Group 1 - The market is anticipating a significant shift in the Bank of Japan's (BOJ) interest rate policy, with expectations for a potential rate hike as early as March or April, influenced by economic and price outlooks [1] - A recent Reuters survey indicates that most economists expect the BOJ to raise the policy rate to 1% by the end of June, moving the timeline forward from previous predictions [1] - Morgan Stanley's research shows that some investors are pricing in the possibility of an earlier rate hike in April, with discussions of a potential action in March [1] Group 2 - The January meeting minutes reveal a convergence of internal disagreements among BOJ policymakers regarding the timing of interest rate hikes, with some members expressing concerns about the transmission of labor costs to core CPI [2] - Key inflation data releases are lagging behind policy meetings, with national CPI and Tokyo CPI data set to be published after the April meeting, creating uncertainty for BOJ decisions [2] - Market participants are closely monitoring comments from BOJ officials, as their statements may provide critical insights into future policy directions during this data vacuum [2] Group 3 - Investors are developing a new understanding of the fiscal stance of Prime Minister Kishi's government, shifting from concerns over excessive fiscal expansion to evaluating selective fiscal easing [3] - The focus is on the latest developments from the Consumption Tax Reduction National Committee, as market participants assess its potential impact on fiscal management frameworks [3] Group 4 - There is a growing interest in Japan's economic upward potential, moving beyond anti-inflation logic to encompass security and strategic investment areas [4] - Investors are particularly interested in the implications of national security-related policies on various industries, with expectations for an expansion of related fiscal budgets [5] - The focus is on crisis management and strategic investment sectors, including economic security, healthcare, and key strategic industries like AI and semiconductors [5]

Market Performance - Japanese stock market experienced a significant rebound, with the Nikkei 225 index soaring over 700 points, marking a rise of 1.23% and stabilizing above the 57,000 point level, ending a four-day decline [2][7] - The Tokyo Stock Exchange index also rose by 1.3% to 3,809.18 points, contributing to a broader increase in the MSCI Pacific index, which gained over 1% [2][8] Political Developments - The Japanese House of Representatives began voting for the Prime Minister on February 18, with the new cabinet expected to be formed shortly after the election [2][8] - High City Sawa is widely anticipated to win the Prime Minister election, with expectations that the new cabinet will continue or enhance economic stimulus policies [3][9] Economic Implications - Investors are optimistic about potential economic stimulus measures from the new cabinet, leading to a short-term increase in the USD/JPY exchange rate, which rose to 153.55, up 0.17% [9] - Analysts suggest that Japan's weak GDP growth in the fourth quarter may prompt further fiscal easing, including a possible supplementary budget in the first half of the upcoming fiscal year [3][9] U.S.-Japan Investment Agreement - President Trump announced the initiation of the first projects under Japan's $550 billion investment commitment to the U.S., focusing on energy and critical mineral sectors [4][10] - The three major projects include a gas-fired power plant in Ohio, a critical mineral project in Georgia, and a liquefied natural gas facility in Texas, aimed at revitalizing the U.S. industrial base and reducing dependence on foreign minerals [5][10] Corporate Participation - Japanese companies such as Hitachi and SoftBank are interested in participating in U.S. investment projects, including a $6 billion synthetic diamond project, a $33.3 billion gas power project, and a $2.1 billion crude oil infrastructure project [11]

Core Viewpoint - Japan's fourth-quarter GDP growth is weak, which may lead to further fiscal easing measures by the government [1] Economic Indicators - Preliminary data for the fourth quarter shows that corporate investment increased by only 0.2% quarter-on-quarter, net exports remained flat, and public demand decreased by 0.2% [1] - The large supplementary budget passed at the end of November has not yet boosted public spending in the previous quarter [1] Government Response - Weak economic activity increases the likelihood that Prime Minister Fumio Kishida will not only push for a suspension of the consumption tax on food but also formulate a supplementary budget for the first half of the fiscal year starting in April, rather than waiting until the end of 2026 [1]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - With the nomination of the new Fed Chair and the release of Q4 earnings of large US tech companies, overseas policy easing and AI industry expansion narratives have fluctuated, leading to a decline in market risk appetite. Meanwhile, the central bank restarted the 14 - day reverse repurchase operation, and the money market remained balanced and loose. The bond market strengthened this week, and futures bond prices generally rose [6]. - In the future, the decline in the profit - making effect of risk assets and the approach of the Spring Festival may bring incremental funds to the bond market. The probability of the 10Y Treasury yield breaking below 1.8% is increasing. However, the short - term yield decline may be limited due to weak policy rate cut expectations, and the bond market sentiment may turn cautious as the second - hand housing market in core cities shows signs of stabilization and important meetings are approaching after the Spring Festival [6]. - The short - term risk - off does not mean a fundamental reversal of the optimistic macro - narrative, and the de - leveraging of risk assets does not mean a complete reversal of their trends [6]. 3. Summary According to Different Sections 3.1 First Part: Weekly Core Points Analysis and Strategy Recommendations 3.1.1 Market Analysis - **Market risk appetite decline**: The nomination of the new Fed Chair and Q4 earnings of large US tech companies caused fluctuations in overseas policy easing and AI industry expansion narratives. This led to increased volatility in global risk asset prices, which spread to the domestic market. The decline in risk - asset profit - making effect and risk appetite was beneficial to the bond market, driving the bond market to strengthen this week [16]. - **Stable cross - festival funds**: Next week, government bond issuance and payment will increase to 6436.87 million yuan. With the approaching Spring Festival, cross - festival fund prices are expected to converge. However, the central bank's clear attitude to protect liquidity may limit the actual fluctuation of fund prices [18]. - **Partial recovery of the second - hand housing market**: Recently, the second - hand housing market in some core cities has shown signs of marginal stabilization, especially in first - tier cities where the second - hand housing listing price index has risen for three consecutive weeks since mid - January. This may be due to the introduction of local housing purchase policies and the market's need for stabilization after a rapid price decline in Q4 last year. However, the sustainability of the recovery needs further observation [29][31]. - **Low valuation of futures bond market**: As of Friday's close, the IRR of TS, TF, T, and TL main contracts were 1.3104%, 1.4461%, 1.3764%, and 1.3644% respectively. Compared with spot bonds, the futures bond market valuation was mostly at a slightly lower - than - neutral level [36]. - **Slow progress of main contract roll - over**: The roll - over of main contracts accelerated this week but was still slower than the historical average. As of Friday, the roll - over progress of TS, TF, T, and TL contracts was 22.0%, 34.7%, 24.6%, and 35.3% respectively [37]. - **Net short - position dominance in the top ten futures seats**: During the rise of futures prices this week, the net long - position ratio of the top ten seats decreased. As of Friday, the net position ratios of TS, TF, T, and TL top ten seats were - 21.38%, - 6.99%, - 4.58%, and - 3.30% respectively. With low contract valuation, slow roll - over, net short - position dominance, and no significant increase in interest - rate cut expectations, the inter - delivery spread may strengthen periodically [44]. - **High spread between new and old ultra - long bonds**: The spread between new and old 30Y bonds widened significantly this week and then narrowed. As of Friday, the spreads between the CTD bonds of TL current and next - season contracts and active bonds were 7.71bp and 7.10bp respectively. It is recommended to short the spread between new and old ultra - long bonds using futures bonds. However, significant spread narrowing may require the elimination of negative factors such as government bond supply, and the next - season TL contract may be a better choice for arbitrage positions [47]. 3.1.2 Strategy Recommendations - **Single - side strategy**: Partially take profits on long TL positions and hold the remaining lightly [7][8]. - **Arbitrage strategy**: Pay appropriate attention to going long on the T - contract inter - delivery spread and shorting the spread between new and old ultra - long bonds using futures bonds [7][8]. 3.2 Second Part: Related Data Tracking - **Bond futures contract spreads**: Data on spreads between TS, TF, T, and TL contracts are provided, showing historical trends [52]. - **Trading volume and open interest**: Data on trading volume and open interest of TS, TF, T, and TL contracts are presented [55]. - **Spot bond yields and spreads**: Information on Treasury bond yield curves, term spreads, spreads between Treasury and local bonds, and spreads between 10Y Treasury and CDB bonds are given [58]. - **US Treasury yields and exchange rates**: Data on US 10 - year Treasury yields, Sino - US 10 - year Treasury yield spreads, the US dollar index, and the offshore US dollar - RMB exchange rate are provided [61].

Macro News - The main focus is on the upcoming oral arguments at the U.S. Supreme Court regarding Federal Reserve Governor Lisa Cook's case, which will be attended by Powell on January 21 [1] - Japan's upcoming House of Representatives election on February 8 is expected to end excessive fiscal tightening [1] - Trump's comments about Greenland indicate a shift in U.S. foreign policy, with threats to impose tariffs on Europe if no agreement is reached [1] Institutional Views - Trump's potential acquisition of Greenland is viewed as a "TACO deal," with European countermeasures seen as largely symbolic [2] - The U.S. is expected to release $600 billion in liquidity in Q1, amidst ongoing geopolitical tensions and military deployments in the Middle East [2] - Central banks globally are increasing gold reserves, which may support rising precious metal prices, despite mixed U.S. employment data and stable consumer inflation [2] - Market expectations suggest that the Federal Reserve is unlikely to cut rates in January, with potential cuts now pushed back to June [2] - The Trump administration's stance towards Fed Chair Powell has softened, and there are currently no new tariffs on key minerals like silver, platinum, and palladium [2]

1. Report Industry Investment Rating - Maintain a wait - and - see stance, waiting for price pullbacks to stabilize [1] 2. Report's Core View - Macro and industrial factors jointly drove strong price increases in platinum and palladium, but prices fluctuated significantly and fell sharply in the last week of December. In the first quarter of this year, the overseas macro - environment will have a negative impact on the precious metals sector. It is expected that after further price declines, the volatility of platinum - group metals will significantly narrow. Currently, it is recommended to temporarily observe platinum and palladium strategies [9] 3. Summary by Directory 3.1 Monthly Assessment and Market Outlook - Since the listing of domestic platinum - group metals, they have generally shown a trend of rising first and then falling. From November 27th to December 31st, the price of the platinum main contract rose 19.56% to 527.25 yuan/gram, and the palladium main contract price rose 12.79% to 425.2 yuan/gram [10] - In December, the NYMEX platinum main contract price rose 38.85% to $2220 per ounce, and the palladium main contract price rose 15.09% to $1685.5 per ounce. However, in the last week of December, platinum and palladium prices fell 4.31% and 14.18% respectively [9] - The Fed's interest - rate cut and balance - sheet expansion in December, along with potential future policy directions, drove up precious metal prices. The EU's decision to abandon the internal combustion engine vehicle ban boosted the demand outlook for catalysts, driving up platinum and palladium prices. But due to weak demand and relatively weak reserve and investment attributes, prices fell after the trading sentiment subsided [9] 3.2 Market Review - **Platinum Price**: The platinum price rose 38.85% to $2220 per ounce this month, and the total position increased from 83,700 lots in the week of November 25th to 97,000 lots in the week of December 16th [17] - **Palladium Price**: The palladium price rose 15.09% to $1685.5 per ounce this month, and the total position increased from 19,100 lots in the week of November 25th to 22,000 lots in the week of December 16th [18] - **Domestic Platinum Price and Spread**: As of December 31st, the spot price of platinum on the Shanghai Gold Exchange was 511.5 yuan/gram. Affected by the adjustment of the import VAT exemption policy, the premium of domestic platinum significantly recovered [21] - **Lease Rate**: As of December 31st, the one - month implied lease rate of platinum spot was 19.67%, and that of palladium was 6.50%, both at the highest levels in the same period in the past five years [22] - **Platinum CFTC Net Position**: In the week of December 16th, the net long position of NYMEX platinum managed funds increased from 13,800 lots to 15,400 lots [25] - **Palladium CFTC Net Position**: The net position of palladium managed funds turned from short to long, with a current net long position of 293 lots [28] 3.3 Inventory and ETF Holdings Changes - **Platinum ETF Holdings**: From December 1st to 30th, the total overseas platinum ETF holdings increased from 75.35 tons to 76.59 tons [39] - **Palladium ETF Holdings**: From December 1st to 30th, the total overseas palladium ETF holdings increased from 14.74 tons to 15.41 tons [42] - **Platinum Inventory**: The US platinum exchange inventory remained at a high level. As of December 30th, the CME platinum inventory was 20.12 tons [46] - **Palladium Inventory**: The CME palladium inventory continued to increase, reaching 6.53 tons as of December 30th [51] 3.4 Supply and Demand - **Platinum Mining**: The predicted platinum production of the top 15 global mines in the fourth quarter of 2025 will reach 33.18 tons. The total annual production in 2025 will be 127.47 tons, a 1.9% decrease from 2024, indicating a contraction in platinum supply at the mine end [57] - **Palladium Mining**: The total production of the top 15 global palladium mines in the fourth quarter will be 41.36 tons. In 2025, the production of some mines will decline, but the production of Impala in South Africa will increase by 12%. Overall, the annual production of the top 15 mines will slightly contract, decreasing by 0.86% to 165.78 tons [60] - **China's Platinum Imports**: As of November, China's cumulative platinum imports reached 91.64 tons, a slight 4.82% year - on - year decrease [63] - **China's Palladium Imports**: The cumulative palladium imports were 31.21 tons, a 19.71% year - on - year increase [66] 3.5 Monthly and Cross - Market Spreads - **NYMEX Platinum Monthly Spread**: The report presents various monthly spreads of NYMEX platinum, such as 1 - 4, 4 - 7, 7 - 10, and 10 - 1 spreads [88][83] - **NYMEX Palladium Monthly Spread**: The report shows various monthly spreads of NYMEX palladium, including 3 - 6, 6 - 9, 9 - 12, and 12 - 3 spreads [95][91] - **London Market Spot and NYMEX Spread**: The report provides the spreads between the London market spot platinum price and NYMEX platinum price, as well as the spreads between the London market spot palladium price and NYMEX palladium price [97]

Core Insights - The commodity market in 2025 is characterized as a "structural bull market," with significant annual gains in gold and silver, while oil prices face pressure due to supply-demand dynamics [1] - Goldman Sachs' 2026 Commodity Outlook indicates a trend towards "increasing differentiation" in the commodity market, with overall returns expected to moderate but significant disparities among different commodities [1][2] - Key factors influencing the market include the geopolitical tensions between the US and China, the competition in AI, and dual supply shocks in the energy market [1][2] Commodity Performance - Precious metals, particularly gold and silver, are expected to continue their strong performance into 2026, with gold prices projected to reach $4,900 per ounce and silver between $50-$60 per ounce [3][6] - Industrial metals like copper are forecasted to maintain a strong price trajectory, with potential average prices between $11,400 and $12,075 per ton, driven by demand from technology and energy transitions [6][8] - The oil market is anticipated to face downward pressure, with Goldman Sachs predicting Brent and WTI crude oil prices to average $56 and $52 respectively in 2026, reflecting a supply surplus [8] Economic and Policy Context - The shift from "monetary easing + fiscal tightening" to "fiscal expansion + accelerated de-globalization" has highlighted the value of physical assets, creating structural opportunities in commodities [2] - The expected continuation of a loose monetary policy by the Federal Reserve in 2026 is seen as a catalyst for increased investment in commodities, as it lowers the opportunity cost of holding these assets [2] Market Dynamics - The energy market is expected to experience significant changes due to supply shocks in both oil and LNG, impacting pricing and availability [1][8] - The agricultural market's performance in 2026 is uncertain, with potential impacts from climate anomalies and trade policy changes affecting supply and demand dynamics [8] Strategic Focus - The 2026 commodity market will require a nuanced approach, moving away from a one-size-fits-all investment strategy to focus on structural opportunities influenced by geopolitical and technological factors [10]

Group 1 - President Trump addressed the nation on December 17, highlighting achievements over the past 11 months and announcing measures to alleviate economic anxiety among the public [1][4] - Trump claimed to have reduced costs for various goods and services, including gasoline, eggs, airline tickets, and hotels, while also increasing wage growth and curbing immigration [1][4] - The announcement included the upcoming selection of a new Federal Reserve chair, with candidates likely being National Economic Council Director Hassett and former Fed Governor Warsh, both of whom have differing views on monetary policy [1][4] Group 2 - Trump revealed that the government sent checks of $1,776 to 1.45 million military personnel, a figure symbolizing the year of America's founding [6] - Recent polls indicate that public concern over economic issues is high, with only 33% of Americans approving of Trump's economic management and 39% approving of his overall job performance [6] - Treasury Secretary Mnuchin reiterated the vision of the "Trump Account" plan, aimed at increasing stock market participation among Americans, with a one-time deposit of $1,000 for newborns to invest in index funds [6]

Core Viewpoint - The price of gold in Shanghai has been rising since December 10, with a cumulative increase of over 2%, driven by expectations of interest rate cuts and balance sheet expansion by the Federal Reserve, global fiscal expansion trends, and actual gold purchases by central banks [1]. Group 1: Economic Indicators - The U.S. non-farm employment in November exceeded expectations, but the previous value declined, raising concerns about a weakening labor market as the unemployment rate increased [3]. - The Federal Reserve began purchasing $40 billion in bonds monthly from December 12 to bolster bank reserves, with plans to gradually reduce this to $20-25 billion in response to natural balance sheet expansion and liquidity gaps from quantitative tightening [3]. - Global fiscal expansion is evident, with the U.S. "Build Back Better" plan raising the debt ceiling by $5 trillion and increasing the deficit by $3.4 trillion; Japan approved a stimulus of ¥21.3 trillion (approximately $135.4 billion); and the UK's fiscal buffer expanded to £22 billion, with net borrowing for the fiscal year 2025-2026 adjusted to £138.3 billion [3]. Group 2: Market Dynamics - The Bank of Japan may raise interest rates by 25 basis points on December 19, which could weaken the low-interest rate advantage and lead to a return of funds from pensions and insurance, potentially reducing demand for U.S. Treasuries and impacting markets like U.S. stocks and cryptocurrencies [3]. - There is a caution regarding the Bloomberg Commodity Index rebalancing in January 2026, which may lower the weight of gold and silver, leading to potential technical selling by passive funds and short-term pressure on these metals [4]. - In the medium to long term, the Federal Reserve's balance sheet expansion, global fiscal easing, geopolitical risks, and central bank gold purchases are expected to support gold prices, while short-term concerns include the reversal of carry trades and index rebalancing [4]. Group 3: Gold Futures Analysis - Shanghai gold futures are showing a bullish trend, breaking through key resistance levels, with short-term moving averages indicating a bullish arrangement and MACD indicators showing continued bullish momentum [5]. - The Bollinger Bands are opening upwards, with prices approaching the upper band, and the RSI indicator is in a neutral to strong area, reflecting cautious optimism in market sentiment [5]. - Key support is noted at 976 yuan per gram, with resistance around 983 yuan per gram; a breakthrough of resistance could open up further upward movement, while a pullback may test support [5].

Market Dynamics - The correlation between price movements and economic data/news has weakened again, with rising yields being the market's default choice in both the US and Eurozone [2] - Eurozone economic data is generally lackluster, while US data shows mixed signals, with consumer confidence assessments exceeding expectations but inflation expectations declining [2] - The US yield curve has generally risen by 3.7-3.9 basis points, moving further away from recent support levels, with the 2-year yield at 3.56% [2] - The market is maintaining a neutral stance ahead of the Federal Reserve's policy decision, despite expectations for further easing [2] - Eurozone swap rates have also increased by over 3-4 basis points, with slight narrowing of the French-German bond yield spread [2] Federal Reserve Focus - Market attention remains on the upcoming Federal Reserve meeting, with expectations for a cautious stance and a potential 25 basis point rate cut to mitigate labor market risks [3] - The Fed's decision-making is still characterized by significant internal disagreement, with no hard data to support a change in the current policy stance [3] - Future guidance on potential easing will depend on labor market and CPI data updates following the Fed's decision [3] Hungary Credit Rating - Fitch has maintained Hungary's BBB credit rating but revised the outlook from stable to negative due to deteriorating public finance conditions [4] - The agency forecasts the deficit to widen from 5% this year to 5.6% by 2026, exceeding previous expectations [4] - Debt-to-GDP ratio is projected to rise from 73.5% in 2024 to 74.6% by the end of 2027, with economic growth expected to stabilize around 2.3% next year [4] UK Employment Report - The S&P Global UK employment report indicates a continued decline in recruitment activity, with permanent job vacancies decreasing for the fifth consecutive month [5] - Temporary worker pay has slightly decreased, while permanent salary growth remains at historical lows due to increased labor supply and intense job competition [5] - The current environment is described as complex and variable, with pre-budget tension impacting temporary hiring [5]