Macro Economic Overview - Global markets remain cautious, influenced by geopolitical conflicts and inflation concerns, with oil prices significantly elevated due to the blockade in the Strait of Hormuz[3] - The U.S. Federal Reserve maintained interest rates at 3.50%-3.75%, with market expectations shifting towards a potential rate hike later this year[3] - China's economic growth target for 2026 is set at 4.5%-5%, indicating continued policy support amid external pressures[3] Stock Market Performance - Major indices in A-shares, H-shares, and U.S. markets experienced declines, with the Shanghai Composite Index falling by 1.09% and the S&P 500 down by 2.12% over the two-week period[7] - The ChiNext Index showed relative resilience, declining only 0.4%, while the Hang Seng Index and Hang Seng China Enterprises Index saw increased losses[7] - Valuation metrics indicate that A-shares are trading at relatively high PE ratios compared to historical averages, with the Shanghai Composite at 68.9 for the past year[8] Bond Market Insights - U.S. Treasury yields remain elevated, with the 10-year yield at 4.43% and the 30-year yield at 4.97%, reflecting market expectations of sustained high rates[14] - China's bond yields show a bullish trend in the short end, with the 2-year yield at 1.30% and a notable decline in yields across most maturities[19] - The probability of a rate cut by the Federal Reserve this year is low, with expectations for only one rate cut in 2027[16] Commodity Market Trends - The commodity market displayed mixed performance, with energy and chemical products strengthening, while precious metals like gold and silver faced downward pressure[33] - Brent crude oil prices rose significantly, reaching $112.57 per barrel, while WTI crude oil was at $99.64 per barrel[33] - Domestic commodity prices showed a split, with energy products like LPG and methanol seeing gains, while agricultural products like soybeans and live pigs weakened[36] Real Estate Market Dynamics - New housing prices in major cities showed slight month-on-month fluctuations, with Beijing's prices at 100.2% of the previous month and Shanghai at 100.2% year-on-year[40] - Overall, the real estate market remains under pressure, reflecting broader economic uncertainties and policy adjustments[40]

Core Viewpoint - The ongoing deterioration of geopolitical situations in the Middle East is likely to push global oil prices and inflation expectations higher, suppressing global macro liquidity, leading to a transition from reflation trades to stagflation trades. The recommendation is to overweight Chinese equities and oil [1]. Group 1: Geopolitical and Economic Context - The geopolitical situation in the Middle East is worsening, with the Strait of Hormuz still blocked, resulting in high oil prices that maintain upward momentum. The key factor for asset pricing will be the duration of the blockade [1][3]. - Central banks in multiple economies are signaling a hawkish stance, shifting monetary policy guidance towards anti-inflation measures, which compresses the space for interest rate cuts and leads to a significant downward adjustment in macro liquidity easing expectations [1]. Group 2: Investment Recommendations - Chinese stock markets exhibit strong resilience, suggesting an overweight position in A-shares. The current market conditions do not warrant panic selling, as there is potential for a significant bottom and rebound in the Chinese market [1]. - The recommendation to overweight oil is based on the current geopolitical tensions and declining oil inventories in major economies, despite relatively weak global oil demand [3]. Group 3: Bond Market Insights - Inflation expectations are likely to suppress the performance of long-duration bonds. The imbalance between financing demand and credit supply remains a reality, but risk appetite is trending upwards, prompting asset reallocation by households and enterprises [2]. - The U.S. economy is converging marginally, with inflation expectations pressuring long-duration U.S. Treasury bonds. The potential for a gradual decline in U.S. Treasury yields is anticipated due to a more cautious monetary policy stance [2]. Group 4: Commodity Market Dynamics - The transition from reflation trades to stagflation trades may suppress demand for industrial commodities. Recent developments in electric power-related construction equipment and military facility updates have created new demand for industrial metals, but the overall macroeconomic environment is likely to dampen this demand [3].

Group 1 - The geopolitical situation in the Middle East continues to deteriorate, leading to upward pressure on global oil prices and inflation expectations, which may suppress global macro liquidity [1][4] - The report suggests an overweight allocation to Chinese equities and oil due to the current market conditions [1][4] - The transition from reflation trading to stagflation trading is noted, with a recommendation to focus on short to medium-term bonds over long-term bonds due to rising inflation expectations [1][4][16] Group 2 - The report highlights the resilience of the Chinese stock market, recommending an overweight position in A-shares, as the market is expected to find a significant bottom [16][18] - The performance of major asset classes is reviewed, with specific attention to the recent declines in various indices, including the Shanghai Composite Index and the Hang Seng Index [9][21] - The report emphasizes the importance of monitoring the ongoing geopolitical developments, particularly the situation in the Strait of Hormuz, which could significantly impact asset pricing [15][17] Group 3 - The report outlines a tactical asset allocation strategy, with a focus on equities (45%), bonds (45%), and commodities (10%), reflecting a balanced approach to risk and return [19][20] - The tactical asset allocation model has shown a cumulative excess return of 5.85% relative to the benchmark, indicating effective positioning in the current market environment [21][22] - Specific recommendations include an overweight in oil due to geopolitical tensions and a cautious stance on long-duration bonds amid rising inflation pressures [17][18]

Group 1: Geopolitical Tensions and Market Impact - The conflict between the US, Israel, and Iran is escalating, with potential for a significant blockade of the Strait of Hormuz, impacting global supply chains and inflation expectations [2] - The market is reacting to geopolitical developments, with US Treasury yields rising and expectations for the Federal Reserve shifting towards a more hawkish stance due to inflation concerns [3] - Oil prices remain high, contributing to inflationary pressures and affecting market liquidity, leading to a shift in investor preference from large-cap tech stocks to mid and small-cap stocks [3] Group 2: Economic Indicators and Market Performance - The US stock market saw declines, with the S&P 500 and Nasdaq indices dropping by 1.9% and 2.1% respectively, driven by ongoing Middle Eastern tensions and high oil prices [3] - In China, new home sales are showing signs of recovery, with a 9.7% year-on-year decline in new home transactions narrowing, and second-hand home sales increasing by 3.2% [7] - Port activity in China is rebounding, with significant increases in cargo and container throughput, indicating a recovery in external demand [8] Group 3: Monetary Policy and Fiscal Outlook - China's monetary policy is expected to tighten, with the central bank signaling a reduced likelihood of interest rate cuts amid rising inflation risks [10][11] - Fiscal revenue in China showed a modest increase of 0.7% year-on-year in January-February, with non-tax revenue performing better than tax revenue [9] - Government spending is projected to increase, particularly in health and social security sectors, while infrastructure spending is recovering but remains under pressure [9] Group 4: Investment Strategies and Sector Focus - Investment strategies should focus on defensive sectors and energy stocks to mitigate risks associated with geopolitical tensions and inflation [3][13] - The A-share market is experiencing volatility, with a recommendation to maintain a defensive posture and focus on dividend, energy, and hard technology sectors [13][14] - The outlook for the bond market remains cautious, with expectations of rising interest rates due to inflationary pressures, while opportunities may arise as the market shifts focus from inflation to potential stagnation [12]

Core Viewpoint - The ongoing geopolitical conflict in the Middle East is escalating, leading to heightened expectations of global stagflation and emerging liquidity risks, significantly impacting capital markets and asset prices, particularly in the Asia-Pacific region [1] Group 1: Equity Market - The situation in the Middle East has worsened, with the Strait of Hormuz experiencing substantial navigation restrictions, which is a critical factor for capital market dynamics [2] - A significant adjustment in the A-share market occurred on March 23, primarily driven by the negative macroeconomic combination of escalating geopolitical tensions and stagflation expectations, resulting in the first negative year-to-date returns for major A-share indices [3] - Historical data indicates that the maximum drawdown for the Shanghai Composite Index in any given year is not less than 8%, suggesting that a decline to the range of 3500-3850 points is a normal adjustment within a bull market [4] - The A-share market has seen a substantial release of risks, but a clear stabilization point requires further observation, with a cautious approach recommended for position management [5] Group 2: Gold Market - Gold prices are under pressure due to rising tightening expectations driven by inflation concerns, with significant outflows from major gold ETFs indicating a rapid withdrawal of institutional funds [7] - Speculation exists regarding oil-producing countries potentially selling gold reserves to manage liquidity, reminiscent of past behaviors during financial crises [8] - The future trajectory of gold prices is highly dependent on the evolution of the U.S.-Iran conflict, with three potential scenarios outlined: prolonged strait blockade leading to stagflation concerns, a swift resolution by U.S. forces, or a situation where inflation rises without economic stagnation [9][10]

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - The stock - bond relationship in 2026 shows new changes, which is still weakly correlated overall, but the situation of stock - bond co - pressure has increased. There are three new clues: the marginal change of fixed - income plus funds, the switching of equity main lines, and the disturbance of easing expectations [4][7][8]. - In the medium and long term, the bond market is still supported by allocation power and the policy environment, but in the short term, the ultra - long end and highly tradable varieties of the bond market may show positive correlation with stocks and be under pressure together with equities, and may also create "opportunities from falls" for the bond market in the medium term [4][32]. 3. Summary by Directory 2026 Stock - Bond Relationship New Trends - In 2026, the stock - bond relationship remains in a weakly correlated range, and the bond market moves along its own pricing main line. Before the Spring Festival in early 2026, the bond market was "desensitized" to the stock market. Recently, under the background of equity shocks, the stock - bond relationship shows a weak positive correlation, and the hedging property of bonds is not as stable as before [7][8]. Fixed - Income Plus Fund Structure Evolution, Equity Volatility Leading to Portfolio Rebalancing - In 2025, fixed - income plus products expanded significantly, with incremental funds mainly concentrated in secondary bond funds. The proportion of funds holding both bond positions and equity positions increased, making the marginal capital sources of stocks and bonds more consistent. Equity fluctuations can be directly transmitted to the bond market through net value retracement, redemption pressure, and rebalancing behavior [9]. - During the equity adjustment in November 2015 and February 2026, and after the outbreak of the US - Israel - Iran conflict, fixed - income plus products sold bonds. When facing redemption, the selling pressure on bonds shows the order of "high - liquidity first, low - liquidity later; trading positions first, allocation positions later" [12][13]. Under the Weak Correlation Pattern, Which Equity Signals Are More Worthy of Attention for Bond Investors - Different equity sectors have different impacts on the bond market. Since 2026, the positive correlation between growth, cyclical, and some stable - style sectors and the bond market has increased, while the financial sector shows a weak negative correlation [19]. - The relationship between sectors and the bond market depends on the trading main line. When growth is trading risk preference and equity profit - making effect, and cyclical is trading total repair and nominal growth increase, they are more negative for the bond market. When growth corresponds to structural prosperity in a low - interest - rate environment and cyclical reflects commodity, supply disturbances, and external shocks, they may be driven by the same macro main line as the bond market [22]. - Financial sector strength often means re - trading of credit expansion, policy efforts, and nominal growth repair, increasing the pressure of the traditional "strong stocks, weak bonds". If growth and cyclical sectors dominate the fluctuations, it is necessary to distinguish whether they correspond to structural prosperity in a low - interest - rate environment or re - inflation trading caused by rising commodity prices, supply disturbances, and geopolitical conflicts [27]. Re - inflation Trading: Why Is the Hedging Property of Bonds Unstable Periodically - Geopolitical conflicts affect the stock - bond relationship through oil price increases and imported inflation expectations, weakening the hedging stability of bonds from the fundamental and policy expectation levels. Once the market trades the concern about policy constraints due to imported inflation, especially when combined with month - end capital fluctuations or central bank net capital withdrawal, it is more likely to form a short - term cautious expectation of monetary policy, suppressing the bond market [28]. - The re - inflation expectation has been reflected in the data. The PPI环比 in February reached 0.4%, a four - year high, showing signs of imported inflation. The bond market is more sensitive to such shocks than before, and geopolitical conflicts may make the hedging property of bonds more unstable [28][30]. The Safe Haven May Have Ripples, but Long - Term Investors Need Not Fear Temporary Waves - In the short term, the bond market may show a certain positive correlation with stocks and needs to be vigilant against external shocks. From the end of the month to before the release of next month's PPI, the bond market may face pressure, especially high - liquidity varieties such as 30 - year treasury bonds, long - term policy financial bonds, and long - term Tier 2 capital bonds [32]. - If the subsequent adjustment leads to an increase in yields, it should be regarded as a mid - term re - layout window. After the quarter - end, if the capital situation eases, external shocks do not escalate, and re - inflation expectations do not strengthen, grid - adding strategies can be used to participate in high - liquidity varieties affected by the shock [32].

报告导读： 在中东地缘政治局势持续恶化的背景下，投资者对通胀的担忧仍有望上行并压 制全球宏观流动性，我们建议超配中国权益、黄金、原油与工业商品。 稳定是稀缺的，中国市场有更低的风险溢价。 增长逻辑是打破"滞胀"风险叙事的突破口，中国市场更多元。俄乌冲突与中美关税冲突表明，情绪峰值冲击后 （认知修正未见情形），市场走向取决于内生逻辑。中国无风险收益下沉、资本市场改革与经济结构转型，是中国资本市场"转型牛"的根本动力与支柱。 通胀预期强化或压制长久期债券表现。 融资需求与信贷供给不平衡仍是客观现实，但风险偏好中枢趋势性上行，居民企业或进行资产配置再平衡。货币政策 发力相对谨慎克制，在地缘政治推高全球能源价格，且内生性通胀超预期上行的背景下，中短久期债券配置性价比优于超长久期债券。 美国经济边际收敛但未失速，劳动力市场温和降温，薪资增速偏缓有利于内生性通胀粘性下降。 特朗普提名的美联储主席沃什主张缩表，并温和调降货币政 策利率，后续美债利率有望温和下行。特朗普政府施行霸权主义，破坏国际地缘政治秩序，美国主权信用被大幅削弱，全球央行与大型资管机构趋势性减持美 债。地缘政治风险冲击下，避险资金或进行防御性配置，但受到再 ...

Core Viewpoint - Geopolitical conflicts have shifted market focus towards supply security and strategic resources, changing the driving logic from risk aversion to concerns about re-inflation [1] Group 1: Market Impact - Rising oil prices are reinforcing inflation expectations, suppressing interest rate cut prospects, and impacting most asset classes [1] - The sustained increase in oil prices is leading to re-inflation trades and delaying Federal Reserve rate cut expectations, which will affect market risk appetite [1] Group 2: A-Share Market Dynamics - The A-share market is expected to remain volatile, with significant structural differentiation, benefiting resource sectors [1] - With the Producer Price Index (PPI) expected to rebound and turn positive, investor positioning may further balance, shifting towards value and inflation-sensitive sectors [1]

Core Viewpoint - Geopolitical conflicts have shifted market focus towards supply security and strategic resources, changing the driving logic from risk aversion to concerns about re-inflation [1] Group 1: Market Impact - Rising oil prices have strengthened inflation expectations, suppressing the outlook for interest rate cuts and impacting most asset classes [1] - The continued upward trend in oil prices is expected to influence market risk appetite, leading to a predominantly volatile A-share market with significant structural differentiation [1] Group 2: Sector Performance - Resource sectors are likely to benefit from the current market dynamics, as the PPI is expected to rebound and turn positive [1] - Investor positioning may further balance towards value-oriented and inflation-sensitive sectors in response to the changing economic indicators [1]

Group 1 - The report highlights that the ongoing geopolitical tensions, particularly the US-Iran conflict, have shifted market focus towards supply security and strategic resources, leading to a transition from risk aversion to concerns about re-inflation [1][4] - Rising oil prices are expected to reinforce inflation expectations, suppressing the prospects for interest rate cuts by the Federal Reserve, which will impact market risk appetite and keep the A-share market in a state of fluctuation, with a clear structural differentiation benefiting resource sectors [1][6] - The report notes that the Producer Price Index (PPI) has narrowed its year-on-year decline to -0.9%, and the continued rise in oil prices is anticipated to accelerate the timeline for PPI turning positive, historically favoring value-oriented market styles post PPI recovery [6][44] Group 2 - The private credit market has seen an increase in risk events since 2025, including localized defaults and redemption pressures, which have contributed to market sentiment suppression and significant declines in private investment firms' stock prices [5][43] - The report indicates that the redemption pressure in the private credit sector is currently manageable, as most private credit funds are structured to minimize liquidity mismatches, with a significant portion of their assets locked in for long durations [34][35] - The private credit market has a high exposure to the technology sector, particularly AI, which creates a feedback loop between the development of AI and the stability of the private credit market, necessitating caution regarding potential AI bubble risks [39][43]