Core Viewpoint - The financial data for January is expected to show a significant increase in new RMB loans and social financing compared to the previous month, with experts predicting a stable outlook for credit and social financing growth in the near term [1][3]. Group 1: Predictions for January Financial Data - Experts anticipate that new RMB loans in January could reach approximately 5 trillion yuan, representing a month-on-month increase of about 4 trillion yuan, although this would be a decrease of around 1 billion yuan compared to the same month last year [1][3]. - The new social financing is projected to be around 7 trillion yuan, with some analysts estimating it could be as high as 7.5 trillion yuan, indicating a year-on-year increase [2][4]. - The bond financing is expected to play a significant role in supporting the new social financing figures, with a notable year-on-year increase anticipated [2][4]. Group 2: Trends in Monetary Policy - The growth rates for various loans, social financing, and M2 (broad money) are expected to slightly decline but will remain significantly above the nominal GDP growth rate, reflecting a continued supportive stance in monetary policy [2][4]. - Future monetary policy adjustments may include a reduction in reserve requirements by 25 to 50 basis points and a potential interest rate cut of 10 basis points, with a focus on structural monetary policy tools to support sectors like technology innovation and small to medium enterprises [2][4].

Core Viewpoint - The Federal Reserve Governor Milan stated that a more significant decline in the dollar is necessary to become a primary factor affecting consumer inflation in the U.S. [1] Group 1 - Milan emphasized that substantial volatility in the dollar is required to truly impact consumer inflation [1] - He noted that the current weakness of the dollar has not had a substantial effect on monetary policy [1] - The dollar index has decreased by 7.7% over the past 52 weeks [1]

Core Viewpoint - The Federal Reserve Governor, Michelle Bowman, emphasizes that monetary policy should align with the business cycle to effectively manage economic conditions [1] Group 1 - The statement highlights the importance of synchronizing monetary policy with the phases of the business cycle to enhance economic stability [1] - It suggests that a well-timed monetary policy can mitigate the adverse effects of economic fluctuations [1] - The commentary reflects ongoing discussions within the Federal Reserve regarding the appropriate stance of monetary policy in response to current economic indicators [1]

Group 1 - The financial data for January is expected to show a significant increase in new RMB loans and social financing compared to December, with estimates suggesting new loans could reach 5 trillion yuan, an increase of approximately 4 trillion yuan month-on-month, but a decrease of about 100 billion yuan year-on-year [1] - Analysts predict that the new social financing in January will be around 7 trillion yuan, with bond financing expected to be a major support factor, indicating a stable overall performance in credit and social financing [2] - The growth rates of various loan balances, social financing, and M2 (broad money) are anticipated to slightly decline, yet remain significantly above the nominal GDP growth rate, reflecting a continued supportive monetary policy stance [2] Group 2 - The chief economist at Zheshang Securities forecasts a potential reduction in reserve requirement ratios by 25 to 50 basis points and a 10 basis point interest rate cut in 2026, alongside ongoing structural monetary policy tools aimed at supporting sectors like technology innovation and small to medium enterprises [2]

Core Viewpoint - The precious metals market is showing signs of stabilization and recovery after experiencing significant volatility, with gold maintaining strong support around the $5,000 mark despite recent profit-taking and reduced safe-haven demand [1][2]. Market Performance - Spot gold reached a high of $5,046.79 per ounce, reflecting a rise of approximately 0.7%, indicating a reassessment of the value of metal assets by market participants after short-term panic subsides [1][2]. - Silver rebounded from a low near $60 per ounce, showing an active performance with a gain of 3.3%, priced at $80.5330 per ounce, while platinum experienced a decline of 2.3% to $2,068.45 per ounce, highlighting differences in liquidity demand among various metal types [2][3]. Economic Indicators - The focus of the global market has shifted to the upcoming non-farm payroll data and CPI inflation indicators, which will directly influence the Federal Reserve's future interest rate path, especially given the complexities introduced by the nomination of Kevin Warsh as Fed Chair [3]. - The potential policy stance of Warsh briefly boosted the dollar and triggered profit-taking in the precious metals market, but such expectation-driven volatility may provide more cost-effective entry points for long-term holders [3]. Year-to-Date Trends - Year-to-date, gold and silver have recorded gains of 15% and 5% respectively, although there has been a pullback from February's historical highs, the overall upward trend remains intact [4]. - Precious metals continue to hold a solid position as core tools for inflation hedging and asset preservation amid intertwined policy uncertainties and macroeconomic fluctuations, with investors advised to be cautious of the dollar's short-term price pressures [4].

1. Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. 2. Core Viewpoints of the Report - The pressure on cross - Spring Festival funds is controllable. The overall liquidity in February is expected to remain stable, with the risk of significant fluctuations being under control, although attention should be paid to the capital arrangements of institutions in the last week before the festival and potential capital disturbances [4][71]. - In January, the central bank actively adjusted monetary policy tools. It cut the interest rates of various structural monetary policy tools, and there is still room for reserve requirement ratio cuts and interest rate cuts this year. The central bank also increased the scale of bond purchases to maintain liquidity [3][52]. 3. Summary According to the Directory 3.1 1 - Month Review of the Capital Market and Liquidity 3.1.1 Capital Market Review - In January 2026, the overnight capital fluctuated in a slightly wider range compared to the previous month, showing an oscillatory upward trend with a fluctuation range of 0.18%. The 7D capital fluctuated in a narrower range and basically remained stable around 1.5%. There was no inversion between overnight and 7D funds [10]. - At the beginning of the month, the central bank significantly withdrew cross - year funds, and the capital operation was generally stable and loose. In the middle of the month, due to the maturity of the 6M reverse repurchase and the freezing of funds for new stock subscriptions on the Beijing Stock Exchange, there was a brief friction in the capital market. Later, with the net injection of funds, the liquidity gradually stabilized. Towards the end of the month, the pressure on capital increase was relatively controllable [2][11]. - The capital stratification pressure in January was at a seasonally low level. The spread between R007 and DR007 decreased, and the spread between GC007 and DR007 also compressed, both at seasonally low levels [16]. - The volatility of overnight and 7D funds was at a seasonally low level, and the daily average trading volume of inter - bank pledged repurchase increased slightly compared to the previous month [23][24]. - Banks' net lending scale remained relatively high, and the net lending scale of money market funds first increased and then decreased [30]. 3.1.2 Liquidity Review - **Liquidity Aggregate**: In January, the base money increased by 1.6 billion yuan. The government deposit consumed about 1.1 trillion yuan of the base money, the central bank's net injection was 1.19 trillion yuan, and the foreign exchange funds continued to be slightly withdrawn by 7 billion yuan. After considering factors such as reserve freezing, cash withdrawal, and changes in non - financial institution deposits, the excess reserve at the end of the month decreased by about 692 billion yuan, and the excess reserve ratio was about 1.3%, which was seasonally high. The narrow - sense excess reserve level after deducting reverse repurchases was about 0.7%, close to the seasonal level [33]. - **Open - Market Operations**: In January, the central bank slightly withdrew short - term reverse repurchases in the open market, with a net injection of - 3.22 billion yuan. The MLF was injected with 90 billion yuan and 20 billion yuan matured, with a balance of 6.95 trillion yuan. The 3M and 6M outright reverse repurchases had a net injection of 30 billion yuan in total. The central bank also increased its net purchase of national debt by 10 billion yuan and carried out operations such as treasury time deposits and PSL [39][44]. 3.2 1 - Month Monetary Policy Tracking - In January 2026, the central bank cut the interest rates of various structural monetary policy tools by 25bp. There is still room for reserve requirement ratio cuts and interest rate cuts this year, as the exchange rate and net interest margin constraints have eased [3][52]. - The central bank continued its liquidity - caring approach, injecting 1 trillion yuan of medium - term liquidity through MLF and outright reverse repurchases. In January, the central bank increased its bond - buying scale to 10 billion yuan [3][52]. - The central bank may further create tools to provide liquidity support for non - bank institutions, and may refer to the SRF and some phased tools. It also promotes the interconnection of financial markets and supports the construction of the offshore RMB market [55]. 3.3 2 - Month Gap Prediction 3.3.1 Rigid Gap - In February, as it is a month with relatively less deposit growth, the increase in general deposits will consume about 3.45 billion yuan of excess reserves. The MLF maturity is 30 billion yuan, and the outright reverse repurchase maturity is 1.2 trillion yuan (70 billion yuan for 3M and 50 billion yuan for 6M), with 80 billion yuan of the 3M outright reverse repurchase being renewed [58]. 3.3.2 Exogenous Shocks - Due to the late Spring Festival this year, cash withdrawal and non - financial institution deposits will slightly consume excess reserves in February. The "currency issuance" item may consume about 1.2 trillion yuan of excess reserves, and non - financial institution deposits may consume about 9.65 billion yuan [62]. 3.3.3 Fiscal Factors - The government deposit may consume about 44.34 billion yuan of liquidity in February. Considering factors such as bond payment, tax revenue, and fiscal expenditure, the government bond issuance is relatively large this month [67]. 3.3.4 Comprehensive Judgment - The overall capital gap pressure in February is similar to that in January, mainly coming from the pressure of cash withdrawal before the Spring Festival and government bond payment. However, considering the current liquidity status of the banking system and the central bank's operation idea of maintaining sufficient liquidity, the cross - year funds are expected to remain stable, and the risk of significant fluctuations is controllable [70][71]. - Since January, the central bank has actively operated monetary policy tools, with an incremental injection of 1 trillion yuan through MLF and 6M outright reverse repurchases, and an increase in the bond - buying scale to 10 billion yuan. The 14D reverse repurchase was launched earlier before the Spring Festival, and the cross - Spring Festival pressure is controllable. However, the progress of cross - Spring Festival funds in the inter - bank market is relatively slow, and attention should be paid to the capital arrangements of institutions in the last week before the festival and potential capital disturbances [5][73].

Key Insights - The report emphasizes the stable landing of the supply peak for local government bonds, highlighting opportunities for interest rate spread compression in ultra-long local bonds [1] - It notes that the central bank has provided substantial medium-term liquidity support ahead of the Spring Festival, resulting in a very loose funding environment [5] - The report anticipates a total issuance of local government bonds of 9,018 billion yuan before the Spring Festival, exceeding the actual issuance in January [14] Group 1: Monetary Policy and Liquidity Insights - The central bank has injected a cumulative net amount of 1.2 trillion yuan in medium to long-term funds since the beginning of the year, ensuring a stable funding environment during the holiday [8] - The net payment of government bonds has risen to 643.7 billion yuan, with the maturity scale of interbank certificates of deposit increasing to 971.9 billion yuan [5] - The report indicates that the interest rates for interbank certificates of deposit continue to operate at low levels due to refinancing advantages [8] Group 2: Local Government Bond Insights - The total issuance of local government bonds is expected to reach 17,652 billion yuan by February 15, with ultra-long bonds accounting for 53% of this issuance [14] - The report highlights a significant increase in the supply of replacement bonds, with 5,899 billion yuan issued compared to 3,781 billion yuan in the same period last year [14] - The interest rate spreads between ultra-long local bonds (20Y, 30Y) and government bonds have widened, but are expected to compress as supply concerns diminish [14][42] Group 3: Institutional Behavior - Funds have made small net purchases of ultra-long local bonds, while insurance companies have significantly increased their holdings during concentrated listings [15] - The report notes that small and medium-sized banks have continued to net buy a considerable amount of 7-10Y and 15-20Y bonds in February [15] - The implied tax rates for various maturities are reported to be around 4.5% for 10Y, 4.3% for 15Y, 5% for 20Y, and 4.3% for 30Y, indicating a favorable position for taxable bonds [15]

Group 1: Economic Indicators - In January, the US manufacturing and services PMI exceeded expectations, indicating overall robust growth overseas [1] - In contrast, China's manufacturing PMI fell back into contraction territory, with both supply and demand components weakening compared to seasonal levels [1][10] - The price index has risen further, reflecting a rapid increase in upstream raw material prices, which is expected to suppress manufacturing supply and demand in the short term [1] Group 2: Market Sentiment and Strategies - Market risk appetite has declined, leading to weaker performance in A-shares and Hong Kong stocks, while bonds saw a slight increase [1][11] - The bond market experienced volatility, with the long end performing stronger due to a rebound logic and hedging demand, despite overall bond market gains falling short of expectations [1][10] - In the equity market, there is a potential for stabilization in risk appetite as volatility is digested, with a focus on high-yield assets and long-duration assets for value allocation [1][11] Group 3: Sector Analysis - The A-share market sentiment has weakened due to fluctuations in overseas markets, but there is potential for recovery in cyclical sectors and consumption as selling pressure from state-owned entities eases [11] - Small-cap and growth sectors may present good opportunities, with improved cost-effectiveness in growth stocks and a favorable calendar effect for small-cap stocks post-Spring Festival [11][12] - The Hong Kong market is currently in a phase of benefiting from liquidity, but its fundamentals remain weak, with the improvement of price levels by 2026 being crucial [12] Group 4: Commodity Insights - Recent geopolitical tensions have driven up gold prices due to increased safe-haven demand, although a subsequent drop occurred due to overheating in trading and expectations surrounding the Federal Reserve [3][12] - Oil prices have been influenced by threats against Iran and cold weather, but significant improvements in the oil supply-demand fundamentals are still under observation [12]

Group 1: Precious Metals - The core viewpoint emphasizes the importance of macroeconomic factors on metal prices, particularly in a tight supply-demand balance, with monetary policy, macro expectations, geopolitical dynamics, and supply disruptions being critical influences [1] - Recent adjustments in precious metal prices are attributed to a decline in risk appetite, influenced by disappointing earnings reports from US tech stocks and expectations of a strong dollar and Federal Reserve's balance sheet reduction [1] - China's central bank continued gold purchases in January, and the increase in gold ETF holdings will support gold prices [1] Group 2: Copper - Ongoing macroeconomic pressures are impacting copper prices, with expectations of strategic reserves providing some support [2] - The establishment of a "copper concentrate strategic reserve" aims to enhance resource control and mitigate overseas supply disruptions, while AI-driven infrastructure demands are expected to support copper prices [2] - Despite macroeconomic pressures, copper prices are anticipated to stabilize due to strategic premium support [2] Group 3: Aluminum - Aluminum prices are under pressure due to a combination of macroeconomic factors and seasonal demand weakness, with a decline in processing rates observed [2] - The ISM services PMI in the US returned to expansion, but lower-than-expected ADP employment figures contributed to price fluctuations [2] - Social inventory trends indicate a continued accumulation during the off-season [2] Group 4: Tin - Tin prices are experiencing downward pressure due to macroeconomic factors and reduced funding, but there is resilience in downstream purchasing as prices decline [2] - Increased activity in the Indonesian tin market and supply recovery in Myanmar may lead to marginally looser supply conditions [2] Group 5: Energy Metals - Demand for lithium remains strong despite a four-week inventory reduction, with expectations of preemptive battery demand due to changes in export tax policies [3] - The cobalt sector faces high prices due to tight raw material supplies, while companies are extending their reach into downstream markets to enhance competitive advantages [3] - Rare earth prices, particularly for praseodymium and neodymium oxides, are rising due to tight supply-demand dynamics [3] Group 6: Strategic Metals - Tungsten prices are on the rise due to long-term contracts and supply-demand dynamics, with a notable increase in prices across the industry [3] - The uranium market is seeing long-term contract prices reach a ten-year high, driven by rigid supply and ongoing nuclear power development [3]

Economic Outlook - A series of growth stabilization measures introduced at the end of last year are gradually being implemented, supporting a strong start for the economy in 2026 [1] - The Chief Economist Confidence Index for February 2026 is reported at 50.2, slightly lower than the previous month, maintaining above the neutral line for seven consecutive months [5] - Economists predict a GDP growth target of around 5% for 2026, with a budget deficit target of approximately 4% and a CPI growth target of about 2% [10][11] Financial Indicators - In January, new RMB loans are expected to rise significantly from 910 billion to 4.97 trillion, with a mean forecast for new social financing at 7 trillion [3][16] - The M2 year-on-year growth rate is predicted to be around 8.4% [3] - The LPR interest rate and the reserve requirement ratio for large financial institutions are expected to remain unchanged in February, but there may be opportunities for rate cuts later in the year [17] Currency and Exchange Rates - The RMB to USD central parity rate on January 30 was 6.9678, with expectations for it to stabilize around 6.9 by the end of February and 6.8 by the end of the year [2][18] Inflation and Price Trends - The CPI year-on-year growth for January is forecasted at 0.4%, down from 0.8% in the previous month, while the PPI is expected to improve slightly from -1.9% to -1.4% [14][15] - Factors influencing inflation include rising food and energy prices, with expectations for a gradual recovery in consumer prices [12][13] Policy Measures - The government is expected to maintain an active fiscal policy, with total fiscal spending projected to increase, supporting domestic demand and investment [11][24] - Structural monetary policy tools are anticipated to be more prominent, focusing on stabilizing employment and promoting consumption [23][24]