September Economic Data Exceeds Expectations, “National Team” Buys In Size

Key News

Asian equities were mixed to start the week, as Korea rebounded from morning losses to outperform. Meanwhile, Indonesia sank -3.6%, and is down -46% year-to-date (YTD) on MSCI’s index removal threat. Hong Kong was closed for Chung Yeung Day. 

With Hong Kong closed, Mainland China's volumes were very light, despite September's economic data release largely beating expectations. Shockingly, there was little coverage of the positive data. As such, it will not fit into the media narrative today. However, China's currency, the renminbi (CNY), did notice, appreciating versus the US dollar to close at 6.68 per USD overnight.

% changes are year-over-year (YoY) unless otherwise indicated.

• New Home Prices -0.14% versus August’s -0.17% (The number of cities with price increases rose by 2 to 17)
• Uses Home Prices -0.26% versus August’s -0.31% (The number of cities with price increases rose by 6 to 9, led by Tier-1 cities)
• Property Investment Year-to-Date (YTD) -20.6% versus August’s -19.9% and expectations of -20%
• Residential Property Sales YTD -13.7% versus August’s -13.1%
• Retail Sales +1.1% versus August’s +0.4% and expectations of +0.5%
• Online Retail Sales of Goods YTD +3.8% (Exclusive to us, as we parsed the data)
• Industrial Production +5.5% versus August’s +5.2% and expectations of 5.5%
• Q3 Gross Domestic Product (GDP) +4.5% versus Q2’s +4.3% and expectations of +4.4%
• GDP YTD +4.6% versus Q2 YTD +4.7% versus expectations of +4.6%

Memory chip giant CXMT fell -7.77% overnight despite announcing net income YTD through Q3 will be between $19.6 billion (CNY 131 billion) and $19.8 billion (CNY 132.4 billion) versus a loss of RMB -5.3 billion over the same time period last year. The company expects revenue over the Q3 and YTD time period to be between CNY 265 billion and CNY 270 billion versus CNY 32.1 billion YoY. Analysts expect 2026 revenue to grow 507% YoY to CNY 375 billion from 2025’s CNY 61 billion. The company also stated it will buy back CNY 1 billion to 2 billion worth of shares. An understated reason for today’s move was likely profit-taking as CXMT’s July 24^th IPO listing price was CNY 8.66 versus today’s close of CNY 41.52.

AI supply chain stocks were largely lower in the semiconductor subsector. However, Cambricon gained +1.48% and Enflame gained +4.65%. Meanwhile, the electronic equipment and communication equipment subsectors were mixed. The Mainland's STAR (Science & Technology) Market fell -2.17%, as its relative strength index (RSI) fell below 30, indicating potential oversold conditions. However, Mainland China was largely higher with a value bias, led by banks. At the same time, a handful of index heavyweights were lower, including Petro China, which fell -0.47%, Kweichow Moutai, which fell -0.30, and CATL, which fell -3.60%.

There was a Mainland media article on US manufacturers visiting Shenzhen. The article noted that exports of humanoid robots in the first half of 2026 reached 36,000 units, versus 2025’s total of 35,000.

China's Central Bank Governor Pan Gongsheng have a speech at the 2026 Financial Street Forum Annual Meeting. During his remarks, he announced certain liquidity support measures for non-bank institutions. He also noted the launch of China’s first active ETFs.

The domestic equity ETFs favored by China's "National Team", i.e. investment firms associated with China's sovereign wealth, had slightly higher volume, though the recent inflows are hard to ignore. Five ETFs have seen more than $1 billion worth of net inflows within the last five trading days. Two of the ETFs are benchmarked to the CSI 300, one to the Shanghai Top 50, one to the ChiNext Index, and another to the STAR Market. The two CSI 300 ETFs have seen $2.9 billion and $2.6 billion worth of net inflows recently versus the YTD net outflow of $33 billion and $42 billion. Two points here: there is a lot of dry powder that can be deployed and support goes beyond large and mega caps This makes the pain trade higher, in my opinion.

Last Night's Performance

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 6.68 versus 6.69 Friday
• CNY per EUR 7.50 versus 7.51 Friday
• Yield on 10-Year Government Bond 1.65% versus 1.65% yesterday
• Yield on 10-Year China Development Bank Bond 1.67% versus 1.70% yesterday
• Copper Price 0.37%
• Steel Price 0.26%