Bloomberg analysis shows China’s deflation is hitting the country’s economy harder than official numbers suggest, with prices of everyday goods plunging and the share of loss-making companies at a 25-year high. Read more: https://t.co/7KF6cBO63K📷️: Bloomberg, Getty Images https://t.co/a3uYDe41oi ...

Economic Analysis - Bloomberg analysis indicates China's deflation is impacting the economy more severely than official figures suggest [1]

Summary of Key Points from Conference Call Records Industry Overview - The records primarily discuss the **Chinese bond market** and its dynamics, particularly in relation to government bonds and credit bonds, as well as the implications of recent regulatory changes and economic indicators on the market. Core Insights and Arguments 1. **Long-term Trends in Bond Yields**: The long-term trend of government bond yields in China is downward, despite fluctuations in CPI and PPI. The overall environment remains deflationary, which is favorable for the bond market [2][19][20]. 2. **Impact of Regulatory Changes**: The anticipated changes in punitive redemption fees for institutional investors are expected to shift from 6 months to 3 months, which may enhance market sentiment once the uncertainty is resolved [3][4]. 3. **Public Fund Dividend Policy**: The tax exemption policy for public fund dividends is likely to remain in place in the short term, stabilizing the investment scale of bank-managed bond funds [5]. 4. **Credit Bond Market Differentiation**: There is a noticeable differentiation in the credit bond market, with industrial bonds performing well while bank capital bonds are adjusting. This is linked to the liquidity and structural changes in the market due to the opening period of amortized cost bond funds [7][8]. 5. **Future Allocation of Bonds**: An estimated allocation of approximately 500 billion yuan towards urban investment and industrial bonds is expected in the coming years, which may negatively impact the National Development Bank bonds [9]. 6. **Banking Sector Dynamics**: The banking sector is experiencing a significant shift towards financial investments, with the total balance reaching 101 trillion yuan, accounting for 31% of total assets. This trend is expected to continue, with financial investments potentially reaching 50% in the next 10-20 years [13][15]. 7. **Interest Rate Expectations**: There is a strong expectation for a reduction in policy interest rates, likely occurring in December or January, which would further push down the yields on 10-year government bonds [11][18]. 8. **Inflation Data Impact**: Future CPI and PPI data are not expected to significantly impact the bond market, as historical trends indicate that even high CPI levels did not lead to substantial changes in bond yields [19][20]. Other Important but Potentially Overlooked Content 1. **Real Estate Market Influence**: The ongoing decline in the real estate market, with significant drops in property prices and rents, is likely to contribute to a prolonged period of low consumer prices, affecting overall economic sentiment [22]. 2. **Comparative Analysis with Japan**: The records draw parallels between China's current economic situation and Japan's past experiences with deflation, suggesting that China may remain in a deflationary environment for the foreseeable future unless significant policy changes occur [21][23]. 3. **Banking Sector's Response to Low Interest Rates**: The decline in deposit rates has led to a significant reduction in banks' overall funding costs, making high-yield local government bonds more attractive [16][17]. This summary encapsulates the key points discussed in the conference call records, providing insights into the current state and future expectations of the Chinese bond market and its related sectors.

China’s Deflationary Pressures Eased in October https://t.co/M4YsGDmn9E ...

5 November 2025 | 12:06PM HKT Economics Research China: Unofficial services PMI edged down in October; October inflation and credit preview Bottom line: The headline RatingDog China Services PMI (formerly the Caixin services PMI) edged down to 52.6 in October from 52.9 in September, suggesting services sector activity continued to expand but at a slightly slower pace. Key numbers: S&P Global services PMI: 52.6 in October (Bloomberg consensus: 52.5), vs. 52.9 in September. Main points: 1. The RatingDog China ...

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the **AI industry**, its impact on various sectors, and the **Chinese and American economies**. Core Insights and Arguments 1. **AI Industry Growth and Economic Impact** The AI industry is characterized by high investment, capital expenditure, and energy consumption, driving development in internet, computing power, and electrical equipment sectors, while also influencing natural gas and crude oil prices, creating new growth points for the economy [1][3][5] 2. **China's Economic Transition** China is undergoing a structural economic transformation, with increasing exports counterbalancing a decline in real estate. Exports have reached 27 trillion yuan, while real estate has decreased to 9 trillion yuan, indicating a shift from old to new economic drivers [8][11] 3. **U.S. Economic Conditions and Risks** The U.S. is experiencing a decline in inflation expectations, with stable consumption and no significant credit risks. However, fiscal tightening, layoffs, and loss of monetary policy independence pose potential risks to fiscal sustainability and inflation pressure [7][9] 4. **Market Strategy and Phases** The market can be divided into bull and bear phases, each requiring different strategies. In a bull market's second half, caution is advised to mitigate risks and adjust investment portfolios [6][22] 5. **Sector Focus for Investment** Industries with high potential for return on equity (ROE) improvement, such as gaming, electronics, motorcycles, traditional electrical equipment, and innovative pharmaceuticals, are highlighted as areas of growth [4][18][20] 6. **Electricity Supply Challenges** The growth in U.S. renewable energy capacity is being offset by increased electricity demand from data centers, leading to supply bottlenecks. Even with a slowdown in AI capital expenditure growth, electricity demand is expected to continue rising [14][16] 7. **Global Consumption Trends** Global consumer behavior is shifting towards emotional and service consumption, with the aviation industry facing a supply shortage of aircraft expected to last 3-5 years, despite a 5-10% annual growth in passenger transport demand [21] 8. **Investment Opportunities in Structural Changes** The current market environment suggests focusing on sectors that can enhance ROE and have high growth potential, particularly in traditional electrical equipment and innovative pharmaceuticals, amidst a backdrop of global economic divergence [20][26] Other Important but Possibly Overlooked Content 1. **Dollar Cycle and Asset Impact** The dollar cycle is entering a decline, with U.S. Treasury yields expected to drop, marking 2026 as a potential turning point for major asset classes [12] 2. **AI Industry's Financial Dynamics** The AI sector is experiencing a high degree of internal capital flow and leverage, with downstream applications not yet showing explosive growth, indicating a competitive environment for capital expenditure [13] 3. **Market Valuation and Risk Premium** The equity risk premium (ERP) analysis shows that lower valuations historically correlate with better future performance, suggesting a need to identify sectors with potential for ROE enhancement [19][23] 4. **Short-term Market Sentiment** The A-share market is experiencing significant fluctuations in sentiment and trading volume, with expectations of reaching a sentiment bottom around mid-November [24][25]

Economic Growth & Inflation - Economists and policymakers view moderate inflation as beneficial for driving economic growth [1] - Moderate inflation helps in preventing deflation [1] Impact on Consumption & Savings - Moderate inflation has an impact on consumption and savings [1]

Thailand’s longer tenor bonds are drawing in global investors after a sharp selloff last month as persistent deflation revives expectations of interest-rate cuts from the central bank https://t.co/zDl5kvPOxK ...

genius act compliance costs run $3-5m annually minimum. projects burning that without revenue face liquidation by q2 2026. aerodrome crossed into deflation with revenue exceeding emissions. jupiter pulling $866m fees. hyperliquid at $1b+ annualized. the regulatory floor just became revenue not roadmaps. teams with 10:1 marketing to dev spend getting repriced to zero. teams with audited contracts and actual transaction volume getting institutional rotation. binary outcome accelerating. ...

Decentralized Finance (DeFi) Protocol Performance - Aerodrome experienced deflation in September 2025 [1] - Aerodrome generated $408 million in fees with a $958 million market cap [1] - Aerodrome's revenue exceeded emissions, a first for DEXs [1] - Aerodrome pays 100% of revenue to veaero lockers, resulting in a 40% APR [1] Comparative Analysis - Uniswap, with an $8.7 billion market cap, generates zero revenue for holders [1] - Aerodrome trades at 2.5x revenue, while other top 10 DeFi protocols trade at 10x+ or have no revenue [1] - Curve's value is fragmented across gauges [1] Institutional Investment & Governance - Coinbase owns mid-8 figures (tens of millions) worth of Aerodrome [1] - Animoca has max locked Aerodrome [1] - ve(3,3) model has disrupted the governance token model [1]