Investment Rating - The report maintains a "Recommended" rating for the banking sector, indicating a positive outlook for the industry [1]. Core Insights - The social financing (社融) growth exceeded expectations, with June's new social financing reaching 4.2 trillion yuan, a year-on-year increase of 900.8 billion yuan. The total social financing stock grew by 8.9% year-on-year, with a month-on-month increase of approximately 0.2 percentage points [4]. - The demand for financing is showing signs of improvement, with both corporate and household credit increasing. The total RMB loans increased by 2.36 trillion yuan in June, a year-on-year increase of 171 billion yuan, marking a positive contribution to social financing growth [4]. - The report highlights that government bonds continue to be a major contributor to social financing growth, with new government bonds issued amounting to 1.35 trillion yuan in June, a year-on-year increase of 507.2 billion yuan [4]. - The M1 and M2 money supply indicators showed significant recovery, with M1 growing by 4.6% year-on-year and M2 by 8.3% year-on-year, indicating improved liquidity in the financial system [4]. Summary by Sections Social Financing Overview - In June, the new social financing was 4.2 trillion yuan, with a year-on-year increase of 900.8 billion yuan. The total stock of social financing grew by 8.9% year-on-year [4]. - The government bond issuance in June was approximately 2.77 trillion yuan, an increase of 818 billion yuan compared to the same period last year [4]. Credit Demand - By the end of June, the balance of RMB loans from financial institutions grew by 7.1% year-on-year. The new loans in June amounted to 2.24 trillion yuan, a year-on-year increase of 110 billion yuan [4]. - Household loans increased by 597.6 billion yuan, with short-term loans rising by 262.1 billion yuan, driven by consumption demand during promotional events [4]. Money Supply and Liquidity - M1 and M2 growth rates were 4.6% and 8.3% year-on-year, respectively, with month-on-month increases of 2.3 percentage points and 0.4 percentage points [4]. - Financial institutions' RMB deposits increased by 8.3% year-on-year, with a monthly increase of 750 billion yuan in June [4].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the given content. 2. Core Viewpoints of the Report - The non - ferrous metals sector showed a pattern of rising and then falling due to the decline in risk appetite. The copper market is affected by various factors such as macro - economic data, raw material supply, and demand. The zinc market is expected to be weak in the short - term with a supply increase in June. The nickel and stainless - steel market is in a weak and volatile state, influenced by geopolitical risks, policy changes, and supply - demand dynamics [1][93][209] - For copper, due to the complex macro - environment and changes in the supply - demand relationship in the industrial chain, the copper price has a risk of falling from high levels. For zinc, considering the supply recovery in June and the weakening demand, the zinc price is expected to decline, and short - selling is recommended. For nickel and stainless - steel, affected by geopolitical risks and policy changes, the prices are expected to be weak and volatile [9][93][209] 3. Summaries Based on the Table of Contents 3.1 Non - ferrous Metal Price Monitoring - The report monitors the closing prices of various non - ferrous metals, including the dollar index, exchange rate CNH, and the prices of industrial silicon, lithium carbonate, copper, aluminum, zinc, lead, nickel, tin, alumina, and stainless steel. It also provides their daily, weekly, and annual price changes [6] 3.2 Copper (CU) - **Macro Factors**: The Sino - US economic and trade negotiations had a general market response. The domestic social financing and credit data improved slightly in May, but the demand - side expectations need to be further improved. The US inflation continued to decline, but the expectation of interest - rate cuts did not rise significantly [9] - **Raw Material End**: The spot processing fee of copper ore decreased slightly, and the copper ore supply remained tight. The domestic copper ore port inventory increased. The production plan of Kamoa - Kakula Copper Mine was reduced due to the flooding incident [9] - **Smelting End**: The loss of smelters using spot copper ore remained around 2950 yuan/ton, while those using long - term contracts turned from near - break - even to a profit of 40 yuan/ton. The domestic copper production in May increased and is expected to remain high in June [9] - **Demand End**: With the arrival of the off - season in May and the high copper price, the domestic copper product operating rate declined slightly [9] - **Inventory**: The domestic copper social inventory decreased slightly, the US copper inventory increased, and the LME copper inventory decreased. The global visible copper inventory decreased slightly [9] - **Investment Viewpoint**: The copper price is expected to be weak and volatile. The macro - market sentiment is complex, and the industrial support is weakening, so there is a risk of the copper price falling from high levels [9] - **Trading Strategy**: Short - term high - level volatility for single - side trading and positive spread arbitrage for Shanghai copper. Attention should be paid to the US tariff policy, copper inventory, and the mid - year negotiation of copper ore processing fees [9] 3.3 Zinc (ZN) - **Macro Factors**: The Middle - East conflict escalated, and the US inflation data cooled down, increasing the expectation of two interest - rate cuts by the Fed this year [93] - **Raw Material End**: The domestic processing fee remained unchanged, and the import processing fee increased. The zinc concentrate port inventory decreased, but the raw material supply is expected to be stable and abundant in the future [93] - **Smelting End**: Some previously shut - down smelters in Henan resumed production last week, and more are expected to resume in June. The production is expected to increase by more than 20,000 tons in June but may decline in July due to some planned shutdowns. The inflow of imported goods has an impact on the spot premium [93] - **Demand End**: The off - season and high - temperature weather in the South have suppressed terminal demand. The export demand is uncertain due to tariff disturbances [93] - **Inventory**: The social inventory of zinc ingots decreased again. As of June 12, it was 7.71 million tons, a decrease of 0.46 million tons from last Thursday. The inventory turning point may become clear in mid - to late June [93] - **Investment Viewpoint**: The zinc price is expected to decline, and short - selling is recommended [93] - **Trading Strategy**: Short - selling for single - side trading and waiting for opportunities for arbitrage. Attention should be paid to macro - risks and the uncertainty of smelter shutdowns [93] 3.4 Nickel - Stainless Steel (NI·SS) - **Macro Factors**: The Israel - Iran conflict intensified, increasing market risk aversion. The US announced tariffs on steel - made household appliances, which may affect the terminal demand for nickel and stainless steel. The domestic social financing growth in May was stable, and the M2 - M1 gap narrowed [209] - **Raw Material End**: The Philippines removed the ban on nickel ore exports, which weakened the market sentiment in the short - term. The Indonesian nickel ore premium remained stable, but the demand for nickel ore procurement may weaken due to the increase in the average inventory of pyrometallurgical smelters. The domestic port inventory decreased slightly due to the impact of rainfall in the Philippines [209] - **Smelting End**: The production of pure nickel decreased slightly in May. The price of nickel iron decreased, and the supply pressure remained. The MHP coefficient was stable, but some nickel sulfate enterprises still have the expectation of production cuts. In the long - term, the new production capacity of primary nickel in Indonesia is expected to continue to be released [209] - **Demand End**: The stainless - steel market is in the off - season, with weak spot transactions. The production of some steel mills is expected to decrease slightly in June. The new - energy vehicle production and sales remained high, but the raw material inventory of precursors has accumulated [209] - **Inventory**: The inventory decreased slightly but remained at a high level. As of Friday, the LME nickel inventory was 197,500 tons (- 1.3%), and the SHFE nickel inventory was 25,600 tons (+ 0.3%) [209] - **Investment Viewpoint**: The nickel price is expected to be weak and volatile. In the long - term, there is still pressure of oversupply for primary nickel. Attention should be paid to the cost range of electrowinning nickel and resource - country policies [209] - **Trading Strategy**: Short - term short - selling for single - side trading and waiting for opportunities for arbitrage. Attention should be paid to nickel - related policies in resource - rich countries and global macro - disturbances [209]

1. Report Industry Investment Rating The document does not provide the industry investment rating. 2. Core Viewpoints of the Report - The bond market is in a low - volatility shock state, waiting for further signals. The short - end may show a shock - strong pattern, but a trend - like decline may require a rate cut. The upside space for the long - end is relatively limited [5][34]. - The pressure on the liability side of large banks is relatively controllable, but the pressure on certificate of deposit (CD) renewal at the end of the month and quarter needs to be observed. In the long run, the "deposit transfer" to non - banks may ease the upward pressure on CD prices [4][34]. 3. Summary by Relevant Catalogs 3.1 Bond Market Performance - From June 9 - 13, the bond market was in a narrow - range shock. Short - end and long - end performed well, while the decline of 5Y bonds was limited. By June 13, the yields of 1Y, 5Y, 10Y, and 30Y government bonds changed by - 1, - 0.1, - 1.1, - 2.7BP respectively compared to June 6 [1][7][8]. - Most yields of major - term CDs declined. The yields of 1M, 3M, 6M, 9M, and 1Y CDs changed by + 0.3, - 2.0, - 1.0, - 0.8, - 0.8BP respectively [8]. 3.2 Funding Situation - This week, the funding was first tight and then loose. DR001 fell below 1.4%. The net financing of large state - owned banks reached a high of 4.27 trillion yuan. Although the CD maturity scale was large, CD yields remained stable [2][11][12]. - The central bank's open - market operations showed a net withdrawal of 727 billion yuan this week. The average weekly values of DR001, R001, DR007, and R007 declined compared to the previous week. The phenomenon of funding stratification was prominent but still at a low level [12]. 3.3 May Social Financing - In May, the overall social financing and credit were in line with expectations. The year - on - year growth rate of social financing stock was flat, while that of loans continued to decline slightly, possibly due to government bonds replacing corporate loans [19]. - Attention should be paid to the weak long - term corporate loans, which may be related to short - term household loans and M2. M1 increased by 0.8pct year - on - year, and long - term household loans improved marginally, indicating better business expectations and spending willingness [20][21]. 3.4 Liability - Side Pressure - The pressure on the liability side of large banks is relatively controllable. The impact of previous deposit rate cuts since 2022 has been mild, and the central bank's support remains. This week, large banks' net lending increased, and CD net financing was negative [25][26][28]. - Next week, the funding will face multiple disturbances, including tax deadlines, MLF maturities, and large CD maturities. However, the pressure on the liability side is generally controllable [32]. 3.5 Next Week's Focus - On June 16, data such as May fixed - asset investment, social retail sales, industrial added value, and unemployment rate will be released. Other important data from various countries will also be released from June 17 - 20 [35][36].

Macro Overview - The People's Bank of China will have a total of 16,178 billion yuan in reverse repos maturing this week, with 10,870 billion yuan maturing on Tuesday and 5,308 billion yuan on Wednesday [3] - The central bank will also release social financing and credit data at unspecified times this week [3] Industry Dynamics - On May 7, the U.S. EIA will release oil inventory data and a monthly short-term energy outlook report [5] - On May 8, the Federal Open Market Committee (FOMC) will announce interest rate decisions, followed by a press conference by Federal Reserve Chairman Jerome Powell [5] - On May 9, several Federal Reserve officials, including New York Fed President John Williams and Chicago Fed President Austan Goolsbee, will deliver speeches [5] - On May 7, China will report its foreign exchange reserves for April [5] - On May 9, China's General Administration of Customs will release April import and export data, and the Ministry of Finance plans to issue 71 billion yuan in long-term special bonds for the first time [5] - On May 10, China will publish monthly reports on CPI and PPI [5] - On May 6, Elon Musk's Grok 3.5 model was unveiled [5] - On May 7, Lenovo will hold its 2025 Innovation Technology Conference in Shanghai [5] - On May 8, the 27th Beijing Science and Technology Expo will take place at the National Convention Center [5] - On May 9, the 25th China Retail Industry Expo will be held at the Shenzhen International Convention and Exhibition Center [5] - On May 7, BeiGene (06160.HK) will announce its earnings [5] - On May 8, SMIC (00981.HK) and Hua Hong Semiconductor (01347.HK) will release their earnings, and "Hushang Ayi" (02589.HK) will be listed [5]

Group 1: Financial Data Overview - In Q1 2025, the total social financing increased by 15.18 trillion yuan, with March contributing 5.89 trillion yuan, a year-on-year increase of 1.06 trillion yuan[2] - The increase in RMB loans for Q1 2025 was 9.78 trillion yuan, with March alone adding 3.64 trillion yuan, a year-on-year increase of 0.55 trillion yuan[2] - The M2 growth rate in March was 7%, unchanged from the previous month, while M1 grew by 1.6%, up from 0.1%[2] Group 2: Economic and Policy Implications - The government bond financing in March was 1.48 trillion yuan, a year-on-year increase of 1.02 trillion yuan, indicating strong fiscal support[6] - The increase in corporate loans was significant, with March seeing 2.84 trillion yuan in new loans, a year-on-year increase of 5 billion yuan[11] - Despite the recovery in corporate financing, household loan demand weakened, with March's new household loans at 9.85 billion yuan, a year-on-year increase of 447 billion yuan[12] Group 3: Monetary Policy Outlook - The monetary policy remains "moderately loose," with potential for rate cuts depending on domestic demand recovery and external economic conditions[3] - The central bank's focus on macro-prudential management of the bond market indicates a cautious approach to interest rate risks[21] - Future monetary policy tools will include targeted cuts and structural tools to support key sectors like technology and infrastructure[36]

Economic Indicators - In March, the total social financing (TSF) stock growth rate rebounded to 8.4% year-on-year, while the credit growth rate under TSF increased to 7.2%[2] - The new TSF in March was 5.89 trillion RMB, with new RMB loans increasing by 3.64 trillion RMB[6] - M2 growth remained stable at 7.0% year-on-year[6] Policy Response - There are sufficient monetary and fiscal policy tools available to address the impact of tariffs, including interest rate cuts and accelerated government bond issuance[2][6] - The government plans to issue approximately 13.86 trillion RMB in new debt for 2025, with 4 trillion RMB issued in the first quarter[6] Credit Dynamics - The increase in credit was primarily supported by government bonds and short-term loans, with corporate medium- and long-term loans showing a slight decrease[6] - In March, corporate short-term loans increased by 460 billion RMB, while medium- and long-term loans decreased by 200 billion RMB[6] Risks and Uncertainties - Economic recovery may be weaker than expected, leading to lower credit growth and social financing stock growth[32] - The final implementation of tariff policies remains uncertain, which could affect domestic economic conditions[32]