EUROZONE ISSUANCE: EGB Supply Daily

Industrial profits are expected to stabilise and rebound in 2026, potentially achieving circa 10% growth by end-2026, mainly driven by a moderate price recovery, Yicai.com reported citing Zhang Jingjing, chief macro analyst at China Merchants Securities. The figure grew by only 0.1% for the first eleven months, facing pressure to maintain a positive reading for 2025, partly due to structural adjustment as the government’s “anti-involution” campaign has temporarily suppressed production and sales expansion by some industries, said Zhang Di, chief macro analyst at China Galaxy Securities. 

The yuan will see continued two-way fluctuations and any one-way trend is unsustainable, China Securities Journal reported citing analysts. The U.S. dollar index may rise in the future after the recent sharp fall amid relatively rational expectations for the Federal Reserve’s interest rate cuts in 2026. Meanwhile, the dollar index could rise passively should the euro and yen depreciate, which could also passively pressurise the yuan, the newspaper said citing Luo Zhiheng, chief economist of Yuekai Securities. The offshore yuan has fluctuated around the 7.0 level against the dollar after briefly breaking through the 7.0 mark last Thursday.

China's authorities should further expand consumer subsidy from goods to service consumption, analysts told Yicai.com after the Ministry of Finance confirmed it will continue with its trade-in scheme in 2026 with the scope and standards of subsidies being optimised. Yuan Haixia, president of the China Chengxin International Research Institute noted the diminishing policy effectiveness as previous subsidies had already overdrawn some of the demand for consumer goods. Yuan said it is necessary to increase consumption subsidies in the form of cash and digital currencies, as well as subsidies for childcare and employment.