Core Viewpoint - The article discusses the recent trends in the RMB exchange rate, highlighting similarities with the macroeconomic context of late 2018 to mid-2019, including low domestic PMI, rising RMB assets, and improved expectations for Sino-US relations [2][8]. Group 1: Main Line, Trading Factors, and Policy Push - The RMB exchange rate trend is primarily driven by fundamental economic data, particularly exports and PMI [4][15]. - Currently, there is marginal improvement in the net settlement rate, but the domestic manufacturing PMI remains low, indicating a need for further confirmation of trend improvement [5][15]. - Two uncertain factors that may amplify exchange rate fluctuations are identified: the potential release of accumulated settlement and the emotional changes stemming from Sino-US interactions [6][21]. Subgroup: Accumulated Settlement Release - The estimated accumulated settlement as of July is approximately between $743.3 billion and $892.6 billion, with a median of around $818 billion [22][23]. - The average weighted exchange rate cost of these accumulated settlements is estimated to be between 7.02 and 7.17, with significant amounts concentrated around the 6.9 to 7.2 range [23]. - The exchange rate of 7.0 is highlighted as a critical threshold, where approaching this level may lead to accelerated settlement and increased volatility [23]. Subgroup: Emotional Changes from Sino-US Contact - The recent strengthening of the RMB is supported by improved expectations regarding Sino-US relations, with historical parallels drawn to the period from November 2018 to June 2019 [30][31]. - The current macroeconomic context shares similarities with the past, including low PMI and a rebound in A-shares, suggesting potential for further RMB appreciation [31][32]. Subgroup: Policy Intent - The article notes a rare occurrence where the counter-cyclical factor remains significant during a period of RMB appreciation, indicating policy support for the strengthening trend [9][35]. - The counter-cyclical factor shadow has shown significant activity, particularly since the Geneva trade talks, suggesting a policy-driven influence on the exchange rate [35][38]. Group 2: Comprehensive Assessment of RMB Exchange Rate - The current valuation of the RMB against the USD is considered relatively high compared to the fitted midpoints based on Sino-US interest rate differentials, while the CFETS RMB index remains slightly undervalued [40][41]. - The RMB's valuation against a basket of currencies is deemed reasonable, with potential for appreciation based on export competitiveness [40][41]. Subgroup: Three Aspects of the Current Exchange Rate - The bank's customer settlement surplus has expanded, indicating improved settlement fundamentals [48]. - Both resident and enterprise expectations have shown signs of recovery, with residents' expectations reflected in the implied exchange rate of gold and enterprises' expectations indicated by the net settlement rate [50][52]. - Trading volumes in the onshore foreign exchange market have increased, suggesting heightened market sentiment and potential for RMB appreciation [56]. Subgroup: Policy Impact - The counter-cyclical factor shadow has increased friction on the depreciation side, indicating a policy stance aimed at stabilizing the RMB [59].

Group 1: Report Industry Investment Rating - No relevant content Group 2: Core Viewpoints of the Report - The short - term view of TL2506 is to fluctuate, the medium - term view is to fluctuate, and the intraday view is to fluctuate strongly, with an overall view of range - bound fluctuations. The core logic is that the expectation of interest rate cuts has been fulfilled, and short - term fluctuations and consolidation are the main trends [1]. - For financial futures in the bond index sector including TL, T, TF, and TS, the intraday view is to fluctuate strongly, the medium - term view is to fluctuate, and the reference view is range - bound fluctuations. The long - term upward policy basis for bonds is solid due to policy - driven interest rate and reserve requirement ratio cuts. However, the current bond futures price already implies the expectation of interest rate cuts, and further cuts require the cooperation of domestic and foreign environments. The hawkish expectation of the Fed's monetary policy may limit the central bank's future easing pace, and the possibility of short - term interest rate cuts is low. Also, due to the high uncertainty of Sino - US contacts, the demand for bond hedging remains. Overall, bond futures are expected to remain high - level fluctuating in the short term with limited downside [4]. Group 3: Summary by Relevant Catalogs Variety Viewpoint Reference - Financial Futures Bond Index Sector - For TL2506, short - term: fluctuate; medium - term: fluctuate; intraday: fluctuate strongly; overall view: range - bound fluctuations. Core logic: expectation of interest rate cuts fulfilled, short - term fluctuations and consolidation [1]. Main Variety Price Market Driving Logic - Financial Futures Bond Index Sector - For TL, T, TF, and TS, intraday view: fluctuate strongly; medium - term view: fluctuate; reference view: range - bound fluctuations. Core logic: long - term upward policy basis for bonds is solid due to policy - driven cuts. Current price implies interest rate cut expectation, further cuts need domestic and foreign cooperation. Hawkish Fed policy may limit central bank's easing pace, short - term interest rate cut possibility is low. High uncertainty of Sino - US contacts leads to hedging demand, short - term high - level fluctuations with limited downside [4].