Report Summary 1. Industry Investment Rating - No industry investment rating is provided in the reports. 2. Core Viewpoints - The current inflation situation aligns with the scenario of a slow recovery in long - term bond yields, and the judgment of a gradual improvement in PPI and a slow recovery in long - term bond yields is maintained [2][14]. - Core CPI continues its upward trend, with the year - on - year increase in August reaching 0.9%, and the year - on - year growth rate expanding for the fourth consecutive month, indicating positive changes in the consumer price sector due to the continuous effectiveness of domestic demand expansion policies [2][5]. - Food prices continue to drag down CPI growth, suggesting that the growth of catering consumption may still be slow [2][5]. - The downward trend of upstream prices shows signs of stabilization, and the absolute level of the edible agricultural product price index has slightly rebounded. The price of edible agricultural products is expected to improve seasonally in September, but the narrowing of the year - on - year decline may be slow [2][11]. - In August, the signs of PPI reaching the bottom became more obvious, with the month - on - month change turning flat and the year - on - year decline narrowing due to the base effect. The narrowing of the decline in real estate and commodity export prices provides conditions for PPI to reach the bottom [2][11]. - Referring to the experience of the steel industry, it is expected that other key industries will mainly conduct precise regulation of production capacity and output, which is expected to promote the gradual improvement of PPI [14]. 3. Summary by Related Catalogs 3.1 CPI Analysis - In August 2025, the national CPI decreased by 0.4% year - on - year, with food prices dropping by 4.3% and non - food prices rising by 0.5%. The CPI remained flat month - on - month [4]. - Core CPI continued to rise, with a year - on - year increase of 0.9% in August, and the growth rate expanded for the fourth consecutive month, showing positive changes in consumption prices due to domestic demand expansion policies [2][5]. - Food prices continued to drag down CPI growth. The year - on - year decline in food CPI in August was 4.3%, and the drag on CPI year - on - year was greater than the overall CPI decline, indicating slow growth in catering consumption [2][5]. - The edible agricultural product price index slightly rebounded in August, but the year - on - year decline was still large due to the base effect. In September, prices are expected to improve seasonally, but the narrowing of the year - on - year decline may be slow because of the late Mid - Autumn Festival [11]. 3.2 PPI Analysis - In August 2025, PPI showed obvious signs of reaching the bottom, with the month - on - month change turning flat and the year - on - year decline narrowing due to the base effect. The narrowing of the decline in real estate and commodity export prices provided downstream demand conditions for PPI to reach the bottom [11]. - Referring to the steel industry experience, it is expected that other key industries will mainly regulate production capacity and output precisely, which will promote the gradual improvement of PPI. The government has set a target for the steel industry's added - value to grow by an average of 4% annually from 2025 - 2026 [14].

Report Industry Investment Rating The report does not provide an industry investment rating. Core Viewpoints - Upstream prices are gradually improving. The production - material price index declined slightly in the week of August 22, but the year - on - year decline since August has narrowed. Steel industry capacity and output will be precisely regulated, which is expected to drive a gradual improvement in PPI and a slow rise in long - bond interest rates [4][13]. - The strengthening of the RMB against the US dollar does not necessarily trigger a more relaxed liquidity supply. If Trump successfully replaces Cook, the proportion of "dovish" Fed governors may increase, leading to a decline in the long - term yield of US Treasury bonds. The strengthening of the RMB against the US dollar is conducive to stabilizing foreign investment, and its stability against the currency basket is conducive to stabilizing foreign trade [4][16]. - The US PCE inflation in July basically met market expectations and may have limited impact on the Fed's interest - rate cut prospects. However, the US trade deficit in July far exceeded expectations, mainly due to a sharp increase in imports, which may lead to intensified inflation and affect the interest - rate cut rhythm [4]. Summary by Directory High - Frequency Data Panoramic Scan - **Upstream prices**: The production - material price index declined slightly in the week of August 22, with a narrowing year - on - year decline since August. The steel industry's average annual added - value growth target for 2025 - 2026 is 4%. By August 29, the closing price of the coking - coal futures main contract was close to the December 2024 average, while that of the rebar main contract was significantly lower [4][13]. - **Exchange rate**: After Powell's hint at the global central - bank annual meeting and Trump's move to remove Cook, if Cook is successfully replaced, the long - term yield of US Treasury bonds may decline. The RMB has strengthened against the US dollar, but the RMB exchange - rate index is still not high, which is an ideal state [4][16]. - **Inflation and trade**: The US PCE inflation in July basically met expectations. The trade deficit far exceeded expectations due to a sharp increase in imports, which may be related to the tariff "grace period" and mild inflation, and may intensify inflation and affect interest - rate cuts [4]. - **High - frequency data changes**: In the week of August 30, the average wholesale price of pork decreased by 0.78% week - on - week and 27.43% year - on - year; the Shandong vegetable wholesale - price index increased by 2.54% week - on - week and decreased by 19.19% year - on - year. The prices of Brent and WTI crude - oil futures increased by 1.85% and 1.63% respectively week - on - week. The LME copper and aluminum spot prices increased by 1.13% and 1.52% respectively week - on - week [4][20]. High - Frequency Data and Important Macroeconomic Indicators Trend Comparison The report provides multiple charts to show the trend comparison between high - frequency data and important macroeconomic indicators, such as the relationship between LME copper spot - price year - on - year change and industrial added - value year - on - year change (plus PPI year - on - year change), and the relationship between crude - steel daily - output year - on - year change and industrial added - value year - on - year change [22][33]. Important High - Frequency Indicators in the US and Europe The report presents charts of US weekly economic indicators and actual economic growth rates, US first - week unemployment - claim numbers and unemployment rates, US same - store sales growth rates and PCE year - on - year changes, and Chicago Fed financial - condition indexes, as well as the implied prospects of the US Federal Fund futures for interest - rate hikes/cuts and the overnight index swap for the ECB's interest - rate hikes/cuts [88][90][93]. Seasonal Trends of High - Frequency Data The report shows the seasonal trends of high - frequency data through various charts, such as the seasonal trends of crude - steel (decade - average) daily output, production - material price index, and 30 - major - city commercial - housing transaction area [101]. High - Frequency Traffic Data in Beijing, Shanghai, Guangzhou, and Shenzhen The report provides charts of the year - on - year changes in subway passenger traffic in Beijing, Shanghai, Guangzhou, and Shenzhen [158][160][165].

Core Viewpoint - Since May, with the reduction of policy interest rates, the liquidity has further eased, but after the reserve requirement ratio (RRR) cut, the funding rates have risen instead. The article discusses the expected government bond supply in June and the liquidity gap, questioning whether the funding environment will tighten or loosen further [1] Group 1: Market Interest Rates - Funding rates continued to decline in May, with the average R007 and DR007 down by 16.1 basis points and 14.5 basis points to 1.61% and 1.58% respectively. Various SHIBOR and interbank certificate of deposit rates also decreased compared to the previous month [4][5] - After the RRR cut on May 15, the funding environment began to tighten, and the central bank's operations shifted to small net injections towards the end of the month, with a total liquidity injection of around 1 trillion yuan [5][6] Group 2: Government Bond Supply - In June, the government is expected to issue approximately 1.38 trillion yuan in national bonds, with a net financing scale of around 490 billion yuan. Local government bonds are projected to total nearly 900 billion yuan, leading to a combined government bond issuance of about 2.3 trillion yuan and a net financing scale of approximately 920 billion yuan [2][22] Group 3: Funding Pressure and Liquidity - The net financing pressure is alleviated due to the increase in government bond maturities in June, with expectations of a decrease in government deposits by about 1.1 trillion yuan. The seasonal increase in bank reserve requirements is expected to consume around 290 billion yuan of excess reserves [3][32] - The central bank's monetary policy remains a crucial variable, with limited room for further easing in the short term due to reduced liquidity pressure and the recent rise in long-term bond rates [3][32]