The Zhitong Finance App learned that China Merchants Securities released a research report saying that on November 10, the US CPI data was released. After the CPI seasonal adjustment in October 2026, it rose 0.4% month-on-month, lower than the previous value of 0.6%, but higher than market expectations of 0.3%; excluding food and energy, the core CPI rose 0.3% month-on-month, maintaining this growth rate for the third month in a row, higher than market expectations of 0.2%. Although overall inflation has slowed somewhat from month to month with the decline in energy prices, core inflation is still sticky. The current inflationary pressure in the US has not been effectively relieved. The December interest rate hike is a foregone conclusion. Before the December interest rate meeting, there was also a non-agricultural and one inflation data to use as a reference.
The main views of China Merchants Securities are as follows:
The US CPI exceeded expectations in October, and the December rate hike is almost a foregone conclusion. On November 10, the US CPI data was released. After the CPI seasonal adjustment in October 2026, it rose 0.4% month-on-month, lower than the previous value of 0.6%, but higher than the market expected 0.3%; excluding food and energy, the core CPI rose 0.3% month-on-month, maintaining this growth rate for the third month in a row, higher than the 0.2% expected by the market. Recently, with the US and Iran situation, although overall inflation has slowed somewhat from month to month with falling oil prices, core inflation is still sticky. Currently, US inflationary pressure has not been effectively mitigated. The December interest rate hike is a foregone conclusion, and we need to be wary of the risk of an accelerated rate hike in December. However, considering that monetary tightening in the early period is already beginning to bear fruit, and if the US-Iran conflict continues to ease or even end, it will accelerate the downward trend in inflation. Combined with the current weak market sentiment and capital market stability, the probability of accelerating interest rate hikes is low.
Monetary policy and interest rates: Last week (11/2-11/6), the central bank made a net return of 1523 billion yuan in the open market, and reverse repurchases of 226 billion yuan will expire in the coming week. Interest rates in the money market have risen, yields on short- and long-term treasury bonds have declined, the scale of interbank deposit issuance has declined, and interest rates for issuing have varied. As of November 6, R007 was down 4.3 bps, DR007 was up 0.0bp, 1-year treasury yield was down 0.3 bps, 10-year treasury yield was down 6.3 bps, interbank deposit issuance was down 436.09 billion yuan, 1M/6M interbank deposit interest rates were rising, and 3M interbank deposit interest rates were declining.
Capital supply and demand: The secondary market can track the net inflow of capital. The financing balance declined, with net sales of 60.34 billion yuan of financing capital; net inflow of ETFs of 195.48 billion yuan; and the share of newly established partial equity public funds decreased. Significant shareholders switched from a net increase in their holdings to a net reduction in their holdings, and the scale of the announced plan to reduce their holdings declined.
Market preferences: In terms of industry preferences, electronics, power equipment, and banks receive a high net inflow of various types of capital. Broad index ETFs are all net purchases, with the Shanghai and Shenzhen 300 ETFs being the most subscribed; industry ETFs are mainly net redemptions. Among them, brokerage ETFs have more redemptions and new energy & smart car ETFs have more subscriptions. The highest net purchase was the Huatai Berry Shanghai and Shenzhen 300 ETF; the highest net redemption was the Cathay Pacific China Securities semiconductor materials and equipment themed ETF.
Risk warning: Economic data and policies fell short of expectations, and overseas policies tightened beyond expectations.