Mini Program: Daily Investment Bank / Institutional Insights Summary
Overseas
1. Goldman Sachs: Expects the Federal Reserve to raise rates in December
According to Kay Hauser, Chief Investment Officer for Fixed Income at Goldman Sachs Asset Management, the Fed’s pause in rate hikes is likely only temporary. Following the Fed’s decision, he wrote: “We expect the Fed to resume rate hikes in December. The strong September CPI data reminds us that upside inflation risks remain, and the Fed is likely to take additional ‘precautionary’ measures,” Hauser said. “If energy prices rise again or subsequent data remain robust, further tightening could come next year.”
2. Fitch: Data in the coming weeks will lay the groundwork for a December rate hike.
Fitch Ratings' Chief Economist Brian Coulton said that data to be released over the coming weeks will likely provide all the signals the Fed needs to justify a December rate hike: "Strong growth in unit profits, elevated energy prices, and the broadening of inflation over the past year all point to upside risks to U.S. inflation prospects—despite recent core CPI inflation data remaining relatively stable."
3. U.S. Banks: Investors Withdraw from U.S. Stocks for the Second Consecutive Week
According to Bank of America’s analysis, investors sold U.S. equities net for the second consecutive week last week, with the communication services sector experiencing the largest outflows. The bank’s clients withdrew $3.5 billion from U.S. equities last week, following a $15 billion outflow the prior week, indicating continued selling pressure. Bank of America analysts Jill Carey Hall and Trey Brown noted that retail investors were the primary drivers of this sell-off. The communication services sector—which includes telecom companies and media and tech firms like Meta—recorded the largest single-week outflow since records began in 2018. Industrials were the second-largest sector by outflow and have now seen net outflows for 13 consecutive weeks.
4. World Bank: Commodities prices expected to rise 23% by 2026, global oil supply to decline by 5.2%
The World Bank stated on Wednesday that global commodity prices are projected to rise by 23% by 2026, driven by higher energy prices during the Middle East conflict, disrupted freight logistics, blocked grain shipments from the Black Sea, and strong demand for safe-haven assets such as gold. In its latest Commodity Markets Outlook report, the World Bank noted that global shocks have intensified this year, leading to significant price increases in oil, natural gas, food, and metals. If the Middle East conflict escalates further and Russian oil infrastructure continues to be damaged, the situation could worsen. The report forecasts a 7% decline in commodity prices next year. However, if shocks persist—including the strongest El Niño event since 1950—food commodity prices may remain elevated, increasing the risk of higher inflation and tighter monetary policy. The World Bank highlighted that global oil inventories have been steadily depleted during the Middle East conflict, and it expects global oil supply to fall by 5.2% in 2026, the largest decline in four decades aside from the 2020 global economic recession.
5. Bank of Montreal: Diplomatic efforts fail to mask risks; U.S. may restart military strikes against Iran
RBC Capital Markets stated that, despite a series of intense diplomatic activities in the days leading up to the midterm elections, the possibility of the United States launching renewed military strikes against Iran remains. Analysts led by Helima Croft noted in their report that there has been no所谓 "face-saving exit" before the election; both the U.S. and Iran have held firm to their deeply entrenched negotiating positions. The overall trend still points toward a short-term military escalation by the U.S. The key question is whether any new action will be the final, decisive blow before the U.S. withdraws, or a broader military campaign aimed at fully achieving its objectives and facilitating regime change. If the U.S. opts for a more comprehensive military operation, the risk of Iran launching a more devastating retaliation will rise accordingly. After the midterm elections, even if Congress cannot forcibly halt the war, if the Democratic Party gains control of either one or both chambers, it is likely to take stricter measures to control appropriations—namely, restricting funding for the war.
6. ING: UK Budget May Benefit the Pound and UK Government Bonds
Analyst Chris Turner of ING stated in a report that the UK budget announcement at 20:30 Beijing time may have a positive impact on the pound and UK government bonds. The yield spread between UK and German government bonds could narrow. Looking ahead to 2027, the UK is one of the few economies in the Group of Seven (G7) whose fiscal position is moving in the right direction. As inflation rises, more workers are being pushed into higher income tax brackets, and the UK budget deficit is expected to remain below 4% of GDP. He said: “Unless the budget unexpectedly introduces stimulative fiscal measures that negatively impact UK government bonds, the EUR/GBP exchange rate appears likely to remain under pressure and could further decline toward 0.8315.”
7. Oxford Institute: France's fiscal crisis may worsen further, but the European Central Bank is unlikely to intervene.
Leo Barincou of the Oxford Economics Institute stated in a report that France’s fiscal crisis may worsen before improving, but it is unlikely to prompt the European Central Bank to act. He noted that a further sell-off of French government bonds could occur if protests escalate further, the government collapses due to failed budget negotiations, far-left presidential candidate Jean-Luc Mélenchon gains additional momentum, or signs emerge that far-right candidate Marine Le Pen does not take fiscal credibility seriously. Barincou said, “Even if French bond spreads widen to 300 basis points, it may not trigger meaningful fiscal action by the government or prompt the ECB to purchase French bonds.” He believes that, under such circumstances, a full-blown crisis could be avoided due to limited exposure of French banks to domestic government debt and the overall resilience of the financial system, “but France will still face significant economic and fiscal costs.”
8. Danske Bank: France's fiscal risks weaken expectations of ECB rate hikes, potentially further weakening the euro
Danske Bank analyst Jesper Fjarstedt stated in a report that the euro still has room to decline due to concerns over France’s fiscal situation. The euro has now fallen to a 17-month low against the U.S. dollar. He said, “The market is beginning to question the necessity of near-term ECB rate hikes, a stark contrast to September, when investors were almost certain the ECB would raise rates at tomorrow’s meeting.” He noted that the market now expects the ECB to hold rates steady this Thursday, and the probability of a rate hike in December has dropped below 80%. Danske Bank still anticipates an ECB rate hike in December but believes this will mark the end of the current tightening cycle. If this assessment is correct, the market is currently pricing in a policy rate one year from now that is approximately 45 basis points too high.
9. Danske Bank: Dollar rebound pressures euro; expectations of ECB rate hike in December remain intact
The EUR/USD retreated after a modest gain in the previous trading session, trading around 1.1140 during the Asian session on Thursday. The dollar rebounded from its previous day’s decline following the Federal Reserve’s decision to hold rates steady, putting pressure on EUR/USD. Markets expect the European Central Bank (ECB) to maintain its deposit rate at 2.50% at its Thursday meeting, after a cumulative 50 basis point hike this year. However, persistent inflationary pressures driven by energy prices have sparked discussions about whether the ECB may raise rates again in December. Analysts at Danske Bank noted that the ECB’s third-quarter bank lending survey indicated that recent monetary policy adjustments have had only limited impact on credit conditions. The bank stated: “Banks have tightened credit standards more than expected, but the net percentage of banks reporting tighter standards remains low by historical standards and is primarily driven by French banks. This suggests that the ECB’s tightening so far has led to only a modest tightening of credit standards; given that policy transmission remains relatively smooth, this situation alone should not prevent the ECB from further tightening monetary policy.”
Domestic
1. CICC: The Fed's rate hikes are not over, but there's no need to rush into action
CICC research report states that the Federal Reserve held rates steady in October, with policymakers demonstrating a firm stance against inflation while also indicating that patience in policy is appropriate. The shift of some hawkish officials toward a wait-and-see approach suggests reduced urgency for consecutive rate hikes. Since the September hike, U.S. financial conditions have slightly tightened, and inflation premiums have eased, allowing the Fed to wait for further evidence of policy effects. Looking ahead, we expect one more rate hike in December, followed by continued observation. This tightening cycle is more likely to be a moderate, gradual adjustment rather than an aggressive contraction. Additionally, Walsh announced that starting next year, the frequency of rate voting meetings will be reduced, with some meetings dedicated solely to discussing long-term monetary policy strategy—continuing her efforts since taking office to reform the Fed’s policy framework. For markets, the risk of unexpected further tightening by the Fed has decreased in the short term, while a relatively tight monetary stance is expected to persist in the medium term.
2. Kaiyuan Securities: The Fed will remain cautious, with another rate hike possible in 2026
The Federal Reserve released its October FOMC statement at 1:00 AM Beijing time on October 29, announcing that it would maintain interest rates unchanged. In response, Orient Securities stated that the Fed will remain cautious and may raise rates once again in 2026. The firm believes that, following the September rate hike, the pressures facing the Fed have slightly eased, reducing the urgency for consecutive hikes. Additionally, with the October FOMC meeting occurring close to the midterm elections, raising rates at this time could entangle the Fed in political controversy. The Fed is likely to maintain a cautious stance on future policy to avoid unexpected spikes in inflation and loss of control over public inflation expectations. Under the base case scenario, the Fed may implement one more rate hike in December 2026; the likelihood of further hikes in 2027 will depend heavily on developments in the Iran-U.S. situation and the transmission effect of oil prices on U.S. inflation.
3. CITIC Securities: Still expects the Fed to raise rates by another 25 bps in December
CITIC Securities' research report states that the Federal Reserve held rates steady as expected in October, with its statement expressing greater optimism about the pace of economic expansion and providing more cautious guidance on policy stance. Powell’s post-meeting remarks were more moderate than in September, noting that credit conditions have tightened and inflation expectations have moved in the right direction, while also previewing adjustments to FOMC meeting schedules over the next two years. We still expect the Fed to raise rates by another 25 bps in December, and the terminal rate of this tightening cycle may not be far from current levels. New developments in the Middle East have not yet provided Iran and the U.S. with a clear or lasting exit path; high oil prices are likely to persist until the situation becomes clearer, and further improvement in dollar liquidity requires a new catalyst.
4. CITIC Securities: Monitor freight rates for another upward trend; view pullbacks as buying opportunities.
According to a research report from CITIC Securities, the timing of short-term cargo release, combined with an increase in vessel attacks, has disrupted freight rates. In October 2026, the number of attacked vessels in the Middle East exceeded that of September. Although the one-year time charter rate for VLCCs has remained stable, last week’s correction in spot rates has raised market concerns. We believe that the spiraling rise in effective vessel demand, coupled with increased exports from the Middle East, continues to strain the transportation sector. As peak-season cargo is released in concentrated batches, VLCC rates are expected to rise again. Non-compliant vessels transitioning to compliant status still face multiple hurdles, including classification society certification and insurance acquisition, and given their generally advanced age, the net impact on effective capacity is estimated to be less than 20 vessels. This round of rate increases stems from strong upstream export demand and persistent downstream inventory drawdowns, which continue to pressure crude oil transportation. Under ongoing geopolitical tensions, the tightness in oil transportation supply and demand is unlikely to ease. Meanwhile, sustained inventory depletion is accumulating restocking demand, and tighter product oil supplies are expected to keep cracking spreads elevated. We recommend monitoring potential mispricing opportunities arising from market overreactions to news events.
5. CITIC Securities: Frequent disclosures of share repurchases and increases demonstrate market confidence.
China Securities' A-share strategy report states that market volatility has recently increased, with A-share listed companies collectively issuing a surge of buyback and增持 announcements. As of the latest data, buyback amounts announced since October have exceeded RMB 16 billion, and the cumulative total for this year has approached RMB 250 billion (including the Beijing Stock Exchange), reaching a multi-year high. Among these, the electronics and non-ferrous metals sectors have seen relatively higher buyback amounts since October. Historically, listed companies exhibit stronger willingness to repurchase and增持 following significant market corrections. As large-scale buybacks and增持 activities proceed, the probability of market stabilization and recovery significantly increases. Recent share repurchases by listed companies are primarily used for equity incentives and market capitalization management, both of which positively contribute to strengthening future fundamentals and enhancing shareholder equity. The recent surge in buyback and增持 announcements signals confidence in the companies’ future operations and prospects in the capital markets. In the short term, the growing volume of such announcements is expected to provide effective support for market stabilization and upward momentum; in the medium to long term, as capital market reforms advance, A-shares are poised for continued improvement in shareholder returns.
6. CITIC Securities: The AIGC creation platform market segment has a potential market size of hundreds of billions of dollars.
CITIC Securities' research report states that AIGC creation platforms are among the native AI application sectors with the fastest path to commercialization. According to WanDian, Yanyu Technology achieved an annual recurring revenue (ARR) of $300 million by May 2026, reflecting sustained high market interest. The market is primarily focused on three aspects: the incremental value platforms provide beyond model aggregation; their long-term competitiveness and risk of being absorbed by model providers; and their potential to enhance bargaining power along the value chain and improve profit margins. CITIC Securities believes this sector holds a market opportunity worth hundreds of billions of dollars, with the core value of platforms lying in aligning model supply with creator intent, supported primarily by model-agnostic orchestration and robust product engineering capabilities. Currently, model providers are focused on iterating model capabilities, while AIGC creation platforms leverage their lightweight organizational structures to rapidly iterate and secure first-mover advantages, building long-term barriers through a data flywheel powered by Harness. In the long term, as API procurement costs decline, pricing power increases, enterprise business share grows, and proprietary in-house models are deployed, platform gross margins are expected to expand. Recommendations: native AIGC creation platforms and internet companies.
7. CITIC Securities: The liquor sector is currently in the late stage of its cycle bottoming out and nearing the end of its consolidation phase.
China Securities Research Report states that the liquor sector is currently in the late stage of its cycle bottoming-out and nearing the end of its consolidation phase, with bottoming signals already evident in pricing, inventory levels, and market expectations. Looking ahead to 2027, the report anticipates a new equilibrium in liquor supply and demand—demand is expected to experience weak recovery driven by macroeconomic catalysts and low base effects, while supply is projected to further contract amid intensifying competition. In the long term, the industry is poised to steadily enter a phase of healthy recovery. Although domestic demand still faces some pressure, current valuations have already priced in substantial pessimism regarding the sector’s medium- to long-term prospects. Considering the liquor sector’s strong dividend yield and the potential for a shift in future demand expectations, the report recommends increasing allocations to leading liquor companies at this industry bottom.