Economic Indicators - The weekly ECI supply index is at 50.09%, up 0.01 percentage points from last week, while the demand index remains flat at 49.89%[6] - The monthly ECI supply index for August is at 50.08%, down 0.03 percentage points from July, and the demand index is at 49.89%, also down 0.03 percentage points from July[7] - The ECI export index is at 50.20%, down 0.03 percentage points from July, indicating a slight decline in export momentum[7] Liquidity and Monetary Policy - The ELI index is at -0.70%, up 0.21 percentage points from last week, indicating continued expansion of liquidity in August[11] - The central bank plans to conduct a 600 billion CNY MLF operation on August 25, with a net liquidity injection of 3,000 billion CNY for the month, doubling the net injection from July[13] - Total mid-term and short-term liquidity net injection for August is 6,000 billion CNY, which is twice the net injection scale of July[13] Industrial and Consumer Trends - Industrial production shows marginal recovery, with the operating rate for automotive tires increasing by 1.67 percentage points for full steel tires and 1.06 percentage points for semi-steel tires[14] - Passenger vehicle retail sales for the week ending August 17 averaged 59,068 units per day, a year-on-year increase of 3,867 units, with a 2.0% increase compared to the same period last year[20] - The real estate market shows a 15.1% year-on-year decline in sales area for 30 major cities, although the decline has narrowed compared to July[7] Export Performance - High-frequency data indicates that cargo throughput at monitored ports remains high, suggesting strong resilience in exports for August[7] - South Korea's export growth for the first 20 days of August is at 7.60%, indicating a recovery compared to July[31] Inflation and Price Trends - The average wholesale price of pork is 20.12 CNY/kg, down 0.08 CNY/kg from last week, which may affect the CPI for August[37] - Brent crude oil futures settled at 66.93 USD/barrel, up 0.71 USD/barrel from the previous week, while COMEX gold futures settled at 3,385.06 USD/ounce, down 10.50 USD/ounce[37]

Market Overview - Chinese markets continued to rise, led by large financial stocks, with significant policy support for securities and insurance sectors[3] - European stocks declined as investors remained cautious about the fragile ceasefire between Israel and Iran[3] - US stocks faced resistance near record highs, with Nvidia (NVDA US) reaching a new peak, reclaiming the top market capitalization spot[3] Monetary Policy and Liquidity - The People's Bank of China announced a 300 billion CNY MLF operation to maintain liquidity, resulting in a net liquidity injection of 118 billion CNY after accounting for 182 billion CNY maturing[5] - The Fed's proposed capital regulation changes for large banks were disclosed, with Powell emphasizing the need for caution regarding interest rate cuts[5] Commodity and Forex Markets - US crude oil inventories fell for the fifth consecutive week, leading to a nearly 1% rebound in international oil prices[4][25] - International gold prices saw a slight increase, reflecting investor sentiment amid geopolitical tensions and Fed's cautious stance[4][25] Stock Performance - The Hang Seng Index rose 1.23%, marking four consecutive days of gains, driven by strong performances in the financial and insurance sectors[10] - The A-share market also saw gains, with the Shanghai Composite Index up 1.04%, reaching a new high since December 2024[14] Key Index Movements - Major US indices showed mixed results, with the Dow Jones down 0.25% to 42,982.4, while the Nasdaq rose 0.31% to 19,973.6[8] - In Europe, the DAX index fell 0.61% to 23,498.3, and the FTSE 100 dropped 0.46% to 8,718.75[8] Sector Highlights - In the Hong Kong market, the financial sector outperformed, with notable gains in brokerage stocks following regulatory support for virtual asset trading[10] - The technology sector in the US saw Nvidia leading gains, with a 4.33% increase, while Tesla's stock fell 3.79% due to declining sales in Europe[8] Bond Market Insights - US Treasury yields showed a slight increase, with the 5-year auction yield at 3.879%, slightly above pre-auction trading levels[28] - Asian bond markets remained active, with Japanese bonds showing resilience amid a broader market sell-off in the US[28]

Core Viewpoint - CITIC Securities expects that conventional liquidity tools such as MLF and reverse repos will maintain net injection of liquidity [1] Group 1: MLF and Reverse Repo - In June 2025, MLF is projected to maintain an excess rollover with a net injection of 118 billion yuan [1] - Both MLF and reverse repos achieved net liquidity injection, providing long-term liquidity supply [1] - There is a possibility of a decline in MLF bidding rates due to the downward trend in the central rate of time deposits [1] Group 2: Liquidity Outlook - The observation period for total tools indicates a sustained demand for ample liquidity [1] - It is anticipated that MLF and reverse repos will continue to maintain net liquidity injection under the current conditions [1]