US CPI remains generally moderate and controllable, with structural divergence in inflation

Important Information: 01) The E Fund Select Strategy Series - E Fund (Hong Kong) Select Bond Fund (the "Sub-Fund") is subject to general market fluctuations and other inherent factors of the Sub-Fund's assets. As such, you must bear the risk of not being able to recover your principal investment in the Sub-Fund or potentially losing a substantial portion or all of your investment. 02) The Sub-Fund primarily invests in a portfolio consisting of investment-grade debt securities denominated in offshore RMB, USD, EUR, or HKD, aiming to generate a stable income stream beyond capital appreciation for long-term capital growth. Risks involved may include a) risks associated with debt securities (including credit risk, risks related to credit ratings, credit rating downgrade risk, interest rate risk, valuation risk, volatility and liquidity risk, sovereign/government debt risk, risks of below-investment-grade or unrated debt securities, and risks associated with investing in loss-absorbing debt instruments), b) concentration risk, c) emerging market risk, d) foreign exchange risk, e) risks related to sale and repurchase agreements, f) risks related to reverse repurchase agreements, g) RMB currency risk and RMB-denominated class risk, h) hedging risk for RMB-denominated classes, i) convertible bond risk, j) risks related to equity securities, k) Eurozone and European country risks, l) "Dim Sum" bond risk. 03) The Sub-Fund may invest in derivatives within the limits permitted by the Code for hedging or investment purposes, and under adverse conditions, its use of financial derivatives may become ineffective and/or result in significant losses to the Sub-Fund. 04) The Sub-Fund may pay distributions out of its capital. Investors should note that paying distributions from capital is equivalent to returning or withdrawing part of an investor’s original investment or any capital gains attributable to that original investment, and such distributions may lead to an immediate reduction in the net asset value of the units. The distribution amount and net asset value of hedged unit classes may be adversely affected by the interest rate differential between the class currency of the hedged unit class and the base currency of the Sub-Fund, resulting in an increased amount of distributions paid from capital and thus greater capital erosion compared to non-hedged unit classes. 05) Unless intermediaries have explained to you during the sale of the fund that this fund is suitable for you after considering your financial situation, investment experience, and objectives, you should not invest in the Sub-Fund. 06) Investors should not make investment decisions based solely on the information provided in this document and should carefully read the details and risk factors contained in the fund's offering documents.

Hello, dear investor friends. What important changes occurred in the markets last week? Let’s take a look together:

Last week’s key US macroeconomic data focused on inflation. The overall CPI remained moderate and controllable, while the PPI rebounded more than expected due to energy price increases, showing structural divergence in inflation.The December CPI increased by 2.7% year-on-year, in line with expectations, while core CPI rose by 2.6% year-on-year, slightly below expectations. Structurally, stickiness in core service inflation was evident, with month-on-month growth rates rebounding in housing, healthcare, and transportation services.Core goods inflation remained flat month-on-month, hitting its lowest level since May 2025, as weak demand curbed gains in categories like automobiles and apparel.Additionally, the November PPI, delayed due to the government shutdown, showed a 3% year-on-year increase, as did core PPI, surpassing expectations of 2.7%, mainly driven by a 4.6% surge in energy prices.Upstream cost pressures saw a temporary rebound, but underlying growth remained moderate.

China released its December trade and social financing data, with exports remaining resilient while the scale of social financing declined and showed significant structural divergence.On the trade front, dollar-denominated exports grew by 6.6% year-on-year and imports by 5.7%,Exports benefited from the global manufacturing upturn and market diversification, with significant growth in exports to ASEAN and Hong Kong. High-tech and mechanical & electrical products led the upgrade, while integrated circuits and automobile exports showed impressive growth.The rebound in imports was driven by recovering domestic demand and increased demand for intermediate goods. Improvements in resource imports reflect industrial restocking needs.However, Sino-US trade remains under pressure, and labor-intensive product exports continue to be sluggish.The central bank lowered the relending rate and signaled further easing, but social financing growth continues to decline. It is expected that the social financing center may keep falling into early 2026.

In terms of bond market performance,The global bond market slightly retreated last week, with the global composite index down 0.16%.The US composite index fell 0.14%, US investment-grade corporate bonds dropped 0.01%, and high-yield corporate bonds rose 0.17%. The emerging market USD bond composite index climbed 0.09%, while the Chinese offshore credit bond index gained 0.02%.In terms of interest rates, US Treasury yields moved higher overall, with the yield curve flattening bearishly.The 2-year US Treasury yield rose 5 bps from last week to 3.59%, while the 10-year US Treasury yield climbed 6 bps to 4.22%.

$E Fund (HK) Select Bond Fund (HK0000672128.MF)$ The A-share cumulative USD share net value is 12.75*. Recent overall trends in the bond market indicate fluctuations.We will continue to deploy high-quality credit assets in the context of low spreads, striving to provide more stable returns relative to the market.。

Key economic data releases to watch this week:

China will release its December economic and employment data on Monday.

China will announce the January Loan Prime Rate (LPR) on Tuesday;

The US will release the PCE Price Index on Thursday;

The US will announce the January S&P Manufacturing PMI data on Friday.

*Data source: E Fund Hong Kong website, as of 2026/1/19.

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