Group 1: Economic Financing Demand - In July, the new RMB loans under social financing decreased by 426.3 billion, marking a low point since 2003, with a year-on-year reduction of 345.5 billion[9] - From January to July, the total new RMB loans amounted to 12.31 trillion, showing a slight year-on-year decrease of 694 billion, indicating relative stability in financing demand[11] - The decline in resident financing demand is attributed to high growth in June that overshot July's demand, cautious credit preferences, and a slowdown in housing sales[12] Group 2: Monetary Supply and Economic Activity - In July, M1 grew by 5.6%, reflecting a marginal improvement, while M2 increased by 8.8%, up by 0.5 percentage points from the previous value[14][16] - The negative gap between M1 and M2 growth rates narrowed to -3.2%, indicating an increase in economic activity[18] - The increase in corporate deposits, despite a slowdown in real estate sales, supported the recovery of M1 growth, with corporate deposits increasing by 320.9 billion year-on-year[14] Group 3: Policy Impacts and Future Outlook - The "anti-involution" policy and personal consumption loan subsidy scheme are expected to stabilize financing demand, with potential short-term boosts to consumer credit and spending[21][22] - The July PPI year-on-year growth rate was -3.6%, suggesting that the effects of the "anti-involution" policy on production have yet to materialize[21] - Risks include escalating geopolitical conflicts, intensified "anti-involution" policies, and underwhelming effects from consumption-boosting measures[23]

Group 1: Economic Financing Demand - In June, the demand for financing in the real economy showed a significant rebound, with new RMB loans amounting to 23,600 billion yuan, an increase of 1,132 billion yuan year-on-year[9] - Corporate bond financing reached 2,422 billion yuan, which is an increase of 322 billion yuan year-on-year, indicating a recovery in financing demand[9] - The increase in household loans in June was 5,976 billion yuan, up by 267 billion yuan year-on-year, reflecting a rise in residents' willingness to leverage[10] Group 2: Monetary Supply and Deposits - In June, new RMB deposits totaled 32,100 billion yuan, an increase of 7,500 billion yuan year-on-year, with household deposits increasing by 3,300 billion yuan[12] - M1 growth was 4.6% year-on-year, up by 2.3 percentage points from the previous value, while M2 growth was 8.3%, reflecting an overall improvement in economic activity[14] - The gap between M1 and M2 growth rates narrowed to -3.7%, indicating increased economic activity but requiring attention to supply-side regulatory impacts[14] Group 3: Market Conditions and Risks - Positive signals from Sino-U.S. trade negotiations have improved market risk appetite, reducing the likelihood of intensified trade friction[2] - The "anti-involution" policy is expected to remain industry self-regulated for now, limiting its immediate impact on production[2] - Risks include potential escalation of geopolitical conflicts and trade tensions, as well as the possibility that policy effects may fall short of expectations[3][18]

Group 1: Financial Data Overview - In June, new social financing (社融) reached 4.20 trillion yuan, exceeding the expected 3.71 trillion yuan by 13.2%[2] - The year-on-year increase in social financing was 900.8 billion yuan, marking a 27.3% rise compared to the same month last year[2] - New RMB loans in June amounted to 2.36 trillion yuan, an increase of 171 billion yuan year-on-year[2] Group 2: Monetary Supply and Trends - M2 growth was 8.3% year-on-year, up 0.4 percentage points from May[2] - M1 growth was 4.6%, showing a significant increase of 2.3 percentage points from the previous month[2] - M0 growth was 12.0%, slightly down by 0.1 percentage points from May[2] Group 3: Loan and Deposit Dynamics - New deposits totaled 3.21 trillion yuan, with household deposits contributing 2.47 trillion yuan, an increase of 330 billion yuan year-on-year[2] - New loans from financial institutions reached 2.24 trillion yuan, with corporate loans accounting for 1.77 trillion yuan, reflecting a positive trend[2] - The increase in short-term loans and bills was particularly notable, indicating a response to short-term export demands[2] Group 4: Economic Outlook and Risks - The report highlights the potential for continued monetary easing in the second half of the year due to external pressures from U.S. tariff policies[2] - Risks include a potential rise in global inflation and a rapid slowdown in the economies of Europe and the U.S.[2]

Report Summary 1. Report Industry Investment Rating No investment rating is provided in the report. 2. Core View Currently, the domestic economic fundamentals are still under pressure due to overseas tariff factors. Domestic demand repair may become the main driving force for economic growth in the future. The Fed's decision to keep interest rates unchanged is expected to put pressure on the RMB exchange rate for some time. The geopolitical conflict in the Middle East may push up inflation, which may lead the Fed to keep interest rates unchanged for a longer period. With the RMB remaining weak, the upside potential of A-shares is limited. It is recommended to wait and see for now [2]. 3. Summary by Relevant Catalogs 3.1 Futures Market - **Futures Prices**: All major and minor contracts of IF, IH, IC, and IM showed an upward trend. For example, the latest price of the IF main contract (2509) was 3797.4, up 25.8 [2]. - **Futures Spreads**: The spreads between different contracts also changed. For instance, the IF - IH current - month contract spread was 1169.4, up 1.8 [2]. - **Futures Positions**: The net positions of the top 20 in IF, IH, and IC increased, while that of IM decreased. The net position of the top 20 in IF was - 28,036.00, up 2817.0 [2]. - **Futures Basis**: The basis of IF, IH, and IC main contracts increased, while that of IM decreased. The basis of the IF main contract was - 60.5, up 12.5 [2]. 3.2 Market Sentiment - **Trading Volume and Balance**: A - share trading volume increased to 11,469.22 billion yuan, up 551.83 billion yuan. The margin trading balance decreased to 18,124.82 billion yuan, down 83.89 billion yuan [2]. - **North - bound Capital and Other Indicators**: North - bound trading volume increased to 1438.39 billion yuan, up 116.10 billion yuan. The proportion of rising stocks reached 82.05%, up 53.61 percentage points [2]. 3.3 Industry News - **Domestic Market**: A - share major indices rose collectively. The trading volume of the Shanghai and Shenzhen stock markets rebounded significantly. Over 4400 stocks rose. Computer and national defense and military industry sectors strengthened significantly [2]. - **Overseas Market**: The US attack on Iranian nuclear facilities intensified regional tensions. The Fed kept interest rates unchanged last week, and Powell's speech was hawkish [2]. 3.4 Economic Fundamentals - **Domestic Economy**: In May, domestic imports and exports, fixed - asset investment, and industrial added - value decreased year - on - year. The real estate market continued to decline. Only social retail sales increased. CPI and PPI data showed future price pressure [2]. - **Financial Data**: In May, the M1 - M2 gap narrowed, the growth rate of social financing stock remained the same as last month, but new RMB loans decreased year - on - year, indicating insufficient real - economy financing demand [2].

Group 1: Economic Financing Demand - The financing demand structure of the real economy is optimizing, with a marginal improvement expected. In May, new RMB loans under the social financing (社融) measure amounted to 596 billion yuan, a year-on-year decrease of 223.7 billion yuan, indicating a shift towards bond financing and debt repayment funds replacing credit financing[12] - The issuance of special bonds accelerated in May, with a total issuance of 763.31 billion yuan, which may have contributed to the stability of financing demand in the real economy[13] - M1 growth rate in May was 2.3%, an increase of 0.8 percentage points from the previous value, indicating a marginal improvement in economic activity[19] Group 2: Deposit and Loan Trends - In May, new RMB deposits reached 2.18 trillion yuan, an increase of 500 billion yuan year-on-year, with household deposits increasing by 50 billion yuan and corporate deposits increasing by 382.4 billion yuan[17] - The growth of loans and deposits showed divergence, with new loans of 620 billion yuan in May, significantly lower than the increase in deposits, suggesting a weakening of the credit creation mechanism[17] - The M1 and M2 year-on-year growth rate gap narrowed to -5.6%, indicating an improvement in economic activity, although uncertainties from U.S. tariff policies remain high[20] Group 3: Macro Environment and Risks - The U.S. tariff policy continues to be a major concern affecting the macroeconomic environment, with no significant impact on inflation observed yet[5] - The global economic landscape shows signs of weak recovery in Europe, while Japan faces challenges due to high inflation, influenced by U.S. tariff policies[5] - Risks include potential escalation of global trade frictions, geopolitical conflicts, and policy effects falling short of expectations[6]

Group 1 - The People's Bank of China announced a reduction in the 1-year LPR to 3% and the 5-year LPR to 3.5%, both down by 10 basis points, marking the first decline this year, signaling a clear intention to stabilize the market and expectations [1] - The adjustment of LPR is expected to lower loan interest rates, which will directly impact borrowing costs for consumers and businesses [1] - Prior to this adjustment, the mortgage rates for first-time homebuyers in Beijing were 3.15%, while second-home buyers faced rates of 3.55% within the Fifth Ring Road and 3.35% outside it [1] Group 2 - A rough estimate indicates that a 10 basis point decrease in the 5-year LPR could reduce monthly interest payments by over 50 yuan for a 1 million yuan loan over 30 years, saving borrowers over 20,000 yuan in total interest [2] - The decline in deposit rates is beneficial for maintaining the stability of commercial banks' net interest margins, enhancing the sustainability of financial support for the real economy [2] - The simultaneous decline of LPR and deposit rates is expected to further lower financing costs for enterprises and residents, stimulating demand for financing, promoting consumption, and expanding investment, thereby contributing to economic recovery [2]

Market Overview - The Shanghai Composite Index is at 3380.82[1] - The CSI 300 Index stands at 3907.20[1] - The Shenzhen Component Index is reported at 10186.44[1] Social Financing Insights - In April 2025, the social financing increment was 1.16 trillion CNY, down from 5.89 trillion CNY in March 2025, slightly below the market expectation of 1.26 trillion CNY[7] - The year-on-year increase in social financing increment for April 2025 was 1.22 trillion CNY, the highest since February 2023[8] - The government bond financing in April 2025 increased by 1.07 trillion CNY, accounting for 87.7% of the total social financing increment[8] Loan Dynamics - The new RMB loans recorded a year-on-year decrease of 246.5 billion CNY in April 2025, only 11% of the average for the same month over the past five years, indicating a significant lack of demand for financing in the real economy[8] - The total new RMB loans for April 2025 were reported at -2.45 trillion CNY, compared to 5.31 trillion CNY in March 2025[10] Monetary Supply Trends - M2 growth rate in April 2025 was +8.0%, an increase of 1.0 percentage points from the previous month, while M1 growth rate was +1.5%, a decrease of 0.1 percentage points[15] - The decline in the M1-M2 gap indicates a decrease in economic vitality[15] Investment Recommendations - Buy: Expected investment returns over the next six months are projected to exceed a 10% increase relative to the CSI 300 Index[18] - Hold: Expected investment returns are projected to be between -10% to +5% relative to the CSI 300 Index[18]

Economic Indicators - The weekly ECI supply index is at 50.39%, unchanged from last week, while the demand index is at 49.95%, also unchanged[1] - The monthly ECI supply index has increased by 0.11 percentage points from February, while the demand index has increased by 0.06 percentage points[5] - The overall economic growth for Q1 2025 is expected to exceed 5%[5] Investment and Financing - The ELI index is at -1.36%, down 0.20 percentage points from last week, indicating a slight decline in liquidity[8] - New loans in January-February totaled 6.14 trillion RMB, a year-on-year decrease of 230 billion RMB, but the net increase in loans to the real economy was 5.87 trillion RMB, up 548 billion RMB year-on-year[11] - The average interest rate for new corporate loans is approximately 3.3%, down about 40 basis points year-on-year, while the rate for personal housing loans is about 3.1%, down about 70 basis points[11] Consumption and Exports - Retail sales of passenger cars in March are expected to show significant recovery, with a year-on-year increase of 14% and a month-on-month increase of 52%[19] - The global manufacturing PMI index rose to 50.6 in February, indicating a recovery in external demand, while South Korea's export growth increased from 0.5% in February to 2.9% in March[5] - China's export growth in March is anticipated to recover significantly due to a low base from the previous year[5] Risks and Policy Outlook - There is a risk of a "rush to export" in the short term, and the effectiveness of policy measures may fall short of market expectations[50] - The sustainability of improvements in the real estate market remains to be observed[50]