Core Insights - The 2025 Policy Address by Hong Kong Chief Executive John Lee emphasizes deepening reforms and enhancing the quality of life, aiming to solidify Hong Kong's status as an international financial center while fostering industrial innovation and productivity [1] Financial Sector Developments - The report highlights the importance of the international financial center, focusing on various dimensions such as stocks, bonds, gold, and green finance, with mechanisms and technological innovations aimed at enhancing global attractiveness [1] - In the stock market, measures include supporting mainland tech companies in financing through the Hong Kong Stock Exchange (HKEX) and optimizing the main board listing and structured product issuance mechanisms [1] - The government plans to explore shortening the stock settlement cycle to T+1 and promote the inclusion of Hong Kong's RMB trading counter in the "Stock Connect" southbound trading [1] Bond and Currency Market Initiatives - The Hong Kong government will advance measures for the "fixed income and currency" sector, expanding the collateral usage of the Central Moneymarkets Unit (CMU) and promoting offshore mainland government bonds as collateral for international clearing [2] - A new "RMB Business Funding Arrangement" will be established to provide long-term RMB financing to enterprises, enhancing Hong Kong's role as an offshore RMB hub [2] Gold and Green Finance Goals - The report sets a target to achieve 2,000 tons of gold storage within three years, with plans to expand gold storage facilities and establish a central clearing system for gold in Hong Kong [2] - In green finance, HKEX will deepen cooperation with the Greater Bay Area's carbon market, and the government will continue issuing sustainable bonds while promoting tokenization of carbon trading [2] Cross-Border Financial Cooperation - The report emphasizes the integration of the Greater Bay Area's industries and finance, with plans to optimize cross-border credit and data verification platforms, and explore digital finance cooperation with Shenzhen [3] - Hong Kong aims to collaborate with exchanges in the Greater Bay Area to develop new businesses in bulk commodity and carbon trading [3]

Group 1: Gold Demand Trends - Chinese wholesale gold demand fell to 85 metric tons in August, the weakest since 2010, down 9 tons from July [1][2] - The decline in gold demand is attributed to subdued bar and coin sales as investors shift focus to equities [2] - Despite the People's Bank of China increasing gold reserves for 10 consecutive months, private demand has decreased in 2025 [5] Group 2: Price Dynamics and Investor Behavior - Gold prices on the London Bullion Market rose nearly 4%, reaching a record high above $3,700 per troy ounce, while the Shanghai Futures Exchange saw a 26% drop in trading activity from July to August [3][6] - Price fatigue among Chinese investors has deterred new gold purchases, with muted tonnage withdrawn from the Shanghai Gold Exchange compared to historical averages [7] Group 3: Shift to Equities - Chinese investors are increasingly moving from gold to domestic stocks, with the CSI300 Index rising 10% in August and approximately 16% year-to-date due to aggressive policy support [9][10] - Retail investors have pulled 6 billion Chinese yuan (approximately $834 million) from gold ETFs in August, reducing holdings by 7.7 tons [6]

Core Points - The Chief Executive of Hong Kong, John Lee, presented the 2025 Policy Address, focusing on economic development and enhancing the quality of life for residents [1] - The address outlines specific measures to accelerate the development of the Northern Metropolis, industrial innovation, and reinforce Hong Kong's status as an international financial center [1] Financial Sector Initiatives - Hong Kong will assist mainland tech companies in financing and explore shortening the stock settlement cycle to T+1 [2][3] - The government aims to enhance the bond market by improving financial infrastructure and establishing connections with markets in Switzerland and the UAE [2][3] - Plans to establish an international gold trading market include expanding gold storage capabilities to exceed 2000 tons within three years [3][4] Commodity and Family Office Development - Collaboration with Greater Bay Area exchanges to develop commodity and carbon trading [4] - The government will optimize tax incentives for family offices to attract more funds to Hong Kong [4][5] Digital Asset and Stablecoin Regulation - The Hong Kong Monetary Authority (HKMA) will promote tokenized deposits and establish a regulatory framework for stablecoin issuers [6] - The Securities and Futures Commission (SFC) is working on expanding the types of digital asset products available to professional investors [6] Innovation and Technology - A HK$3 billion "Frontier Technology Research Support Scheme" will be launched to attract international research talent in AI [7] - The government plans to accelerate the development of autonomous vehicles and establish a regulatory framework for ride-hailing services [8] Clinical Trials and Pharmaceutical Development - The government aims to attract more pharmaceutical companies to conduct clinical trials in Hong Kong, particularly for rare diseases and advanced therapies [12] - A new "International Clinical Trial Academy" will be established to train clinical trial professionals in the Greater Bay Area [12] Investment and Economic Policies - The "New Capital Investor Entry Scheme" will be optimized to encourage investments in Hong Kong, with increased limits for non-residential property investments [13][14] - The government will enhance cross-border payment systems and improve cash assistance distribution for elderly residents in mainland China [13][14] Governance and Management - A "Department Head Responsibility System" will be established to strengthen governance and accountability within the government [15] Innovation Fund Launch - The "Innovation and Technology Industry Guidance Fund" is set to launch in the 2026-2027 fiscal year to promote strategic investments in emerging industries [16]

Core Points - The 2025 Policy Address by Hong Kong Chief Executive John Lee emphasizes economic development and aligning with national strategies [1] - Specific measures include accelerating the development of the Northern Metropolis, industrial innovation, and reinforcing Hong Kong's status as an international financial center [1] Development of Northern Metropolis - The Northern Metropolis is identified as a new economic engine for Hong Kong, with plans to establish a "Northern Development Committee" led by John Lee [2] - The government will create dedicated legislation to facilitate the development of the Northern Metropolis, including funding channels for park companies and streamlined cross-border logistics [2] - The first phase of the Hong Kong Science and Technology Innovation Cooperation Zone is complete, with major industries like life sciences and AI tenants moving in [2] Industrial Development and Innovation - Emphasis on artificial intelligence (AI) development, including a HKD 3 billion funding plan to attract international research talent [4] - Plans to establish the "Hong Kong AI Research Institute" by 2026 with a budget of HKD 1 billion to promote AI research and application [4] - The life sciences sector is set to grow, with initiatives to attract pharmaceutical companies for clinical trials and the establishment of an "International Clinical Trial Academy" [5] Reinforcing Hong Kong's Financial Center Status - The government aims to support tech companies in raising funds through the stock market and improve listing mechanisms [6] - Initiatives to enhance the bond market include creating a centralized platform for managing various assets and promoting offshore Chinese government bonds [6][7] - Plans to establish an international gold trading market and enhance commodity trading, including carbon trading [7][8] Stock Market Performance - Following the Policy Address, the Hang Seng Index rose by 1.41%, reaching a new high [9] - The Hong Kong stock market has seen significant recovery in 2025, with the Hang Seng Index up over 33% year-to-date and new stock issuance increasing dramatically [10][11] - The average daily trading volume in the Hong Kong stock market has surged by 118% year-on-year [11]

Report Information - Report Title: "Large Class Asset Morning Report" - Report Date: September 17, 2025 - Author: Macro Team of the Research Center [2] Global Asset Market Performance 10 - Year Treasury Yields of Major Economies - Yields and Changes: On September 16, 2025, the 10 - year Treasury yields of the United States, the United Kingdom, France, etc. were 4.029, 4.638, 3.488 respectively. There were various changes in the latest, weekly, monthly, and yearly periods. For example, the latest change in the US was -0.010, and the yearly change was 0.319 [3]. 2 - Year Treasury Yields of Major Economies - Yields and Changes: On September 16, 2025, the 2 - year Treasury yields of the United States, the United Kingdom, Germany, etc. were 3.560, 3.960, 2.000 respectively. There were also different changes in different time - spans [3]. Dollar Exchange Rates Against Major Emerging - Market Currencies - Exchange Rates and Changes: On September 16, 2025, the dollar - to - Brazilian real exchange rate was 5.297, and there were percentage changes in the latest, weekly, monthly, and yearly periods. For instance, the latest change was -0.37%, and the yearly change was -5.40% [3]. Stock Indices of Major Economies - Index Values and Changes: On September 16, 2025, the S&P 500 was 6606.760, the Dow Jones Industrial Average was 45757.900, etc. There were percentage changes in the latest, weekly, monthly, and yearly periods. For example, the latest change in the S&P 500 was -0.13%, and the yearly change was 22.16% [3]. Credit Bond Indices - Index Changes: The latest, weekly, monthly, and yearly changes of credit bond indices such as the US investment - grade credit bond index, the euro - zone investment - grade credit bond index, etc. were presented. For example, the latest change in the US investment - grade credit bond index was 0.04%, and the yearly change was 4.72% [3] Stock Index Futures Trading Data Index Performance - Closing Prices and Changes: The closing prices of A - shares, CSI 300, SSE 50, etc. were 3861.87, 4523.34, 2947.82 respectively, with corresponding percentage changes [4]. Valuation - PE Ratios and Changes: The PE (TTM) ratios of CSI 300, SSE 50, and others were 14.09, 11.80, 34.32 respectively, with环比 changes [4]. Risk Premium - Risk Premium and Changes: The risk premiums (1/PE - 10 - year interest rate) of S&P 500 and German DAX were -0.39 and 2.50 respectively, with环比 changes [4]. Fund Flows - Fund Flow Values: The latest values and 5 - day average values of fund flows in A - shares, the main board, etc. were provided. For example, the latest value of A - share fund flow was -305.93 [4]. Trading Volumes - Trading Volumes and Changes: The latest trading volumes of the Shanghai and Shenzhen stock markets, CSI 300, etc. were 23414.02, 6137.28, etc., with环比 changes [4]. Main Contract Basis and Premium/Discount - Basis and Premium/Discount: The basis and percentage of premium/discount of IF, IH, IC were given. For example, the basis of IF was -6.54, and the percentage was -0.14% [4] Treasury Bond Futures Trading Data Closing Prices and Changes - Closing Prices and Percentage Changes: The closing prices of Treasury bond futures T00, TF00, T01, TF01 were 108.000, 105.795, 107.680, 105.680 respectively, with corresponding percentage changes [5]. Fund Interest Rates - Interest Rates and Daily Changes: The R001, R007, and SHIBOR - 3M interest rates were 1.4778%, 1.4998%, 1.5530% respectively, with daily changes in basis points [5]

Core Viewpoint - Global market risk appetite continues to rise, with US stocks reaching historical highs as investors focus on upcoming retail data and prepare for the widely expected first interest rate cut by the Federal Reserve this year [1]. Group 1: Market Performance - Asian stock markets have reached record highs, while European stocks opened mixed, and US stock index futures are collectively rising [1][2]. - The S&P 500 index has surpassed the 6600-point mark [2]. - The MSCI Asia stock index has achieved a historical high and is on track for its best consecutive gains in nearly five years [3]. Group 2: Economic Indicators - August retail sales data is expected to grow by 0.2%, which will provide critical reference for Federal Reserve decision-making [1]. - There is a general expectation of a 25 basis point rate cut on Wednesday, with some investors considering the possibility of a 50 basis point cut [1]. Group 3: Bond Market - US Treasury prices have risen, with the 10-year yield dropping by 1 basis point to 4.03% as investors bet on an impending rate cut cycle by the Federal Reserve [4][6]. - The 10-year Treasury yield is reported at 4.029%, reflecting a slight decrease [6]. Group 4: Commodity Market - Spot gold has increased by $7, currently reported at $3694 per ounce, approaching the $3700 mark [6]. Group 5: Currency Market - The US dollar has fallen to its lowest level against all major currencies since July [9].

Core Insights - The article presents a comprehensive market monitoring dashboard covering multiple asset classes, including stocks, forex, commodities, and cryptocurrencies, providing traders with indicators for trend, reversal, volatility, and overbought/oversold conditions [1]. Asset Classification - The assets are categorized into four main classes: Equity, FX, Commodities, and Crypto, each with specific indicators for analysis [2]. Key Assets and Recent Changes - Key assets to focus on include: - **Equity**: SP500_US and Nasdaq100_US are highlighted for their significant volatility and potential for trend continuation or reversal [1]. - **China Stocks**: CSI300_China and SSE_China are noted for their low valuations and potential rebound, albeit with high volatility [1]. - **Forex**: USDJPY and USDCNY are emphasized due to significant central bank policy differences, while EURUSD and GBPUSD are suitable for macro hedging [1]. - **Commodities**: Gold and CrudeWTI are driven by safe-haven demand and inflation expectations, while CopperHG and Soybean are sensitive to economic cycles and Chinese demand [1]. - **Cryptocurrency**: BTCUSD and ETHUSD are recognized for their high volatility and suitability for swing trading [1]. Potential Trading Opportunities - Trading opportunities are identified based on specific numerical indicators, such as extreme Sigma values indicating potential rebounds or trend continuations [3]. Suggested Operational Framework - Strategies include: - **Rebound Opportunities**: Identifying assets with low Sigma values and reversal signals for potential rebounds [4]. - **Trend Continuation**: Following assets where EMA20 is above EMA100, indicating an upward trend [4]. - **Volatility Strategies**: Utilizing high VolRank and rising ATR% for options strategies or breakout trades [4]. Risk Considerations - Risks include: - **Overbought Risks**: High Sigma values indicating potential short-term overheating [4]. - **Trend Reversal Risks**: Signals indicating potential reversals, especially with high deviation [4]. - **Liquidity/Volatility Risks**: Extreme market conditions requiring position control [4]. Multi-Asset Comparison and Risk Management - Emphasis on comparing assets within the same category and using multiple indicators for comprehensive analysis [4]. - Risk management is prioritized, with all trades requiring stop-loss measures based on volatility and drawdown metrics [4]. - The technical analysis should be complemented with macroeconomic factors such as central bank policies and geopolitical events [4].

Core Viewpoint - The article discusses the relationship between volatility and risk, emphasizing that while volatility is often equated with risk, it can also represent potential returns depending on the investor's perspective [6][34]. Group 1: Academic Perspective on Volatility - Volatility is defined as risk in traditional finance, where it represents the uncertainty of future returns [7][9]. - The Sharpe Ratio is highlighted as a key metric for evaluating fund performance, taking into account the risk taken to achieve returns [8][10]. - Historical volatility is used to quantify risk, with higher volatility indicating greater risk and necessitating higher expected returns [11][12]. Group 2: Practical Perspective on Volatility - Warren Buffett and other value investors argue against equating volatility with risk, focusing instead on the risk of permanent capital loss [15][18]. - The article presents a dichotomy where risk-averse investors view volatility as something to avoid, while risk-seeking investors see it as an opportunity for profit [23][34]. - Different investment strategies are discussed, including those that embrace volatility for potential gains, such as grid trading and trend trading [31][32]. Group 3: Trading Perspective on Volatility - Volatility can be viewed as a tradable commodity, with options pricing reflecting historical volatility [26][27]. - The article explains that risk is a commodity that can be bought and sold, with different strategies catering to varying attitudes towards volatility [25][28]. - The concept of "volatility = returns" is explored, indicating that higher volatility can lead to greater profit opportunities for certain investors [22][24]. Group 4: Conclusion on Volatility - The article concludes that volatility is an inherent aspect of the financial world, influencing investor behavior and creating opportunities for profit [39][40]. - It emphasizes the importance of understanding what can be controlled and what cannot in the context of volatility and investment strategies [38][39].

Core Viewpoint - The article highlights that the current market dynamics, driven by ETFs, quantitative trading, QE, and 0DTE options, are creating a bubble that is likely to burst, with a Shiller CAPE ratio of 38 indicating an inevitable market reset [2][9][14] Group 1: Market Dynamics - The S&P 500 is projected to reach 6512 points in 2025, with a 25% increase in the year, primarily driven by momentum rather than earnings [3] - The Shiller CAPE ratio is at 38, significantly above the historical average of 17, indicating a severe disconnection between valuation and earnings growth, which is only 7-10% [3][9] - The market is experiencing a similar scenario to the lead-up to the 1987 "Black Monday," where momentum and technical risks are overlapping [7][8] Group 2: Momentum Factors - Four key momentum factors are identified as driving the market: index ETFs, quantitative funds, QE liquidity, and 0DTE options [4] - The total assets under management (AUM) of U.S. ETFs reached $12.2 trillion in 2025, a 74% increase from $7 trillion in 2020, with significant inflows into large-cap stocks [4] - Quantitative hedge funds achieved an 11% return in the first half of 2025, with momentum strategy ETFs rising by 15.5%, indicating a strong reliance on price trends [5] - The Federal Reserve's balance sheet is projected to be $6.2 trillion in 2025, still 55% higher than pre-pandemic levels, contributing to a liquidity-driven market environment [6] - Retail trading volume has surged, with retail investors accounting for 10-36% of market activity in 2025, and 0DTE options making up 61% of S&P 500 options volume [6] Group 3: Historical Comparisons - The article draws parallels between the current market conditions and those of 1987, noting that both periods exhibit high CAPE ratios and reliance on momentum-driven trading strategies [9][12] - Historical data shows that when CAPE exceeds 30, markets typically experience a 20-30% decline, suggesting a similar outcome is likely in 2025 [9] Group 4: Investment Implications - The article suggests that value stocks, particularly in sectors like energy and finance, may outperform momentum stocks in the current environment, similar to post-1987 trends [13] - Diversifying assets and returning to fundamental analysis are emphasized as key strategies to navigate the current momentum-driven market [13][14]

Group 1: Market Overview - The global financial market experienced a unique rally where both risk and safe-haven assets rose simultaneously, driven by weak labor market data in the US, paving the way for potential interest rate cuts by the Federal Reserve [1] - Major global stock indices saw significant gains, with the S&P 500 rising approximately 1.6% for the week, marking its best weekly performance of the month and reaching historical highs [1][3] - European stock markets also recorded gains, albeit more modestly, influenced by improved global risk sentiment and the European Central Bank's decision to maintain interest rates [1] Group 2: Regional Market Performance - The Nikkei 225 index in Japan reached a new historical high, benefiting from positive global risk sentiment and a weaker yen, which favored export-oriented companies [2] - Semiconductor and AI-related stocks were key drivers of the Nikkei's rise, reflecting strong performance in these sectors [2] Group 3: Commodity Market Dynamics - Gold emerged as a standout performer, breaking historical highs due to expectations of Fed rate cuts, a weaker dollar, and declining real yields, supported by ongoing central bank purchases and geopolitical uncertainties [2] - The oil market exhibited mixed trends, influenced by concerns over economic slowdown and OPEC+ production increases, while a weaker dollar and ongoing geopolitical tensions provided some support [2]