Inflation Data Summary - In February, the overall and core CPI in the U.S. increased by 0.2% month-on-month, a decrease of 0.3 and 0.2 percentage points from the previous month respectively[2] - Year-on-year, the overall CPI rose by 2.8%, while the core CPI increased by 3.1%, both down by 0.2 percentage points compared to the previous month[2] CPI Trends - The core CPI reached a new low, dropping to levels not seen since April 2021, breaking below the previous range of 3.2-3.3%[3] - The CPI structure showed a divergence in inflation performance between goods and services, with food inflation rising by 0.2% month-on-month, a decrease of 0.2 percentage points from January[4] Energy Prices - Energy prices increased by 0.2% month-on-month in February, lower than the 1.1% increase in January, but still above the average of the past 12 months[6] - Gasoline and fuel prices fell by 0.9% in February, while electricity and natural gas prices rose by 1% and 2.5% respectively[6] Core Inflation Contributions - Core services contributed the most to the CPI growth, accounting for 0.15% of the increase, although this was a decrease of 0.15 percentage points from the previous month[9] - Core goods contributed 0.04% to the CPI growth, while the energy component's contribution fell to 0.01%, down by 0.06 percentage points from January[9] Economic Outlook - The adjustment in U.S. stock markets is expected to weaken consumer demand, potentially reversing the "re-inflation" narrative[13] - Factors such as low savings rates and high stock valuations may lead to a decline in consumer spending in 2025, counteracting the effects of tariff and immigration policies aimed at re-inflation[13]

Investment Rating - The report does not explicitly provide an investment rating for the industry [15][16]. Core Insights - The report discusses the recent decline in U.S. Treasury yields, with the 10-year yield dropping from approximately 4.8% at the beginning of the year to around 4.3% [9][11]. - The "Trump trade" is experiencing a cooling off, similar to the trend observed in 2017, driven by slow implementation of tariff policies and weakening economic indicators in the U.S. [9][12]. - Positive carry is highlighted as a significant factor driving the strength of long-term bonds, providing a protective cushion in a volatile market environment [11][13]. Summary by Sections U.S. Treasury Yields - The report notes a rapid decline in U.S. Treasury yields, particularly the 10-year yield, which has decreased significantly despite rising inflation indicators [9][11]. - The market's focus on purchasing long-term U.S. Treasuries is emphasized as a safe trading strategy [11]. Market Dynamics - The report indicates that the narrowing interest rate differential between the U.S. and Europe suggests that the dollar's strength may not have reached its peak yet [12][14]. - The report also mentions that the market's reaction to clear directional signals often results in lower trading value, while positive carry trades can accumulate small victories into larger gains [13]. Currency and Interest Rate Outlook - The report suggests that the narrowing of the U.S.-Euro interest rate differential may lead to a stronger euro, indicating ongoing dynamics in the forex market [12][14]. - It is noted that the market's expectations for the European Central Bank's interest rate cuts have remained stable despite the changes in U.S. rates [12].

Investment Rating - The report indicates a strong performance in the non-ferrous metals sector, with a weekly increase of 7.08%, outperforming the Shanghai Composite Index by 5.52 percentage points [1][9]. Core Insights - The macroeconomic sentiment has improved, leading to a strong performance in the non-ferrous metals and steel sectors. The report emphasizes the importance of cyclical commodities, recommending industrial metals such as copper and aluminum, as well as the steel sector [2][21]. - The government work report for 2025 sets a GDP growth target of around 5% and a budget deficit rate of approximately 4%, indicating a continuation of proactive fiscal policies to boost consumption and improve macroeconomic sentiment [2][21]. - Key price movements include a significant drop in alumina prices, which is expected to enhance the profitability of electrolytic aluminum producers. The report anticipates a continued upward trend in electrolytic aluminum prices due to a tight supply situation [2][22]. - The report highlights the potential for copper prices to rise amid "re-inflation" expectations, with a focus on the supply dynamics and the possibility of reduced production in the smelting sector [2][24]. Summary by Sections Weekly Market Review - The Shanghai Composite Index rose by 1.56%, with the non-ferrous metals sector leading at +7.08%. Industrial metals increased by 8.43%, precious metals by 6.48%, and energy metals by 4.58% [1][9]. - Top-performing stocks included Huayu Mining (+47.77%) and Xinweiling (+45.12%), while the worst performers were Liyuan Co. (-8.97%) and *ST Zhongrun (-8.88%) [1][9]. Metal Prices & Inventory Changes - Copper prices on the LME reached $9,602.00 per ton, up 2.57% week-on-week, while domestic prices were at ¥78,320.00 per ton, up 1.93% [16][27]. - Aluminum prices increased to $2,689.00 per ton on the LME, a rise of 3.26%, with domestic prices at ¥20,835.00 per ton, up 0.94% [25][27]. - Zinc prices also saw an increase, with LME prices at $2,882.00 per ton, up 3.00% [17][27]. Core Insights Update and Key Stock Tracking - The report emphasizes the cyclical nature of the non-ferrous metals sector, recommending investments in copper and aluminum due to expected price increases driven by supply constraints and improving demand [2][22]. - The report notes that the price of strategic metals like praseodymium-neodymium oxide has stabilized, with a current price of ¥460,900.00 per ton, reflecting a month-on-month increase of 5.44% [53][54].