Group 1: U.S. CPI and Tariff Impact - The U.S. CPI growth rate in March was lower than expected, indicating a cooling trend, with the impact of tariffs on inflation not yet significant [1] - Despite a 90-day tariff suspension announced by Trump, various tariff measures remain in effect, potentially raising the PCE deflator by approximately 1.2% this year [1] - The market's pricing of "stagnation" is considered adequate, while the pricing of "inflation" may be insufficient, with the Federal Reserve likely to cut rates up to two times this year [1] Group 2: Price Data and Tariff Effects - In March 2025, the CPI remained weak, aligning with market expectations, while the PPI was slightly below expectations, driven by falling international oil prices and weak domestic construction activity [2] - The additional tariffs on China have reached a rate of 20%, negatively impacting domestic exports and PPI, estimated to contribute a 0.13 percentage point decline in PPI [2] - The anticipated impact of U.S. tariffs on PPI could range from a 1.8% to 3.2% decline, while China's counter-tariffs may raise CPI by about 0.1 percentage points [2] Group 3: Banking and Financial Products - In March 2025, the issuance of bank wealth management products increased, with a total of 2,964 products launched [4] - The average annualized yield for pure debt and non-pure debt fixed-income products rose to 2.35% and 2.10%, respectively, reflecting a recovery from the previous month [4] - The total scale of bank wealth management products reached 29.32 trillion yuan, showing a seasonal decline but supported by improved product yields [4] Group 4: Tariff Policies and Economic Outlook - Trump's tariff policies are compared to historical protectionist measures, with expectations for negotiations on reciprocal tariffs to conclude in mid-2025, although U.S.-China trade talks may take longer [5] - The implementation of "reciprocal tariffs" has triggered a global risk-averse capital flow, leading to a significant drop in risk assets and a rally in safe-haven assets [6] - The bond market is expected to perform well, with dividend-paying assets becoming a core safe haven amid tariff-related uncertainties [6] Group 5: Consumer Finance ABS - The growth in consumer loans has led to a significant increase in the issuance of consumer finance ABS in early 2025, with improved asset quality and attractive yield spreads compared to non-financial credit bonds [7] - The focus is on the investment opportunities in consumer finance ABS, particularly in bank-affiliated consumer finance subsidiaries and state-owned enterprise trust products [7]

Core Viewpoint - Since 2025, the national strategy to promote consumption upgrades has led to a year-on-year recovery in the growth rate of consumer loan balances, positively impacting the issuance and quality of consumer finance ABS [1][2]. Group 1: Importance of Consumer Finance ABS - The continuous push for consumption upgrades has resulted in increased consumer loan balances, which in turn has elevated the supply of consumer finance ABS. In contrast, the issuance and net financing scale of non-financial credit bonds have decreased compared to the first quarter of 2024 [2]. - The quality of underlying assets for consumer finance ABS has significantly improved, with no reported defaults or downgrades in 2024, indicating a stable investment environment [2]. - In 2025, the priority ABS is expected to offer better value compared to interest rate bonds and high-grade credit bonds, catering to low-risk preference investors such as banks and insurance funds [2]. Group 2: Current Status of Consumer Finance ABS - As of March 20, 2025, there are 437 outstanding consumer finance ABS with a total balance of approximately 392.8 billion yuan, accounting for about 12% of the total outstanding asset-backed securities [3]. - The distribution of underlying assets includes consumer loan ABS (371 cases), auto loan ABS (65 cases), and credit card installment loan ABS (1 case), with consumer loan ABS making up over half of the total balance [3]. Group 3: Product Design of Consumer Finance ABS - Consumer finance ABS features mechanisms such as credit triggers, revolving purchase settings, and special mechanisms to enhance asset efficiency and investor protection [4][5]. - The credit trigger mechanism includes provisions for subordinate securities to absorb losses first, ensuring the repayment of principal and interest to senior investors [4]. Group 4: Credit Risk Management of Consumer Finance ABS - The credit risk management measures at both the securities and underlying asset levels are robust, with subordinate securities designed to absorb potential losses effectively [6]. - The asset pool management includes a comprehensive risk management system throughout the loan lifecycle, from pre-loan assessments to post-loan monitoring [6]. Group 5: Investment Strategy Outlook for Consumer Finance ABS - The high proportion of private placements in outstanding consumer finance ABS indicates relatively lower liquidity in the secondary market, making it suitable for strategic allocations [7]. - The average yield for senior consumer finance ABS is 2.20%, while the middle-tier average yield is 2.67%, suggesting attractive investment opportunities in these segments [7].