Report Industry Investment Rating - The investment rating for the US dollar bond market is "Underperform the Market" [1][4] Core Viewpoints - The US employment data continues to cool down, with weak employment growth and an increasing unemployment rate. The inflation data unexpectedly cools down, providing room for the expectation of interest rate cuts next year. The US GDP in the third quarter of 2025 grew at an annualized quarterly rate of 4.3%, the fastest in two years [1][2] - The current US Treasury market presents complex characteristics of both inflation stickiness and fiscal expansion pressure. It is recommended to prioritize defense, core - allocate medium - and short - duration investment - grade bonds, and moderately allocate TIPS while keeping a low allocation for long - duration varieties over 10 years [3] Summary by Relevant Catalogs US Macro - economy and Liquidity - The US employment market is weak. In November, non - farm employment increased by about 64,000, and the unemployment rate rose to 4.6%, the highest since September 2021. In October, non - farm employment decreased by 105,000, mainly due to the significant shrinkage of federal government employment. The private sector's employment elasticity is insufficient [1] - The inflation in the US cools down. In November, the CPI increased by 2.7% year - on - year, and the core CPI increased by 2.6% year - on - year, the lowest since 2021, which provides more room for future monetary policy adjustments and the expectation of interest rate cuts next year [2] - The US GDP in the third quarter of 2025 grew at an annualized quarterly rate of 4.3%, the fastest in two years, mainly driven by the resilience of consumer and corporate spending and more stable trade policies. Personal consumption expenditure increased by 3.5%, and corporate investment remained strong [2] Exchange Rate - No specific text - based content is provided, only information about related charts such as the one - year trend of non - US currencies, recent changes in non - US currencies, etc. [50][55] Chinese - funded US Dollar Bonds - Information about the return trends of Chinese - funded US dollar bonds since 2023 (by level and industry), and the yield and spread trends of investment - grade and high - yield Chinese - funded US dollar bonds are presented in the form of charts [63][65] Rating Actions - In the past two weeks, the three major international rating agencies took 16 rating actions on Chinese - funded US dollar bond issuers, including 2 rating revocations, 6 rating upgrades, 5 rating downgrades, and 3 initial ratings [71]

Group 1: Macroeconomic Insights - Recent U.S. economic data indicates a simultaneous cooling of inflation and employment, with November CPI falling to 2.7% year-on-year[10] - Non-farm payrolls added 64,000 jobs in November, while the unemployment rate rose to 4.6%, marking five consecutive months of increases[10] - The Federal Reserve is expected to lower interest rates more than the market's current expectation of two cuts in 2026[1] Group 2: Small Business Outlook - Small businesses have faced significant profit pressure compared to large enterprises since the interest rate hike cycle began in 2022, but recent adjustments in profit expectations have narrowed the gap[2] - Small business valuations are at historical lows, suggesting potential for future rebounds, especially during a rate-cutting cycle[2] - The capital expenditure of tech giants is expected to positively impact the profitability of downstream small businesses, as historical data shows a strong correlation between overall capital expenditure and small business revenue[2] Group 3: Risks and Challenges - If inflation exceeds expectations, it may delay or limit the extent of interest rate cuts, weakening the financing improvement for small businesses[3] - Limited progress in capital expenditure or regulatory easing could constrain the profitability and valuation recovery of small businesses[3]

Group 1 - Gold prices have shown strong performance, with XAU/USD reaching around 4340 USD, close to a seven-week high, amid signs of a cooling U.S. labor market and pressure on the dollar [1] - The U.S. non-farm payrolls added 64,000 jobs in November, slightly above expectations, but the unemployment rate rose to 4.6%, the highest since 2021, indicating a marginal slowdown in the job market [1] - Average hourly earnings increased by only 0.1% month-on-month, a significant drop from previous values, suggesting a decrease in wage inflation pressure [1] Group 2 - The Federal Reserve completed its third rate cut of the year in December, but there is significant disagreement among officials regarding the need for further easing in 2026, with some suggesting no further adjustments are necessary [2] - The market is closely monitoring statements from key Fed officials, as any hawkish signals could support the dollar and disrupt commodity markets [2] - Discussions around the long-term pricing logic of U.S. assets are intensifying, with some strategists suggesting that investors may first reduce dollar exposure before re-evaluating U.S. Treasuries and equities [2] Group 3 - In the current environment of rate cuts, cooling employment, and a pressured dollar, gold's defensive and hedging functions are gaining market attention [3] - Technically, gold prices are stabilizing above the 100-day moving average, with the Bollinger Bands opening and the RSI above the midpoint, indicating a strong bullish structure [3] - If XAU/USD can maintain above the 4305 USD level, it may test the 4350 USD area, while a short-term pullback could see support around 4270 USD [3] Group 4 - The focus should be on structural changes rather than isolated results during this phase of marginal employment cooling and unresolved policy disagreements [4] - Key considerations include whether the labor market continues to show signs of "moderate cooling," if official statements will lead to directional shifts in rate expectations, and whether the dollar and U.S. Treasuries will further strengthen gold's hedging demand [4] - The market is still in a "reassessment" phase rather than confirming a trend, with employment slowdown providing a basis for easing, but inflation stickiness and policy independence issues remain constraints [4]