Economic Outlook - The New York Fed President John Williams highlights substantial risks and high uncertainty in the economic outlook due to the conflict in the Middle East, which could lead to a significant supply shock, raising inflation while dampening economic activity [2][3] - Williams notes that supply chain disruptions in energy and related goods are already being observed, with tariffs and high energy prices expected to raise headline inflation in the short term, although he remains optimistic that these effects will reverse if prices decrease and hostilities end [3][4] Inflation and Employment - The labor market is not contributing to inflationary pressures, and Williams sees a resilient economy with GDP growth projected at close to 2.5% for the year, supported by favorable fiscal policy and AI investments [5] - Inflation is expected to be at 2.75% this year, with a decline to 2% anticipated by 2027, while unemployment is expected to edge down [5] Monetary Policy and Financial Stability - Williams did not provide specific insights on monetary policy, reiterating previous statements without offering new guidance [6][10] - There are no current indications of systemic risk in private credit markets, and Fed officials are monitoring the situation but do not see it leading back to the banking system at this time [10][11]

Core Viewpoint - The report from China Galaxy Securities indicates that despite global non-US assets being under pressure, Hong Kong stocks rose by 1.45% on March 16, suggesting a search for "safe havens" as funds reallocate within non-US assets [1][2]. Group 1: Market Dynamics - The ongoing US-Iran conflict is causing significant shocks to global markets, with potential long-term implications for energy prices and inflation, leading to a scenario of low growth, high interest rates, and persistent inflation [1]. - The synchronized tightening of global monetary conditions is further compressing policy space for various countries, leading to a stronger US dollar and pressure on non-US currencies, which in turn affects equity valuations [2]. Group 2: Capital Flows - From February 27 to March 13, international intermediaries reduced their holdings in Hong Kong stocks by approximately 700 billion HKD, reflecting a phase of withdrawal by international funds, particularly from Europe and the US, due to global risk aversion [3]. - Despite the net selling of 11.01 million HKD by southbound funds on March 16, the Hang Seng Index still showed strong performance, indicating that foreign capital was a significant driver of the rebound, possibly sourced from Middle Eastern markets seeking safe havens [4]. Group 3: Sector Analysis - The energy sector has emerged as a consensus among both foreign and domestic investors, while technology stocks, particularly those of internet giants like Tencent and Alibaba, have seen increased foreign investment due to attractive valuations following prior declines [5]. - The current market environment is characterized by a "Risk-off" trading mode, with global funds shifting from cyclical stocks to defensive assets in response to geopolitical risks and inflation concerns [5]. Group 4: Investment Outlook - The resilience of Hong Kong stocks is attributed to their low valuations, which attract risk-averse funds seeking certainty, with a notable valuation gap compared to other major markets [6]. - Looking ahead, the consumer discretionary sector is expected to show the strongest performance in terms of earnings growth and profitability, while the financial sector offers substantial safety margins [6].

Market Performance - Risk assets continued to decline last week, with MSCI Global down by 1.5%, MSCI Developed Markets down by 1.5%, and MSCI Emerging Markets down by 1.4% [8] - In the developed markets, the UK FTSE 100 showed the strongest performance at -0.2%, while the Nikkei 225 was the weakest at -3.2% [8] - In the emerging markets, the ChiNext Index performed best at +2.5%, while the Indian Sensex 30 was the worst at -5.5% [8] Trading Sentiment - Under the shadow of geopolitical tensions, the sentiment in the US stock market weakened, reaching historically low levels [18] - Trading volumes decreased across major indices, with the Shanghai Composite Index trading at 3.706 billion shares and $7.770 billion, and the Hang Seng Index at 178 million shares and $739 million [18] - The short-selling ratio in the Hong Kong market decreased to 17.5%, indicating a historical low in investor sentiment [18] Fundamental Analysis - The earnings forecast for the Hong Kong market was revised downwards, with the Hang Seng Index's 2026 EPS forecast adjusted from +9.5% to +8.6% [64] - In contrast, the earnings forecast for the US market remained stable at +12.9% for the S&P 500 Index, with the energy sector seeing the most significant upward revision of +5.5% [64] - The European market's earnings forecast remained unchanged at -3.0% for the Eurozone STOXX 50 Index, with the energy sector also experiencing a notable upward revision of +9.4% [65] Capital Flows - Expectations for overseas liquidity continued to tighten, with offshore dollar liquidity tightening [51] - The market anticipates that the Federal Reserve will delay its first rate cut of the year, with expectations now at 0.9 cuts for 2026 [51] - In terms of capital flows, the Hong Kong market saw a net inflow of HKD 3.8 billion, primarily from flexible foreign capital [60]

Group 1 - The report highlights that global markets experienced a decline, with the Hang Seng Index dropping by 1.1% while the Hang Seng Technology Index increased by 0.6% during the week of March 9-13, 2026 [1][2] - The energy sector led the gains with a 6.2% increase, while the financial sector faced the largest decline at 4.4% [1][2] - The geopolitical tensions in the Middle East have led to a rise in oil prices, impacting the profitability of the technology sector and increasing market volatility [1][3] Group 2 - The report suggests that investors should remain cautious with their positions in the Hong Kong stock market, focusing on sectors related to energy, military, and renewable energy [3] - The report indicates that the "calculation power for all" policy supports the AI sector, while high oil prices enhance the defensive attributes of the lithium battery and energy storage industries [1][3] - The report notes that there is a significant net inflow of capital from mainland China into Hong Kong, particularly in the technology, healthcare, and non-essential consumer sectors [2][12] Group 3 - Upcoming key data and events include the NVIDIA GTC conference, China's retail sales data, and the U.S. Federal Reserve's interest rate decision [4][30] - The report emphasizes the importance of monitoring the earnings reports of major internet companies, which are expected to influence market sentiment [3][4] - The report also mentions that the IPO market in Hong Kong is showing signs of recovery, with a total of 47.8 billion HKD raised in the week [2][4]

- The "Hong Kong Stock Selection Portfolio" strategy aims to construct a portfolio by dual-layer screening based on fundamental and technical aspects of stocks recommended by analysts. The portfolio includes stocks with fundamental support and technical resonance, focusing on analyst recommendation events such as upward earnings revisions, initial coverage, and unexpected research report titles. The backtesting period is from January 1, 2010, to December 31, 2025, with an annualized return of 19.08% and an excess return of 18.06% relative to the Hang Seng Index after considering transaction costs in a fully invested state[13][15][19] - The "Stable New High Stock Screening Method" identifies stocks that have reached a 250-day high in the past 20 trading days. The screening criteria include analyst attention (at least 5 buy or overweight ratings in the past 6 months), relative stock strength (top 20% in 250-day returns), and stock price stability. Stability is assessed using metrics like price path smoothness and the average 250-day high distance over the past 120 days and the last 5 days. Stocks are ranked, and the top 50% are selected, with a minimum of 50 stocks[20][22][23] - The formula for calculating the "250-day high distance" is: $ 250\text{-day high distance} = 1 - \frac{\text{Close}_{t}}{\text{ts\_max}(\text{Close}, 250)} $ where $\text{Close}_{t}$ represents the latest closing price, and $\text{ts\_max}(\text{Close}, 250)$ is the maximum closing price over the past 250 trading days. A value of 0 indicates a new high, while positive values represent the percentage drop from the high[22] - Backtesting results for the "Hong Kong Stock Selection Portfolio" show annualized returns of 19.08%, excess returns of 18.06%, and various performance metrics such as IR (1.19), tracking error (14.60%), and maximum drawdown (23.73%). The portfolio consistently outperformed the Hang Seng Index across multiple years, with notable excess returns in years like 2020 (70.00%) and 2019 (33.78%)[15][19][17] - The "Stable New High Stock Screening Method" identified stocks like Yancoal Australia, China Shenhua, and China Ocean Oil as stable new high performers. The sector distribution includes 8 stocks from cyclical industries, followed by technology (4 stocks), manufacturing (3 stocks), pharmaceuticals (1 stock), and financials (1 stock)[22][23][27]

Report's Industry Investment Rating No relevant content found. Core Viewpoints of the Report The report provides a comprehensive analysis of various futures markets, including financial derivatives, agricultural products, black metals, non - ferrous metals, shipping and carbon emissions, and energy chemicals. It takes into account factors such as geopolitical conflicts, supply and demand dynamics, and policy changes to offer trading strategies for each market. Summary by Directory Financial Derivatives - **Stock Index Futures**: On Thursday, the stock index was in a low - level oscillation. The main contracts of stock index futures all declined, with increased trading volume and positions. The market was affected by factors such as the US 301 investigation and the adjustment of technology stocks. It is recommended to go long on dips, conduct IM/IC 2609 long + ETF short cash - and - carry arbitrage, and adopt a bull spread option strategy [20][21][22]. - **Treasury Bond Futures**: On Thursday, treasury bond futures closed higher across the board. The market sentiment was initially cautious but turned positive due to the news of potential cuts in inter - bank deposit rates. It is recommended to close short positions on dips and stay on the sidelines for arbitrage [23][24]. Agricultural Products - **Protein Meal**: The CBOT soybean and soybean meal indices declined. The supply of soybeans still has an impact, and the futures market is in a high - level oscillation. It is recommended to stay on the sidelines, narrow the MRM09 spread, and stay on the sidelines for options [26][27]. - **Sugar**: International sugar prices rose, and domestic sugar prices showed a strong trend. The production increase in India and Thailand may be lower than expected, and the global sugar supply surplus is expected to decrease. It is recommended that international sugar prices and Zhengzhou sugar futures are expected to be slightly stronger in the short - term, stay on the sidelines for arbitrage, and sell put options [28][31][33]. - **Oilseeds and Oils**: The prices of CBOT soybean oil and BMD palm oil fluctuated. The expectation of biodiesel is positive, and the oils may oscillate at a high level. It is recommended to expect high - level oscillations in the short - term, consider p59 and y59 reverse arbitrage opportunities, and stay on the sidelines for options [35][36]. - **Corn/Corn Starch**: The CBOT corn futures rose. The spot prices in the production areas are strong, and the futures market is in a high - level oscillation. It is recommended to go long on dips for the outer - market 05 corn, adopt a high - level oscillation strategy for the 05 corn, widen the 05 corn - starch spread on dips, and stay on the sidelines for options [38][39]. - **Hogs**: The hog prices are oscillating. The supply pressure is large, and the price is expected to continue to face pressure. It is recommended to short the near - month contracts, stay on the sidelines for arbitrage, and adopt a short strangle option strategy [40][41]. - **Peanuts**: The peanut spot prices are stable, and the futures market is oscillating at the bottom. It is recommended to conduct light - position short - term long operations on dips for the 05 peanuts, stay on the sidelines for arbitrage, and sell the pk605 - P - 7700 option [42][43][45]. - **Eggs**: The egg prices are stable. The enthusiasm for culling laying hens has decreased, and the overall capacity reduction has slowed down. It is recommended to short the June contracts on rallies, stay on the sidelines for arbitrage, and stay on the sidelines for options [46][47][48]. - **Apples**: The apple inventory has decreased, and the prices are relatively firm. The 5 - month contract of apple futures is expected to oscillate at a high level. It is recommended to exit and stay on the sidelines, stay on the sidelines for arbitrage, and stay on the sidelines for options [50][51]. - **Cotton**: The outer - market cotton futures oscillated. The cotton price has strong support at the bottom and is expected to oscillate strongly. It is recommended to build long positions on dips for Zhengzhou cotton, stay on the sidelines for arbitrage, and stay on the sidelines for options [53][56][57]. Black Metals - **Steel**: The black sector oscillated strongly at night. The steel price is supported by raw materials and is expected to oscillate strongly. It is recommended to maintain an oscillating and strong trend, short the coil - coal ratio on rallies, hold the short coil - rebar spread, and stay on the sidelines for options [60][61]. - **Coking Coal and Coke**: The double - coking market fluctuates greatly, mainly following the changes in oil and gas and chemicals. It is recommended that cautious investors stay on the sidelines and consider going long on dips. It is recommended to stay on the sidelines for arbitrage and options [63][64]. - **Iron Ore**: The iron ore price rose rapidly from the bottom. The supply disturbance is increasing, and the spot market is recommended for high - level hedging. It is recommended to conduct high - level hedging for the spot, stay on the sidelines for arbitrage, and stay on the sidelines for options [66][67]. - **Ferroalloys**: The short - term driving force of ferroalloys is strong, but the profit - loss ratio has decreased. It is recommended to expect high - level oscillations, stay on the sidelines for arbitrage, and sell out - of - the - money put options [68][69]. Non - Ferrous Metals - **Gold and Silver**: The prices of gold and silver oscillated due to the repeated geopolitical situation. It is recommended to adopt an oscillating range strategy, stay on the sidelines for arbitrage, and exit the bull call spread strategy on rallies [71][72][73]. - **Platinum and Palladium**: The platinum and palladium markets are in an oscillating situation due to the continuous game of the Middle East issue. It is recommended to stay on the sidelines for platinum and palladium, wait for low - long opportunities for platinum, look for opportunities to go long on the platinum - palladium spread at low levels, and stay on the sidelines for options [75][76]. - **Copper**: The copper price is affected by geopolitical risks and continues to oscillate. It is recommended to buy on dips after the short - term oscillation stabilizes, stay on the sidelines for arbitrage, and stay on the sidelines for options [79][80][81]. - **Alumina**: The alumina price oscillates. It is recommended to expect short - term oscillations [82][85]. - **Electrolytic Aluminum**: The aluminum production in the Middle East has suspended production cuts, and the price is expected to oscillate in the short - term. It is recommended to stay on the sidelines for arbitrage and options [87][90]. - **Cast Aluminum Alloy**: The cast aluminum alloy price oscillates with the aluminum price. It is recommended to stay on the sidelines for arbitrage and options [91][92]. - **Zinc**: Be vigilant about the impact of capital on the zinc price. It is recommended to hold long positions and buy on dips, stay on the sidelines for arbitrage, and stay on the sidelines for options [93][94]. - **Lead**: It is recommended to buy on dips. The supply and demand of lead have increased in March, and the price is expected to oscillate in a range. It is recommended to buy low and sell high, stay on the sidelines for arbitrage, and stay on the sidelines for options [96][97]. - **Nickel**: The nickel price is strong due to the blocked passage of the strait. It is recommended to adopt a low - long strategy [98][99]. - **Stainless Steel**: The stainless steel price is supported by cost and follows the nickel price. It is recommended to adopt a low - long strategy, stay on the sidelines for arbitrage, and stay on the sidelines for options [101][103][104]. - **Industrial Silicon**: The industrial silicon price oscillates in a range. It is recommended to conduct range operations, stay on the sidelines for arbitrage, and stay on the sidelines for options [105]. - **Polysilicon**: The fundamentals of polysilicon have not improved significantly, and the price oscillates weakly. It is recommended to be bearish, pay attention to positive arbitrage opportunities, and stay on the sidelines for options [107][108]. - **Lithium Carbonate**: The supply - demand contradiction of lithium carbonate is not prominent, and the price oscillates at a high level. It is recommended to adopt a low - long strategy, stay on the sidelines for arbitrage, and stay on the sidelines for options [109][111]. - **Tin**: The tin price oscillates downwards due to high risk - aversion sentiment. It is recommended to expect the price to oscillate downwards and stay on the sidelines for options [112][113]. Shipping and Carbon Emissions - **Container Shipping**: The Middle East geopolitical situation is repeated, and ship attacks continue. The spot freight rate is affected by fuel prices and insurance costs. It is recommended to stay on the sidelines for the near - month 04 contract and stay on the sidelines for arbitrage [115][116][117]. - **Dry Bulk Freight**: The negotiation on iron ore pricing rights between China and Australia is at a deadlock, and the future rental height of the Capesize ship type may be limited. The market trends of different ship types are differentiated. It is necessary to pay attention to the impact of the war duration on the dry bulk shipping chain [118][119][120]. - **Carbon Emissions**: The domestic carbon market trading is dull, and the EU has differences in the EU ETS reform. The EU carbon price is expected to oscillate. It is necessary to pay attention to the EU's policy on carbon market reform, geopolitical situation evolution, and energy supply recovery progress [120][121][124]. Energy and Chemicals - **Crude Oil**: The risk spill - over range of crude oil has expanded, and the Brent oil price is above $100 per barrel. It is recommended to be bullish at a high level, stay on the sidelines for arbitrage, and stay on the sidelines for options [125]. - **Asphalt**: The asphalt supply is limited and the price is rising, while downstream users are on the sidelines. The cost is supported by the rising crude oil price, and the supply is expected to tighten. It is recommended to stay on the sidelines for arbitrage and options [129][130]. - **Fuel Oil**: The Singapore fuel oil inventory has increased for three consecutive weeks. The low - sulfur supply is expected to shrink, and the demand in Singapore may increase. It is recommended to expect a strong oscillation, stay on the sidelines for arbitrage, and stay on the sidelines for options [132][133]. - **LPG**: The LPG price follows the oil price. It is recommended to expect high - level oscillations, stay on the sidelines for arbitrage, and stay on the sidelines for options [134]. - **Natural Gas**: Qatar's production suspension continues, and the supply shortage is accumulating. It is recommended to stay on the sidelines for trading, arbitrage, and options [137][138][140]. - **PX & PTA**: The supply of PX and PTA is expected to shrink unexpectedly. It is recommended to expect an upward trend driven by supply tension, conduct positive arbitrage, and stay on the sidelines for options [141][142][143]. - **BZ & EB**: The domestic operating loads of pure benzene and styrene have decreased. It is necessary to pay attention to the impact of Middle - East logistics on supply. It is recommended to pay attention to the supply impact and prevent the price from falling back, conduct positive arbitrage, and stay on the sidelines for options [146][147][148]. - **Ethylene Glycol**: The ethylene cracking enterprises have reduced their loads. The supply is expected to decrease, and the supply - demand structure is expected to improve. It is recommended to expect a strong oscillation, conduct positive arbitrage, and stay on the sidelines for options [149][150]. - **Short - Fiber**: The short - fiber price follows the cost and is strong. It is recommended to follow the cost and be bullish, stay on the sidelines for arbitrage, and stay on the sidelines for options [151][152]. - **Bottle Chips**: The de - stocking amplitude in the first quarter is limited. The bottle - chip price follows the cost and is strong. It is recommended to follow the cost and be bullish, conduct positive arbitrage, and stay on the sidelines for options [153][154]. - **Propylene**: The supply and demand of propylene are supported. The operating load has decreased, and the cost of downstream products is under pressure. It is recommended to expect an upward trend, pay attention to the Middle - East situation, prevent the price from falling back, conduct positive arbitrage, and stay on the sidelines for options [156][157][159]. - **Plastic PP**: It is recommended to hold long positions for L and PP. Set stop - loss levels at recent high points. Consider arbitrage opportunities for SPC L2605&PP2605 and set stop - loss levels at recent high points. Stay on the sidelines for options [160][161]. - **Caustic Soda**: The caustic soda price is strengthening. It is recommended to expect a strengthening trend, stay on the sidelines for arbitrage, and stay on the sidelines for options [163][164]. - **PVC**: The PVC price oscillates widely. The supply at home and abroad is expected to decrease, and the price is expected to rise. It is recommended to go long on dips and not chase the rise, stay on the sidelines for arbitrage, and stay on the sidelines for options [165][166]. - **Soda Ash**: The soda ash price oscillates weakly. The supply has increased, and the inventory has decreased slightly. It is recommended to expect wide - range oscillations and a weak direction, stay on the sidelines for arbitrage, and sell call options [167][168][169]. - **Glass**: The glass price has large fluctuations, wide - range oscillations, and a weak direction. The supply has decreased slightly, the demand has improved, and the inventory has decreased. It is recommended to expect wide - range oscillations and a weak direction, close the short - glass long - soda - ash arbitrage position, and stay on the sidelines for options [170][171][173]. - **Methanol**: The methanol price oscillates at a high level due to news disturbances. The supply in Iran may decrease, and the domestic market is worried about supply shortages. It is recommended to go long on dips, stay on the sidelines for arbitrage, and sell put options on pullbacks [174][175]. - **Urea**: The urea price oscillates widely following the energy - chemical market. The supply is at a historical high, and the demand is gradually increasing. It is recommended to operate cautiously, stay on the sidelines for arbitrage, and stay on the sidelines for options [177][178]. - **Pulp**: The pulp inventory is high, and the market rebound is weak. The supply exceeds demand, and the demand recovery is slow. It is recommended to conduct wide - range oscillations, lay out long positions in small amounts near integer points, stay on the sidelines for arbitrage, and sell the SP2605 - P - 5200 option [179][180]. - **Offset Printing Paper**: The high inventory suppresses the paper price. The supply and demand of offset printing paper are in a weak balance, and the inventory is increasing. It is recommended to short on rallies, stay on the sidelines for arbitrage, and sell the OP2604 - C - 4250 option [182][184][185]. - **Logs**: The import cost of logs is rising, and it is necessary to pay attention to the resumption of construction sites. The price is supported by cost and demand. It is recommended to go long on dips, stay on the sidelines for arbitrage, and stay on the sidelines for options [186][187][188]. - **Natural Rubber and No. 20 Rubber**: The full - steel tire production line has reached a new high in operation. The domestic tire production line operation rate is increasing. It is recommended to stay on the sidelines for the RU 05 contract, pay attention to the pressure at the previous high point, conduct small - amount long operations for the NR 05 contract and set stop - loss levels at recent low points, stay on the sidelines for arbitrage, and sell the RU2605 put 15750 contract and set stop - loss levels at recent high points [189][190][191]. - **Butadiene Rubber**: The profit of butadiene rubber has improved. The profit of BD has increased, and the tire production line operation rate is increasing. It is recommended to chase long positions for the BR 05 contract and set stop - loss levels at recent low points, stay on the sidelines for arbitrage, and stay on the sidelines for options [193][194][195].

Market Performance Review - The Hang Seng Index, Hang Seng Tech Index, and MSCI Hong Kong Small Cap Index experienced declines of -3.79%, -3.28%, and -3.7% respectively due to heightened risk aversion stemming from the US-Iran conflict [5][14] - Only the energy, utilities, and telecommunications sectors saw gains, with increases of 3.74%, 0.5%, and 0.08% respectively, while other sectors faced declines [5][14] - Small-cap stocks suffered the most significant losses, while large-cap and growth stocks showed relative resilience [5][14] Market Valuation Level - As of the end of the week, the 5-year PE (TTM) valuation percentile for the Hang Seng Index stood at 82.87%, indicating that the valuation level is close to one standard deviation above the 5-year average [4] Market Macro Environment - The macroeconomic environment shows that February's CPI increased significantly, while PPI continued to decline; the manufacturing PMI indicates ongoing contraction, but the service sector shows marginal recovery [42] - The government work report and the draft of the 14th Five-Year Plan have established a positive policy tone and pragmatic policy objectives [42] - The financial environment is characterized by a net outflow of 80.94 billion HKD from southbound funds, a decrease of 147.99 billion HKD compared to the previous week [42] Sector Allocation Outlook - The report favors sectors that are relatively prosperous and benefit from policy support, such as new energy, innovative pharmaceuticals, and AI technology [5] - Low-valuation state-owned enterprises that are stable in performance and stock prices are also seen as favorable due to policy benefits [5] - Hong Kong local banks, telecommunications, and utility dividend stocks are expected to benefit from the interest rate cut cycle [5]

Market Overview - Global markets experienced significant pullbacks this week due to escalating geopolitical issues in the Middle East, with the S&P 500, Nasdaq, and Dow Jones all declining by 2.02%, 1.24%, and 3.01% respectively[1][4][12] - The S&P 500 Energy Index was the only sector to see a slight increase, while the S&P 500 Materials Index faced the largest decline of 7.15%[1][12] U.S. Market Performance - The TAMAMA Technology Index continued its downward trend, marking nearly five months of decline, with a current P/E ratio of 32.49[1][18] - The Philadelphia Semiconductor Index fell by 7.21%, with a P/E ratio of 41.84, indicating high valuation concerns[1][18] - The Nasdaq Index also saw a decline, with a P/E ratio of 39.51, suggesting ongoing pressure on tech stocks due to high valuations and potential inflation from rising oil prices[1][18] European Market Insights - Major European markets, including Germany's DAX and France's CAC40, experienced notable declines of 6.70% and 6.84% respectively, reflecting economic pressures and high P/B ratios[1][9][10] - The Nikkei 225 Index in Japan fell by 5.49%, with a P/B ratio of 2.47, indicating continued valuation concerns amid tight monetary liquidity[1][9][10] Emerging Markets - Emerging markets in Latin America and Southeast Asia also faced significant pullbacks, with Brazil's IBOVESPA down by 4.99% and India's SENSEX30 showing similar trends[1][11] - The South Korean Composite Index dropped by 10.56%, highlighting the ongoing pressure on tech assets[1][11] Economic Data - In February, the U.S. ISM Manufacturing PMI was reported at 52.4, slightly down from 52.6, indicating a potential slowdown in manufacturing activity[5][38] - The Eurozone's PPI year-on-year growth was -2.2%, while retail sales growth was reported at 2%, reflecting mixed economic signals[35][41] Risk Factors - Key risks include potential surprises in U.S. Federal Reserve monetary policy, slower-than-expected economic growth, and escalating geopolitical tensions globally[6][43]

Group 1 - The Korean stock index Kospi experienced a significant drop of over 7% in a single trading day, triggering a trading halt due to high volatility [2][3] - Major stocks such as Samsung and SK Hynix saw substantial declines, with prices falling by 9.88% and 11.5% respectively, contributing to the largest single-day drop since August 2024 [7] - The year-to-date gain of the Kospi index decreased from 50% to 37% following this sharp decline, indicating a significant profit-taking event [8] Group 2 - Foreign investors had already begun to reduce their exposure prior to the market drop, with a net outflow of 7 trillion KRW (approximately 4.7 billion USD) on the last trading day of February [9] - The Korean won depreciated by 1.34% against the US dollar, reflecting increased risk aversion in the market, while oil prices surged due to geopolitical tensions, impacting Korea's economy as a major oil importer [7][10] - Despite the market downturn, certain sectors such as shipping, defense, and energy stocks saw gains, indicating a structural shift in investment focus towards assets driven by geopolitical events [10][11]

Global Asset Price Performance - Commodity prices have generally increased, driven by geopolitical risks between the US and Iran, with WTI and Brent crude oil prices rising by 3.8% and 4.9% respectively, and gold prices increasing by 3.3% [2] - Global stock markets showed mixed results, with the S&P 500, Dow Jones, and Nasdaq indices declining by 0.4%, 1.3%, and 1% respectively [2] - In the bond market, yields in major overseas markets mostly declined, with the 10-year US Treasury yield falling by 11 basis points compared to the previous week [2] - The US dollar index decreased by 0.1%, while the offshore RMB appreciated by 0.5% against the US dollar [2] Major Central Bank Monetary Policies - The Federal Reserve is advancing a "deregulation" agenda, proposing reforms to the banking regulatory framework, including raising asset thresholds for community banks and revising anti-money laundering reporting standards [4] - The European Central Bank (ECB) is maintaining its policy interest rates unchanged, with President Lagarde expecting inflation to stabilize at the 2% target in the medium term [4] - The Bank of Japan (BOJ) hinted at a possible interest rate hike in March or April if wage negotiations yield higher-than-expected results [4] US Mortgage Rates and Housing Market - The 30-year mortgage rate in the US has fallen below 6% for the first time since September 2022, potentially reviving housing demand [7] - Year-over-year growth rates for home prices have declined, with the S&P/Case-Shiller Home Price Index, FHFA Home Price Index, and Freddie Mac Home Price Index recording decreases of 1.3%, 1.8%, and 0% respectively [7] - Inflation remains sticky, with the US December PPI showing a month-on-month increase of 0.5% and a year-on-year rate holding steady at 3% [7] Economic Dynamics in Other Regions - Economic confidence in Europe has decreased, with both the EU and Eurozone economic sentiment indices dropping by 1 point to 98.3, below the long-term average [12] - The UK private credit giant Market Financial Solutions (MFS) has entered bankruptcy proceedings due to allegations of fraud and asset double-pledging, raising concerns about the fragility of the private credit market [12]