Mini Program: Daily summary of investment bank/institutional views

foreign

1. Bank of America: Investor sentiment was "super optimistic" in December

Bank of America's December Global Fund Manager Survey found that investor sentiment was "super optimistic" in December. The report said that investors' allocation to cash was at an all-time low, while allocation to U.S. stocks was at an all-time high. The report said that global risk appetite was at a three-year high, driven by optimism about economic growth related to Trump's second term and the Federal Reserve's rate cuts.

2. Bank of America: The dollar is expected to outperform the market in 2025

The latest Bank of America Global Fund Manager Survey shows that the U.S. dollar is expected to be the best performing currency by 2025. 40% of investors expect the dollar to outperform the market in 2025, up from 31% in November. Long positions in the U.S. dollar are considered the second most popular trade after bullish "Big Seven U.S. stocks". In December, the proportion of investors who believe that the dollar is overvalued rose to 59%, up from 51% in November and the highest level since January 2023.

3. TD Securities: The Fed's guidance on the pace of rate cuts may be more cautious

Analysts at TD Securities said investors now think the Fed may only cut rates by 50 basis points next year after data showed inflation stalled above its 2% target and Trump's victory, and they will closely study forecasts and comments from Fed Chairman Jerome Powell at the post-meeting press conference to see if policymakers have also become more cautious about further rate cuts. "While the Fed will still be keen to forecast further easing in 2025, guidance on the pace of rate cuts is likely to be more cautious," the bank's analysts said. On the data front, data including a strong November retail sales report released on Tuesday did little to change the Fed's description of "solid" economic growth after its last policy meeting, while inflation, while falling, "remains somewhat elevated."

4. Royal Bank of Canada: The Fed's latest dot plot is expected to suggest only two rate cuts in 2025

RBC Capital Markets said Fed officials this week could signal just two rate cuts next year when they update their quarterly dot plot forecasts, compared with four cuts expected in September. The median Fed dot plot forecast for September suggested a 100 basis point cut in 2024 and another 100 basis point cut in 2025. "Fed officials' speeches since the November meeting have all but locked in a 25 basis point rate cut," Blake Gwinn and Izaac Brook of Royal Bank of Canada wrote in a note on Wednesday. "Therefore, the focus of this week's meeting will be primarily on the updated dot plot and Powell's speech."

5. Capital Economics: Trump's presidency may prolong the dollar's strength

Capital Economics said in a commentary that the dollar is expected to appreciate slightly further in 2025 as the U.S. economy and stock market continue to outperform their peers and President-elect Trump implements a large-scale tariff policy next year. Capital Economics said that as widely expected, the Republican Party's big victory in the U.S. election in November triggered a broad rise in the dollar. The agency added that adjustments to the U.S. tariff increase are expected to push the dollar higher next year, pushing the dollar index to around 110, close to its 2022 peak.

6. Saxo Bank: Gold prices may remain strong next year

Ole Hansen, head of commodity strategy at Saxo Bank, said gold prices are likely to remain strong in 2025 after a record rally this year and the best annual return since 2010. Hansen said in a report that investors are increasingly turning to defense to protect and lock in gains before the end of the year. However, Hansen said Saxo Bank is optimistic about the outlook for gold in 2025 as an uncertain world drives demand from central banks and investors. Hansen added that fiscal instability, volatile inflation, geopolitical concerns and imbalances in the U.S. stock market could further push up safe-haven asset prices next year.

7. State Street Global Advisors: Gold prices have room to continue rising in 2025

Even after a spectacular run in 2024, gold prices still have room to rise further, according to State Street Global Advisors. George Milling-Stanley and other strategists say central bank gold buying will remain strong, helping to offset the negative impact of a stronger dollar on gold. Consumer demand is growing in India and China, and the agency believes that more investors will seek gold due to expected interest rate cuts and concerns about geopolitical tensions. They added that loose monetary policy and the Trump administration's fiscal policies that could increase deficits and exacerbate inflation should reduce the opportunity cost of buying gold instead of buying dollars or U.S. Treasuries. The agency's base case is for gold prices to be between $2,600 and $2,900 an ounce in 2025, with the possibility of rising to $3,100 an ounce.

8. ING: High short-term swap rates support the dollar against seasonal weakness

Francesco Pesole, an analyst at ING, said the dollar was higher as it continued to defy seasonal weakness due to elevated short-term swap rates. The Fed is widely expected to cut interest rates by 25 basis points this week, but this may indicate that future rate cuts will be cautious, as the market expects. Unless the Fed signals more rate cuts than market pricing implies, the two-year U.S. dollar overnight index swap rate around 4.0% should prevent the dollar from a sharp correction in a typically weak month.

9. ING: Cyclical and structural problems plague the German economy, and corporate confidence declines again

Carsten Brzeski, an economist at ING, said the confidence index released by the German think tank IFO on Tuesday showed that German corporate confidence has fallen again. Businesses are now more pessimistic than at any time since the worst of the COVID-19 pandemic in 2020. This is partly due to recent political events, including Trump's victory and the split in the Scholz government. But beyond that, the German economy has been stagnant for two years. The country is trapped between cyclical and structural obstacles and is struggling to agree on a way out.

10. TD Securities: Canada's accelerated core CPI growth brings uncertainty to the central bank's interest rate cut

Robert Both, a strategist at TD Securities, said the strength of Canada's core inflation will give the Bank of Canada pause in its next deliberations. Given the weak labor market, the rebound in core CPI is not enough to prevent the Bank of Canada from cutting interest rates by 25 basis points in January. In addition, trade policy and whether U.S. President-elect Trump will impose a 25% tariff on Canadian imports may put more pressure on the Bank of Canada's policymakers.

11. Capital Economics: The Bank of England will not follow the European Central Bank in cutting interest rates, and the interest rate may drop to 3.50% in early 2026

Ruth Grogery, an analyst at Capital Economics, said: "Despite weak domestic economic news and a deteriorating global outlook, we do not think the Bank of England will follow the ECB and cut interest rates by 25 basis points tomorrow. Our forecast is that interest rates will continue to fall gradually, to 3.50% in early 2026, rather than the low of 3.75-4.00% currently expected by investors."

domestic

1. CITIC Securities: The “two new” policies may boost investment and retail sales growth by 2.5% and 0.8% respectively next year

CITIC Securities said that the Central Economic Work Conference put expanding domestic demand as the first priority for next year, and pointed out that efforts should be made to expand the implementation of the "two new" policies, reflecting the importance attached to boosting domestic demand. We reviewed the effects of the "two new" policies implemented this year, and assuming that the special treasury bond funds used for the "two new" policies will double next year, we estimate that the boost to investment and retail sales growth in 2025 may be 2.5 percentage points and 0.8 percentage points respectively, which is expected to promote the continued recovery of my country's economy.

2. CITIC Securities: It is expected that the Federal Reserve will not be able to launch a digital dollar during Trump’s term

CITIC Securities said that looking forward, Trump may set up a "Cryptocurrency Advisory Committee" and consider using Bitcoin as a strategic reserve asset for the United States. Even if the U.S. Congress subsequently promotes the Bitcoin reserve plan, we expect its rate to be slow and the process will be full of twists and turns, which will have limited impact on the global dollar reserve currency system. However, it is expected that cryptocurrency payments will be promoted, especially the use of stablecoins in cross-border payments may be more extensive. Given that the Republicans won both the Senate and the House and Trump expressed his opposition to the digital dollar in this election, it is expected that the Federal Reserve will not be able to launch a digital dollar during Trump's term. The Federal Reserve will still focus on traditional economic indicators, and cryptocurrencies will have little impact on its monetary policy. During the Trump 2.0 period, cryptocurrencies may amplify the volatility of the U.S. stock market to a certain extent and trigger a redistribution of liquidity between different assets. Cryptocurrencies will occupy a more important position in overseas asset allocation portfolios, and it is expected that U.S. stock cryptocurrency-related targets will also benefit from policy dividends.

3. Everbright Securities: It is expected that the interest rate will be cut by 20 to 30 basis points throughout next year

Zhang Xu, chief fixed income analyst at Everbright Securities, believes that the monetary policy orientation has been adjusted from "prudent" to "moderately loose", and the deposit reserve ratio may be reduced by about 1.5 percentage points next year, and the policy interest rate may be reduced by 20 to 30 basis points. The re-setting of the monetary policy orientation this time not only reflects the decision-makers' full recognition of the short-term economic operation difficulties and the deep-seated contradictions of the medium- and long-term structural transformation, but also reflects the adaptive change of macro-control thinking, and more importantly, reflects the determination to promote the continued recovery of the economy. (Everynet)

4. CICC: China's embodied smart sensor market is expected to reach 10 billion yuan by 2030

CICC said that perception is the basis of embodied intelligence and environmental interaction, and sensors are the core hardware of the perception system. Analogous to human sensory organs, embodied intelligence uses various sensors such as vision, hearing, touch, and force to perceive the external environment and understand its own status. With the development and maturity of the embodied intelligence industry, the performance of sensors continues to iterate and the number of single-machine installations also shows an increase. We believe that embodied intelligence is expected to bring incremental demand for sensors. We estimate that by 2030, China's embodied intelligence sensor market is expected to reach 10 billion yuan, and the market scale will gradually expand.

Article forwarded from: Jinshi Data