The Fed has kept interest rates unchanged for the second consecutive time, with rate cut expectations suppressed by inflation and geopolitical risks.

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. Therefore, you bear the risk of being unable to recover the principal invested in the Sub-Fund or potentially losing a significant portion or all of your investment. 02) The Sub-Fund primarily invests in a portfolio of investment-grade debt securities denominated in offshore Renminbi, US dollars, Euros, or Hong Kong dollars, aiming to generate a stable income stream for the Sub-Fund beyond capital appreciation, thereby achieving long-term capital growth. Potential risks include a) risks related to 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 debt instruments with loss-absorption features), 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) Renminbi currency risk and Renminbi-denominated share class risk, h) hedging Renminbi-denominated share class risk, i) convertible bond risk, j) risks related to equity securities, k) Eurozone and European country risk, l) "Dim Sum" bond risk. 03) The Sub-Fund may invest in derivatives for hedging or investment purposes within the limits permitted by the Code. Under adverse conditions, the use of financial derivatives may become ineffective and/or cause the Sub-Fund to suffer significant losses. 04) The Sub-Fund may pay distributions from the capital of the Sub-Fund. Investors should note that paying distributions from capital is equivalent to returning or withdrawing part of the investor's original investment amount 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 relevant units. The distribution amount and net asset value of the hedged share class may be adversely affected by the interest rate differential between the share class currency of the hedged share class and the base currency of the Sub-Fund, leading to an increase in distributions paid from capital and consequently greater capital erosion relative to other non-hedged share classes. 05) You should not invest in the Sub-Fund unless the intermediary has explained to you that, after considering your financial situation, investment experience, and objectives, this fund is suitable for you. 06) Investors should not make investment decisions based solely on the information provided in this document and should read the details and risk factors contained in the relevant fund's offering documents.

Hello, fellow investors, what important changes occurred in the market last week? Let's take a look together:

Last week, the US core focus was the Federal Reserve's March interest rate meeting, while also paying attention to inflation and economic forecast adjustments, as well as the issue of Powell's tenure. The Fed announced that it would maintain the federal funds rate target range at 3.5%-3.75%, marking the second consecutive hold this year. Among the 12 FOMC members, 11 supported the decision, with only one advocating for a 25 basis point rate cut. Members who previously opposed pausing rate cuts have now shifted to supporting the hold. The meeting emphasized the uncertainty of the impact of Middle East geopolitical conflicts, and the transmission of high oil prices to inflation needs continuous observation. At the same time, the 2026 PCE inflation forecast was raised to 2.7%, GDP growth was slightly raised to 2.4%, and the unemployment rate was kept unchanged at 4.4%. The dot plot shows that officials' disagreements are converging towards fewer rate cuts, with the median projecting one rate cut this year, leading to a decline in market rate cut expectations. Additionally, Powell clearly stated that he has no intention of leaving the Federal Reserve Board before the investigation is completed. If the nomination of a new chair is not confirmed in time, he will serve as interim chair, and his personal policy guidance role has somewhat diminished.

Last week, China released January-February national economic data, showing a strong start overall with a steady and improving trend. In terms of consumption, total retail sales of consumer goods increased by 2.8% year-on-year, with strong support from online consumption, a recovery in catering consumption growth, and continued repair in discretionary consumption. However, auto consumption saw a significant decline. Core retail sales growth, excluding autos and petroleum products, reached 8.9%. In industry, the value-added of industrial enterprises above designated size increased by 6.3% year-on-year, with private enterprises leading the growth. High-end manufacturing sectors such as computer and communication equipment, railway, ship, and aerospace equipment showed outstanding growth rates, energy production remained stable, crude oil production shifted from decline to growth, and power production growth accelerated. In terms of investment, national fixed-asset investment increased by 1.8% year-on-year, infrastructure investment growth reached 11.4%, and industrial investment grew by 5.4%. However, private investment declined year-on-year. Real estate development investment saw a narrowing decline, but sales and new construction starts still showed a downward trend. In terms of employment, the average urban surveyed unemployment rate for January-February was 5.3%, unchanged from the same period last year. The youth unemployment rate for those aged 16-24 has declined for six consecutive months, and employment overall remained stable.

In bond market performance, global bond markets continued to decline overall over the past week, with the global aggregate index down 0.14%, the US aggregate index down 0.51%, US investment-grade corporate bonds down 0.27%, and US high-yield corporate bonds down 0.31%. The emerging market US dollar bond aggregate index fell 0.99%, and the Chinese US dollar credit bond index fell 0.39%. In terms of interest rates, US Treasury yields rose overall, with the 2-year US Treasury yield up 18 bps to 3.90% and the 10-year US Treasury yield up 10 bps to 4.38%.

The net asset value of the E Fund (Hong Kong) Select Bond Fund A Class Accumulative USD share is 12.66*. Regarding the recent overall bond market situation, we will continue to deploy targets with high credit quality under low spread conditions, striving to provide more stable returns than the market.

Key economic data releases to focus on this week:

Tuesday: The US will release the preliminary March S&P Global Manufacturing PMI;

Friday: The US will release the March University of Michigan Consumer Sentiment data.

* Data sourced from E Fund Hong Kong's official website, as of 2026/3/23.

Disclaimer: The issuer of this report is E Fund Management (Hong Kong) Limited. This report does not constitute an invitation or recommendation to invest in fund units. Subscription for fund units can only be made using the application form attached to the fund prospectus. Investment involves risks. Fund prices may rise or fall, and past performance is not indicative of future results. Before investing, investors should read the investment risks related to the fund contained in the fund prospectus (including the "Risk Factors" section). This report may only be distributed in certain jurisdictions. In any jurisdiction where it is unlawful to distribute such materials or make any invitation or offer, or to any person to whom such distribution or invitation or offer would be unlawful, this report does not constitute such distribution, invitation, or offer. This document is exempt from pre-vetting and authorization by the Hong Kong Securities and Futures Commission and has not been reviewed by the Hong Kong Securities and Futures Commission. SFC authorization does not imply a recommendation or endorsement of the scheme, nor does it guarantee the commercial merits or performance of the scheme. It also does not mean the scheme is suitable for all investors, or that the scheme is suitable for any individual investor or any class of investors. Copyright©2026. E Fund Management (Hong Kong) Limited.