CITIC Securities: There is still room for downward adjustment of interest rate hikes expectations in the US market.

The research report by CITIC Securities pointed out that in June 2026, the unemployment rate in the United States was 4.2%, lower than expected, and the number of new non-farm jobs was also lower than expected. The leisure hotel industry, which made a major contribution in May, became a drag on the non-farm data in June. However, the industry's non-seasonally adjusted employment continued to increase, with the month-on-month growth weaker than in previous years, resulting in a seasonally adjusted negative growth. The decline in the unemployment rate was affected by the drop in labor participation rate, and the significant decline in the labor force participation rate among the 25-54 age group in a single month may be related to factors such as the World Cup, which we believe should not be seen as a trend change. Wage growth remains high, and inflation stickiness still exists. After the data was released, the market adjusted the pricing for rate hikes downwards, but the fundamentally strong non-farm data was not enough to shift market expectations towards significantly loose liquidity. We maintain our judgment that the Federal Reserve will keep interest rates unchanged for the year and believe that there is still room for downward adjustment in market rate hike expectations.