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]