Market Overview - The domestic main contracts showed mixed performance on August 22, with IH, IF, IC, IM, and caustic soda rising over 2%, while industrial silicon, styrene, SC, low-sulfur fuel oil, and soda ash increased by more than 1% [3] - In contrast, lithium carbonate fell over 4%, red dates dropped more than 2%, and urea, European line, rapeseed meal, polysilicon, BR, and soybean two declined by over 1% [3] Capital Market Liquidity - The capital market liquidity is relatively abundant, driven by the appreciation of the RMB against a weak dollar, leading to continued net inflows of northbound funds this week [1] - Additionally, as local governments deepen their debt repayment efforts, corporate loan and deposit data continue to improve, indicating a preference for liquidity to flow into the stock market during a period of relatively high equity risk premium [1]

Report Summary 1. Investment Ratings - Stock Index Futures: Neutral (Oscillation) [1] - Treasury Bond Futures: Bearish in the short term, neutral (oscillation) in the long term [2] 2. Core Views - **Stock Index Futures**: The recent rise in the stock market is mainly due to three logics. Long - term: The market anticipates fiscal policy to shift more towards promoting consumption and an increase in the domestic inflation level after the easing of Sino - US relations. Medium - term: The anti - involution trend and infrastructure investment on the demand side benefit upstream cyclical sectors. Short - term: The capital market has relatively abundant liquidity, with funds flowing in due to RMB appreciation and improved enterprise deposit and loan data [1]. - **Treasury Bond Futures**: In the short term, the bond market is under pressure due to the recovery of risk appetite. However, there are no significant changes in the capital and fundamental aspects, and the bond market lacks directional drivers. It should be treated with an oscillation mindset in the long term [2] 3. Summary by Section **Research Views** - **Stock Index Futures**: On August 19, the A - share market fluctuated with increased trading volume. The Wind All - A index fell by 0.05% with a trading volume of 2.64 trillion yuan. The CSI 1000 index rose by 0.07%, while the CSI 500, SSE 50, and CSI 300 indices fell by 0.19%, 0.93%, and 0.38% respectively. Personal consumption loan subsidy policies and the implementation of the parenting subsidy system are expected to boost the economy. The central bank may purchase national debt to support more inclusive fiscal policies [1]. - **Treasury Bond Futures**: On August 19, the 30 - year, 10 - year, 5 - year, and 2 - year treasury bond futures contracts rose by 0.26%, 0.06%, 0.06%, and 0.03% respectively. The central bank conducted 580.3 billion yuan of 7 - day reverse repurchase operations, with a net injection of 465.7 billion yuan. The weighted average interest rates of DR001 and DR007 increased [2] **Daily Price Changes** - **Stock Index Futures**: On August 19, compared with August 18, IH fell by 1.16%, IF by 0.51%, IC by 0.12%, and IM by 0.10%. Among the stock indices, the SSE 50 fell by 0.93%, the CSI 300 by 0.38%, the CSI 500 by 0.19%, and the CSI 1000 rose by 0.07% [3] - **Treasury Bond Futures**: On August 19, compared with August 18, TS rose by 0.03%, TF by 0.08%, T by 0.04%, and TL by 0.39% [3] **Market News** - From January to July, the national general public budget revenue was 1.35839 trillion yuan, a year - on - year increase of 0.1%. Among them, tax revenue was 1.10933 trillion yuan, a year - on - year decrease of 0.3%, and non - tax revenue was 249.06 billion yuan, a year - on - year increase of 2% [4] - The Ministry of Finance plans to issue 30 billion yuan of 91 - day book - entry discount treasury bonds on August 20 [4] **Chart Analysis** - **Stock Index Futures**: The report presents the historical trends and basis trends of IH, IF, IM, and IC contracts [6][7][9] - **Treasury Bond Futures**: It shows the historical trends, basis trends, and cross - period spread trends of TS, TF, T, and TL contracts, as well as the yields of treasury bonds [12][15][16] - **Exchange Rates**: The report includes the historical trends of the US dollar - RMB, euro - RMB exchange rates, forward exchange rates, and other exchange rate - related data [20][21][22]

Investment Rating - The report maintains a recommendation for the banking sector, indicating a positive outlook for both short-term and mid-term performance [8][9]. Core Insights - The report highlights a significant decline in total credit, with a net decrease of 50 billion yuan in July, marking the first negative monthly growth since data collection began. This is attributed to seasonal factors and a weaker overall demand for credit [1][2]. - Non-bank deposits saw a substantial increase of 2.14 trillion yuan in July, suggesting a shift of household savings into capital markets, as evidenced by a corresponding decrease in household deposits [2][3]. - The report emphasizes that the current banking sector is experiencing a liquidity shift, with a potential migration of deposits into capital markets due to lower deposit rates and higher expected returns from equities [4][10]. Summary by Sections Financial Data Overview - July's financial data aligns with previous forecasts, showing a slight underperformance in credit growth and an upward trend in M1 and M2 growth rates [1]. - The total credit for July was negative 500 billion yuan, a year-on-year decrease of 310 billion yuan, indicating a seasonal dip in credit demand [1][2]. Credit and Deposits Analysis - The report notes that the outstanding loans due within one year for listed banks amount to 65.6 trillion yuan, representing 37.2% of the total loans as of the end of 2024 [2]. - The increase in non-bank deposits by 2.14 trillion yuan in July contrasts with a decrease in household deposits by 1.1 trillion yuan, indicating a potential trend of capital market investment [2][3]. Market Liquidity and Investment Recommendations - The report suggests that the liquidity in the banking sector may face instability due to the shift towards shorter-term deposits and increased investment in capital markets [8]. - It is recommended that investors adopt a rational approach to the current market conditions, as the potential for volatility exists due to the migration of deposits into equities [10]. Long-term Outlook - The report anticipates that the banking sector will continue to benefit from structural fiscal spending, which is expected to support long-term demand and supply dynamics [10]. - The banking sector is viewed as a high-quality asset class, with expected annualized returns surpassing the overall market, making it an attractive investment opportunity for long-term investors [10].

Report's Investment Rating for the Industry No investment rating for the industry is provided in the report. Core Views of the Report - The current rebound in M1 growth rate has different causes from previous cycles, with certain base effects. Both the corporate and household sectors contribute under the new caliber, and the core is the re - allocation effect under low interest rates. Its implications for capital market liquidity are more worthy of attention than economic activity [1]. - In the short - term, the bond market is still in the stage of improving expectations but lacks a clear main line. The trading range of the 10 - year Treasury bond remains between 1.6 - 1.8%. The loose funding situation clearly benefits the short - end, while the long - end and ultra - long - end are repeatedly disturbed by the stock market and domestic demand policies [1]. - The new VAT regulations are still an important observation point. Coupled with the loose funding situation, long - term interest rates should be regarded as band opportunities. It is recommended to moderately seize the coupon opportunities of ordinary credit bonds, Tier 2 capital bonds, and certificates of deposit, with the yield curve slightly steepening [1]. - In terms of operation, band + coupon > leverage > duration > credit risk exposure. From the perspective of asset allocation, equities are still stronger than bonds, but short - term fluctuations increase [1]. Summary by Related Catalogs 1. This Week's Strategy View: Significance of M1 Growth Rate Rebound - Last week, the funding situation was loose, and the impact of the new VAT regulations was the core concern. The stock market and commodities performed strongly, and bond yields continued to fluctuate. The yields of 10 - year Treasury bonds and active CDB bonds remained basically flat at 1.69% and 1.79% respectively compared with the previous week, the yield of 30 - year Treasury bonds rose 2BP to 1.92%, the 10 - 1 - year term spread remained basically flat, and credit spreads narrowed slightly [9]. - This week's financial data is about to be released. Bill rates indicate that credit may perform weakly, social financing is not weak, and M1 is the focus. In the first half of this year, the year - on - year growth rate of M1 rebounded rapidly, from 1.2% in December last year to 4.6% [10]. 2. M1's Leading Role in the Macroeconomy: Source and Evolution - Historically, M1 had a certain leading role in economic variables such as prices, nominal growth, and corporate profits, mainly because M1 changes were mainly affected by corporate demand deposits. Corporate demand deposits came from real economic activities such as export settlement, household consumption and housing purchases, government revenues and expenditures, and corporate expansion investments, so M1 could reflect the real capital activation degree of micro - entities [2][12]. - In the past decade, the economic cycle mainly relied on real estate, and M1's leading role was more significant. However, in recent years, M1's leading role in the economy has weakened significantly, mainly related to the transformation of the economic growth model and the reduced volatility of the data itself [2][12]. - Since January this year, the central bank has adopted a new revised M1 statistical caliber, which adds household demand deposits and balances of third - party payment platforms such as Alipay/WeChat. The overall trends of the old and new M1 are basically the same [2][13]. 3. Main Reasons for the Current Rebound: Base Effect and Re - allocation under Low Interest Rates - M0 and customer reserves of non - bank payment institutions changed little in the first half of the year and contributed little to M1. The increase in M1 growth rate can be largely explained by corporate demand deposits [3][14]. - Reasons for the increase in corporate demand deposits include: the base effect caused by manual interest compensation last year; the re - allocation of corporate time deposits under the low - interest environment; the acceleration of fiscal expenditures and debt resolution improving corporate cash flows; and the shortening of the accounts receivable cycle of small and medium - sized enterprises [3][18][21]. - Household demand deposits are also rising rapidly and have a higher absolute contribution to the year - on - year growth of M1. The increase in the activation degree of household deposits is also due to the re - allocation effect caused by the decline in deposit interest rates. In addition, policies have supported the improvement of household consumption activities compared with last year [3][26]. - The seasonality of the overall deposit term structure can explain the M1 rebound in June to some extent [27]. 4. Characteristics of the Current M1 Rebound Different from Previous Ones - This rebound is likely to be jointly driven by the household and corporate sectors, and the "quantitative change to qualitative change" caused by the continuous decline in deposit interest rates seems to be the core factor [4]. - Due to the extremely low base last year, the high - growth trend of M1 year - on - year may last until at least October. After that, the trend of M1 will depend more on the endogenous economic momentum [4][33]. - The rebound of M1 is more significant for capital market liquidity than for economic activity. It may be accompanied by capital re - allocation behavior, and the off - market opportunity cost in the capital market is low, bringing new funds [4][33]. 5. Implications for the Market - The rebound of M1 has triggered discussions about the recovery of economic vitality, but more evidence is needed. With anti - involution factors, the bottom of the stock market's performance is expected, but it is still difficult to be performance - driven [5]. - This rebound of M1 is partly due to the contribution of the household sector and the re - allocation of corporate funds under low interest rates. The stock market faces a good liquidity environment, with many hot - spot and thematic opportunities [5]. - The cause of the M1 growth rate rebound determines that the re - allocation effect under low interest rates exceeds the fundamental recovery effect, having little impact on the bond market. If it continues to exceed expectations after the base effect, it may be an early signal of economic recovery, which may trigger an adjustment in the bond market [5]. 6. This Week's Bond Market Strategy - Last week's export data exceeded expectations, and inflation remained low, indicating that the characteristics of the economic fundamentals, including overall resilience, structural differentiation, and wave - like operation, continue. The bond market is expected to continue to be in a volatile pattern with a ceiling and a floor, and the trading range of the 10 - year Treasury bond remains between 1.6 - 1.8% [39]. - Last week, the funding situation continued to be loose, and the overnight interest rate tested the previous low. The central bank's support is expected to continue. The loose funding situation clearly benefits the short - end, but the long - end and ultra - long - end are not fully priced, and the yield curve steepens slightly. It is recommended to actively explore interest - spread leverage opportunities at the short - end and increase holdings at the long - end and ultra - long - end on dips [39]. - The impact of the new VAT regulations on new bonds is controllable, and old bonds have relatively better cost - effectiveness. It is recommended to moderately seize the opportunities of ordinary credit bonds, Tier 2 capital bonds, certificates of deposit, and other core varieties of public funds and asset management products [40]. - In terms of operation ideas, band + coupon > leverage > duration > credit risk exposure. From the perspective of asset allocation, equities are still stronger than bonds, but short - term equity fluctuations increase, and convertible bond valuations are high [40].

Group 1: Investment Ratings - No investment ratings provided for the industry in the report. Group 2: Core Views - For stock index futures, the A - share market oscillated and pulled back yesterday, with the Wind All - A down 1.36% and a trading volume of 1.87 trillion yuan. The implementation of the parenting subsidy system is expected to boost inflation. The recent stock market rise is due to long - term expectations of fiscal policy shift and inflation recovery, mid - term anti - involution and infrastructure demand, and short - term capital inflows. The market is currently divided, and investors should wait for clearer policies and trends before adjusting positions [1]. - For treasury bond futures, the 30 - year, 10 - year, 5 - year, and 2 - year main contracts rose by 0.57%, 0.17%, 0.08%, and 0.01% respectively. After the anti - involution policy expectations, the bond market is expected to have a repair market, and short - term treasury bonds may stop falling and stabilize [3]. Group 3: Summary by Directory Research Views - **Stock Index Futures**: Yesterday, the A - share market declined, with the CSI 1000 down 0.85%, CSI 500 down 1.4%, SSE 50 down 1.54%, and SSE 300 down 1.82%. The parenting subsidy system is expected to boost inflation. The long - term logic is the shift of fiscal policy and inflation recovery; the mid - term is anti - involution and infrastructure; the short - term is capital inflows. The market is divided, and position adjustment should wait for clarity [1]. - **Treasury Bond Futures**: The 30 - year, 10 - year, 5 - year, and 2 - year main contracts rose. The central bank conducted 2832 billion yuan of 7 - day reverse repurchase operations, with a net withdrawal of 478 billion yuan. After the anti - involution policy expectations, the bond market may have a repair market [3]. Daily Price Changes - **Stock Index Futures**: IH decreased by 1.52%, IF by 1.92%, IC by 1.47%, and IM by 1.00%. The corresponding stock indexes also declined, with the SSE 50 down 1.54%, SSE 300 down 1.82%, CSI 500 down 1.40%, and CSI 1000 down 0.85% [4]. - **Treasury Bond Futures**: TS rose by 0.02%, TF by 0.09%, T by 0.17%, and TL by 0.64% [4]. Market News - In July, affected by the traditional production off - season and natural disasters, the PMI dropped to 49.3%. The production index remained in expansion, but market demand slowed down [5]. Chart Analysis - **Stock Index Futures**: Charts show the trends and basis of IH, IF, IC, and IM main contracts and related stock indexes [7][9][11]. - **Treasury Bond Futures**: Charts display the trends, basis, spreads, and capital interest rates of treasury bond futures [14][17][19]. - **Exchange Rates**: Charts present the exchange rates of the US dollar, euro, pound, and yen against the RMB, including spot and forward rates [22][23][26]. Member Introduction - Zhu Jintao, a master in economics from Jilin University, is the director of the macro - financial research at Everbright Futures Research Institute [29]. - Wang Dongying, an index analyst with a master's degree from Columbia University, focuses on stock index futures research [29].

Research Views Index Futures - Yesterday, the A-share market oscillated and pulled back, with the Wind All A index down 0.4% and a trading volume of 1.87 trillion yuan. The CSI 1000 index fell 0.82%, the CSI 500 index dropped 0.65%, the SSE 50 index rose 0.38%, and the SSE 300 index declined 0.02%. The implementation of the parenting subsidy system is expected to boost inflation. The recent stock market rally is driven by long-term, medium-term, and short-term factors. It's advisable to wait for clearer policies and market trends before adjusting positions [1]. Treasury Futures - Treasury futures closed higher, with the 30-year, 10-year, 5-year, and 2-year contracts up 0.40%, 0.15%, 0.08%, and 0.03% respectively. The central bank conducted 3090 billion yuan of 7-day reverse repurchase operations, with a net injection of 1585 billion yuan. The bond market is expected to have a repair market, and short-term treasury bonds are expected to stop falling and stabilize [2]. Daily Price Changes Stock Index Futures - IH rose 0.21%, IF fell 0.12%, IC dropped 0.76%, and IM declined 0.87%. Among stock indices, the SSE 50 rose 0.38%, the SSE 300 fell 0.02%, the CSI 500 dropped 0.65%, and the CSI 1000 declined 0.82% [3]. Treasury Futures - TS rose 0.03%, TF rose 0.08%, T rose 0.16%, and TL rose 0.42%. Yields of treasury bonds decreased, with the 2-year, 5-year, 10-year, and 30-year yields down 1.52, 0.92, 1.41, and 2.15 respectively [3]. Market News - The Politburo meeting on July 30 stated that macro policies should continue to exert force and add strength in a timely manner. Fiscal policies should be more proactive, and monetary policies should maintain liquidity and lower financing costs [4]. Chart Analysis Stock Index Futures - The report presents charts of the trends and basis of IH, IF, IM, and IC, including their historical price trends and basis changes [6][7][9]. Treasury Futures - Charts show the trends of treasury futures contracts, yields of treasury bonds, basis, inter - period spreads, cross - variety spreads, and funding rates [13][16][18]. Exchange Rates - Charts display the middle rates of the US dollar, euro against the RMB, forward exchange rates, and exchange rates of other currency pairs such as the euro - US dollar, pound - US dollar, and US dollar - yen [21][22][26].