CITIC Securities says US Sep CPI YoY 3.7% and PPI YoY 6.3% exceeded expectations
but long-end Treasury moves faded within 24 hours. After Oct 14 CPI the 10‑yr
yield jumped ~13bp to 5.325% then reversed to close lower; after Oct 15 PPI the
10‑yr rose only ~2.5bp, the 30‑yr fell, and the 10‑yr quickly dropped to about
5.048%. The firm judges market pricing of inflation is rapidly waning and the
long-end pricing anchor has rotated decisively toward a growth/AI cycle — the
priced “recession” is primarily tail risk from a downcycle in AI capex rather
than a conventional demand slump, and can coexist with stagflation. Current
moves are left-side tentative pricing, not a confirmed trend. Near term, US
equities may see continued sector rotation as flows shift from AI into energy,
defensive consumer staples and healthcare (which could benefit if Democratic
sweep expectations firm). Hong Kong stocks could benefit from a reversal in
overseas AI-hardware flows and potential MSCI EM exclusion of Indonesia
prompting reallocations.
