CITIC Securities said in a market note that margin financing in China’s A-share market and exchange-traded fund flows are moving in opposite directions, with liquidation pressure not fully over even as volatility has started to ease. The brokerage added that selling from earlier dip buyers seeking to break even may limit the pace of any rebound.
On U.S. rates, the note said the 10-year Treasury has been fluctuating around 4.7%, reflecting two forces: implied inflation and AI-related debt financing, both of which have pushed up long-end yields. CITIC Securities also said the U.S. Treasury has stepped up bond buybacks, a sign policymakers do not want sharply tighter financial conditions to damage the AI sector and the broader economy. In its view, the pressure from rates on equities remains relatively manageable.
At the strategy level, the firm described the current recovery trade as having support on the downside but limited room on the upside. It said policymakers have shown a clear willingness to stabilize the market, but fresh capital has yet to form a unified force, leaving trading dominated by existing funds. A stronger catalyst would be needed for indexes to break higher.
Odaily reported that CITIC Securities said margin financing in China’s A-share market and exchange-traded fund flows are moving in opposite directions, with the clearing process not yet complete even though volatility has started to narrow. The firm added that selling pressure from earlier bargain hunters looking to get back to break-even could cap the slope of any rebound.
On overseas rates, CITIC Securities said the U.S. 10-year Treasury has been fluctuating at a high level around 4.7%. It pointed to two drivers behind long-end yields: implied inflation and AI-related debt financing.
The firm also said the U.S. Treasury has increased bond buybacks, which in its view shows policymakers do not want financial conditions to tighten abruptly and hurt AI and the broader economy. On that basis, it said the pressure from rates on equities remains relatively controllable.
From a strategy perspective, CITIC Securities said the current recovery trade has support below but resistance above. It said policy support is clearly in place, but new inflows have not yet formed a combined force, leaving the market defined by existing capital. A stronger catalyst would be needed for indexes to break upward.
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