capital market volatility, which may provide investment opportunities [1] - The report maintains a tactical overweight position on A/H shares, indicating a positive outlook for Chinese equities due to multiple supportive factors [1] Group 2 - The expectation of a more accommodative monetary policy in the U.S. may lead to a mild decline in real interest rates, supporting a tactical allocation to U.S. Treasuries [2] - The report suggests that the recent regional bank crises could accelerate the process of adjusting monetary policy and liquidity expectations [2] Group 3 - The imbalance in credit supply and demand, along with stable liquidity, continues to support the bond market, maintaining a tactical allocation to government bonds [3] - The report notes that geopolitical uncertainties and rising risk aversion are influencing domestic interest rates, which may experience wide fluctuations [3] Group 4 - Global macro liquidity improvements and rising risk aversion are expected to support gold prices, with a tactical overweight position on gold maintained [4] - The report indicates that gold has recently surpassed key resistance levels, driven by factors such as U.S. interest rate cuts and ongoing purchases by the Chinese central bank [4] Group 5 - The resilience of the Chinese economy and reduced risks from extreme geopolitical conflicts are supporting the stability and appreciation of the RMB [5] - The report anticipates that the RMB will exhibit a two-way fluctuation pattern, with a tendency for central stability and appreciation in the context of a complex global macro environment [5]

Core Insights - The Westpac-Melbourne Institute Leading Index of Economic Activity for Australia shows a slight recovery in the six-month annualized growth rate, rising from -0.16% in August to 0.04% in September 2025, indicating potential economic growth approaching trend levels by early 2026 [1][2] Economic Activity - The leading index's growth rate has decreased by 0.44 percentage points over the past six months, from 0.48% in March to 0.04% in September, primarily due to declines in residential approvals and softening commodity prices [2] - Recent declines in residential approvals may be temporary, with low interest rates and government measures potentially stimulating the market in the future [2] - Commodity prices, particularly gold, have shown slight increases after significant drops earlier in the year, which may also support economic activity [2] Monetary Policy Outlook - The Reserve Bank of Australia is expected to consider interest rate cuts in its upcoming monetary policy meeting on November 3-4, depending largely on the third-quarter inflation data [3] - The leading index indicates a weakening economic growth momentum since the beginning of the year, suggesting that without further interest rate support, growth may fall below trend levels again [3]

Core Viewpoint - The central-bank leader indicated that the Federal Reserve may be nearing the conclusion of a three-year strategy aimed at passively reducing its $6.6 trillion asset holdings [1] Group 1 - The Federal Reserve has been engaged in a campaign to reduce its asset holdings over the past three years [1] - The current asset holdings of the Federal Reserve stand at $6.6 trillion [1]

Market Overview - International gold prices saw a significant increase on October 13, opening at $4000.66 per ounce, reaching a high of $4107.37, a low of $3995.30, and closing at $4104.87 [1] - The largest gold ETF, SPDR Gold Trust, increased its holdings by 1.72 tons, bringing the total to 1018.88 tons [5] Monetary Policy Insights - Federal Reserve's Paulson indicated a preference for two more rate cuts this year, each by 25 basis points, suggesting that tariffs' impact on consumer prices should be disregarded in policy formulation [3] - Analysts from Standard Chartered noted that if the U.S. economy remains strong, the likelihood of further rate cuts in 2026 may decrease, potentially leading to higher dollar and U.S. Treasury yields [4] - Morgan Stanley analysts expect weak organic sales growth in the consumer goods sector for Q3, with a possibility of slight improvement by 2026, but overall growth may remain below long-term trends [4] Technical Analysis of Gold - Gold prices have shown a stable upward trend, with a significant rise after testing the $3995 level, stabilizing around $4131 [8][9] - Short-term indicators suggest a strong upward trend, but caution is advised due to potential overbought conditions [9] Trading Strategy - Suggested trading strategies include aggressive buying around $4090 with a stop loss of 3-5 points and a target above $4010, or a more conservative entry at $4060 with similar stop loss and a target above $4080 [10]

Fundamental Analysis - The initial value of the U.S. one-year inflation expectation for October is 4.6%, slightly lower than the forecast and previous value of 4.7%, but still at a relatively high historical level, providing significant support for gold prices [1] - The slight decline in inflation expectations has not fundamentally alleviated market concerns about long-term price pressures, instead reinforcing gold's appeal as an inflation hedge amid overall uncertainty [1] - Increasing domestic economic pressures in the U.S., including a government plan to lay off over 4,000 employees primarily from the Democratic Party, may exacerbate social division and policy uncertainty, driving safe-haven funds towards the gold market [1] - The potential for significant adjustments in monetary policy is indicated by Trump's narrowing of the Federal Reserve chair candidate list to five, alongside the upcoming release of the September CPI report on October 24, which continues to fuel uncertainty regarding inflation and interest rate policies, providing solid potential support for gold prices [1] - Escalating tensions in South Asia, particularly between Pakistan and Afghanistan, and Trump's potential intervention highlight the seriousness of the conflict, while the possibility of providing "Tomahawk" missiles to Ukraine could significantly escalate the situation, further supporting gold prices due to increased safe-haven sentiment [1] Technical Analysis - The current gold price (XAUUSD) shows a strong bullish upward trend, with the moving average system in a bullish arrangement, indicating a potential for further upward movement after short-term corrections [4] - The CCI indicator is in the overbought zone and may suggest a short-term correction opportunity, but the overall market sentiment remains bullish [4] Trading Strategy - For gold, a buy position is recommended around 4015.6, with a stop loss at 4005.0 and a target range of 4090.0-4110.0 [5] - For silver (XAGUSD), the price is on a strong upward trajectory, with a buy position suggested around 50.10, a stop loss at 49.90, and a target range of 51.21-51.50 [9] News Events - Upcoming events include China's September trade balance and the World Bank and IMF's autumn meetings, along with a speech by Federal Reserve's Paulson [9]

Summary of Key Points from Conference Call Industry Overview - The conference call primarily discusses the bond market and its relationship with the stock market, particularly in the context of the ongoing U.S.-China trade tensions and their impact on investor sentiment and market dynamics [1][2][3][4]. Core Insights and Arguments - **Market Sentiment and Bond Market Outlook**: The bond market is expected to benefit from a potential decline in risk appetite due to high stock valuations and ongoing trade tensions. A significant inflow of institutional funds, estimated at 2 trillion yuan, is anticipated to return to the bond market [2][3]. - **Impact of U.S.-China Trade War**: The escalation of the trade war, with the U.S. imposing a 100% tariff on Chinese goods, is expected to create uncertainty in the markets, leading to a decrease in risk appetite and providing opportunities for bond investments [1][7]. - **Stock Market Performance**: The stock market, particularly technology stocks, has seen significant gains, which has elevated overall risk tolerance. However, this has also placed pressure on the bond market [3][6]. - **Interest Rate Predictions**: The ten-year government bond yield is projected to decline to 1.5% by 2026, with potential increases if trade tensions escalate further. The central bank may also lower policy rates by 10-20 basis points [5][9]. - **Investor Behavior**: Institutional investors are shifting funds towards short-term deposits and credit products due to stock market volatility. This behavior is expected to change as year-end assessments prompt a reallocation back to long-term credit products [8][11]. Additional Important Insights - **High Valuations and Market Volatility**: Current stock valuations are significantly higher than in previous years, leading to uncertainty regarding potential market corrections and the role of state intervention [6][10]. - **Long-term Debt Instruments**: There is a strong recommendation for investing in long-term government bonds and local government special loans, particularly for insurance companies, as these instruments are expected to provide stable returns [12][13]. - **Economic Growth and Monetary Policy**: The slowing economic growth in China necessitates further monetary policy adjustments, with conditions now favorable for a potential rate cut [14][15]. - **Credit Market Strategies**: Various credit strategies have shown positive returns historically, and there is an emphasis on adapting investment strategies to current market conditions to optimize returns [16][17]. - **Seasonal Trends in Bond Market**: Historically, the fourth quarter has been the strongest for the bond market, although current geopolitical tensions may alter this trend [18][19]. This summary encapsulates the key points discussed in the conference call, highlighting the bond market's dynamics, investor behavior, and the broader economic context influenced by U.S.-China relations.

Group 1 - The Federal Reserve's FOMC meeting minutes from September indicate a majority support for a 25 basis point cut in the federal funds rate, with only one dissenting vote advocating for a larger cut of 50 basis points due to softening labor market conditions and core inflation nearing the 2% target [1] - The Fed officials expressed that there is no preset path for future monetary policy, which will be adjusted based on data, economic outlook, and evolving risks, with most officials believing further easing may be appropriate for the remainder of the year [1] - Market expectations suggest a high probability of a rate cut in October, with a 92.5% chance of a 25 basis point reduction, as signs of a weakening labor market and easing inflation pressures emerge [2] Group 2 - The U.S. government has entered a "shutdown" state, affecting the release of key macroeconomic data, which may impact the Fed's policy decisions and increase market uncertainty [2] - The ADP employment report for September showed a decrease of 32,000 jobs, significantly below expectations, while the number of layoffs decreased from 86,000 in August to 54,100 in September, indicating a stable but declining job market [2] - Nearly all respondents in a Desk survey expected a 25 basis point cut in the September meeting, with almost half anticipating another cut in October and a majority expecting at least two cuts by the end of 2025 [3]

Core Viewpoint - The current U.S. government shutdown is causing a critical data supply disruption, intensifying the debate within the Federal Reserve regarding the extent of interest rate cuts needed [1] Group 1: Federal Reserve's Internal Debate - There is a division within the Federal Reserve between those wary of inflation resurgence and those concerned about the pressure on the job market, leading to stark contrasts in monetary policy adjustment paths [3] - New Fed Governor Milan consistently advocates for "aggressive rate cuts," emphasizing the need to return interest rates to "neutral levels" as soon as possible [3] - Milan believes that the current neutral interest rate has significantly decreased compared to a year ago, indicating that the monetary policy is more restrictive now than it was a few quarters ago [3] Group 2: Economic Indicators and Policy Implications - Milan warns that while the economy appears stable, the risks of economic weakening are accumulating due to the effects of restrictive policies, necessitating timely interest rate adjustments to prevent potential risks from materializing [3] - During the September 17 Fed meeting, the decision-makers projected two rate cuts in 2025, but Milan opposed a mere 25 basis point cut, arguing for a more substantial reduction [3] - Milan has repeatedly called for larger rate cuts, even suggesting the need for five cuts within this year [3] Group 3: Inflation and Economic Constraints - Fed official Schmidt stated that current interest rates only "slightly restrict" the economy, which he views as "just right," emphasizing that inflation remains the core consideration for monetary policy [4] - Schmidt pointed out that as long as inflation exceeds targets, monetary policy must continue to suppress demand growth to create space for supply recovery and alleviate price pressures [4] - Recent price increases in durable goods and services, such as landscaping and electricity, have exceeded the Fed's 2% inflation target, with service prices rising by 3.5% in recent months [4] Group 4: Data Availability and Decision-Making - Milan expressed concerns that private sector data cannot adequately replace official government data, highlighting the lack of essential data for monetary policy formulation during the government shutdown [4] - Despite the data challenges, Milan remains optimistic that sufficient data will be available to support the Fed's next interest rate decision during the meeting on October 28-29 [4]

Core Viewpoint - The US dollar index (DXY) has halted a three-day rally, currently trading around 98.70, primarily due to short-term downward pressure from the government shutdown and market expectations of Federal Reserve rate cuts [1][2] Group 1: Economic Context - The US government shutdown has entered its ninth day with no signs of resolution, as the Senate has rejected proposals to end the impasse for the sixth time [1] - The Federal Reserve's September meeting minutes indicate that a majority of policymakers support a rate cut in September and suggest further easing of policies this year, although some members express caution due to inflation concerns [1] Group 2: Federal Reserve Insights - Federal Reserve Governor Stephen Milan presents a unique view that inflation is fundamentally driven by "population growth," emphasizing the need for monetary policy adjustments ahead of the downward trend in neutral interest rates [1] - Minneapolis Fed President Neel Kashkari adopts a more reserved stance, warning that it is too early to determine whether tariff-induced inflation is "sticky," but remains optimistic about the labor market's performance [1] - Kansas City Fed President Jeffrey Schmid emphasizes the need for the Fed to maintain its anti-inflation credibility, noting that current inflation levels are too high and suggesting that monetary policy adjustments are appropriately timed [1] Group 3: Market Expectations - According to the CME FedWatch Tool, the market currently prices in a 92.5% probability of a rate cut in October and a 78% probability of another cut in December [2] - The DXY has retreated below the 99 mark from last month's high, with short-term moving averages trending downward, indicating a bearish momentum [2] - If the DXY breaks below the 98.50 support level, it may extend its decline to 98.20, while resistance is seen in the 99.20 to 99.50 range, suggesting an overall downward consolidation pattern [2]