Report Summary 1) Investment Rating for the Industry No investment rating for the industry is provided in the report. 2) Core Views - Domestic bond market faces short - term pressure from supply and capital disturbances. The central bank maintains a loose stance but with limited policy support, causing the rebound of Treasury bond futures to be weak due to rising capital interest rates. - The Fed's stance in the US has turned dovish, leading to improved short - term risk appetite and increased pressure on the steepening of the interest rate curve. - The differences in the capital and policy stances between the Chinese and US bond markets are widening, with China being moderately tight and the US moving towards easing [1][2][3]. 3) Summary by Relevant Catalogs a. Interest Rate Pricing Tracking Indicators - Price indicators: China's CPI (monthly) has a 0.40% month - on - month increase and 0.00% year - on - year change; China's PPI (monthly) has a - 0.20% month - on - month decrease and - 3.60% year - on - year decrease. - Monthly economic indicators: Social financing scale is 431.26 trillion yuan, with a month - on - month increase of 1.04 trillion yuan (+0.24%); M2 year - on - year is 8.80%, up 0.50% (+6.02%); Manufacturing PMI is 49.30%, down 0.40% (-0.80%). - Daily economic indicators: The US dollar index is 98.23, down 0.19 (-0.19%); USD/CNH (offshore) is 7.1541, down 0.014 (-0.19%); SHIBOR 7 - day is 1.47, down 0.02 (-1.15%); DR007 is 1.49, down 0.03 (-1.85%); R007 is 1.67, down 0.26 (-13.67%); AAA - rated 3 - month interbank certificates of deposit yield is 1.55, with no change (+0.00, - 0.11%); AA - AAA 1 - year credit spread is 0.09, up 0.01 (-0.11%) [9][10]. b. Overview of Treasury Bonds and Treasury Bond Futures Market The report presents multiple charts related to the market, including the closing price trend of Treasury bond futures' main continuous contracts, the price change rate of each Treasury bond futures variety, the trend of the funds settled in each Treasury bond futures variety, the proportion of open interest in each Treasury bond futures variety, the net open - interest proportion of the top 20 in each Treasury bond futures variety, the long - short open - interest ratio of the top 20 in each Treasury bond futures variety, the spread between national development bonds and Treasury bonds, and the issuance of Treasury bonds [14][15][22]. c. Overview of the Money Market Capital Situation The report shows charts about the bank - to - bank pledged repo transaction statistics and local government bond issuance [25]. d. Spread Overview The report provides charts on the inter - period spread trend of each Treasury bond futures variety and various spot - bond term spreads and futures cross - variety spreads [28][36][38]. e. Two - Year Treasury Bond Futures The report includes charts on the implied interest rate and Treasury bond maturity yield of the two - year Treasury bond futures' main contract, the IRR of the TS main contract and the capital interest rate, and the three - year basis and net basis trends of the TS main contract [48][51]. f. Five - Year Treasury Bond Futures The report presents charts on the implied interest rate and Treasury bond maturity yield of the five - year Treasury bond futures' main contract, the IRR of the TF main contract and the capital interest rate, and the three - year basis and net basis trends of the TF main contract [53][59]. g. Ten - Year Treasury Bond Futures The report has charts on the implied yield and Treasury bond maturity yield of the ten - year Treasury bond futures' main contract, the IRR of the T main contract and the capital interest rate, and the three - year basis and net basis trends of the T main contract [60][64][61]. h. Thirty - Year Treasury Bond Futures The report shows charts on the implied yield and Treasury bond maturity yield of the thirty - year Treasury bond futures' main contract, the IRR of the TL main contract and the capital interest rate, and the three - year basis and net basis trends of the TL main contract [67][72]. 4) Strategies - Unilateral strategy: As the repo interest rate falls and the Treasury bond futures price fluctuates, it is recommended to short the 2512 contract at high prices [4]. - Arbitrage strategy: Pay attention to the decline of the TF2512 basis [5]. - Hedging strategy: Since there is medium - term adjustment pressure, short - position holders can use far - month contracts for moderate hedging [5].

Core Viewpoint - UBS indicates that Federal Reserve Chairman Powell's speech at Jackson Hole displayed a "classic Powell style," signaling an increased probability of a rate cut in September to counteract the drag from trade tariffs, but lacking a mid-term policy framework for an economy facing structural changes [1] Group 1 - The market welcomed the hints of a rate cut, but UBS believes the core message is essentially "data-dependent rhetoric wrapped in fancy language" [1] - UBS pointed out that Powell did not provide a stronger defense of the Federal Reserve's independence, which may lead to potential political influences from Trump on the Fed [1] Group 2 - Potential consequences of a politicized Federal Reserve include: 1) Reignition of inflation uncertainty 2) An increase in actual borrowing costs by an entire percentage point 3) Ripple effects on fiscal policy, corporate investment, housing affordability, household savings, and speculative activities [1]

Revenue Insights - In July 2025, the national general public budget revenue increased by 2.7% year-on-year, improving from a decline of -0.3% in June[1] - Tax revenue grew by 5.0% in July, significantly higher than the previous month's growth of 1.0%, while non-tax revenue fell by 12.9%[5] - The cumulative general public budget revenue from January to July showed a slight increase of 0.1% year-on-year, compared to a decline of -0.3% previously[7] Expenditure Trends - General public budget expenditure in July rose by 3.0% year-on-year, accelerating by 2.6 percentage points from May[8] - Cumulative expenditure from January to July grew by 3.4%, slightly below the average progress of 54.4% over the past five years, completing 54.1% of the annual budget[9] Government Fund Performance - In July, government fund revenue increased by 8.9% year-on-year, although this was a decrease of 11.9 percentage points from the previous month[10] - Government fund expenditure in July surged by 42.4% year-on-year, despite a slowdown of 36.8 percentage points from the previous month[11] - From January to July, government fund expenditure grew by 31.7%, significantly outpacing the revenue growth due to accelerated issuance of local government special bonds, totaling 2.78 trillion yuan, an increase of 1 trillion yuan compared to the same period last year[11]

Report Industry Investment Ratings - Iron Ore: Volatile [2] - Coking Coal and Coke: Bullish with Volatility [2] - Rebar and Coiled Steel: Volatile [2] - Glass: Bullish with Volatility [2] - CSI 300 Index: Volatile [2] - SSE 50 Index: Bullish [2] - CSI 500 Index: Upward [3] - CSI 1000 Index: Upward [3] - 2 - Year Treasury Bond: Volatile [3] - 5 - Year Treasury Bond: Volatile [3] - 10 - Year Treasury Bond: Downward [3] - Gold: Bullish with Volatility [3] - Silver: Bullish with Volatility [3] - Pulp: Consolidating [4] - Logs: Range - bound Volatility [4] - Soybean Oil: Bullish with Volatility [4] - Palm Oil: Bullish with Volatility [4] - Rapeseed Oil: Bullish with Volatility [4] - Soybean Meal: Volatile [4] - Rapeseed Meal: Volatile [4] - No. 2 Soybeans: Volatile [4] - No. 1 Soybeans: Bearish with Volatility [4] - Live Pigs: Bearish with Volatility [6] - Rubber: Volatile [8] - PX: Hold for Observation [8] - PTA: Volatile [8] - MEG: Hold for Observation [8] - PR: Hold for Observation [8] - PF: Bullish with Volatility [8] Core Views - The short - term manufacturing recovery has been interrupted, and the Politburo meeting fell short of expectations. However, Powell signaled a potential interest rate cut, providing support for commodities [2] - The expected blast furnace production restrictions in China have been temporarily disproven, so the impact on iron ore demand is minimal. The iron ore market is expected to move in a volatile manner [2] - Affected by a coal mine accident in Fujian and the initial success of anti - cut - throat competition, coking coal and coke prices rose sharply overnight. The overall recovery of coal mines in the production areas is still slow, and coal prices are supported in the short term [2] - The steel market's supply - demand contradiction has intensified. With the approaching traditional peak season, the spot demand for rebar remains weak, and the futures price is looking for support after a significant adjustment [2] - The glass market's supply - demand pattern has not improved significantly in the short term. The market is subject to many sentiment disturbances, and the real demand needs to be further observed [2] - The stock index market has seen capital inflows into semiconductor, computer hardware, and financial sectors, while capital has flowed out of aviation and gas sectors. The market's bullish sentiment is rising, and it is recommended to hold long positions in stock indices [2][3] - The bond market has shown weak trends due to market interest rate fluctuations. It is recommended to hold long positions in bonds with a light position [3] - The pricing mechanism of gold is shifting from being centered on real interest rates to central bank gold purchases. The current logic driving the gold price increase remains valid, and gold is expected to be bullish with volatility [3] - The pulp market shows a pattern of weak supply and demand, and the price is expected to consolidate [4] - The log market has relatively small supply pressure and increasing demand for stocking up by processing plants. The price is expected to move within a range [4] - The oil market has positive demand prospects. The demand for biofuels is increasing, and the inventory of palm oil is lower than expected. The oil market is expected to be bullish with volatility [4] - The meal market is affected by factors such as the adjustment of soybean planting area, weather conditions, and import policies. The market is expected to be volatile [4] - The live pig market has an increasing supply and weak consumption demand due to high - temperature weather. The price is expected to be bearish with volatility [6] - The natural rubber market has a pattern of supply exceeding demand, but the gap is narrowing. The price is expected to be strong in the short term [8] - The PX market is affected by the uncertainty of ending the Russia - Ukraine conflict and the reduction of old production capacity in South Korea. The price is relatively strong [8] - The PTA market's supply - demand situation has improved, and the price mainly follows cost fluctuations [8] - The MEG market has increasing supply pressure, but low inventory supports the price [8] - The PR and PF markets have relatively stable short - term supply - demand structures, but the market's expectations for future demand are cautious [8] Summaries by Categories Metals - **Iron Ore**: Global iron ore shipments have increased significantly on a环比 basis, and the arrival volume has also rebounded. There is no obvious inventory accumulation pressure under high port clearance. The terminal demand is weak, but steel mills have little motivation to cut production actively. The price is expected to be volatile [2] - **Coking Coal and Coke**: Affected by a coal mine accident and anti - cut - throat competition, the prices rose sharply overnight. The recovery of coal mines in production areas is slow, and downstream enterprises'开工 rates remain high. The price is expected to be bullish with volatility [2] - **Rebar and Coiled Steel**: The steel mill's production restrictions in Tangshan are less than expected. The overall demand is weak, and the supply - demand contradiction has intensified. The price is expected to be volatile [2] - **Gold and Silver**: The pricing mechanism of gold is changing, and its de - fiat currency attribute is becoming more prominent. The market's risk - aversion demand still exists, and the price is expected to be bullish with volatility [3] Financial Futures - **Stock Indices**: The market's bullish sentiment is rising due to policies such as large - scale equipment updates and promoting sports consumption. It is recommended to hold long positions in stock indices [2][3] - **Bonds**: The bond market trends are weak due to market interest rate fluctuations. It is recommended to hold long positions in bonds with a light position [3] Industrial Products - **Pulp**: The cost support for pulp prices has weakened, and the demand is in the off - season. The market shows a pattern of weak supply and demand, and the price is expected to consolidate [4] - **Logs**: The supply pressure is relatively small, and the demand for stocking up by processing plants is increasing. The price is expected to move within a range [4] - **Rubber**: The supply - demand gap in the natural rubber market is narrowing. With the expected improvement in supply and relatively stable demand, the price is expected to be strong in the short term [8] - **PX, PTA, MEG, PR, PF**: The PX price is relatively strong due to supply - demand and production capacity factors. The PTA price follows cost fluctuations, the MEG price is supported by low inventory, and the PR and PF markets have stable short - term supply - demand but cautious demand expectations [8] Agricultural Products - **Oils and Meals**: The demand for oils is positive due to biofuel demand and lower - than - expected palm oil inventory. The meal market is affected by planting area, weather, and import policies, and is expected to be volatile [4] - **Live Pigs**: The supply of live pigs is increasing, and the consumption demand is weak due to high - temperature weather. The price is expected to be bearish with volatility [6]

Core Viewpoint - The People's Bank of China (PBOC) has conducted a 600 billion MLF operation for a one-year term, marking the sixth consecutive month of increased liquidity injection, with a net MLF injection of 300 billion in August, reflecting a coordinated monetary and fiscal policy approach [1][2]. Group 1: Monetary Policy Actions - The PBOC's MLF operation of 600 billion is part of a broader strategy to support the banking system's liquidity, with a total net liquidity injection of 600 billion in August, double that of the previous month and the largest since February 2025 [2]. - Following a reserve requirement ratio (RRR) cut in May that released 1 trillion in long-term liquidity, the mid-term liquidity has remained in a net injection state for the past three months, with a significant increase in August [2][3]. - The central bank's actions are aimed at stabilizing market expectations and ensuring ample liquidity in the market, especially as medium to long-term market interest rates have generally risen [2][3]. Group 2: Economic Context and Implications - The current economic environment shows signs of pressure, with indicators such as retail sales growth slowing and real estate investment under strain, necessitating continued macroeconomic policy support [3][4]. - The manufacturing PMI index has declined, indicating increased economic downward pressure, which may lead to further monetary easing measures, including potential RRR cuts and interest rate reductions in the fourth quarter [4]. - The PBOC's ongoing liquidity injections signal a commitment to maintaining market liquidity, with expectations for continued MLF operations and reverse repos to support the economy [4].

Core Viewpoint - The fiscal policy for the second half of the year will continue to follow a theme of "more proactive, more precise, and more sustainable" measures aimed at boosting consumption and investing in human capital [1][10]. Group 1: Fiscal Policy Direction - Recent actions by fiscal authorities indicate a shift towards "investing in people," with a focus on enhancing tax fairness and addressing "involution" in competition [1][3]. - The increase in public budget revenue in July, the highest year-to-date, is attributed to the effectiveness of "anti-involution" policies, which have improved corporate profits and tax revenues [3][4]. - The restoration of VAT on interest from government bonds aims to create a fairer tax environment and guide funds towards credit bond markets [3][4]. Group 2: Investment in Human Capital - There has been a noticeable increase in public budget expenditures on social security, health, and cultural sectors, reflecting a clear shift towards "investing in people" [6][7]. - New fiscal policies, including direct subsidies for childcare and support for personal consumption loans, are designed to alleviate the financial burden on families and stimulate consumer demand [7][8]. - The introduction of new policy financial tools, with an initial scale of 500 billion yuan, is expected to boost infrastructure investment by approximately 2 percentage points this year [8]. Group 3: Future Measures - Experts anticipate that the fiscal policy will implement additional measures to alleviate employment pressure among youth and enhance social security systems [10][11]. - Future fiscal strategies may include providing financial subsidies for consumer spending in areas such as green appliances and education, as well as promoting tourism and elderly care services [11].

Core Viewpoint - The recent actions by fiscal and tax authorities indicate a shift towards more proactive fiscal policies, focusing on "investing in people" and promoting consumption alongside targeted support for key industries [1][4][6] Group 1: Fiscal Policy Adjustments - The fiscal policy is becoming more active, with a focus on tax fairness and reducing "involution" competition, which is expected to enhance the business environment and support industrial upgrades [2][3] - The recovery of fiscal revenue is attributed to the effectiveness of "anti-involution" measures, which have improved corporate profits and, consequently, tax revenues [2][4] - The introduction of new tax policies, such as the resumption of VAT on interest from various bonds, aims to create a fairer tax environment and guide funds towards credit bond markets [2][3] Group 2: Investment in People - There is a noticeable increase in public budget expenditures on social security, health, and cultural sectors, reflecting a clear shift towards "investing in people" [4][5] - Recent fiscal policies include direct subsidies for child-rearing and education, aimed at alleviating the financial burden on families and stimulating consumer demand [4][5] - New policy financial tools, with an initial scale of 500 billion yuan, are expected to support key industries and consumer infrastructure, potentially boosting infrastructure investment by approximately 2% this year [5][6] Group 3: Future Outlook - Experts predict that fiscal policies will continue to be "more proactive, precise, and sustainable," with measures aimed at boosting consumption and supporting employment, particularly for youth [6] - Potential future measures include increased social security subsidies, support for vocational education, and enhancements to the social safety net to stimulate consumer spending [6] - The government may also utilize investment funds and long-term bonds to mitigate fiscal balance risks while promoting innovation and development in emerging industries [6]

Core Viewpoint - The recent actions by the financial and tax departments indicate a shift towards a more proactive fiscal policy, focusing on "investing in people" and promoting consumption while addressing tax fairness and reducing "involution" competition [1][5]. Group 1: Tax Policy and Revenue - The "anti-involution" measures have led to a recovery in fiscal revenue, with July's public budget revenue growth reaching a year-high, supported by improved corporate profits and tax collections [1][2]. - The restoration of VAT on interest from government bonds and the introduction of measures to ensure tax fairness are aimed at optimizing the business environment and fostering sustainable tax sources [2][3]. - The emphasis on a unified market and fair competition is expected to reduce local policy involution and speculative practices among enterprises, ultimately benefiting fiscal health [2][3]. Group 2: Expenditure and Social Investment - Recent budget expenditures have increasingly focused on social security, health, and cultural sectors, reflecting a clear shift towards "investing in people" [3][4]. - New policy financial tools and local government bonds are expected to support social welfare and consumption infrastructure, aiding in economic transformation [3][4]. - Cash and consumption subsidies are being introduced to alleviate the financial burdens on low- and middle-income households, stimulating consumer demand [3][5]. Group 3: Future Fiscal Policy Outlook - Experts predict that fiscal policy will continue to be "more proactive, precise, and sustainable," with measures aimed at boosting consumption and investing in human capital [5][6]. - Potential measures include increasing social security subsidies, enhancing vocational education, and improving social safety nets to stimulate consumer spending [5][6]. - The use of government investment funds and long-term bonds is anticipated to support innovation and attract social capital, further enhancing fiscal policy effectiveness [5][6].

Group 1: Commodity Market Overview - Domestic commodity futures experienced mixed performance from August 18 to August 22, with caustic soda, fuel oil, and crude oil leading gains, while lithium carbonate, coking coal, and the European shipping index saw declines [1] - In the energy and chemical sector, fuel oil rose by 2.51% and crude oil by 1.13%, while lithium carbonate fell by 9.14% [1] - The black coal sector saw coking coal drop by 5.53% and coke by 2.95%, while basic metals and agricultural products experienced slight fluctuations [1] Group 2: Oil Market Dynamics - Brent crude oil prices increased by 2.51% to $67.79 per barrel, while WTI crude oil rose by 1.00% to $63.77 per barrel, indicating a wide fluctuation in oil prices [2] - OPEC+ reported a production increase of 263,000 barrels per day in July, reaching 27.54 million barrels per day, easing some supply concerns [2][3] - U.S. EIA data showed a significant drop in crude oil inventories by 6.014 million barrels, exceeding expectations, which provided short-term support for oil prices [3] Group 3: Palm Oil Market Insights - Palm oil prices saw a weekly increase of 1.40%, closing at 9,592 yuan per ton, driven by tightening supply-demand dynamics [5] - Indonesia's palm oil exports surged by 35.4% in June, reaching 3.61 million tons, despite an increase in production [5] - Malaysia's palm oil production growth has slowed significantly in August, with exports increasing by only 13.61% compared to the previous month [6] Group 4: Fiscal Policy Developments - China's fiscal revenue for the first seven months of 2025 reached 1.35839 trillion yuan, a year-on-year increase of 0.1%, with tax revenue showing significant recovery [8] - Government spending for the same period totaled 1.60737 trillion yuan, up 3.4% year-on-year, with a notable increase in spending on health and social services [8][9] - The real estate market continues to impact local finances, with high land sales in major cities indicating a potential recovery [9] Group 5: U.S. Federal Reserve Policy Outlook - Federal Reserve Chairman Jerome Powell hinted at potential interest rate cuts in the coming months, despite ongoing inflation risks [10][11] - Powell emphasized the need to balance maximum employment with price stability, indicating a shift towards prioritizing employment [11][12] - Analysts expect the Fed may initiate rate cuts in September, but the pace will be cautious due to inflation uncertainties [12]

Group 1: Commodity Market Overview - Domestic commodity futures experienced mixed performance from August 18 to August 22, with caustic soda, fuel oil, and crude oil leading gains, while lithium carbonate, coking coal, and the European shipping index saw declines [1] - In the energy and chemical sector, fuel oil rose by 2.51%, crude oil increased by 1.13%, while lithium carbonate fell by 9.14% [1] - The black coal sector saw coking coal drop by 5.53%, while basic metals and agricultural products experienced slight fluctuations [1] Group 2: Oil Market Dynamics - Brent crude oil prices increased by 2.51% to $67.79 per barrel, while WTI crude oil rose by 1.00% to $63.77 per barrel, indicating a wide fluctuation in oil prices [2] - OPEC+ reported a production increase of 263,000 barrels per day in July, reaching 27.54 million barrels per day, easing some supply concerns [2][3] - U.S. EIA data showed a significant drop in crude oil inventories by 6.014 million barrels, exceeding expectations, which provided support for oil prices [3] Group 3: Palm Oil Market Insights - Palm oil prices saw a weekly increase of 1.40%, closing at 9,592 yuan per ton, driven by tightening supply-demand dynamics [5] - Indonesia's palm oil exports surged by 35.4% in June, reaching 3.61 million tons, despite an increase in production [5][6] - Malaysia's palm oil production growth has slowed significantly since August, with exports increasing by only 13.61% compared to the previous month [6] Group 4: Fiscal Policy Developments - China's fiscal revenue for the first seven months of 2025 reached 1.35839 trillion yuan, a year-on-year increase of 0.1%, with notable growth in tax revenues [7][8] - Government expenditure during the same period totaled 1.60737 trillion yuan, reflecting a 3.4% increase year-on-year, with a focus on social welfare and health spending [8][9] - The fiscal outlook indicates a continued emphasis on supporting economic stability through targeted spending and potential adjustments in land sales revenue [9] Group 5: U.S. Federal Reserve Policy Signals - Federal Reserve Chairman Jerome Powell hinted at potential interest rate cuts in the coming months, despite ongoing inflation risks [10][11] - Powell emphasized the need to balance maximum employment with price stability, indicating a shift in policy focus towards employment protection [12] - Analysts suggest that the Fed may initiate rate cuts in September, but the pace will be cautious due to inflation uncertainties [12]