Global events of the week

　　1. Central Economic Work Conference: The Central Economic Work Conference will be held in Beijing from December 10th to 11th. The meeting determined to focus on the following key tasks in economic work next year. One is to adhere to domestic demand as the driving force and build a strong domestic market; Secondly, we must adhere to innovation driven development and accelerate the cultivation and growth of new driving forces; Thirdly, we must adhere to reform and strengthen the vitality of high-quality development; Fourthly, we must adhere to opening up to the outside world and promote win-win cooperation in multiple fields; Fifth, adhere to coordinated development, promote urban-rural integration and regional linkage; Sixth, adhere to the guidance of "dual carbon" and promote comprehensive green transformation; Seventh, we must adhere to the principle of putting people's livelihood first and strive to do more practical things for the people; Eighth, we must adhere to the bottom line and actively and prudently resolve risks in key areas.

　　2. Meeting of the Political Bureau of the CPC Central Committee: The Political Bureau of the CPC Central Committee held a meeting on December 8 to analyze and study the economic work in 2026 and review the Regulations on the Work of CPC Leaders to Administer the Country in an All round Way by Law. The meeting pointed out that next year's economic work should adhere to seeking progress while maintaining stability, improving quality and efficiency, continuing to implement more proactive fiscal policies and moderately loose monetary policies, leveraging the integrated effect of stock policies and incremental policies, increasing countercyclical and cross cyclical adjustment efforts, and effectively enhancing the effectiveness of macroeconomic governance.

　　3. Federal Reserve: According to CME's "Federal Reserve Watch" data, the probability of the Federal Reserve cutting interest rates by 25 basis points in December is 87.3%, and the probability of keeping interest rates unchanged is 12.7%. The probability of the Federal Reserve reducing interest rates by 25 basis points cumulatively by January next year is 66.7%, the probability of maintaining interest rates unchanged is 9.2%, and the probability of reducing interest rates by 50 basis points cumulatively is 24.2%.

　　4. IMF raises China's economic growth forecast for 2025: According to Xinhua News Agency, the International Monetary Fund (IMF) stated in Beijing on December 10 that despite facing multiple shocks, the Chinese economy has shown significant resilience. The IMF predicts that China's economic growth rate will reach 5% by 2025, which is 0.2 percentage points higher than the World Economic Outlook report released in October this year.

　　5. Mexico's tariffs on China: According to reports, the Mexican Senate has passed a new import and export tariff bill that will impose tariffs of 5% to 50% on some products from multiple Asian countries, including China, starting next year. Foreign Ministry spokesperson Guo Jiakun pointed out that going against the trend of economic globalization, engaging in protectionism, and harming others do not benefit oneself. I hope that the Mexican side can correct its erroneous practices as soon as possible, work together with the Chinese side to maintain the overall situation of bilateral economic and trade relations.

　　Asset Performance Review

　　This week, A-shares fluctuated and differentiated. The Shanghai Composite Index fell 0.35%, the Shanghai and Shenzhen 300 Index fell slightly by 0.08%, the CSI 1000 Index rose 0.39%, and the ChiNext Index rose 2.74%; In terms of Hong Kong stocks, the Hang Seng Index fell 0.42% and the Hang Seng Technology Index fell 0.43%.

　　The bond market has rebounded overall this week. The contents of the Politburo meeting were basically in line with expectations. The market went out of the negative landing market, the bond market interest rate fell, and the rally of ultra long treasury bond bonds led the rise. The yield of 10-year treasury bond rose by 1.4 BP, and the yield of 10Y US bonds rose by 4.5 BP.

　　The weekly trend of the US stock market is divided, with the Dow Jones index rising 1.05%, reaching a new historical high, the Nasdaq index falling 1.62%, and the German DAX index rising 0.66%; Gold surged 2.43%, reaching $4300, crude oil fell nearly 4%, and Bitcoin fell slightly.

　　Asset allocation recommendations

　　China International Capital Corporation (CICC): We believe that in the context of prominent supply-demand contradictions in China and challenges in the external environment, the overall policy may be moderately strengthened next year, and fiscal and monetary policies may also increase coordination to enhance governance efficiency. Structural policies may increase or decrease in parallel, both adding and subtracting, to improve policy efficiency, boost demand and improve supply, and achieve reasonable growth.

　　Guotai Haitong: Regarding the future market, we believe that after a long period of sideways consolidation, the Chinese stock market will enter a cross year offensive, and the index will take a new step upwards. Reform boosts risk appetite in the Chinese market. December to February is a window period for China's policies, liquidity, and fundamentals to resonate upwards. We believe that the Chinese stock market will gradually launch a cross year offensive, and there is still a lot of room for growth.

　　Oriental Wealth Securities: Due to the relatively late Spring Festival of 2026 (February 17), we believe that investors need to maintain some patience in short-term tactics and patiently wait for gradual layout. Gradually increase the proportion of non silver sectors; Subsequently, with the improvement of liquidity expectations and the gradual recovery of risk appetite, congestion and valuation will gradually decline, and the direction of the industry trend for next year will be determined. Key focus: insurance, securities firms, non-ferrous metals, overseas computing power, power grid equipment, etc.

　　Huachuang Securities: The monthly liquidity gap in December may be around 1.6 trillion yuan, and due to the large amount of instrument maturity, the overall funding gap pressure may be at a seasonal high level. However, based on the current operational strategy of the central bank to maintain sufficient liquidity, DR007 is expected to fluctuate at a level of 1.4-1.5%. It is expected that the central bank may not significantly increase its bond buying in December.