Group 1: PPI and Asset Framework - The "PPI-Liquidity Framework" indicates that PPI determines asset style while liquidity determines beta, reflecting the impact of different macroeconomic cycles on various assets[1] - The framework consists of four quadrants: 1. Quadrant 1: Liquidity expansion + PPI up corresponds to overheating, favoring cyclical assets 2. Quadrant 2: Liquidity contraction + PPI up corresponds to stagflation, favoring short-duration assets 3. Quadrant 3: Liquidity contraction + PPI down corresponds to recession, favoring bonds over stocks 4. Quadrant 4: Liquidity expansion + PPI down corresponds to recovery, favoring both stocks and bonds[1] - As of 2024, domestic assets were in Quadrant 3 before September 24, and in Quadrant 4 from September 24 to mid-2025[1] Group 2: PPI Trends and Economic Implications - PPI is a leading indicator for corporate profits, typically leading A-share profit cycles by about three months[1] - A rebound in PPI is expected to signal a transition from recession to recovery, improving corporate profit expectations[1] - The global inventory cycle and oil prices are anticipated to drive PPI recovery, with a potential bottom reached in June-July 2025[1][2] Group 3: Currency and Investment Outlook - A strong dollar (≥100) combined with a depreciating RMB may lead to reduced foreign investment in Chinese equities, while a weak dollar (<100) with an appreciating RMB is likely to attract foreign investment[1] - The RMB's appreciation is supported by strong export performance and favorable global trade conditions, particularly after tariff adjustments by other economies[1][2] - If the RMB returns to the 6 range, it could enhance the attractiveness of Chinese equities, leading to a comprehensive asset revaluation[1][2]

Core Viewpoint - The recent "Geneva Economic and Trade Joint Statement" between China and the U.S. indicates a significant easing of trade tensions, with both countries agreeing to modify tariffs on each other's goods, which may lead to a gradual recovery of trade flows and improved economic conditions [1]. Group 1: Trade Policy Changes - The U.S. will suspend the implementation of a 24% tariff on Chinese goods for the first 90 days, retaining a 10% tariff thereafter, and will eliminate additional tariffs imposed in early April [1]. - China will similarly suspend a 24% tariff on U.S. goods for 90 days, keeping a 10% tariff, and will cancel other tariffs imposed in early April [1]. Group 2: Market Reactions and Implications - The easing of trade tensions is expected to positively impact sensitive sectors, with shipping and oil markets likely to see increased demand and price stabilization [2][7]. - The potential for a recovery in U.S. orders and changes in transshipment trade are critical indicators for future trade negotiations and market dynamics [3]. Group 3: Commodity-Specific Impacts - The shipping market is anticipated to experience a surge in demand due to the tariff suspensions, particularly in the U.S. shipping lanes, which may lead to a temporary reversal in shipping volumes [7]. - The oil market remains cautious, as the tariff adjustments do not directly affect crude oil trade flows, but the overall sentiment may improve due to reduced trade tensions [9]. - Cotton exports from China to the U.S. may recover if negotiations continue positively, enhancing China's competitive position in the textile market [11]. Group 4: Economic Indicators and Future Outlook - Key indicators to monitor include China's PMI new export orders and U.S. retail inventory levels, which will provide insights into the stability of trade conditions [4]. - The overall economic outlook remains cautious, with potential risks from U.S. fiscal policies and global inventory cycles impacting market sentiment [5].