CITIC Securities forecasts that the macro asset environment in 2026 may be characterized by marginally easing liquidity and a moderate economic recovery, with a recommended allocation order of commodities > stocks > bonds. In equities, the Wind All Share Index A is projected to gain 5%-10% for the full year; Hong Kong stocks are expected to experience a double whammy of earnings bottoming out and a second round of valuation repair; US stocks are likely to continue their fundamental growth momentum against a backdrop of dual fiscal and monetary easing in a midterm election year. For bonds, the 10-year Chinese government bond yield is anticipated to fluctuate within a range of 1.5%-1.8%, trending downward first then upward; the 10-year US Treasury yield may maintain a range-bound movement between 3.9%-4.3%. In commodities, the crude oil supply-demand balance is expected to shift from surplus to equilibrium, with Brent crude oil oscillating within a $58-70 per barrel range for the year; gold is projected to maintain its strength, albeit with slower gains, supported by loose liquidity and geopolitical risks, potentially challenging $5000 per ounce; copper is expected to find strong support from supply constraints and power demand, with the average price forecast to rise to $12,000 per ton. Regarding foreign exchange, the Renminbi may enter a moderate appreciation cycle, with the USD/CNY central parity rate expected to gradually approach 6.8.
For A-shares, the Wind All Share Index A is projected to gain 5%-10%. Listed company profits are expected to show continuous improvement in 2026, with full-year net profit growth forecast at 4.8%. As CPI and PPI recover, the dampening effect of price factors on corporate profits is likely to ease quarter by quarter. With the gradual intensification and implementation of domestic demand policies, the ROE of domestically-oriented sectors is expected to stabilize and rebound, while sectors with overseas revenue exceeding 20% will likely sustain an upward ROE trend. Valuation-wise, the rotation of structural opportunities may become a market norm, with the index potentially exhibiting a "low-volatility slow bull" trend. Absolute return funds, represented by insurance capital, "fixed-income+" products, and private equity, are expected to be the main source of incremental capital. Sector-wise, three key themes are recommended: quality upgrades in resources/traditional manufacturing industries, Chinese companies going global, and the further expansion of AI commercialization. Although domestically-oriented sectors may show weaker sentiment compared to export-oriented ones, unexpected recovery could trigger significant valuation elasticity. Under an optimistic scenario, unexpected policy stimulus could lead to systematic changes in the vast domestic market's fundamentals, boosting overall market risk appetite and potentially expanding valuations by an additional 10%. Under a cautious assumption, overall index valuation upside may be limited with weakening market risk appetite and trading enthusiasm, but the probability of a sharp decline remains low given sustained capital inflows from insurance funds and potential market stabilization efforts.
Hong Kong stocks are expected to experience a double whammy of earnings bottoming out and a second round of valuation repair. Catalyzed by DeepSeek, Hong Kong stocks underwent a first round of valuation repair in 2025. However, they remain a valuation洼地 among global major markets, with the Hang Seng Index's dynamic P/E at only 11.3x and an ERP as high as 5.5%. Earnings-wise, the Hang Seng Index and Hang Seng Tech Index's 2026E net profits are forecast to grow 6.7% and 24.3% year-on-year, respectively. Considering the high probability of dual fiscal and monetary easing in the US during a midterm election year, potential increased fiscal spending in Japan and Germany, and possible policy intensification in China at the start of the "15th Five-Year Plan," the global macro environment is expected to favor Hong Kong stocks. Coupled with the implementation of domestic "anti-involution" policies and the advancement of AI commercialization, macro-level improvements are also anticipated to materialize in the earnings of Hong Kong-listed companies. Liquidity-wise, a marginal easing in Sino-US relations in 2026 could drive the return of active foreign management capital. Domestic retail investors and pension funds are also expected to continuously increase their allocation to Hong Kong stocks through ETF products. Considering policy catalysts, fundamental improvements, and sustained capital inflows, Hong Kong stocks are projected to experience a second round of valuation repair in 2026, with the dynamic P/E of the Hang Seng Index and Hang Seng Tech Index expected to expand by 5% and 10%, respectively. The full-year rhythm is anticipated to be stable first then rising: policy signals from the "Two Sessions" early in the year, progress in Sino-US relations and foreign capital回流 mid-year, and earnings realization towards year-end. Recommendations include focusing on cloud computing/AI applications, CXO, industrial-precious metals, paper, and aviation sectors.
US stocks are expected to maintain their fundamental growth momentum amid dual fiscal and monetary easing in a midterm election year. From a macro policy perspective, the Federal Reserve is projected to continue rate cuts in 2026, potentially even restarting QE to alleviate upward pressure on long-term rates, while the OBBBA is expected to unleash fiscal expansion effects, supporting US household consumption and employment. Concurrently, the privatization of "the two GSEs" is forecast to generate approximately $240 billion in non-tax revenue, easing deficit pressures. Fundamentally, the net profit growth rates of the S&P 500, Nasdaq 100, and MAG 8 are projected to increase to 15.6%, 20.0%, and 24.5% respectively in 2026, providing upward momentum for US stocks. Furthermore, given the relatively healthy balance sheets and operating cash flows of US hyperscalers, the likelihood of an AI bubble bursting in 2026 is deemed low. However, with major US indices currently at historically high valuation percentiles, further valuation expansion next year appears less probable. Market liquidity-wise, rate cuts and tax reductions are expected to fuel increased corporate buybacks, while money market funds with a substantial $7.7 trillion balance are also likely to serve as a significant source of incremental capital for US stocks. US stocks are forecast to exhibit a gradual upward trend next year, yet vigilance is advised for potential disruptions in the first half of the year, as Chairman Powell, in his final months leading the Fed, might prioritize perceived "central bank independence" over underlying risks in the real economy and financial system. Recommendations include focusing on technology, resource commodities like steel, aluminum, copper, energy infrastructure (particularly nuclear power), defense, and internet diagnostics.
The 10-year Chinese government bond yield is projected to fluctuate within a range of 1.5%-1.8% in 2026, potentially trending downward first then upward. Compared to the 1.6%-1.9% range observed for the 10-year CGB yield in 2025, the yield center is expected to shift downward by about 10 bps in 2026, while maintaining a fluctuation range of approximately 30 bps. On one hand, the Central Economic Work Conference maintained a stance of appropriately loose monetary policy, suggesting potential for policy rates to be cut by around 10 bps. Aligning with the PBOC's Q3 2025 monetary policy report emphasizing maintaining reasonable interest rate parity, the downward shift in the 10-year CGB yield center is expected to roughly match the magnitude of policy rate adjustments. On the other hand, government bonds are likely to maintain a "low yield + high volatility" pattern, with fluctuation amplitudes comparable to 2025. Changes in the PBOC's treasury bond operations, the stock-bond跷跷板 effect, and regulatory uncertainty significantly amplified yield volatility in 2025. Looking ahead to 2026, despite the continuation of a loose policy基调, the specific timing of RRR and rate cuts remains uncertain, and disruptive factors have not fully subsided, suggesting the 10-year CGB yield will likely maintain a fluctuation range of about 30 bps. In terms of rhythm, yields may exhibit a "two-phase" characteristic: from the start of the year through the first half, front-loaded RRR/rate cuts could push yields lower; after mid-year, as rising inflation supports nominal growth and local debt resolution gradually concludes with improving credit expansion conditions, yields may face阶段性 upward pressure.
The 10-year US Treasury yield is projected to fluctuate within a range of 3.9%-4.3% for the full year 2026. US GDP growth is expected to slow significantly in Q4 2025. The US economy is forecast to gradually recover in 2026 against a backdrop of Fed rate cuts, with real GDP growth projected at 1.9% for the year. Supported by further Fed easing and the stimulative effects of the "Big and Beautiful" Act on consumption, US consumption is expected to see a mild boost and moderate growth. Simultaneously, US private investment is anticipated to stabilize and recover, underpinned by AI investment and facilitated by rate cuts. Regarding US inflation pressures, recent substantive reductions in Trump-era tariff rates suggest their inflationary impact will likely fade in 2026. Leading and current inflation indicators suggest future US inflation pressure increases may be relatively manageable, with the headline CPI forecast at 2.7% year-on-year for 2026. Fed Chair Powell's term concludes in May 2026, with the next chair expected to be chosen between Hassett and Wash. Given that Fed rate decisions are made by a vote of 12 FOMC members, and considering the intensifying internal hawk-dove divide among current voters, the next chair's ability to control the Fed internally remains to be seen. The Fed is projected to cut rates by 50 bps in 2026. If Hassett becomes the next chair, his dovish倾向 might be slightly stronger than Wash's. Based on expectations of a moderate US economic recovery and manageable inflation pressures in 2026, alongside about 50 bps of potential Fed rate cuts, short-term US Treasury yields are expected to gradually decline following policy rates. The 3-month and 1-year US Treasury yields are projected to fluctuate within ranges of 3.0%-3.6% and 3.1%-3.6%, respectively, for the full year. Meanwhile, considering the ongoing review of the IEEPA tariff ruling and persistent US fiscal deficit concerns, the 10-year US Treasury yield is forecast to operate within a 3.9%-4.3% range for 2026.
The Renminbi may enter a moderate appreciation cycle, with the 2026 exchange rate center expected to gradually approach 6.8. Looking ahead to 2026, driven by three factors - narrowing China-US interest rate differentials, accelerated corporate FX settlement, and central bank guidance - the USD/CNY rate is expected to appreciate moderately towards 6.8. First, the Fed is projected to cut rates more aggressively than the PBOC, further narrowing the interest rate differential. Under the baseline scenario, the Fed is forecast to cut by 50 bps for the full year, while the PBOC is expected to cut by 10 bps to address insufficient domestic effective demand. Second, it is estimated that Chinese exporters have accumulated approximately $1 trillion since 2022. Against a backdrop of Renminbi appreciation expectations, these funds might be settled more rapidly, creating a positive feedback loop of "appreciation - expectation shift - increased settlement - further appreciation." Third, the central bank's exchange rate management approach might shift from preventing depreciation to promoting appreciation. During H2 2023 - H1 2025, when the rate approached 7.2-7.3, depreciation pressure was significant, prompting the PBOC to use counter-cyclical factors for intervention. However, in H2 2025, the Renminbi successively broke through 7.2 and 7.1, while the central parity rate continued guiding towards appreciation, beginning to show some pro-cyclical characteristics. This trend is expected to continue in 2026, likely manifesting as the central parity rate leading, followed by the onshore and offshore rates catching up.
The crude oil supply-demand balance is expected to shift from surplus to equilibrium in H2 2026, with Brent crude prices oscillating within a $58-70 per barrel range for the full year. Incremental oil demand will primarily come from the US, India, etc., while Chinese demand is expected to remain stable. Global trade frictions and order restructuring may continue to pressure economic growth and oil consumption in existing demand countries. On the supply side, OPEC+'s spare capacity is no longer ample, leading to slower production increases. Supply growth will mainly originate from the US and South America, but falling prices have triggered cost challenges for North American shale oil. Considering pressured Chinese demand and a persistent supply surplus in H1, Brent crude is expected to fluctuate within a lower range of $58-65 per barrel. In H2, as US rate cuts释放 demand增量, the market is anticipated to gradually transition from loose to balanced, potentially driving a relatively positive price trend for Brent crude in 2026, with prices oscillating upward to $65-70 per barrel.
Gold prices are expected to continue their upward trend amid liquidity easing expectations, potentially challenging $5000 per ounce in 2026. Gold is projected to benefit from the loose liquidity environment resulting from Fed rate cuts in 2026, with global gold ETF inflows serving as significant buying support. Potential safe-haven demand fueled by geopolitical risks and trade conflicts will continue to underpin prices. Long-term trends like de-dollarization and central bank gold purchasing form a solid foundation for price increases. Gold prices are forecast to reach new highs in 2026, but given the significant gains in 2025 and the partial pricing-in of the aforementioned factors, the rate of appreciation is expected to narrow to 10%-15%, with the annual price potentially冲击 $5000 per ounce.
The copper supply-demand deficit is projected to widen in 2026, with the annual average price expected to rise to $12,000 per ton. Supply disruptions at the mine level are anticipated to remain high in 2026, and potential production cuts at the smelting level exacerbate supply tightness. Global refined copper production is forecast to grow by only 1.1%. Demand will continue to benefit from power sector investment driven by rapid AI development and US inventory stocking行为, with a projected year-on-year increase of 2.1% in 2026. The annual copper supply-demand deficit may widen to 450,000 tons. Furthermore, the loose liquidity environment will continue to support relatively strong copper prices. The average copper price is forecast to rise by 20% to $12,000 per ton in 2026.
Risk factors include unexpected Fed policy disruptions; escalation of global geopolitical and trade conflicts; and Chinese macro policy strength falling short of expectations.
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