Market Overview - In July, global risk appetite increased due to the passage of the "Big and Beautiful" bill, leading to a rise in equity markets, particularly in the Asia-Pacific region[3] - The "Big and Beautiful" bill, passed on July 3, includes $4 trillion in tax cuts and at least $1.5 trillion in spending cuts over the next decade, enhancing global risk appetite[8] Asset Flow - In July, global funds saw a significant slowdown in inflows to money market funds, with approximately $63 billion flowing in compared to $156 billion in June[19] - Developed market equities attracted $43.4 billion in July, up from $39 billion in June, while emerging market equities saw a decrease in inflows from $8 billion to $5 billion[19] Fund Performance - The performance of major indices in July showed positive returns: CSI 300 (3.5%) > Hang Seng Index (2.9%) > S&P 500 (2.2%) > Nikkei (1.4%) > STOXX Europe 600 (0.9%)[8] - In the U.S., there was a notable outflow from technology and healthcare sectors, while financials, industrials, and utilities saw inflows[39] China Market Dynamics - In July, China's equity market experienced a net outflow of $1.57 billion, while fixed income funds saw inflows of $8.38 billion, accounting for 54.81% of total inflows in emerging markets[3] - Passive equity funds shifted from outflows in June to inflows in July, with $313 million entering the Chinese market[3] Global Fund Allocation - As of June, the allocation of global funds to the U.S. increased to 61.0%, while China's allocation remained stable at 25.1%, indicating potential for growth[3] - The allocation to emerging markets decreased slightly to 42.7%, nearing historical averages[3]

Report Title - Domestic commodity futures mostly rose, with the black sector leading the gains - CITIC Futures Morning Report 20250725 [1] Core Viewpoints - Overseas fundamentals are relatively stable, but the potential new Fed Chair's stance may affect interest - rate cut expectations. The US tariff policies are expected to be finalized in early August. Domestically, the Q2 economic data shows resilience, and there are expectations for policy - driven growth, especially in Q4. Domestic assets present structural opportunities, and long - term weak - dollar trend is expected [7]. Industry Investment Ratings - Not provided in the report Summary by Directory 1. Macro Highlights - **Overseas Macro**: US consumer confidence improved in June, leading to a slight rebound in CPI and retail sales. The potential Fed Chair nominees generally advocate for interest - rate cuts, with nominations expected between Oct - Dec 2025. US tariff policies may be finalized on Aug 1 and 12, with uncertainties remaining [7]. - **Domestic Macro**: China's Q2 GDP grew 5.2% year - on - year, and June exports rose 5.8% year - on - year, better than expected. High - frequency data shows an increase in infrastructure investment. As the Politburo meeting approaches, there are expectations for policies to boost domestic demand, with more incremental policies likely in Q4 [7]. - **Asset Views**: Domestic assets have structural opportunities. Overseas, attention should be paid to tariff frictions, Fed policies, and geopolitical risks. A long - term weak - dollar trend is expected, and strategic allocation to resources like gold and copper is recommended [7] 2. Viewpoint Highlights Financial Sector - **Stock Index Futures**: There is no need to overly worry about market adjustments, with expectations of incremental funds. The short - term outlook is for a volatile upward trend [9]. - **Stock Index Options**: Volatility is increasing, but market sentiment remains positive. However, option liquidity is deteriorating, and the short - term is expected to be volatile [9]. - **Treasury Bond Futures**: Bond market sentiment is weak. Key factors include unexpected tariff policies, supply, and monetary easing. The short - term outlook is volatile [9] Precious Metals - Gold and silver are in a short - term adjustment phase. Key factors include Trump's tariff policies and Fed's monetary policy. The short - term outlook is volatile [9] Shipping - For container shipping on the Europe route, attention is on the balance between peak - season expectations and price - increase implementation. Key factors are tariff policies and shipping companies' pricing strategies. The short - term outlook is volatile [9] Black Building Materials - **Steel and Iron Ore**: Market sentiment is cooling, and price increases are slowing. Key factors include the progress of special - bond issuance, steel exports, iron - water production, and overseas mine production. The short - term outlook is volatile [9] - **Coke**: The second round of price increases has been fully implemented, and price increases are moderating. Key factors are steel - mill production, coking costs, and macro sentiment. The short - term outlook is volatile [9] - **Coking Coal**: There are strong expectations for anti - cut - throat competition policies, and prices continue to rise. Key factors are steel - mill production, coal - mine safety inspections, and macro sentiment. The short - term outlook is volatile [9] Non - ferrous Metals and New Materials - **Copper**: An anti - cut - throat competition plan for non - ferrous metals is about to be introduced, providing support for copper prices. Key factors are supply disruptions, domestic policies, Fed policies, and demand recovery. The short - term outlook is volatile [9] - **Aluminum Oxide**: Market sentiment is fluctuating, and prices are adjusting at high levels. Key factors are slower - than - expected ore production resumption, faster - than - expected electrolytic aluminum production resumption, and extreme market trends. The short - term outlook is volatile [9] - **Aluminum**: The boost in sentiment is weakening, and prices are falling. Key factors are macro risks, supply disruptions, and demand shortfalls. The short - term outlook is volatile [9] Energy and Chemicals - **Crude Oil**: Prices are under pressure at high levels, and geopolitical factors are key. The short - term outlook is volatile [11] - **LPG**: The fundamental situation remains loose, and prices follow the cost side. The short - term outlook is volatile [11] - **Asphalt**: Main - producer spot prices are falling, and futures prices are adjusting due to high valuations. The short - term outlook is downward [11] - **High - Sulfur Fuel Oil**: There is significant downward pressure on prices. Key factors are crude - oil and natural - gas prices. The short - term outlook is downward [11] - **Low - Sulfur Fuel Oil**: Prices are following crude - oil prices and weakening. Key factors are crude - oil and natural - gas prices. The short - term outlook is downward [11] Agriculture - **Pig**: Market sentiment is cooling, with near - term prices weak and far - term prices strong. Key factors are breeding sentiment, epidemics, and policies. The short - term outlook is for a volatile increase [11] - **Rubber**: Market bullish sentiment persists, and prices are oscillating at high levels. Key factors are weather in production areas, raw - material prices, and macro changes. The short - term outlook is for a volatile increase [11] - **Synthetic Rubber**: The market is in an adjustment phase. Key factor is significant crude - oil price fluctuations. The short - term outlook is for a volatile increase [11]

Group 1 - The report highlights a significant inflow into Chinese fixed-income funds, with a total inflow of $130.44 billion in June 2025, compared to $49.07 billion in the previous month [29][18][49] - In contrast, the Chinese equity market experienced a marginal outflow of $37.16 billion, indicating a shift in investor preference towards fixed-income assets [15][18][48] - Emerging markets saw a notable inflow of $210.85 billion in fixed-income funds, with China being a major contributor [29][49] Group 2 - The report indicates that global funds have been reallocating towards U.S. equities, with a net inflow of $168.62 billion in June 2025, while European equities saw a decrease in allocation [15][4] - The U.S. equity market experienced a shift in sector allocations, with significant outflows from technology and healthcare sectors, while essential consumer goods, industrials, and utilities saw inflows [38][41] - Emerging markets, particularly India, have shown a relatively higher inflow into equity funds, contrasting with the outflows observed in the Chinese equity market [16][48]

Economic Overview - In January-February 2025, both industrial and service sector production achieved rapid growth, but domestic demand remains weak and external demand has declined, indicating a need for further optimization of the supply-demand structure [1][2] - The industrial added value growth rate for January-February was 5.9%, significantly exceeding the market expectation of 5.1%, driven mainly by the transportation equipment, metal products, and equipment manufacturing sectors [3][4] - Investment growth in January-February significantly surpassed market expectations, primarily due to strong infrastructure investment performance, while manufacturing investment showed resilience and real estate investment's decline narrowed [14][25] Production Insights - The industrial added value growth was supported by "promoting consumption" and "grabbing exports," with manufacturing sector performance particularly strong in January-February [3][4] - The service sector also maintained a high growth rate, with modern service industries showing particularly good performance [3][4] - However, high-frequency data and tariff impacts suggest that both industrial and service sectors may face weakening pressures in the future [3][4] Investment Analysis - Total investment, infrastructure investment, manufacturing investment, and real estate development investment in January-February were 4.1%, 9.9%, 9.0%, and -9.8% respectively, showing significant improvements compared to the same period last year [14][25] - The strong performance of narrow infrastructure investment was attributed to the proactive commencement of major projects post-Spring Festival and good progress in the issuance of special bond funds [14][25] - Manufacturing investment is expected to improve in the second quarter of 2025, driven by the continuation of equipment renewal policies and marginal improvements in PPI [14][25] Consumption Trends - In January-February, the total retail sales of consumer goods reached 837.31 billion yuan, with a year-on-year growth rate of 4.0%, slightly below the market expectation of 4.5% [25] - The growth rate of commodity retail was recorded at 3.9%, while catering revenue growth increased to 4.3%, reflecting improved consumption during the Spring Festival [25] - Future consumption support is anticipated from the recovery of housing prices and stock markets, increased social security income, and the continuation of "old-for-new" policies [25]

Market Insights - The domestic economy shows signs of stabilization and improvement, with the manufacturing PMI rising to 50.2 in February from 49.1 in January, indicating a return to the expansion zone [1] - The increase in manufacturing sentiment is attributed to improvements in production index, new orders index, employment index, and supplier delivery time index [1] - In January, the CPI increased by 0.5% year-on-year, while the PPI decreased by 2.3%, reflecting stable price movements in food and service sectors [1] AI Industry Focus - The AI industry, represented by Deepseek and humanoid robots, gained significant market attention in February, bolstered by a government meeting emphasizing support for the private sector [2] - Major stock indices saw increases in February, with the Shanghai Composite Index and Shenzhen Component Index rising by 2.16% and 4.48%, respectively [2] - The computer, machinery, automotive, and electronics sectors experienced gains exceeding 8%, driven by advancements in AI technology and domestic replacements in smart automotive components [2] Bond Market Adjustments - The bond market faced adjustments in February, with a tightening of liquidity due to a significant net withdrawal of 10,773 billion yuan by the central bank [3] - The yields on government bonds increased, with 1-year, 5-year, and 10-year yields rising by 16, 19, and 9 basis points to 1.46%, 1.60%, and 1.72%, respectively [3] - The overall return of the bond market, as reflected by the China Bond Index, decreased by 0.83% in February [3] Global Economic Performance - The U.S. Markit Composite PMI recorded 51.6 in February, down from 52.7 in January, while the Eurozone manufacturing PMI improved to 47.6 from 46.6 [4] - Major overseas stock indices showed mixed results, with the DAX, CAC40, FTSE 100, and Hang Seng indices rising by 3.77%, 2.03%, 1.57%, and 13.43%, respectively [5] - Brent crude oil prices fell by 4.47% in February, while gold prices increased by 2.13%, influenced by geopolitical tensions and expectations of U.S. interest rate cuts [5] Fund Performance Overview - The Morningstar China Open-End Fund Index recorded a 2.77% increase in February, with stock and allocation funds rising by 4.48% and 1.65%, respectively [6] - Growth-style funds outperformed value and balanced funds, with mid-cap growth funds achieving an average return of 8.10% [10] - Convertible bond funds led fixed-income categories with a 2.78% average return, while credit bond and pure bond funds faced declines [11]