Geopolitical Risks - The Middle East geopolitical situation is deteriorating, with the U.S. military conducting airstrikes on Iran's oil export hub, which may escalate tensions further[13] - Concerns over inflation are expected to suppress global macro liquidity, impacting market sentiment and asset performance[15] Asset Allocation Recommendations - Overweight Chinese equities due to lower risk premiums and a more diverse market structure, which is seen as a key driver for capital market transformation[16] - Recommend overweighting gold as a hedge against geopolitical uncertainties, with central banks and large asset managers continuing to buy gold, supporting long-term price stability[17] - Suggest overweighting oil due to geopolitical tensions affecting supply, particularly with declining oil inventories in major economies[17] Bond Market Insights - Inflation expectations are likely to suppress long-duration bond performance, making mid-duration bonds more attractive compared to long-duration bonds[16] - The U.S. economy is showing signs of marginal convergence but has not stalled, with a moderate cooling in the labor market and wage growth, which may lead to a gradual decline in U.S. Treasury yields[16] Commodity Market Outlook - Industrial commodities, particularly copper, are expected to see increased demand driven by construction, electric vehicles, and AI expansion, despite rising development costs[17] - The global order is rapidly restructuring, making safety a scarce resource, which further supports the case for gold as a protective asset[17] Performance Metrics - The tactical asset allocation portfolio achieved a cumulative excess return of 6.62% and an absolute return of 11.10% as of March 15, 2026[21]

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The rapid increase in the price of London spot gold from $5,000 per ounce to $5,400 per ounce within a week is mainly driven by the concentrated rise in market risk - aversion sentiment, which stems from the escalation of the Middle - East geopolitical conflict and panic trading in the US stock market regarding AI development. Under the dominance of risk - aversion sentiment, the whole market switches to a "risk - aversion first" trading strategy, with US Treasury bonds, the US dollar, and precious metals rising simultaneously [3]. - The current focus of the Middle - East situation is the assassination of the Iranian supreme leader. The confrontation among the US, Israel, and Iran is more likely to become long - term, and the tail risk of continuous conflict will systematically raise the central price of gold [3]. - The support of the Middle - East geopolitical conflict for gold will also form a secondary drive through the transmission of oil prices to inflation expectations. If the conflict escalates and causes the supply interruption of the Strait of Hormuz, international oil prices are likely to soar, leading to an increase in global inflation expectations and further strengthening the allocation attractiveness of gold as an inflation - resistant asset [3]. - To judge whether the short - term gold price can continue to rise, the change in internal - external premium is the core observation indicator. Currently, there is no obvious sign of acceleration in the internal - external premium, so it is not advisable to easily judge that the top has been reached [3]. - AI panic trading has pushed up the expectation of interest rate cuts, with the expected annual interest rate cut increasing to 60.9 bps. The concerns about the negative impact of AI on software companies and the labor market have lowered the threshold for the Fed to cut interest rates [7]. 3. Summaries According to Relevant Catalogs AI Panic Trading and Interest Rate Expectations - AI panic trading has pushed up the expectation of interest rate cuts, with the expected annual interest rate cut reaching 60.9 bps. Concerns about the impact of AI on software companies and the labor market have lowered the Fed's threshold for interest rate cuts [7]. US Treasury Yields - Last week, the yields of US Treasury bonds at various maturities declined. The 30 - year UST yield dropped 11.1 bps to 4.6%, the 10 - year UST yield dropped 13.57 bps to 3.95%, and the 2 - year UST yield dropped 9.9 bps to 3.4%. The yield curve flattened. The decline in yields is mainly due to the increase in risk - aversion demand, which goes against the relatively strong US economic data [10]. Fed Reserves - Last week, the usage of ONRRP was $329.2 billion, a decrease of $1.26 billion from the previous value. The Fed's reserve balance on Wednesday last week was $3.004 trillion, an increase of $44.4 billion from the previous week [15]. US Treasury Bond Positions - As of February 24, there was a divergence in the positions of long - and short - term US Treasury bond interest rates. The non - commercial net short positions of 2 - year UST futures increased by 113,628 lots to 1,348,036 lots, while the non - commercial net short positions of 10 - year UST futures decreased by 103,833 lots to 744,020 lots [20]. US Real Interest Rates - The yields of 5 - year and 10 - year TIPS declined. The 5 - year TIPS yield closed at 1.11%, a decrease of 11 bps from the previous week, and the 10 - year TIPS yield closed at 1.72%, a decrease of 8 bps from the previous week [28]. US Dollar Index and Liquidity - Last week, the US dollar index and the gold price moved in opposite directions. Gold rose 3.4%, and the US dollar index fell 0.1% to 97.6, with the rolling correlation between them decreasing. The US dollar appreciated 0.7% against the yen, depreciated 0.3% against the euro, and depreciated 0.1% against the pound [34]. - As of February 24, the total position of the US dollar index decreased. The non - commercial long positions decreased by 2,121 contracts to 13,300 contracts, and the non - commercial short positions decreased by 4 contracts to 15,100 contracts, with the short side dominant. In terms of position ratios, the non - commercial long position ratio was 51%, a decrease from the previous week, and the non - commercial short position ratio was 58%, an increase from the previous week [38]. - Last week, the 3 - month Basis Swap of the yen and the euro decreased month - on - month, and the financing cost of offshore US dollar liquidity increased [41]. Inflation High - Frequency Indicators - Last week, the copper - gold ratio dropped to 2.52, indicating that the growth rate of copper prices was lower than that of gold, and the marginal decline in global total demand momentum [48]. Price Ratios and Volatility - The gold - silver ratio fluctuated downward because the increase in the gold price was less than that of silver last week; the gold - copper ratio increased because the increase in the gold price was greater than that of copper; the gold - oil ratio increased month - on - month because the increase in the oil price was less than that of gold [57]. - From the perspective of rolling correlation, the correlation between gold and the US dollar index and copper decreased, while the correlation with crude oil increased [63]. - The internal - external premiums of silver and gold tended to be stable, and the Asian influence was not fully prominent [68]. Inventory and Positions - In terms of inventory, last week, the COMEX gold inventory was 33.321 million ounces, a decrease of 599,000 ounces month - on - month, and the COMEX silver inventory was 360.333 million ounces, a decrease of 5.925 million ounces month - on - month. The SHFE gold inventory was about 105.1 tons, a decrease of 0.012 tons month - on - month, and the SHFE silver inventory decreased by 43.0 tons to 306.6 tons month - on - month [74]. - The SPDR gold ETF position increased by 22.6 tons to 1,101.3 tons, and the current position scale is near the lower median of the past 10 years; the SLV silver ETF position increased by 474.8 tons to 15,992.4 tons, and it is currently at a medium - to - high level [80]. - The total COMEX gold position increased by 13,104 lots to 420,000 lots. Among them, the non - commercial long positions decreased by 1,783 lots to 211,000 lots, and the short positions decreased by 1,045 lots to 52,000 lots, indicating an increase in the short - side power of gold allocation. In terms of position ratios, the non - commercial long position ratio decreased to around 50%, and the non - commercial short position ratio decreased to around 12% [86]. - The total COMEX silver position decreased by 6,042 lots to 125,000 lots. Among them, the non - commercial long positions decreased by 4,126 lots to 33,000 lots, and the short positions decreased by 2,383 lots to 10,000 lots, indicating an increase in the short - side power of silver allocation. In terms of position ratios, the non - commercial long position ratio decreased to around 25.9%, and the non - commercial short position ratio decreased to around 8.2% [91].

Group 1 - The core viewpoint of the article suggests that the stabilization of the U.S. real estate market may signal the onset of a new round of inflation, characterized by declining interest rate expectations rather than tightening, leading to a weaker dollar [2] - The K-shaped economic recovery starting in the second half of 2024 indicates that high-income groups and AI sectors are supporting GDP resilience, while traditional industries and low-income groups are contracting [3][8] - The real estate sector is identified as a "watchtower" for the K-shaped economy, as over 40% of assets for low-income households are in real estate, and the construction industry's hiring rate is expected to decline the most in 2025 [3][13] Group 2 - The current housing affordability index is at a historical low but remains above 100, indicating that median-income families can still afford to purchase homes [4][12] - The decline in housing affordability can be attributed to high home prices (60%) and high interest rates, with potential for improvement if mortgage rates drop below 5.6% or the price-to-income ratio falls to 3.5 [4][15] - The resilience of income growth (4-5% in 2025) compared to the slower growth of median home prices (1-2%) supports a favorable outlook for housing affordability [4][16] Group 3 - Post-pandemic high home prices have suppressed demand, leading to a deflationary phase in housing prices, but a lack of supply suggests that prices may rebound as demand stabilizes [5][21] - The U.S. real estate market has faced long-term supply shortages due to regulatory issues, labor shortages, and supply chain disruptions, making it increasingly difficult to build homes [5][24] - Existing home supply is constrained by high interest rates, and the market is primarily driven by improvement-driven demand, indicating that existing home prices are more elastic than new home prices [5][26] Group 4 - Housing inflation typically leads CPI by about 18 months, but in the context of a K-shaped economy, inflation expectations are coupled with declining interest rate expectations, resulting in a weaker dollar [6][29] - The market is beginning to accept a loss of independence for the Federal Reserve, reflected in the long-term U.S. Treasury yields anchoring inflation expectations at 2.4% [6][29] - There is a risk that the 10-year U.S. Treasury yield may exceed 4.5%, with a possibility of challenging 5% due to the self-reinforcing cycle of inflation expectations [6][29]

Summary of Conference Call Notes Industry Overview - The focus is on the convertible bond market, which has reached high valuation levels, comparable to the mid-2015 bull market. New bond pricing has even exceeded those levels, indicating a need to be cautious of overvaluation risks [2][3]. Key Points and Arguments 1. **High Valuation Risks**: Convertible bonds have seen a significant increase in premium rates, rising by 6-7 percentage points since the beginning of the year, with valuation volatility reaching 3-4 percentage points. Current valuations are at a high level, similar to the mid-2015 bull market [3][4]. 2. **Impact of Terms Adjustment**: Recent adjustments in terms have led to a compression of premium rates for high-premium convertible bonds, highlighting the importance of existing terms in supporting bond valuations [2][3]. 3. **Market Dynamics**: The stock market's adjustment due to global liquidity shocks has negatively impacted underlying stocks, which in turn affects convertible bonds. The decline in underlying stocks has led to a lagging decline in convertible bonds after reaching their peak [3]. 4. **Supply and Demand Factors**: The supply of convertible bonds has rapidly decreased since August 2023, with a notable drop in the positions of convertible bonds in secondary debt funds from 14-15% to 6-7%. This has led to a dispersion of market pricing power, with bulls dominating the pricing landscape [3][4]. 5. **Investment Strategy**: The current strategy should focus on high-quality, existing bonds with a willingness to continue, as these are the main targets for capital clustering and valuation elevation. Bonds that have not significantly risen above 150 yuan face redemption issues, necessitating attention to the short-term performance of underlying stocks [4][5]. Additional Important Insights - **Market Recovery Expectations**: The convertible bond market is expected to see a recovery during the regulatory vacuum period around the Spring Festival, which may boost demand due to increased scarcity [4]. - **Alpha Generation Strategies**: To generate alpha in the current high-valuation environment, it is recommended to streamline operations and focus on bonds with strong performance and a willingness to hold, avoiding losses while capturing gains from underlying stock increases [6]. - **Outlook for Pure Bond Market**: The outlook for the pure bond market in February 2026 is optimistic, with expectations of further interest rate declines and a stable liquidity environment due to supportive central bank policies [7][9]. - **Interest Rate Trends**: The overall interest rate trend for Q1 2026 is expected to remain stable and potentially decline, influenced by seasonal patterns and central bank actions [9][10]. Conclusion The convertible bond market is currently characterized by high valuations and volatility, necessitating careful investment strategies focused on quality and existing bonds. The overall outlook for the bond market remains positive, with expectations of stable liquidity and potential interest rate declines.

Core Viewpoint - On January 29, a rare event occurred in the market where resource-related LOFs, including oil LOFs from E Fund and Jiashi, experienced a collective surge, with many products hitting the daily limit up [1][3]. Group 1: Market Performance - Multiple LOF products announced suspension of trading after a week of rapid price increases, indicating a strong market reaction [2][8]. - Key LOF products that hit the daily limit include E Fund Oil LOF, Jiashi Oil LOF, and several others, with price increases around 10% [2][3]. - The WTI crude oil futures reached $65.002 per barrel, marking a 2.83% increase, the highest since September 2025 [5]. Group 2: Trading Dynamics - High premium rates and strong market sentiment contributed to the surge in oil-related LOFs, with investors utilizing the "off-market subscription + on-market sale" arbitrage mechanism [4][6]. - The trading volume for the oil LOF products was significant, with some experiencing a turnover rate of 38.33% [4]. Group 3: Regulatory Actions - Several fund companies announced collective suspensions of resource-related LOFs to warn investors about the risks associated with high trading premiums [8][9]. - Starting January 30, the daily subscription limit for certain oil LOFs was drastically reduced to as low as 2 yuan, indicating tighter controls on fund inflows [6][10]. Group 4: Investor Sentiment - Analysts noted that the high premium rates could lead to significant losses for investors if international oil prices decline or if there is a withdrawal of arbitrage funds [8][9]. - The overall sentiment in the market remains cautious due to the potential for rapid price corrections [9].

27 January 2026 | 11:08PM HKT Economics Research China: PBOC Q4 Surveys: Lower loan demand, but slightly more willingness to consume and better employment sentiment Bottom line: PBOC released its Q4 surveys of bank loan officers, enterprises, and urban depositors on January 23. The latest data paint a mixed picture, with weakening credit demand and household price expectations but a marginal improvement in employment sentiment. PBOC's bank survey suggests loan demand fell in Q4, especially among large enter ...

Report Summary 1. Industry Investment Rating - Not provided in the report 2. Core Viewpoints - Short - term: On July 9, the main contract of Shanghai gold futures closed down 1.0% to 776.82 yuan/gram, and the main contract of Shanghai silver futures closed down 0.2% to 889 yuan/kilogram. Trump extended the tariff suspension to August 1 and pressured for talks. The new tariff letter's tax rate did not increase significantly, and the US said it would meet with Chinese officials next month. This eased tariff concerns and reduced safe - haven demand, which was bearish for precious metals from a macro perspective. Also, the US economic data was okay, the economic downturn risk in the second half of the year weakened, and the Fed was unlikely to cut interest rates in the short term, which also suppressed precious metals. However, due to tariff policy uncertainties, China's central bank's continuous gold - buying for 8 months, and weakening US inflation expectations with a September rate - cut expectation, gold prices were unlikely to decline significantly. So, in the short term, precious metals were expected to continue to fluctuate [4]. - Medium - to - long - term: Against the backdrop of the trade war, the Fed still had a certain probability of cutting interest rates this year. With global geopolitical uncertainties, intensifying major - power games, and the trend of de - dollarization, global central banks' gold - buying continued. The medium - to - long - term upward trend of gold remained unchanged. The strategy suggested continuous low - buying [4]. 3. Summary by Directory Price Tracking - **15 - point prices of domestic and foreign gold and silver**: On July 9, 2025, London gold spot was 3293.35 dollars/ounce, down 1.3% from July 8; London silver spot was 36.60 dollars/ounce, down 0.7%. COMEX gold was 3301.80 dollars/ounce, down 1.3%; CONEX silver was 36.80 dollars/ounce, down 0.7%. AU2508 was 764.70 yuan/gram, down 1.2%; AG2508 was 8879.00 yuan/kilogram, down 0.5%. AU (T + D) was 763.00 yuan/gram, down 1.2%; AG (T + D) was 8864.00 yuan/kilogram, down 0.6% [3]. - **Price differences/ratios**: On July 9, 2025, the gold TD - SHFE active price difference was - 1.7 yuan/gram, up - 8.6% from July 8; the silver TD - SHFE active price difference was - 15 yuan/kilogram, up 36.4%. The gold domestic - foreign (TD - London) price difference was 5.50 yuan/gram, up 11.3%; the silver domestic - foreign (TD - London) price difference was - 574 yuan/kilogram, up - 1.9%. The SHFE gold - silver main ratio was 86.12, down - 0.7%; the COMEX main ratio was 89.72, down - 0.6%. AU2512 - 2508 was 3.82 yuan/gram, down - 6.4%; AG2512 - 2508 was 40 yuan/kilogram, down - 14.9% [3]. Position Data - **ETF and COMEX non - commercial positions**: As of July 8, 2025, the gold ETF - SPDR was 946.51 tons, down - 0.12% from July 7; the silver ETF - SLV was 14935.15145 tons, up 0.45%. COMEX gold non - commercial long positions were 258631 contracts, up 1.00%; non - commercial short positions were 56651 contracts, down - 7.24%; non - commercial net long positions were 201980 contracts, up 3.58%. CONEX silver non - commercial long positions were 82747 contracts, down - 2.06%; non - commercial short positions were 19347 contracts, down - 10.20%; non - commercial net long positions were 63400 contracts, up 0.72% [3]. Inventory Data - **Domestic and foreign inventories**: On July 9, 2025, SHFE gold inventory was 21585.00 kilograms, up 0.13% from July 8; SHFE silver inventory was 1320909.00 kilograms, down - 1.04%. On July 8, COMEX gold inventory was 36876794 ounces, up 0.43% from July 7; COMEX silver inventory was 497932946 ounces, down - 0.07% [3]. Related Market Indexes - **July 9, 2025 data**: The dollar index was 97.49, up 0.01% from July 8; the US 2 - year Treasury yield was 3.90%, unchanged; the 10 - year Treasury yield was 4.42%, up 0.06%. VIX was 16.81, down - 5.51%; the S&P 500 was 6225.52, up 0.45%; NYMEX crude oil was 68.18 dollars/barrel, down - 0.07%. The dollar/yuan central parity rate was 7.15, up 0.38% [4].