Summary of Key Points from the 2026 Global Macro Conference on China Industry Overview - The conference focused on the Chinese economy, policy, and markets, reflecting the views of both domestic and global investors regarding China's economic outlook and key issues affecting the market [5][6]. Core Insights 1. **GDP Growth Expectations**: - Over two-thirds of investors anticipate China's official real GDP growth for 2026 to be between 4.6% and 4.9%. The baseline scenario predicts a growth of 4.8%, which is above the Bloomberg consensus of 4.5% due to resilient export growth and policy easing [6][10]. - More than half of the investors expect annualized real GDP growth to be 4-5% during the 15th Five-Year Plan (2026-30), an increase from last year's expectation of 3-4% [6][16]. 2. **PPI Deflation Outlook**: - 82% of investors believe that PPI deflation will end in 2027 or later, indicating a shift in market sentiment towards caution compared to last year [6][12]. - The baseline forecast expects PPI inflation to rise from -2.6% in 2025 to -0.7% in 2026, turning positive by late 2026 or early 2027 [6][12]. 3. **Real Estate Market Predictions**: - Only 7% of investors expect house prices to bottom out in 2026, while 34% predict this will happen in 2027, and nearly 60% expect it to occur in or after 2028 [6][18]. 4. **RMB Exchange Rate Expectations**: - More than 90% of investors expect the RMB to appreciate against the USD this year, with a target range of 6.8-7.0 [6][14]. - Last year, only 3% of attendees anticipated the USDCNY to fall below 7.0 by the end of 2025 [9][14]. 5. **Equity Market Outlook**: - Over 90% of investors expect the China equity market price index to increase by at least 10% in 2026, aligning with the equity strategy team's views [9][23]. - However, research indicates that a stock market rally may have limited impact on household consumption, benefiting only a specific subgroup of the population [9]. 6. **Geopolitical Concerns**: - Investors expressed heightened concerns regarding geopolitical risks and military conflicts compared to other factors such as fiscal sustainability and US-China tensions [9][25]. Additional Important Insights - Domestic investors showed more confidence in China's export resilience, while foreign investors were more cautious about sustainability [8]. - Key topics of interest during client meetings included expectations for the "Two Sessions," property market policies, and consumption boosting measures [8]. - The majority of investors believe that central bank surprises this year may come from the US and Japan rather than China, with expectations of two 10 basis point cuts in the PBOC policy rate in 2026 [9][20]. This summary encapsulates the key findings and insights from the conference, highlighting the evolving perspectives on China's economic landscape and investor sentiment.

Summary of Key Points from the Conference Call Industry Overview - The conference focused on the macroeconomic outlook for Asia excluding Japan, with insights gathered from seminars held in Singapore and Hong Kong in December 2025 [2][4]. Economic Outlook - **US Monetary Policy**: A majority of respondents (64% in Singapore and 69% in Hong Kong) expect 2-3 Federal Reserve rate cuts by the end of 2026, which is lower than the market's pricing of approximately 90 basis points [5][6]. - **China PPI Inflation**: About 91% of respondents anticipate that China's Producer Price Index (PPI) will remain in deflation in 2026, with expectations of improvement to between -1.0% and -2.0% from -2.8% year-on-year in the first 10 months of 2025 [5][8]. - **Japan's Monetary Policy**: Nearly all respondents believe that the Bank of Japan's (BOJ) hiking cycle is not over, with a plurality expecting 1-2 more hikes to a terminal rate of 0.75-1.00% [5][12]. - **India's Monetary Policy**: Views are mixed; 49% in Singapore think the Reserve Bank of India (RBI) has completed its easing cycle, while 43% in Hong Kong expect at least two more rate cuts [5][13]. - **Bank of Korea (BOK) Outlook**: A majority (58% in Singapore and 61% in Hong Kong) agree that the BOK will maintain an extended hold through the end of 2026 [5][16]. - **ASEAN Growth from China Transshipments**: 74% of Hong Kong respondents and 35% of Singapore respondents believe Vietnam will benefit the most from China's transshipment of US-destined exports, despite narrowing tariff gaps [5][22]. Market Strategy - **FX Expectations**: 57% of respondents expect the DXY to decrease in the next six months, with a notable divide between Singapore (57% expecting an increase) and Hong Kong (65% expecting a decrease) [21][26]. - **Rates Strategy**: Singapore swaps were the most favored (50%) among Singapore respondents, while Korea swaps were preferred by 44% of Hong Kong respondents [21][32]. - **Equity Market Performance**: 33% of respondents expect China/Hang Seng to be the best-performing equity market by Q1 2026, closely followed by Japan/TOPIX at 31% [21][33]. - **Credit Preferences**: Both Singapore and Hong Kong respondents showed a strong preference for Asian Additional Tier 1 (AT1) credits for H1 2026, with 44% and 33% respectively [21][36]. Additional Insights - The conference highlighted differing regional perspectives, particularly in monetary policy expectations and market performance forecasts, indicating a complex economic landscape in Asia [5][21]. - The data reflects a cautious optimism among investors regarding potential rate cuts and economic recovery, particularly in China and Japan, while also recognizing the risks associated with inflation and monetary policy shifts [5][6][21].

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the inflation metrics in China, specifically the Consumer Price Index (CPI) and Producer Price Index (PPI) for October 2023 Core Insights 1. **CPI Inflation**: - China's headline CPI inflation increased to +0.2% year-over-year (yoy) in October from -0.3% yoy in September, indicating a broad-based price rise in goods and services sectors [1][3] - Month-on-month, the CPI inflation rose to +3.3% (annualized, seasonally adjusted) in October compared to -1.7% in September [3] 2. **Food Inflation**: - Year-over-year food inflation improved to -2.9% in October from -4.4% in September, driven by price increases in fresh vegetables and fruits [4] - Pork prices decreased by 16.0% yoy in October, a slight improvement from -17.0% in September [4] 3. **Non-Food Inflation**: - Non-food CPI inflation rose to +0.9% yoy in October from +0.7% in September, with broad-based increases across goods and services [5][7] - Energy price deflation eased, contributing to the overall increase in non-food inflation [5] 4. **PPI Inflation**: - Year-over-year PPI inflation rose to -2.1% in October from -2.3% in September, indicating a lessening of price declines in downstream sectors [9] - Month-on-month, PPI inflation fell to -0.9% (annualized, seasonally adjusted) in October compared to 0.0% in September [9] 5. **Core CPI and Services Inflation**: - Core CPI inflation (excluding food and energy) rose to +1.2% yoy in October from +1.0% in September [8] - Services inflation increased to +0.8% yoy in October from +0.6% in September, with transportation services prices up by 0.3% yoy [8] Additional Important Insights - The improvements in CPI and PPI are primarily attributed to a low base from the previous year rather than a significant rise in spot prices [9] - The report suggests that the seasonal demand around the Golden Week may have influenced the price increases, but the sustainability of this trend remains uncertain [1] This summary encapsulates the key findings and insights from the conference call regarding China's inflation metrics for October 2023, highlighting both the improvements and the underlying factors influencing these changes.

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