Monetary policy remains accommodative. On the macro front, PBOC Governor Pan Gongsheng stated that in 2026, China will continue to implement an appropriately easy monetary policy, flexibly and efficiently utilizing various monetary policy tools such as reserve requirement ratio (RRR) cuts and interest rate reductions to maintain ample liquidity. There is still some room for RRR and interest rate cuts this year. Efforts will continue to maintain the stable operation of financial markets. Expectation management will be enhanced to keep the RMB exchange rate basically stable at a reasonable and balanced level. Supervision of the bond market, foreign exchange market, money market, commercial paper market, and gold market will be strengthened. Institutional arrangements will be established to provide liquidity to non-bank financial institutions under specific scenarios. The two monetary policy tools supporting the capital market will continue to be utilized effectively to support its stable development. The six major state-owned banks collectively announced measures to implement the fiscal discount policy for personal consumption loans and optimize related services. During the execution of the consumption loan discount policy, the actual interest rate for some premium customers can enter the "2%" range after enjoying the discount. Overseas, the final annualized quarter-on-quarter GDP growth for the US in Q3 2025 was 4.4%, higher than the preliminary estimate of 4.3%, marking the fastest growth rate in nearly two years. The Fed's preferred inflation gauge, the core PCE price index for November, rose 2.8% year-on-year and 0.2% month-on-month, both meeting expectations. US initial jobless claims for the past week were 200,000, lower than the expected 210,000.
Indices fluctuated but closed higher. In the spot market, the three major A-share indices oscillated before finishing in positive territory, with the Shanghai Composite Index rising 0.14% to close at 4,122.58 points and the ChiNext Index gaining 1.01%. Sector-wise, most industry indices advanced, led by Building Materials, Defense & Military, Petroleum & Petrochemicals, and Communications. The Cosmetics & Personal Care, Banking, and Pharmaceuticals & Biotechnology sectors were among the top decliners. The combined turnover for the Shanghai and Shenzhen markets reached 2.7 trillion yuan that day. Overseas, the three major US stock indices all closed higher, with the Nasdaq Composite rising 0.91% to 23,436.02 points.
IF saw increased open interest. In the futures market, regarding basis, the front-month contracts for IH, IC, and IM were trading at a premium. In terms of trading volume and open interest, the trading volume for stock index futures increased, while the open interest for both IF and IH rose simultaneously.
Overseas, robust US economic data propelled the three major US stock indices to collective gains. Domestically, monetary policy is expected to maintain its appropriately accommodative stance, with room for further RRR and interest rate cuts this year. Concurrently, the personal consumption loan discount policy has been officially implemented, and its supportive effect on consumption recovery warrants close attention. The current trend of policy-driven moderation continues, with the SSE 50 Index experiencing further declines, making the entry opportunity for IC a key focus.
Risks include potential downside pressure on stock indices if domestic policy implementation falls short of expectations, overseas monetary policy becomes more hawkish than anticipated, or geopolitical risks escalate.
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