Core Viewpoint - The recent appreciation of the RMB alongside a significant decline in Hong Kong stocks (especially the Hang Seng Technology Index) is counterintuitive, as historically, both have moved in the same direction due to shared macroeconomic variables. The current divergence is attributed to a combination of "tight USD liquidity + uncertain domestic fundamentals," compounded by unique factors driving RMB appreciation [2][4][14]. Group 1: Divergence Phenomenon - The RMB has appreciated from 6.95 to 6.86 since January 28, marking a cumulative increase of 1.3%, while the Hang Seng Technology Index has dropped from 5900 to 5138, reflecting a cumulative decline of 12.9% [16][17]. - This divergence contradicts market intuition, which typically associates RMB appreciation with foreign capital inflows and rising Hong Kong stocks [17]. Group 2: Theoretical Framework - The pricing of Hong Kong stocks and the RMB exchange rate is influenced by two core drivers: domestic fundamentals and USD liquidity. The pricing of Hong Kong stocks is primarily driven by earnings (aligned with domestic fundamentals) and valuation (dependent on USD liquidity) [5][18]. - Historical data indicates that these two core drivers often exhibit a consistent directional relationship, where improvements in domestic economic fundamentals typically rely on global financial conditions being accommodative [24]. Group 3: Conditions for Divergence - Two scenarios may lead to divergence between the RMB and Hong Kong stocks: 1. A divergence in the direction of domestic fundamentals and USD liquidity (e.g., tightening USD financial conditions while domestic fundamentals improve) [6][26]. 2. Unique factors influencing the RMB temporarily overshadowing the combined effects of fundamentals and liquidity [7][27]. Group 4: Historical Cases of Divergence - Since 2015, there have been five notable instances of divergence between the RMB and Hong Kong stocks, with only one instance of RMB appreciation coinciding with a decline in Hong Kong stocks [8][31]. - The common characteristics of these divergence periods suggest that when domestic fundamentals and USD liquidity move in opposite directions, Hong Kong stock performance is more influenced by liquidity, while the RMB remains anchored to domestic fundamentals [34]. Group 5: Focus on Current Divergence - The current divergence is similar to a previous instance where the RMB appreciated while Hong Kong stocks fell. In both cases, domestic PMI was relatively low, and USD financial conditions were tightening [39][44]. - The strong export performance has supported the RMB, while the Hong Kong stock market has faced downward pressure primarily due to valuation declines, despite a slight recovery in earnings [42][44].

Group 1: Macro Analysis - The recent appreciation of the RMB contrasts with the significant decline in Hong Kong stocks, particularly in the Hang Seng Tech Index, indicating a divergence that contradicts market intuition[2] - Historically, the RMB and Hong Kong stocks have moved in tandem due to shared macro pricing variables: domestic fundamentals and USD liquidity[3] - Current conditions show a combination of "tight USD liquidity + uncertain domestic fundamentals," leading to the RMB's appreciation driven by unique factors, such as seasonal export impulses[2][9] Group 2: Divergence Scenarios - Two scenarios can drive divergence between the RMB and Hong Kong stocks: a divergence in domestic fundamentals and USD liquidity, or unique factors temporarily dominating the RMB's movement[4] - The sensitivity of the RMB to domestic fundamentals contrasts with the greater sensitivity of Hong Kong stocks to valuation changes, particularly in liquidity-driven environments[4][8] Group 3: Historical Cases of Divergence - Since 2015, there have been five notable divergences between the RMB and Hong Kong stocks, with only one instance of RMB appreciation coinciding with a decline in Hong Kong stocks[5] - In the most recent divergence (February 2026), the RMB appreciated by 1.3% while the Hang Seng Tech Index fell by 12.9%[14] Group 4: Contributing Factors - The divergence is characterized by weak domestic PMI and tightening US financial conditions, which have led to a weak profit contribution for Hong Kong stocks while the RMB remains supported by strong exports[9][47] - During the divergence periods, valuation contributions to the Hang Seng Index averaged 14.3%, significantly higher than the 4.7% profit contribution, indicating a liquidity-driven market[8][40]

Core Viewpoint - The A-share market has experienced adjustments after reaching new highs, but it remains in a consolidation phase since September, with a positive outlook on liquidity and market sustainability [1] Market Analysis - The current market's sustainability is heavily influenced by the liquidity situation, which appears to be positive [1] - There is a focus on the direction of market profitability moving forward, with ongoing improvements in overseas liquidity and geopolitical issues [1] - The domestic economic fundamentals are showing upward momentum, supporting a mid-term bullish outlook for the market [1] Investment Strategy - It is recommended to maintain a high position in the market, with an emphasis on balanced sector selection [1] - Attention should be given to the continuation of the positive trends indicated in the third-quarter reports [1] - Specific sectors to focus on include domestic computing power chains, innovative pharmaceuticals, robotics, chemicals, batteries, and leading consumer goods companies [1]

Core Viewpoint - The report from Huatai Securities indicates that after reaching a new high, the A-share market has experienced some adjustments but remains in a consolidation phase since September. The sustainability of the current market trend is largely dependent on the positive feedback from the liquidity situation [1] Market Conditions - The current liquidity environment is viewed as positive, with ongoing improvements in overseas liquidity and geopolitical issues. The domestic economic fundamentals are also showing upward momentum, supporting the mid-term outlook for the market [1] Investment Strategy - The company recommends maintaining a high position in the market and emphasizes the importance of balanced sector selection. Attention should be paid to the continuation of profitability trends as reflected in the upcoming third-quarter reports [1] Sector Focus - Specific sectors to watch include: - Domestic computing power chain - Innovative pharmaceuticals - Robotics - Chemicals - Batteries - Leading consumer goods companies [1]

Core Viewpoint - In late August, the RMB experienced a rapid appreciation against the backdrop of a weak US dollar index, strong central bank midpoint pricing, and attractive domestic equity market performance, leading to a new low for the USD/CNY exchange rate this year [1] Group 1 - The RMB exchange rate is expected to remain strong in the short term, gradually returning to a "three-price unification" [1] - If the RMB can maintain a strong trend as the year-end approaches, the demand for settlement is likely to continue supporting the RMB exchange rate [1] - The current domestic fundamentals are primarily providing a floor for the exchange rate, with foreign capital inflow into the equity market but facing outflow pressure in the bond market [1] Group 2 - A breakthrough of the 7 level for the RMB exchange rate will require additional catalysts [1]

Core Insights - The Central Committee of the Communist Party of China decided to hold the Fourth Plenary Session in October 2025 to discuss the "14th Five-Year Plan" and analyze the current economic situation [1] - The report indicates that while the easing of US-China tensions and better-than-expected economic data in the first half of the year have reduced the urgency for additional stimulus policies, there remains a need for flexibility and foresight in macroeconomic policy [1] - The potential for "timely" incremental policy adjustments exists if external risks increase or domestic economic pressures mount in the second half of the year [1] Economic Policy Outlook - The report emphasizes the importance of maintaining a backstop in policy, suggesting that the government is prepared to act if necessary [1] - Continuous monitoring of external risks and domestic fundamentals is crucial for future policy decisions [1] - The "14th Five-Year Plan" will provide definitive industry clues that should be closely observed [1]

Report Summary 1. Report Industry Investment Rating - Not provided in the report. 2. Core View of the Report - On April 22, the yields of Treasury bond cash bonds strengthened, with the yields of 1 - 7Y maturities declining by about 0.5 - 1.5bp, and the yields of 10Y and 30Y maturities declining by about 1.5bp and 2.5bp to 1.64% and 1.87% respectively. Treasury bond futures closed higher across the board, with the TS, TF, T, and TL main contracts rising by 0.01%, 0.07%, 0.17%, and 0.50% respectively. The central bank conducted a net withdrawal, and the weighted average rate of DR007 fluctuated around 1.70%. - Domestically, in March, both the manufacturing and service industry PMIs were in the expansion range and increased month - on - month, indicating marginal improvement in the economy. The unemployment rate improved month - on - month, but price data remained weak, with CPI down 0.1% year - on - year and PPI down 2.5% year - on - year. Financial data slightly exceeded expectations, with government bonds supporting social financing, but the financing willingness of the private sector still needed to be boosted. With policy front - loading to boost domestic demand, economic data performed strongly, with retail sales, fixed - asset investment, and industrial added value slightly exceeding expectations. - Overseas, the US PMI in March declined slightly, and non - farm payrolls growth, CPI, PPI, and retail sales data all fell short of expectations. - In terms of strategy, the risk - aversion sentiment caused by tariff shocks has eased, and the focus of the bond market may return from short - term sentiment to domestic fundamental pressure. The need for stable growth supports the continued decline of the medium - and long - term interest rate center. The second quarter may be the window for monetary easing, and reserve requirement ratio cuts may take precedence over interest rate cuts. There is a greater divergence at the important interest rate level of 1.6% for the 10 - year bond. Under heavy selling pressure, bond futures fluctuated and declined, but still showed strength after the adjustment. Attention should be paid to whether the Politburo meeting at the end of the month releases incremental information. If the policy intensity fails to meet expectations, the yield of the 10 - year Treasury bond may fluctuate and stabilize in the range of 1.65% - 1.75% in the short term and then continue to decline [2]. 3. Summary by Relevant Catalogs 3.1 Futures Market - **Futures Prices and Volumes**: On April 22, the closing prices of T, TF, TS, and TL main contracts were 108.970 (up 0.17%), 106.165 (up 0.07%), 102.402 (up 0.01%), and 119.920 (up 0.5%) respectively. The trading volumes of T, TF, TS, and TL main contracts were 41,633 (down 2,124), 33,835 (down 348), 23,837 (down 492), and 79,801 (down 333) respectively [2]. - **Futures Spreads**: The spreads of TL2509 - 2506, T2509 - 2506, TF2509 - 2506, and TS2509 - 2506 were 0.13 (up 0.01), 0.13 (down 0.02), 0.25 (up 0.02), and 0.21 (up 0.01) respectively. Other spreads such as T06 - TL06, TF06 - T06, etc., also showed certain changes [2]. - **Futures Positions**: The positions of T, TF, TS, and TL main contracts were 189,451 (up 4,438), 166,353 (up 1,274), 101,641 (down 1,350), and 110,368 (up 5,213) respectively. The net short positions of the top 20 in T, TF, TS, and TL also changed to different extents [2]. 3.2 Bond Market - **CTD Bonds**: The net prices of some CTD bonds such as 220003.IB, 240025.IB, etc., showed upward trends on April 22 [2]. - **Active Bond Yields**: The yields of 1y, 3y, 5y, 7y, and 10y active bonds were 1.4400% (up 1.00bp), 1.4900% (up 1.20bp), 1.5250% (up 2.25bp), 1.6100% (up 1.75bp), and 1.6630% (up 1.55bp) respectively [2]. 3.3 Interest Rates - **Short - term Interest Rates**: The silver - pledged overnight rate was 1.5997% (down 0.03bp), the Shibor overnight rate was 1.7090% (down 0.70bp), etc. The LPR rates of 1y and 5y remained unchanged at 3.10% and 3.6% respectively [2]. - **Open Market Operations**: The issuance scale of reverse repurchase operations was 220.5 billion yuan, the maturity scale was 164.5 billion yuan, and the interest rate was 1.5% for 7 days [2]. 3.4 Industry News - On April 22, the State Council Information Office held a press conference to introduce the "Work Plan for Accelerating the Comprehensive Pilot Program of Service Industry Opening - up". The pilot tasks will be implemented in all 11 pilot provinces and municipalities at once. Relevant work on cross - border trade and investment and financing facilitation will be carried out, the green finance policy toolkit will be optimized, etc. - On April 22, the State - owned Assets Supervision and Administration Commission of the State Council required central enterprises to take the initiative, strengthen fund planning, ensure timely payment, and support upstream and downstream enterprises in the industrial chain [2]. 3.5 Key Data to Watch - April 22, 22:00, Eurozone April consumer confidence index preliminary value - April 23, 21:45, US April S&P Global manufacturing PMI preliminary value - April 24, 01:00, US initial jobless claims for the week ended April 19 (in ten thousand people) - April 25, 22:00, US April University of Michigan consumer confidence index final value [3]