Core Insights - The report predicts that the old-caliber M1 year-on-year growth will decline from 6.2% in September to approximately 3.4% by the end of the year, while M2 is expected to decrease from 8.4% in September to around 8.0% by year-end [1][10] - The analysis framework for M1 and M2 growth is based on the formula: old-caliber M1 = M2 - other currencies, where M2 is derived from various leverage factors across different sectors [4][14] M1 and M2 Growth Analysis - The report outlines five key factors influencing M2 growth: corporate leverage, household leverage, foreign exchange derivation, government leverage, and other factors, with a projected M2 year-on-year decline of 900 billion [6][20] - The anticipated decline in M1 growth is attributed to a combination of factors, including a decrease in corporate loans by 300 billion and a reduction in household deposits by 6200 billion [7][33] - Historical data indicates that changes in M1 correlate with shifts in PPI and industrial inventory levels, suggesting that M1 serves as a leading indicator for these economic metrics [2][13] Investment Themes - The report emphasizes the importance of understanding the dynamics of M1 and M2 in relation to asset allocation, highlighting that M1's growth is closely tied to the performance of equity markets and corporate profitability [9][33] - The analysis suggests that a stable equity market environment could lead to a shift in household deposits towards investment assets, thereby impacting M1 growth positively [34][40] Future Projections - The report forecasts that M1 growth will be approximately 2.3 trillion, with M2 growth around 25 trillion, reflecting a broader economic context where monetary policy and market conditions play crucial roles [51][53] - The anticipated government bond issuance is expected to decrease, which may further influence M2 growth dynamics in the upcoming quarters [27][30]

Core Viewpoint - The report from CITIC Securities forecasts that the Producer Price Index (PPI) will record year-on-year changes of -2.9% and -2.0% in Q3 and Q4 of 2025, respectively [1] Economic Indicators - The Consumer Price Index (CPI) year-on-year reading for September has rebounded to -0.3%, although the increase is slightly below market expectations [1] - The core CPI has shown a continuous increase for five months, marking the first time in nearly 19 months that the growth rate has returned to 1% [1] Price Trends - There is a notable divergence in price trends, with durable consumer goods and gold jewelry prices performing well, while service prices remain relatively weak [1] - Looking ahead, the effects of the pig cycle misalignment are expected to gradually weaken, leading to a significant rebound in the CPI year-on-year reading in Q4 of 2025 [1] Future Projections - Under a neutral scenario, the year-end CPI year-on-year reading is expected to reach a peak of around 1.0% [1]

Core Viewpoint - CITIC Securities predicts that under a neutral scenario, the year-on-year Producer Price Index (PPI) will record -2.9% and -2.0% in the third and fourth quarters of 2025 respectively [1] Group 1: PPI and CPI Trends - The "pig cycle misalignment" has led to a significant decline in the Consumer Price Index (CPI), with a year-on-year reading dropping to -0.4% [1] - In August, the impact of pork prices contributed to a decrease in CPI by approximately 0.24 percentage points [1] - The core CPI has been on an upward trend since April, with notable increases in prices for gold jewelry and durable consumer goods benefiting from trade-in subsidy policies [1] Group 2: Future Expectations - Looking ahead, the effects of the pig cycle misalignment are expected to gradually weaken starting in September, which will support improvements in future CPI year-on-year readings [1] - The CPI year-on-year reading is anticipated to show a significant rebound in the fourth quarter of 2025, with the highest point potentially reaching around 1.0% by the end of the year [1]

Group 1 - The article highlights the upcoming release of China's June CPI and PPI data, scheduled for 09:30 Beijing time [1]