Mini Program: Daily Investment Bank / Institutional Insights Summary
Overseas
1. J.P. Morgan: Maintains bearish stance on U.S. Treasury duration, but bearish sentiment has weakened.
JPMorgan strategists stated in their report that, considering the upcoming U.S. non-farm payrolls report and technical factors related to long positions, they maintain a bearish view on U.S. Treasury duration, though the bearish bias is less pronounced than in recent weeks. The strategists noted that the short and mid segments of the U.S. Treasury yield curve have now realigned with fundamental drivers, providing some support for recent yield movements.
2. JPMorgan: Strong PMI data and energy factors may be the main drivers behind recent bond selling.
JPMorgan strategists stated in their report that the latest round of bond selling reflects stronger-than-expected September PMI data, particularly in the eurozone and the United States, alongside heightened market sensitivity to energy-related news. The strategists noted that recent noise surrounding potential U.S. restrictions on diesel exports has added another layer of uncertainty. JPMorgan recommends that investors maintain a neutral duration stance on German government bonds in the short term; however, they emphasize that medium-term yields on German bonds remain attractive for long-term investors capable of enduring short-term volatility.
3. Goldman Sachs: Expects the yen to rise to 150 over the next 12 months, supported by capital inflows and the Bank of Japan's rate hikes.
Goldman Sachs expects the yen to rise to the 150 level over the next 12 months, marking a shift from its previous bearish stance. The firm believes that domestic policy changes in Japan and potential capital inflows will strengthen the yen’s upward prospects. In its report, Goldman Sachs strategist Karen Reichgott Fishman raised her 12-month yen forecast from 165 yen per U.S. dollar to 150 yen per U.S. dollar, while adjusting the 3-month and 6-month targets to 158 and 155, respectively. She stated that the revision is primarily driven by the Bank of Japan’s faster-than-expected interest rate hikes and an increased likelihood of domestic capital returning to Japanese assets. Fishman wrote: “These developments collectively enhance the appeal of going long on the yen, particularly as markets begin to worry about recession risks, given the yen’s potential to offer some protection.”
4. Morgan Stanley: Expects the Bank of England to raise rates by 25 basis points in November and February next year.
Morgan Stanley revised its forecast for the Bank of England’s interest rates on Friday, now expecting two 25-basis-point hikes in November and February, after previously anticipating no rate increases in the foreseeable future. In a research report, Morgan Stanley’s analysts stated: “We have formally updated our Bank of England forecast to two quarterly rate hikes, with fiscal policy being a key potential catalyst for further tightening. We expect economic growth to slow at the start of the year, but view near-term risks as balanced given strong global growth.” The Bank of England held rates steady last week but warned that rates may need to rise if the Iran conflict persists, while forecasting that UK inflation will exceed 4% early next year.
5. Bank of America: Rising energy prices are pushing inflation higher; the ECB is expected to raise rates by 25 bps in December.
Bank of America expects the European Central Bank to raise interest rates by 25 basis points in December, citing a new energy shock that will keep eurozone inflation above the central bank’s target for longer. Recent increases in European natural gas and oil prices are intensifying inflation concerns. Ongoing geopolitical tensions and the lack of progress in resolving the Iran conflict could keep energy markets tight through the winter demand peak. Meanwhile, Bank of America stated in its report: “Growth may still hold up reasonably well, but its strength is likely to fall short of current levels, and we suspect significant second-round effects have not yet materialized.” The bank noted that an ECB action in October is not impossible, but this would likely require significantly higher inflation data.
6. Jefferies: Inflation and budget deficits may continue to pressure long-term bonds.
Jefferies global economist Mohit Kumar stated in a report that the firm continues to avoid long-dated government bonds, saying, “We still won’t touch the long end of the yield curve.” Kumar noted that rising interest rates are driven not only by inflation but also by concerns over fiscal deficits. According to Jefferies, fiscal deficits are a greater medium-term concern than oil-driven inflation, and there are currently no clear signs of efforts to rein in fiscal deficits in either the U.S. or Europe. Kumar added, “As sovereign and corporate bond issuance remains high over the coming quarters and could further increase, we believe long-dated bonds will continue to face pressure.”
7. Apollo: Diesel prices hit record highs, presenting greater inflation challenges for the Federal Reserve
Apollo Global Management’s chief economist, Torsten Slok, warned that the inflationary threat from record-high diesel prices could exceed the Federal Reserve’s current expectations, as fuel costs are being passed through to core consumer prices. Slok noted that diesel-related transportation costs affect the economy differently than gasoline prices. Because transporting goods is essential to economic activity—from retail supply chains to data center construction—demand is highly inelastic, meaning price increases will ultimately be passed on to businesses and consumers. This impact is particularly critical as the Fed sets monetary policy following its first interest rate hike since 2023. Inflation remains significantly above the central bank’s 2% target. Since core inflation metrics exclude energy, Slok argues that the Fed cannot treat rising diesel prices as merely temporary, as they will spill over into core inflation categories.
8. BNP Paribas: The Federal Reserve is unlikely to repeat the rate-hiking cycle of 2022-2023
Barclays strategist Chi Lo said that although the market expects two more rate hikes, a September Fed rate increase is unlikely to mark the beginning of a new tightening cycle similar to those seen from 2022 to 2023. Instead, it could signal the start of “preventive rate hikes” aimed at bringing inflation back to target by reversing last year’s three cuts. He noted that further hikes will not resolve external shocks such as war and energy price inflation, but they could alleviate financial market concerns about the Fed’s credibility in fighting inflation. The Fed cannot indefinitely ignore recurring or persistent shocks that fail to fade as expected. However, by dampening activity in other parts of the economy, additional rate hikes could also carry the risk of pushing the economy into stagflation.
9. Mitsubishi UFJ Morgan Stanley Securities: Rising expectations for Fed rate hikes may prompt the Bank of Japan to accelerate its own tightening cycle.
Mitsubishi UFJ Morgan Stanley Securities has advanced its forecast for the Bank of Japan's interest rate hike from January and June 2027 to December 2026 and April 2027. The brokerage’s analysts stated in their report: “As market expectations for further Fed rate hikes intensify, the Bank of Japan may accelerate the pace of reducing its monetary policy support.” The Bank of Japan’s July meeting minutes, released on Monday, revealed that one policy board member noted that, given underlying inflation is approaching 2% and price upside risks should be given greater attention than before, the pace of rate hikes could be faster than market expectations.
Domestic
1. CITIC Securities: Maintains its view that the A-share market will remain volatile this year, with the period around the third-quarter earnings report being the final offensive window of the year.
China Securities Research Institute's report points out that U.S. equities have reached new highs driven by a new wave of application adoption and hardware recovery, and external markets should no longer be considered a factor influencing A-shares. Although market sentiment is temporarily relatively weak, China Securities still maintains its view that the A-share market will remain range-bound this year. The period around the third-quarter earnings release represents the final offensive window of the year, and the probability of index recovery is significantly higher than that of a new low. In fact, given an improving earnings trend, visible macroeconomic risks, and already depressed sentiment, the likelihood of a sharp market correction is very low. Meanwhile, the conditions for the Shanghai Composite Index to recover are not as stringent as commonly assumed. China Securities tested five possible scenarios for the index’s recovery within the year; under conditions of industry vitality and limited short-term incremental capital, a rally led by technology leaders, resource and chemical sectors, and financial heavyweights best balances fundamentals and liquidity. During this period of market hesitation, investors should remain optimistic and position portfolios around AI combined with energy and chemicals.
2. CITIC Securities: Recommends Hong Kong investors prioritize high-quality sectors with strong defensive characteristics and stable dividends, such as power.
China Securities noted that, under conditions of relatively limited capital, technology and biotechnology—two growth-oriented sectors in the Hong Kong market with higher elasticity and greater sensitivity to liquidity—are more likely to exhibit a trade-off relationship in portfolio allocation. Meanwhile, due to relatively weak inflows of southbound capital in 2026, particularly as foreign capital has consistently returned to Hong Kong stocks since June, marginal pricing power has been dominated by foreign investors. Consequently, amid sustained foreign outflows from the Hang Seng Tech Index and inflows into the biotechnology sector, a dynamic has emerged where the Hang Seng Tech Index is relatively weak while biotechnology is relatively strong. Overall, both the Hang Seng Tech Index and the Hang Seng Biotechnology Index have faced significant pressure under the current high-interest-rate environment. Given the current expectation of tightening global liquidity, investors are advised to prioritize sectors with strong defensive characteristics and stable dividends, such as power, telecommunications, and utilities.
3. CITIC Securities: Advanced driver assistance systems are accelerating adoption, continuously benefiting the industrial chain.
China Securities Research Report indicates that, according to data from First Electric Vehicle Network, the penetration rate of urban NOA in China’s passenger vehicle market reached 20.9% in the first half of 2026, driving significant growth in shipments of high-performance autonomous driving chips, urban NOA software, LiDAR, and autonomous driving domain controllers, with leading companies reporting substantial revenue increases. On the other hand, the commercialization of L4 autonomous driving is accelerating, with multiple companies already realizing economic benefits in flagship projects and actively advancing lightweight business models and global market expansion. Looking ahead to the second half of 2026, all segments of the industry chain are expected to further advance technology R&D and product launches, positioning the automotive intelligence value chain for continued gains.
4. CICC: Rising energy prices may boost intermediate goods exports
A report by China International Capital Corporation (CICC) states that from January to August 2026, China’s intermediate goods exports continued to accelerate. Beyond AI, the growth rate of upstream intermediate goods exports has rebounded, becoming a new driver of intermediate goods export growth. The increase in upstream intermediate goods exports is linked to rising energy prices; for example, exports of chemical and rubber/plastic intermediates have benefited from higher crude oil prices. For the non-ferrous metals sector, the rise in crude oil prices has increased the price competitiveness of domestic products relative to foreign ones, which may be one reason for export growth. Since non-ferrous metals are highly energy-intensive and China’s energy structure relies less on crude oil, the impact of rising crude prices on energy costs is relatively limited, providing a competitive advantage for non-ferrous metal intermediate goods exports.
5. Huatai Securities: Within the technology sector, prioritize optical communications, PCBs, and select domestic leaders in computing power.
Huatai Securities' A-share strategy indicates that the A-share market may currently be in a phase of consolidation and recovery. Given that prior adjustments have already released substantial valuation and trading risks, and historical patterns suggest a higher probability of market recovery after pre-holiday pullbacks, the risk-reward profile for holding stocks through the holiday has improved. However, as key U.S. data—including employment and PMI figures—are likely to be released during the holiday period, portfolio allocation should shift toward sectors with higher earnings certainty and more fully absorbed valuations: 1) Within technology, prioritize optical communications, PCBs, and leading domestic AI computing players with well-digested valuations and clear earnings visibility, while reducing exposure to earnings downgrades and purely thematic names; 2) Simultaneously consider underweighted sectors with improving valuation spreads, such as chemicals and paper, using dividend-paying assets as portfolio stabilizers. Prior to the holiday, maintain core positions with strong fundamentals, moderately reduce high-volatility trading positions, and prioritize portfolio structure over overall exposure.
6. Guojin Securities: Market trend opportunities remain unclear; structural responses remain the primary strategy.
According to a research report from Guojin Securities, market trend opportunities remain unclear, and structural positioning remains the primary strategy. Guojin Securities recommends: First, non-ferrous metals (gold, copper, aluminum) as assets opposing the U.S. dollar—over the long term, current technological advancements lack the capacity for further acceleration; however, a temporary rebound is taking shape following the realization of extreme rate hike expectations and a relaxation of geopolitical tensions. Second, the recent volatility in oil prices may instead trigger global restocking demand for energy, benefiting the petrochemical chain, including oil, oil transportation, and refining.