Economic Concerns - Economic growth in the first half of 2025 remained high at 5.3% year-on-year, exceeding market expectations, primarily driven by strong exports and the "two new" policies boosting manufacturing investment and consumer goods [2][10] - Recent months have shown signs of economic concerns, particularly in the "two new" sectors, with retail sales growth declining to 3.7% in July due to factors like e-commerce promotions and a gap in national subsidies [2][10] - The real estate sector continues to drag on the economy, with credit financing for property companies falling to -15.8%, the lowest in two years, and construction area growth dropping significantly [2][17] Inflation and Price Transmission - The inflation performance in July was below market expectations, with PPI remaining low at -3.6%, attributed to the inability of upstream price increases to be transmitted downstream due to lower capacity utilization in midstream and downstream sectors [3][29] - The current capacity utilization rates are 76.7% for upstream, 74% for midstream, and 74.7% for downstream, indicating a blockage in price transmission from upstream to downstream [3][29] Service Sector Resilience - While manufacturing sector sentiment is declining, the service sector shows strong resilience, with service production index only slightly down to 5.8% in July [4][38] - Service retail sales for the first seven months of 2025 saw a minor decline of 0.1% year-on-year, indicating stable performance, with certain service categories like tourism and transportation experiencing double-digit growth [4][38] Policy Support for Services - Recent policies are increasingly favoring investments in the service sector, with loan interest subsidy policies expected to generate around 210 billion yuan in new credit for service sector entities [5][49] - The large-scale support phase for manufacturing investment appears to be over, with a shift in investment growth momentum towards the service sector anticipated [5][49] Export Performance - Current strong export performance is attributed to 70% stemming from improvements in external demand and market share, rather than the 30% related to short-term "export grabbing" factors [6][101] - In July, exports grew by 7.2% year-on-year, with significant contributions from exports to emerging economies and non-US developed countries, reflecting improved demand and market share recovery [6][101] - The potential for further increases in exports to emerging economies is supported by rising investment and demand in these regions, alongside China's growing import share in the Middle East and Africa [6][73]

Economic Concerns - Economic growth in the first half of 2025 was strong at 5.3% YoY, driven by exports and the "two new" sectors, but recent months show signs of weakness[3] - Retail sales growth fell to 3.7% in July, influenced by e-commerce promotions and a gap in national subsidies[3] - Real estate continues to drag on the economy, with credit financing for property companies dropping 13.5 percentage points to -15.8%, the lowest in two years[3][20] Inflation and Price Transmission - July's inflation was below market expectations, with PPI at -3.6% due to poor price transmission from upstream to downstream sectors[4][24] - Capacity utilization in midstream (74%) and downstream (74.7%) is significantly lower than upstream (76.7%), hindering price transmission[4][24] Service Sector Resilience - While manufacturing sector sentiment is declining, the service sector shows strong resilience, with a service production index at 5.8%[5][32] - Service retail sales for January to July saw a slight decline of 0.1 percentage points to 5.2%, but certain service categories like tourism and leisure are experiencing double-digit growth[5][35] Export Performance - Exports grew by 7.2% YoY in July, with only 30% attributed to "panic buying" and 70% due to improved external demand and market share[7][44] - The contribution of "panic buying" to July's exports was approximately 2 percentage points, primarily affecting trade with ASEAN and Hong Kong[7][44] Future Outlook - Emerging economies are increasing investment, which, combined with China's growing import share in the Middle East and Africa, may boost exports to these regions[8][59] - Risks include potential short-term constraints from economic transformation and the effectiveness of policy implementation[8]

Core Viewpoint - The issuance of 1.3 trillion yuan of ultra-long-term special government bonds is progressing rapidly, aimed at stabilizing investment, promoting consumption, and supporting economic growth [1][2]. Group 1: Bond Issuance Details - As of July 14, 2023, the Ministry of Finance has issued a total of 678 billion yuan in ultra-long-term special government bonds, with 622 billion yuan remaining to be issued [2][3]. - The bonds include two phases: the fourth phase with a scale of 40 billion yuan and a 20-year term at a 1.92% interest rate, and the fifth phase with a scale of 83 billion yuan and a 30-year term at a 1.90% interest rate [1][2]. Group 2: Funding Allocation - Of the 1.3 trillion yuan, 800 billion yuan is allocated for "two major" constructions, focusing on infrastructure and ecological projects, while 300 billion yuan is designated for consumer goods replacement and 200 billion yuan for equipment updates [2][3]. - The "two major" projects include significant investments in areas such as high-standard farmland construction, ecological protection, and urban infrastructure [2]. Group 3: Impact on Consumption - The consumer goods replacement policy has led to over 1.4 trillion yuan in sales of related products since the beginning of the year, indicating a strong market response [4]. - Retail sales in categories such as home appliances and communication equipment have seen significant year-on-year growth, contributing to an increase in overall social retail sales [5].

Report Summary 1. Investment Ratings - Not provided in the report. 2. Core Views - **Stock Index Futures**: The intraday view is oscillating with a slight upward bias, with IC and IM being relatively stronger. The medium - term view is bullish. The core logic includes the expected marginal improvement in Sino - US trade relations, the implementation of domestic positive policies, and a healthy chip structure in the AI industry chain [1][2]. - **Treasury Bond Futures**: The intraday and medium - term views are high - level oscillations, and there is a need to be cautious about the adjustment risk of long - term bonds. The core logic is that the fundamental situation has fulfilled the tariff shock expectation, and loose policy expectations support the bond market, but there are also risks of repeated Sino - US tariff games [3][4]. - **Commodity Futures (Black and Building Materials)**: The intraday view is a gradual decline in steel prices, and the medium - term view is that steel prices will be under pressure. The core logic is the large inventory pressure of steel raw materials and the general downstream demand for steel [5]. 3. Summary by Category Stock Index Futures - **Varieties**: IF, IH, IC, IM [1] - **Intraday View**: Oscillating with a slight upward bias, IC and IM are relatively stronger [1] - **Medium - term View**: Bullish [1] - **Reference Strategy**: Hold IM2505 long positions, buy 1 lot of MO2506 - C - 5900 call options and sell 2 lots of MO2506 - P - 5200 put option combinations [1] - **Core Logic**: Sino - US trade relations are expected to improve, domestic positive policies are being implemented, and the AI industry chain has a healthy chip structure [1][2] Treasury Bond Futures - **Varieties**: TS, TF, T, TL [3] - **Intraday View**: High - level oscillations, be cautious about the adjustment risk of long - term bonds [3] - **Medium - term View**: High - level oscillations [3] - **Reference Strategy**: Cautiously operate the long TF2506 and short TL2506 hedging combination [3] - **Core Logic**: The fundamental situation has fulfilled the tariff shock expectation, loose policy expectations support the bond market, but there are risks of repeated Sino - US tariff games [4] Commodity Futures (Black and Building Materials) - **Varieties**: Rebar, Hot - rolled coil [5] - **Intraday View**: Gradual decline in steel prices [5] - **Medium - term View**: Steel prices will be under pressure [5] - **Reference Strategy**: Hold short rebar call option RB2510 - C - 3450, hold long rebar in - the - money put option RB2510 - P - 3150 [5] - **Core Logic**: Large inventory pressure of steel raw materials and general downstream demand for steel [5]