Industry Investment Rating - No investment rating information was provided in the report. Core Viewpoints - In the production industry, the 8th China International Import Expo was held in Shanghai from November 5th to 10th [1]. - In the service industry, the State Council issued the holiday arrangements for 2026 on November 4th, with the Spring Festival having a 9 - day holiday, and ticket search volumes on the platform soared. The central bank conducted a 700 billion - yuan 3 - month买断式逆回购 on November 5th [1]. - In the upstream market, liquefied natural gas and palm oil prices declined. In the mid - stream, PX and road asphalt开工 rates increased, and power plant coal inventories piled up. In the downstream, real - estate sales in first, second, and third - tier cities dropped, while domestic flight frequencies increased slightly [2]. Summaries by Related Catalogs Industry Total Overview Upstream - Energy: Liquefied natural gas prices fell [2]. - Agriculture: Palm oil prices decreased [2]. Mid - stream - Chemical: PX开工 rate went up [2]. - Energy: Power plant coal inventories accumulated [2]. - Infrastructure: Road asphalt开工 rate rose slightly [2]. Downstream - Real estate: Commodity housing sales in first, second, and third - tier cities declined [2]. - Service: Domestic flight frequencies increased slightly [2]. Key Industry Price Indicators - Agricultural products: The prices of corn, eggs, palm oil, and pork decreased, while the price of cotton increased slightly [34]. - Non - ferrous metals: The prices of copper, zinc, aluminum, nickel, and aluminum showed different trends, with copper prices falling and zinc and aluminum prices rising [34]. - Ferrous metals: The prices of iron ore, wire rod, and glass had different trends, with iron ore prices rising [34]. - Non - metals: The prices of natural rubber and the China Plastic City Price Index decreased [34]. - Energy: The prices of WTI crude oil, Brent crude oil, and liquefied natural gas decreased, while coal prices increased [34]. - Chemicals: The prices of polyethylene, urea, and soda ash decreased, while the price of PTA increased slightly [34]. - Real estate: The building materials comprehensive index and the national concrete price index decreased [34].

Market Performance - The majority of government bond futures closed lower, with the 30-year main contract up by 0.03%, the 10-year main contract unchanged, the 5-year main contract down by 0.01%, and the 2-year main contract down by 0.01% [1] - The yields on major interbank bonds mostly rose, with the 10-year China Development Bank bond "25国开15" yield increasing by 0.1 basis points to 1.8610%, while the 10-year government bond "25附息国债16" yield remained unchanged at 1.7900% [1] - The 30-year government bond "25超长特别国债06" yield rose by 0.1 basis points to 2.1410%, and the 1-year government bond "25附息国债13" yield increased by 1.5 basis points [1] Funding Conditions - The central bank announced a 117.5 billion yuan 7-day reverse repurchase operation on November 4, with a fixed rate of 1.40% and a bid amount of 117.5 billion yuan [2] - On the same day, 475.3 billion yuan of reverse repos matured, resulting in a net withdrawal of 357.8 billion yuan [2] - The interbank funding conditions remained stable and loose, with overnight repurchase rates for deposit institutions slightly rising and hovering around 1.31% [2] Operational Recommendations - In October, the central bank purchased 20 billion yuan in bonds, which was below expectations, leading to a neutral impact on the bond market [3] - The bond market may enter a waiting phase due to a short-term policy vacuum, with overall market sentiment improving and bond yield fluctuation ranges expected to decrease [3] - It is suggested that investors consider buying on dips and look for opportunities in positive spread strategies due to rising IRR [3]

zerohedge @zerohedge · Follow Cabana: "we see room for Fed to not only end QT in October but restart balance sheet growth" zerohedge @zerohedge Scarce it is 11:42 AM · Oct 29, 2025 451 Reply Copy link Read 24 replies All Hell Breaks Loose In Repo Markets... And Why A Historic Meltup Could Follow 回购市场陷⼊⼀⽚混乱……以及为何 可能随之出现历史性的暴涨 BY TYLER DURDEN TUESDAY, NOV 04, 2025 - 02:00 AM Back on October 15, when looking at the sudden and dramatic deterioration in funding markets, we wrote "On The Verge Of A Funding Crisis ...

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report The slow resumption of tin mines in Wa State, Myanmar, has led to an expectation of tight supply and demand. However, due to the hawkish shift in the Fed's interest - rate cut expectations, the strengthening of the US dollar index, and tight liquidity, the Shanghai tin price may be adjusted. It is recommended that investors try short - selling the main contract at high levels with a light position in the short term, and pay attention to the support and resistance levels of Shanghai tin and London tin [3]. 3. Summary by Relevant Catalogs 3.1 First Part: Spread and Inventory Situation - The Shanghai tin basis is positive and the monthly spread is negative, both within the reasonable range. This is due to the slow resumption of tin mines in Wa State, Myanmar, leading to an expected tight supply, and a decline in the total inventory of refined tin at home and abroad. However, with the hawkish shift in the Fed's future interest - rate cut expectations, the strengthening of the US dollar index, tight liquidity, and the arrival of the domestic traditional consumption off - season, investors are advised to temporarily wait and see for arbitrage opportunities [7][9]. - The LME tin (0 - 3) and (3 - 15) contract spreads are positive and within the reasonable range. The Shanghai - London tin price ratio is lower than the 50% quantile of the past five years. This is because the manufacturing PMI in Europe and the US in October was weak, and the inventory of refined tin in the LME is increasing but still at a relatively low level. It is recommended to temporarily wait and see for arbitrage opportunities in the LME tin (0 - 3) and (3 - 15) contract spreads [11]. - The inventory of refined tin in the Shanghai Futures Exchange has increased compared to last week; the social inventory of tin ingots in China has decreased compared to last week; the inventory of refined tin in the LME has increased compared to last week; the total inventory of refined tin at home and abroad has decreased compared to last week [13]. 3.2 Second Part: Mid - upstream Supply Situation - The daily processing fee of domestic tin ore has decreased, indicating an expected tight supply of domestic tin ore [19][20]. - The production (import) volume of domestic tin ore in November may increase month - on - month. Reasons include the closure of 1000 illegal tin mines in Bangka Belitung by the Indonesian president, the commissioning of the second concentrator of the Uis mine in Namibia, the resumption of mining in Wa State, Myanmar, the phased resumption of the Bisie tin mine in the DRC, and the suspension of the transit export of Myanmar tin ore through Thailand [22][24]. - The production volume of recycled tin in China in November may increase month - on - month [25][26]. - The capacity utilization rate of refined tin in Yunnan and China (Jiangxi) has decreased (remained flat) compared to last week; the production (inventory) volume of refined tin in China in November may increase (decrease) month - on - month [29]. - The import volume of refined tin in China in November may increase month - on - month. The export volume of refined tin from Indonesia is expected to increase, which may lead to an increase in China's refined tin imports [30][32]. 3.3 Third Part: Downstream Demand Situation - The daily processing fee of photovoltaic solder strips has decreased month - on - month, which may lead to an increase in the capacity utilization rate (inventory) of tin solder in China in November [36]. - The import (export) volume of solder strips in China in November may decrease (increase) month - on - month [37][39]. - The production (import, export) volume of tin - plated sheets in China in November may decrease (decrease, increase) month - on - month [40]. - The capacity utilization rate of lead - acid batteries in China has decreased compared to last week. Since tin is an important additive in lead - acid batteries, this may affect the demand for tin [42][44].

Core Insights - The article discusses the integration of macro quantification and factor momentum to identify resonant factors for investment strategies, emphasizing the importance of economic, liquidity, and credit indicators in shaping market expectations [1][3]. Group 1: Factor Scores and Market Indicators - The macroeconomic indicators show signs of recovery, with economic growth expected to improve, while liquidity is slightly weak and credit conditions are tightening [3][4]. - Value factors have seen a significant increase in scores, becoming resonant factors in the CSI 300 index, while growth factors have declined [4][6]. - The article presents a table of factor scores across different indices, indicating a preference for value and low volatility factors in the current market environment [4]. Group 2: Economic Outlook and Leading Indicators - The economic leading indicators model suggests that the economy is in a rising cycle since September 2025, with a slight upward trend expected in the coming months [6][9]. - Specific indicators such as PMI and fixed asset investment are analyzed, showing a mixed outlook with some indicators in a rising phase while others are nearing a peak [11][12]. - The article highlights the importance of monitoring leading indicators to anticipate future economic cycles and potential downturns [9][10]. Group 3: Liquidity and Credit Conditions - The liquidity environment is assessed as slightly loose despite some tightening in interest rates, with a focus on the net monetary supply and excess reserve rates [12][16]. - Credit indicators show a mixed picture, with overall credit volume and structure remaining low, but some signs of recovery are noted [17][18]. - The article suggests a cautious approach to credit-sensitive investments due to the ongoing tightening in credit conditions [17]. Group 4: Asset Allocation and Market Focus - The asset allocation strategy is adjusted to reflect a neutral to positive stance on A-shares, while reducing exposure to gold and bonds due to changing market dynamics [18]. - The focus on PPI and liquidity as key market drivers indicates a shift in investor sentiment towards these macroeconomic variables [19]. - The article emphasizes the importance of selecting industries that are sensitive to economic changes but less affected by credit conditions, with a preference for sectors like utilities and coal [21].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The money market in November may continue to fluctuate within a narrow range at a low level, with stability expected. However, the increase in liquidity demand, deposit "migration", and credit expansion may add uncertainty to the money market. The central bank's liquidity injection remains a key factor for the stable operation of the money market [2][78]. - The rigid supply of certificates of deposit (CDs) will increase from November to December. The marginal impact of new policy - based financial instruments on credit and the outflow of high - interest deposits will also add variables to the supply and demand of CDs. There are three possible scenarios for CD market trends [2][3]. Summary by Directory 10 - Month Review: Super - Seasonal Stability of Funds and Price Increase of CDs 1.1 Review: Characteristics of the Money Market in October - **Super - seasonal stability of funds**: In October, the money market was more stable than in previous years. After the cross - quarter period, the money market entered a state of low - level and low - volatility. In the last week of October, due to the resonance of cross - month and tax payment periods, the money market rate increased moderately, but the fluctuation was smaller than the seasonal level. The reasons include limited disturbances and strong liquidity supply [10]. - **Positive net financing and price increase of CDs**: In October, the net financing of CDs was 61.12 billion yuan, turning positive for the first time since June, reaching a new high since the second quarter. The structure was mainly dominated by joint - stock banks and 6 - month CDs. At the beginning of the month, there was a trend of price increase, which may reflect the short - term pressure on the bank's liability side [16][18]. - **The central bank's resumption of bond purchases may bring additional benefits**: On October 27, the central bank governor mentioned the resumption of treasury bond trading operations. The resumption may be due to the objective need for base money injection, and changes in the bond market supply - demand relationship and yield curve shape may no longer be constraints [24]. 1.2 Focus: Reasons for the Price Increase of CDs - **Supply - side dominance**: The price increase of CDs in October was mainly driven by the supply side. Although the non - bank buying power increased, the relative absence of allocation power from state - owned banks and rural commercial banks limited the protection of the CD adjustment market. Once the issuance increased, the price increase pressure emerged [27]. - **Issuance increase leading to price increase**: The supply of CDs increased in October, with the net financing turning positive for the first time since June. Joint - stock banks and 6 - month CDs had significant increases in issuance and net financing. The reasons include the joint - stock banks' need to catch up on the use of the annual quota, cost considerations, and the need to improve the NSFR indicator [28][29]. - **Limited support from bank buying**: The CD buying structure in October showed a pattern of "weak banks and strong non - banks". State - owned banks and rural commercial banks were net sellers for most of the time, providing limited protection for the price increase. In contrast, wealth management products and money market funds increased their buying, which constrained the upward space of CD prices [38]. November Focus: More Variables but Expected Stability 2.1 Review: Limited Impact of Seasonal Factors - **Diverse historical trends**: In different years, the money market rate in November showed different trends. In 2020 and 2022, the money market rate fluctuated greatly, mainly affected by events such as the "Yongmei incident" and wealth management redemptions. In 2021 and 2024, the money market rate was relatively stable, supported by sufficient liquidity supply. In 2023, the money market rate showed a unilateral upward trend, mainly due to increased liquidity demand [46][47][48]. - **Limited impact of seasonal factors**: The impact of seasonal factors on the money market is relatively limited. Fiscal expenditures usually support the money market, while M0 and reserve requirements cause minor disturbances. Non - seasonal factors such as redemption pressure, the "Yongmei incident", and increased government bond issuance have a strong influence on the money market, and the central bank's liquidity injection is a key variable [54]. 2.2 Changes and Constants in November this Year - **Increased non - seasonal disturbances**: In November, the demand for liquidity is expected to be high, with high medium - and long - term liquidity withdrawal, a slight increase in CD maturity compared to the same period last year, and the issuance of 50 billion yuan of local government bond balance limits in the fourth quarter. Structural factors such as the impact of new policy - based financial instruments on credit, the outflow of high - interest fixed deposits, and the trend of deposit currentization and non - bankization may also amplify liquidity demand [2][62]. - **Support from liquidity supply**: Under the current supportive monetary policy, the central bank has a strong intention to protect the money market. The money market has been in a stable and balanced state for a long time, with low - level and low - volatility money market rates. The central bank's resumption of treasury bond trading operations may provide additional support. The probability of a reserve requirement ratio cut in the fourth quarter is also increasing [2][76]. 2.3 Outlook for the CD Market - **Increased supply**: From November to December, the rigid supply of CDs will increase due to the increase in maturity and the possibility of some banks "catching up" to use their annual quota. The marginal impact of new policy - based financial instruments on credit and the outflow of high - interest deposits will add variables to the supply and demand of CDs [2][79]. - **Three scenarios for market trends**: - **Positive scenario**: Supply and demand are balanced, and CD rates decline moderately. With moderate deposit outflow, the bank's liability side is stable, and non - bank institutions are willing to allocate CDs, so the CD supply and demand remain balanced, and the 1 - year CD rate may fall to 1.60% - 1.65% [3][81]. - **Neutral scenario**: Supply and demand are in a tight balance, and CD rates fluctuate more. The bank faces some liability outflow, but the central bank's medium - and long - term liquidity injection provides support. The 1 - year CD rate will remain in the range of 1.65% - 1.70%, but the increase in the proportion of trading - disk funds may amplify the rate fluctuations [4][82]. - **Negative scenario**: Supply increases, and CD rates rise under pressure. With large - scale deposit outflow, the bank needs to issue more CDs, but the non - bank demand is diverted by other assets, so the 1 - year CD rate may exceed 1.70% [5][83].

Group 1 - The value factor score has improved, indicating a recovery in the economy, with liquidity slightly loose and credit indicators showing slight improvement. The macro direction is characterized by economic recovery, weak liquidity, and credit contraction [3][8][14] - The economic leading indicators are expected to maintain an upward trend, with predictions indicating a peak in March 2026 [14][15] - The liquidity environment is slightly loose overall, despite interest rates being above the average, with monetary supply remaining positive [21][24][22] Group 2 - The credit indicators are weak, with credit volume and structure maintaining low levels, although there has been a slight expansion in credit structure [25][26] - The allocation view for major asset classes indicates a decrease in gold allocation to 10%, while A-shares are favored [26][27] - Market focus has shifted towards economic indicators, with PPI attention rising above economic concerns recently [27][28] Group 3 - The industry selection is inclined towards sectors that are sensitive to economic changes but insensitive to credit fluctuations, with a general preference for value-oriented sectors [29][30] - The top-performing industries based on economic sensitivity include utilities, coal, and construction decoration, while the highest credit scores are seen in retail and banking [30]

Group 1 - The value factor score has improved, indicating a recovery in the economy, with liquidity slightly loose and credit indicators showing slight improvement. The macro direction suggests economic recovery, weak liquidity, and credit contraction [3][6][8] - The economic outlook indicator is maintained at an upward trend, with expectations of a slight increase over the next three months, reaching a peak in March 2026 [14][15] - The liquidity environment is characterized by interest rates above the average, but overall remains slightly loose, with monetary supply still positive [23][24][26] Group 2 - The credit indicators are weak, with credit volume and structure remaining low. The total credit indicators continue to decline, while the credit structure shows slight recovery [28] - The allocation view for major asset classes indicates a decrease in gold allocation to 10%, while A-shares allocation is increased [29] - Market focus has shifted towards economic indicators, with PPI attention rising above economic concerns recently [30] Group 3 - Industry selection is inclined towards sectors sensitive to economic changes but insensitive to credit fluctuations, with a general preference for value-oriented industries [32] - The top scoring industries based on economic sensitivity include utilities, coal, and construction decoration, while the highest credit scoring industries include retail and banking [33]

Core Viewpoint - The People's Bank of China (PBOC) is maintaining a supportive monetary policy stance, with recent actions indicating a focus on liquidity provision and economic stability amid a challenging economic environment [1][2][3][4]. Group 1: Monetary Policy Actions - On November 3, the PBOC conducted a 783 billion yuan 7-day reverse repurchase operation at an interest rate of 1.40%, maintaining the previous rate, while net liquidity withdrawal amounted to 2,590 billion yuan due to 3,373 billion yuan of reverse repos maturing [1]. - The PBOC's net reverse repo injection last week was 12,008 billion yuan, with a net MLF injection of 2,000 billion yuan, indicating a proactive approach to liquidity management [1]. - The PBOC plans to continue using various monetary policy tools to ensure adequate liquidity in the short, medium, and long term, while also emphasizing the importance of maintaining relatively loose social financing conditions [2][3]. Group 2: Economic Outlook and Market Reactions - Analysts suggest that the funding environment is likely to remain loose due to limited government bond net payment pressures and seasonal factors supporting fiscal spending [2]. - The recovery of government bond trading signals a focus on stabilizing growth, especially as economic performance has shown signs of slowing down in the third quarter [4]. - The PBOC's actions reflect a need for monetary easing to support the current economic fundamentals, with potential for interest rate cuts in the future, although the timing remains uncertain [3][4]. Group 3: Future Policy Considerations - The PBOC's resumption of bond purchases does not necessarily indicate an immediate need for rate cuts, as the conditions for using different monetary tools vary [4]. - There is a possibility of further policy measures, including rate cuts or reserve requirement ratio adjustments, to enhance liquidity and reduce financing costs for banks and the real economy [4]. - The overall approach suggests a combination of fiscal and monetary policies aimed at stimulating demand and ensuring economic stability in the face of external uncertainties [4].

Group 1: Macroeconomic Outlook - The report highlights that both the US and China are entering critical years, with global investment driven by three and a half engines: AI investment, defense spending, and industrial restructuring [1][14] - The nominal GDP growth rate is expected to recover, with a focus on domestic demand and technology as key policy areas [1][2] - The transition from old to new economic drivers in China is anticipated to gain momentum, leading to a rebalancing of supply and demand [2][11] Group 2: Policy Environment - The "15th Five-Year Plan" sets a supportive policy tone, with monetary policy expected to remain accommodative, albeit with less room than in the current year [3][15] - Fiscal policy is projected to maintain a certain level of expansion, with total tools estimated at 15.7 trillion yuan, an increase of approximately 1.2 trillion yuan from this year [3][15] - The report emphasizes the importance of structural tools and the coordination between monetary and fiscal policies to support various sectors [3][15] Group 3: Supply and Demand Dynamics - The narrative of "asset scarcity" in the bond market is expected to weaken, with a focus on the verification of corporate profits and capacity utilization [4][18] - The report notes that government bond supply is likely to increase, but market pressure will be manageable due to central bank support [4][18] - Institutional behavior is identified as a major source of market volatility, with a reduction in stable funding leading to increased market fluctuations [4][18] Group 4: Bond Market Strategy - The bond market is expected to maintain a "low interest rate + high volatility" characteristic, with the central rate likely remaining stable or slightly increasing [5][18] - The report suggests a strategy of segment trading, coupon strategies, and equity exposure as priorities over duration adjustment and credit downgrading [5][18] - The ten-year government bond yield is projected to fluctuate between 1.6% and 2.1%, with a widening of term spreads anticipated [5][18]