Core Viewpoint - The Chinese yuan (RMB) has appreciated against the US dollar, with the central parity rate reported at 7.1385, marking an increase of 29 points and reaching the highest level since November 6, 2024 [1] Summary by Category - Currency Exchange Rate - The RMB/USD central parity rate is set at 7.1385, reflecting a 29-point increase [1] - This rate represents the highest value for the RMB against the USD since November 6, 2024 [1]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views - The report constructs the Guoxin Risk - Aversion Index by synthesizing the price states of four major asset classes (stocks, bonds, commodities, and exchange rates) in the Chinese capital market using the diffusion index method. The index reflects the market's risk - off state, considering only the direction of asset price changes rather than the amplitude [1][11][12]. - The Guoxin Risk - Aversion Index has an obvious negative correlation with the macro - economic fundamentals. Economic fundamentals change first, followed by changes in the risk - aversion state of the capital market [2]. - The change in the week - on - week increase or decrease of the Guoxin Risk - Aversion Index leads the change of the fixed - base diffusion index, and it can be used to judge the possible inflection points of the overall index [38]. 3. Summary by Related Catalogs 3.1 Construction of Guoxin Risk - Aversion Index - **Definition**: The report divides the assets in the capital market into risk assets and risk - aversion assets. It uses the Shanghai - Shenzhen 300 Index to represent stock prices, the 10 - year Treasury bond interest rate for bond prices, the Nanhua Industrial Products Index for commodity prices, and the RMB - US dollar exchange rate for the exchange - rate market. The index is used to measure the market's risk pricing [11]. - **Compilation Method**: The report uses the diffusion index method to synthesize the price states of the four asset classes. It selects the weekly frequency for processing, starting from the first week of 2012 with an initial index value of 100. The rising index indicates a risk - off state in the capital market, and the falling index indicates a risk - on state [12]. 3.2 Relationship between Guoxin Risk - Aversion Index and Economic Fundamentals - **Relationship with Guoxin Macro - high - frequency Diffusion Index**: The Guoxin Macro - high - frequency Diffusion Index is a high - frequency tracking indicator for macro - economic growth. It uses seven high - frequency indicators to track representative industries weekly. Both the weekly and monthly comparisons show that the Guoxin Risk - Aversion Index has a negative correlation with the macro - economic fundamentals, and the macro - economic fundamentals lead the change of the risk - aversion index [22][23][30]. - **Relationship with GDP**: The Guoxin Risk - Aversion Index has a weak correlation with the constant - price quarterly year - on - year GDP, and a certain negative correlation with the current - price quarterly year - on - year GDP and the quarterly year - on - year GDP deflator. However, there are periods of deviation, indicating that the economic fundamentals lead the change of the risk - aversion index [36][37]. 3.3 Technical Analysis of Guoxin Risk - Aversion Index - The week - on - week increase or decrease of the Guoxin Risk - Aversion Index is a more sensitive indicator than the fixed - base index. By observing its change and the moving average, it is possible to judge the possible inflection points of the fixed - base index. The leading sensitivity is more significant on a monthly frequency [38][41].

Core Viewpoint - The recent performance of the Renminbi (RMB) exchange rate shows resilience and low volatility, with both onshore and offshore rates demonstrating a consistent upward trend against the US dollar [1][2]. Group 1: Onshore and Offshore RMB Performance - On June 30, the onshore RMB closed at 7.1656 against the US dollar, marking a rise of 34 basis points from the previous trading day and reaching the highest level since November 8, 2024 [1]. - In June, the onshore RMB appreciated by 0.41%, while in the second quarter, it cumulatively appreciated by 1.2%, and for the first half of the year, the overall appreciation was 1.86% [1]. - The offshore RMB also showed positive trends, with the exchange rate surpassing 7.16 on June 26, peaking at 7.1524, the highest since mid-November of the previous year [1]. Group 2: External Factors Influencing RMB - The US dollar index experienced a pullback during this period, with a decline of nearly 0.7% on June 26, providing a favorable external environment for the RMB [1]. - Year-to-date, the RMB's midpoint against the US dollar has appreciated by 0.37%, while the onshore spot rate has appreciated by nearly 1.8% [1]. Group 3: Market Stability and Expectations - The RMB exchange rate has exhibited characteristics of "low volatility and resilience," with the onshore and offshore rate differentials narrowing, indicating a stable "three-price unity" [2]. - The stability of the RMB reflects a growing consensus among market participants regarding exchange rate expectations, supported by the stability of China's economic fundamentals [2]. - The recent changes in the exchange rate market occurred amidst increased volatility in global financial markets, influenced by shifts in US Federal Reserve monetary policy expectations [2].