Monetary Policy - The Bank of Japan raised interest rates by 25 basis points to 0.75%, the highest level since 1995, while maintaining a loose monetary environment[8] - The core CPI in Japan showed a year-on-year increase of 3.0%, indicating persistent inflation[8] - The UK central bank lowered rates by 25 basis points to 3.75%, aligning with market expectations[11] Economic Data - In the US, the unemployment rate rose to 4.6%, the highest in four years, while non-farm payrolls increased by 64,000 in November, exceeding expectations[18] - The US core CPI rose by 2.6% year-on-year in November, the lowest since 2021, indicating easing inflation pressures[19] - In the UK, the CPI growth rate fell from 3.6% in October to 3.2% in November, below expectations[29] Fiscal Policy - Japan's supplementary budget for FY 2025 amounts to 18.3 trillion yen, with 64% funded by new government bonds[13] - The US defense authorization bill for FY 2026 totals $901 billion, including military pay raises and support for Ukraine[14] Bond Market - The yield on Japan's 10-year government bonds rose by 6.5 basis points to 2.02% following the interest rate hike[40] - The yield on US 10-year Treasury bonds decreased by 3 basis points to 4.16% amid softening inflation expectations[32]

1. Report Industry Investment Rating - Not provided in the content. 2. Core Viewpoints of the Report - On December 19, the liquidity remained loose, the bond market continued to be bullish, the convertible bond market followed the equity market and continued to rise, most convertible bond issues increased, yields on US Treasuries of various maturities generally increased, and 10-year government bond yields in major European economies generally rose [2]. 3. Summary by Relevant Catalogs 3.1 Bond Market News 3.1.1 Domestic News - The State Council executive meeting arranged the implementation of the decisions and deployments of the Central Economic Work Conference, emphasizing that all departments should implement the work to consolidate and expand the positive economic trend [4]. - The Shanghai and Shenzhen Stock Exchanges, together with China Securities Depository and Clearing Corporation Limited, issued notices to support overseas institutional investors in conducting bond repurchase business to deepen the opening-up of the exchange bond market [5]. - The National Financial Regulatory Administration released a draft for comments on the Asset-Liability Management Measures for Insurance Companies to strengthen supervision of the insurance industry's asset-liability [5]. - In November 2025, cross-border payments remained active, and securities investment fund flows became more stable, with a net inflow of $17.8 billion in cross-border funds from non-bank sectors [6]. 3.1.2 International News - The Bank of Japan raised interest rates by 25 basis points to 0.75%, the highest since 1995, and may continue to raise rates depending on economic and price conditions [7]. - New York Fed President John Williams said there is no urgency to cut rates further, strengthening the market's expectation of a short-term pause in rate cuts [8]. 3.1.3 Commodities - On December 19, international crude oil futures prices continued to rise, and international natural gas prices turned up. WTI January crude oil futures rose 0.91% to $56.66 per barrel, Brent February crude oil futures rose 1.09% to $60.47 per barrel, COMEX February gold futures rose 0.52% to $4,387.3 per ounce, and NYMEX natural gas prices rose 2.05% to $4.026 per ounce [9][10]. 3.2 Liquidity 3.2.1 Open Market Operations - On December 19, the central bank conducted 7-day reverse repurchase operations worth 56.2 billion yuan at an interest rate of 1.40% and 14-day reverse repurchase operations worth 100 billion yuan. With 120.5 billion yuan of reverse repurchases maturing, the net capital injection was 35.7 billion yuan [12]. 3.2.2 Funding Rates - On December 19, the liquidity remained loose. DR001 fell 0.11bp to 1.271%, and DR007 rose 0.21bp to 1.441% [13]. 3.3 Bond Market Dynamics 3.3.1 Interest Rate Bonds - **Spot Bond Yield Trends**: On December 19, boosted by LPR rate cut expectations, the bond market continued to be bullish. By 20:00, the yield on the 10-year Treasury bond active issue 250016 fell 0.70bp to 1.8350%, and the yield on the 10-year CDB bond active issue 250215 fell 1.55bp to 1.8920% [15]. - **Bond Tendering**: The issuance scale of the 3-year and 5-year Treasury bonds was 97 billion yuan and 99 billion yuan respectively, with corresponding winning yields of 1.3554% and 1.5603% [17]. 3.3.2 Credit Bonds - **Secondary Market Trading Anomalies**: On December 19, the trading prices of two industrial bonds deviated by more than 10%. "19 Shanghai Shimao MTN001" and "20 Shanghai Shimao MTN001" rose by more than 26% [17]. - **Credit Bond Events**: Multiple companies had events such as debt restructuring, being listed as an executor, being criticized for violations, and canceling bond issuances [20]. 3.3.3 Convertible Bonds - **Equity and Convertible Bond Indexes**: On December 19, the three major A-share indexes rose, and the convertible bond market followed the equity market. The CSI Convertible Bond Index, Shanghai Convertible Bond Index, and Shenzhen Convertible Bond Index rose 0.38%, 0.27%, and 0.52% respectively. Most convertible bond issues rose [19]. - **Convertible Bond Tracking**: On December 19, Changgao Electric's convertible bond issuance was approved, some convertible bonds proposed to lower the conversion price or were about to meet the conditions, and some were about to be redeemed early or met the early redemption conditions [24]. 3.3.4 Overseas Bond Markets - **US Bond Market**: On December 19, yields on US Treasuries of various maturities generally rose. The 2-year and 10-year yields rose 2bp and 4bp to 3.48% and 4.16% respectively. The 2/10-year yield spread widened 2bp to 68bp, and the 5/30-year yield spread narrowed 2bp to 112bp. The 10-year TIPS break-even inflation rate remained unchanged at 2.24% [22][23][25]. - **European Bond Market**: On December 19, 10-year government bond yields in major European economies generally rose. German, French, Italian, Spanish, and British 10-year yields rose 4bp, 5bp, 4bp, 5bp, and 5bp respectively [26]. - **Daily Price Changes of Chinese Dollar Bonds**: As of the close on December 19, some Chinese dollar bonds had significant price changes, with some rising and some falling [28].

Report Industry Investment Rating No information provided in the report. Core Viewpoints - With market sentiment boosted, convertible bonds are expected to maintain a strong, oscillating upward trend in the short term. However, near the year - end, some funds' profit - taking needs may cause short - term shocks, especially the volatility of high - priced convertible bonds may increase. Against a backdrop of strong risk appetite, it is cost - effective to make bargain - hunting layouts for large - cap convertible bonds in the bottom - position category and hard - tech themed convertible bonds supported by strong performance and high prosperity. In December, the exchange accelerated the review of convertible bond pre - plans, and in a strong market environment, convertible bond subscription will continue to be an important means to increase returns [2]. Summary by Directory Policy Tracking - On December 16, 2025, the Ministry of Commerce announced that from December 17, 2025, for the next 5 years, anti - dumping duties would be imposed on imported relevant pork and pork by - products from the EU [3]. - On December 18, 2025, six departments including the National Development and Reform Commission issued a document to expand the scope of key areas for clean and efficient coal utilization and encourage enterprises to upgrade their projects [4]. Secondary Market - Last week, major equity market indices showed mixed performance. The Shanghai Composite Index rose slightly by 0.03%, while the Shenzhen Component Index and the ChiNext Index fell by 0.89% and 2.26% respectively. Overseas, the US and Japanese markets had different trends, and globally, capital markets and commodities showed a differentiated performance. Domestically, economic data in November indicated continued downward pressure on the economy, with retail sales data underperforming expectations. The equity market initially declined on low trading volume but rebounded after Huijin's purchase of ETFs. Concepts such as commercial space, Hainan Free Trade Zone, and retail led the gains [5]. - Convertible bond market indices all closed up. The CSI Convertible Bond Index, Shanghai Convertible Bond Index, and Shenzhen Convertible Bond Index rose by 0.48%, 0.18%, and 0.86% respectively, with an average daily trading volume of 63.611 billion yuan, an increase of 2.975 billion yuan from the previous period. Convertible bond ETFs had a net redemption of 1.476 billion yuan. Small - cap convertible bonds outperformed, while high - rated and high - priced convertible bonds lagged. In terms of industry, most convertible bonds in various industries rose, with the light manufacturing industry leading the gain, and some industries such as household appliances and electronics underperforming [6][7][8]. - Looking ahead, convertible bonds are expected to continue their upward trend in the short term. However, due to profit - taking needs near the year - end, high - priced convertible bonds may experience greater volatility. Bargain - hunting for large - cap and hard - tech themed convertible bonds is recommended. Convertible bond subscription will also be an important way to increase returns [9]. Primary Market - Last week, Dingjie Convertible Bond was issued, no convertible bonds were listed, and several convertible bonds were redeemed early or expired. As of December 19, the convertible bond market's outstanding scale was 559.626 billion yuan, a decrease of 174.267 billion yuan from the beginning of the year. The issuance scale last week was 828 million yuan [31]. - Twelve convertible bonds had a conversion ratio of over 5%, with some having announced early redemption or approaching redemption conditions. Some convertible bonds triggered more conversions due to negative conversion premiums [32]. - Haitian Co., Ltd., Doctor Optical, and Changgao Electric's convertible bond issuance plans were approved by the exchange; Jinpan Technology and Shangtai Technology's plans were approved by the CSRC. As of last Friday, 5 convertible bonds were approved by the CSRC to be issued, with a total of 5.9 billion yuan, and 10 convertible bonds passed the issuance review committee, with a total of 8.515 billion yuan [34]. - In terms of clause tracking, 2 convertible bonds announced downward revisions of conversion prices, and 3 announced early redemptions. Several other convertible bonds were approaching or expected to trigger relevant conditions [35].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core View of the Report - Last week, the bond market continued to show warmth, with the yield curve shifting downward in a steepening manner. The bond market first declined and then rose, remaining generally strong, and long - term bond yields continued to fall. Short - term interest rates also decreased, with a larger decline in short - term bond yields than long - term ones. This week (the week of December 22), the bond market is expected to fluctuate weakly. The unchanged LPR quote on Monday may drive institutions to realize floating profits, bringing adjustment pressure. However, supported by factors such as central bank bond - buying, loose liquidity, and funds' year - end scale - boosting demands, the long - end bond yields are expected to be "capped" and fluctuate slightly. Before the end of the year, the bond market is mainly driven by institutional behavior, and the 10 - year Treasury yield is expected to oscillate within the range of 1.83% - 1.88% [3]. 3. Summary by Relevant Catalogs 3.1 Last Week's Market Review 3.1.1 Secondary Market - The bond market was generally warm last week, and long - term bond yields continued to fall. The 10 - year Treasury futures main contract rose 0.14% cumulatively. The 10 - year Treasury yield decreased by 0.88bp, and the 1 - year Treasury yield decreased by 3.32bp compared with the previous Friday, with the term spread continuing to widen [4]. - On December 15 (Monday), the bond market continued to adjust. The yields of major inter - bank interest - rate bonds mostly rose, and Treasury futures contracts closed down across the board. The 10 - year main contract fell 0.12%, and the 30 - year main contract fell 0.99%, hitting a new closing low since November 18, 2024 [4]. - On December 16 (Tuesday), the bond market recovered slightly. The yields of major inter - bank interest - rate bonds generally declined, and the 10 - year Treasury yield decreased by 0.30bp. The performance of Treasury futures contracts at different maturities was divergent, with the 10 - year main contract rising 0.05% [4]. - On December 17 (Wednesday), the bond market continued to recover. The yields of major inter - bank interest - rate bonds generally declined, and the 10 - year Treasury yield decreased by 1.18bp. Treasury futures contracts closed up across the board, with the 10 - year main contract rising 0.10% [4]. - On December 18 (Thursday), short - term bonds continued to recover, but long - term bonds were weak. The yields of major inter - bank interest - rate bonds mostly declined, but the 10 - year Treasury yield rose 0.16bp. Most Treasury futures contracts closed up, with the 10 - year main contract remaining flat [4]. - On December 19 (Friday), the bond market continued its upward trend. The yields of major inter - bank interest - rate bonds generally declined, and the 10 - year Treasury yield decreased by 0.48bp. Treasury futures contracts closed up across the board, with the 10 - year main contract rising 0.10% [4]. 3.1.2 Primary Market - Last week, 35 interest - rate bonds were issued, a decrease of 62 compared with the previous week. The issuance volume was 376.1 billion yuan, a significant decrease of 919.8 billion yuan, and the net financing amount was 20.9 billion yuan, a decrease of 374.4 billion yuan. The issuance and net financing of Treasury bonds, policy - bank bonds, and local government bonds all decreased compared with the previous week [10]. - The subscription demand for interest - rate bonds was generally acceptable. Four Treasury bonds were issued with an average subscription multiple of 2.82 times; seven policy - bank bonds were issued with an average subscription multiple of 3.92 times; 24 local government bonds were issued with an average subscription multiple of 19.28 times [11]. 3.2 Last Week's Important Events - The macro data in November continued the downward trend. The year - on - year actual growth rate of industrial added value above designated size in November was 4.8% (previous value: 4.9%); the cumulative year - on - year actual growth rate in the first 11 months was 6.0% (2024 full - year cumulative year - on - year: 5.8%). The year - on - year growth rate of total retail sales of consumer goods in November was 1.3% (previous value: 2.9%); the cumulative year - on - year growth rate in the first 11 months was 4.0% (2024 full - year cumulative year - on - year: 3.5%). The cumulative year - on - year decline in national fixed - asset investment from January to November 2025 was 2.6% (previous value: a decline of 1.7%, 2024 full - year cumulative year - on - year growth: 3.2%) [12]. - The slight decline in industrial added - value growth in November was mainly due to the weakening of the pulling effect of domestic - demand - promoting policies, weak domestic consumption and investment momentum, and subsequent pressure on demand, which was transmitted to industrial production. The significant decline in the year - on - year growth rate of total retail sales of consumer goods in November was mainly due to the weakening of the subsidy policy for trading in the old for the new, the expansion of the decline in commercial housing sales, the pre - positioning of some consumption demand in October due to the early "Double Eleven" promotion, and factors such as fluctuations in the external economic and trade environment and the accelerating decline in domestic housing prices, which continuously suppressed residents' consumption confidence and willingness. The cumulative year - on - year negative growth in fixed - asset investment from January to November continued for three months and the decline was expanding, mainly because the three major investment sectors of infrastructure, manufacturing, and real estate all slowed down. After excluding price factors, the actual fixed - asset investment from January to November maintained positive growth, indicating that investment still played a positive role in promoting economic growth [12]. 3.3 Real - Economy Observation - Most high - frequency data on the production side declined last week. The blast - furnace operating rate, petroleum asphalt plant operating rate, semi - steel tire operating rate, and daily average pig iron output all decreased to varying degrees. On the demand side, the BDI index continued to decline, while the China Container Freight Index (CCFI) continued to rise. The sales area of commercial housing in 30 large and medium - sized cities rebounded significantly. In terms of prices, the pork price rose slightly overall, while most commodity prices declined, including copper and oil prices, while the rebar price increased [13]. 3.4 Last Week's Liquidity Observation - The central bank's open - market operations had a net capital injection of 109 billion yuan last week. The R007 rose, and DR007 declined. The issuance rate of inter - bank certificates of deposit of joint - stock banks fluctuated upward, the national and stock direct - discount rates at all maturities continued to rise, the trading volume of pledged repurchase continued to increase, and the inter - bank market leverage ratio continued to rise [26][27].

Group 1: LPR Pricing and Economic Context - The LPR for both 1-year and 5-year terms remains unchanged at 3.0% and 3.5% respectively as of December 2025[1] - The stability in LPR pricing is attributed to the unchanged policy interest rates and slight increases in market financing costs for banks[2] - Economic growth is expected to meet the annual target of around 5.0%, reducing the urgency for aggressive monetary policy adjustments[2] Group 2: Future Economic Projections and Policy Implications - Economic growth momentum is projected to decline, with GDP growth expected to drop from 4.8% in Q3 to approximately 4.5% in Q4 2025[3] - The central bank is likely to shift to a more accommodative monetary policy in Q1 2026, potentially leading to interest rate cuts[3] - A significant reduction in the LPR is anticipated to stimulate domestic financing demand and support consumption and investment[4] - The real estate market is expected to receive targeted support through lower LPR rates and fiscal incentives to boost housing demand[4]

Report Summary 1. Core Views - The National Financial System Work Conference emphasized the need to effectively carry out key financial tasks in 2026, including risk prevention, regulatory strengthening, and promotion of high - quality development [3]. - The central bank will continue to implement a moderately loose monetary policy, using various tools like reserve requirement ratio cuts and interest rate cuts, and focus on promoting economic growth and price stability [5]. - The Fed officials have different views on interest rate cuts, with some opposing due to concerns about inflation [9]. 2. Domestic News 2.1 Policy - related - At the National Financial System Work Conference, measures were proposed to prevent and resolve risks in local small and medium - sized financial institutions, real estate enterprises, and local government financing platforms, and to strengthen financial supervision and promote high - quality development [3]. - The National Development and Reform Work Conference summarized 2025 work and set nine key tasks for 2026 [4]. - The central bank will continue the moderately loose monetary policy, using the integrated effect of existing and new policies and multiple monetary policy tools [5]. - The National Financial Supervision and Administration总局 issued the "Interim Measures for the Supervision and Administration of Commercial Bank Custody Business" to standardize the custody business of commercial banks [7]. - Three departments jointly issued a notice to boost consumption by strengthening financial support [7]. 2.2 Economic Data - As of the end of November 2025, the stock of social financing scale was 440.07 trillion yuan, with a year - on - year increase of 8.5%. The cumulative increase in social financing scale in the first 11 months was 33.39 trillion yuan, 3.99 trillion yuan more than the same period last year [6]. - China's economic aggregate is expected to reach about 140 trillion yuan this year [8]. 3. International News - Fed officials debated whether interest rate cuts would harm inflation, and there were differences among next year's voting members on policy [9]. 4. Commodities - On December 12, WTI January crude futures fell 0.28% to $57.44 per barrel, down about 4.4% for the week; Brent February crude futures fell 0.26% to $61.12 per barrel, down about 4.1% for the week. COMEX February gold futures rose 0.35% to $4328.3 per ounce, up 2% for the week. NYMEX natural gas prices fell 3.14% to $4.101234 per ounce [10]. 5. Fundamentals 5.1 Open - market Operations - On December 12, the central bank conducted 1205 billion yuan of 7 - day reverse repurchase operations, with an operating rate of 1.40%. With 1398 billion yuan of reverse repurchases maturing, the net withdrawal was 193 billion yuan [12]. 5.2 Fund Rates - On December 12, DR001 decreased by 0.21bp to 1.275%, and DR007 increased by 1.75bp to 1.469%. Other rates also showed different changes [13][14]. 6. Bond Market Dynamics 6.1 Interest - rate Bonds - On December 12, the bond market weakened. The yield of the 10 - year treasury bond active bond 250016 rose 2.75bp to 1.8425%, and the yield of the 10 - year CDB bond active bond 250215 rose 3.35bp to 1.9165%. There were also auctions of 2 - year and 10 - year treasury bonds [15][17]. 6.2 Credit Bonds - On December 12, 5 bonds had a trading price deviation of more than 10%. "21 Vanke 02" fell more than 17%, while some bonds of Shimao and Baolong rose significantly. There were also credit - related events such as Zheng Rong being listed as a dishonest executor [17][18]. 6.3 Convertible Bonds - On December 12, the A - share market rose, and the convertible bond market also followed. The CSI Convertible Bond, Shanghai Stock Exchange Convertible Bond, and Shenzhen Stock Exchange Convertible Bond indices rose 0.35%, 0.38%, and 0.30% respectively. There were new listings, price increases and decreases of individual bonds, and various events such as proposed price adjustments and early redemptions [19][20][26]. 6.4 Overseas Bond Markets - In the US bond market on December 12, the yield of the 2 - year US Treasury remained unchanged at 3.52%, while other maturities generally rose. The 10 - year TIPS break - even inflation rate rose 1bp to 2.26%. In the European bond market, the 10 - year government bond yields of major European economies generally rose [23][27][28].

Report Summary 1. Industry Investment Rating - There is no information about the report's industry investment rating. 2. Core Viewpoints - On December 15, the capital market remained loose, the bond market continued to adjust with greater fluctuations in ultra - long bonds, the convertible bond market followed the decline, and most convertible bond issues fell; yields of US Treasury bonds across various maturities generally declined, and yields of 10 - year government bonds in major European economies generally decreased [1]. 3. Summary of Each Section 3.1 Bond Market News - **Domestic News** - The 24th issue of Qiushi magazine published General Secretary Xi Jinping's important article "Expanding Domestic Demand is a Strategic Move", emphasizing that expanding domestic demand is crucial for economic stability and security [3]. - The CSRC will continue to deepen the comprehensive reform of investment and financing in the capital market to contribute to economic development [3]. - In November, the year - on - year actual growth of the added value of industrial enterprises above designated size was 4.8%, and the cumulative year - on - year actual growth in the first 11 months was 6.0%. The year - on - year growth of total retail sales of consumer goods in November was 1.3%, and the cumulative year - on - year growth in the first 11 months was 4.0%. From January to November 2025, the cumulative year - on - year decline of national fixed - asset investment was 2.6% [4]. - Six departments supported eligible service outsourcing enterprises to use multi - level capital markets for financing and development [4]. - The DVP settlement function for open - market repurchase of bonds by the Central Bank's Accounting Data Centralized System was launched [5]. - **International News** - New York state's manufacturing activity unexpectedly contracted, but the outlook for the next six months improved significantly, and inflation pressure eased [6]. - **Commodities** - On December 15, WTI January crude oil futures fell 1.08% to $56.82 per barrel, Brent February crude oil futures fell 0.92% to $60.56 per barrel, COMEX gold futures rose 0.12% to $4333.30 per ounce, and NYMEX natural gas prices fell 1.58% to $4.036 per ounce [7]. 3.2 Capital Market - **Open - Market Operations** - On December 15, the central bank conducted 7 - day reverse repurchase operations of 130.9 billion yuan, with an operating interest rate of 1.40%. After offsetting the 122.3 billion yuan of reverse repurchases due on the same day, the net capital injection was 8.6 billion yuan [9]. - **Capital Interest Rates** - On December 15, the capital market remained loose. DR001 dropped 0.07bp to 1.274%, and DR007 dropped 2.51bp to 1.444% [10]. 3.3 Bond Market Dynamics - **Interest - Rate Bonds** - **Yield Trends of Spot Bonds**: On December 15, the bond market continued to adjust, with greater fluctuations in ultra - long bonds. The yield of the 10 - year Treasury bond active issue 250016 rose 1.65bp to 1.8590%, and the yield of the 10 - year CDB bond active issue 250215 rose 2.25bp to 1.9390% [13]. - **Bond Tendering**: Information on the tendering of three agricultural development bonds, including the term, issuance scale, winning yield, and other indicators, was provided [15]. - **Credit Bonds** - **Secondary - Market Transaction Anomalies**: On December 15, the transaction prices of 4 industrial bonds deviated by more than 10%, including significant declines in "11 Willie MTN1", "21 Vanke 02", and "21 Vanke 04", and a significant increase in "H0 Zhongnan 02" [15]. - **Credit Bond Events**: Multiple companies, such as R&F Properties, Fantasia, and Times China Holdings, announced bond - related events, including resumption of trading, debt restructuring, and cancellation of bond issuance [16][18]. - **Convertible Bonds** - **Equity and Convertible Bond Indices**: On December 15, the three major A - share indices fell, and the main convertible bond indices also declined. The convertible bond market turnover was 59.394 billion yuan, a decrease of 7.972 billion yuan from the previous trading day. Most convertible bond issues fell [18][19]. - **Convertible Bond Tracking**: Information on convertible bond issuance approvals, potential price adjustments, and non - early redemptions was announced [24]. - **Overseas Bond Markets** - **US Bond Market**: On December 15, yields of US Treasury bonds across various maturities generally declined. The 2/10 - year yield spread remained unchanged at 67bp, and the 5/30 - year yield spread widened by 1bp to 111bp. The 10 - year inflation - protected Treasury bond (TIPS) break - even inflation rate dropped 1bp to 2.25% [22][24][26]. - **European Bond Market**: On December 15, the yield of Italy's 10 - year government bond remained unchanged, while yields of 10 - year government bonds in other major European economies generally declined [27]. - **Price Changes of Chinese - Issued US - Dollar Bonds**: The daily price changes of Chinese - issued US - dollar bonds as of the close on December 15 were presented, including the top 10 gainers and losers [29].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - Last week, the bond market rebounded slightly, with the yield curve continuing to steepen. Affected by the Politburo meeting and the Central Economic Work Conference, the bond market was bullish from Monday to Thursday, but turned weak on Friday due to concerns about bond supply pressure. Overall, long - term bond yields declined, and short - term bond yields declined more than long - term ones, resulting in a wider term spread. [3] - This week, the bond market is expected to oscillate weakly. Despite the weak fundamentals shown by November's economic data, the market reaction has been dull. With factors such as year - end profit - taking by institutions, the upcoming implementation of new regulations on public fund sales, expected increase in nominal GDP growth rate, and the stock - bond ratio, market sentiment remains cautious. [3] Summary by Sections 1. Last Week's Market Review 1.1 Secondary Market - The bond market warmed up last week, with long - term bond yields declining slightly. The 10 - year Treasury bond futures main contract rose 0.09% for the whole week. The 10 - year Treasury bond yield decreased by 0.84bp and the 1 - year Treasury bond yield decreased by 1.37bp compared to the previous Friday, and the term spread continued to widen. [4] - On December 8, the bond market was weak in the morning and then recovered in the afternoon after the Politburo meeting mentioned a "moderately loose monetary policy". The 10 - year Treasury bond yield rose 0.19bp, and the 10 - year Treasury bond futures main contract rose 0.02%. [4] - On December 9, after the Politburo meeting clarified the "moderately loose" monetary policy for 2026, the bond market oscillated bullishly. The 10 - year Treasury bond yield decreased by 0.74bp, and the 10 - year Treasury bond futures main contract rose 0.12%. [4] - On December 10, the release of worse - than - expected November PPI data and loose funds continued to boost the bond market. The 10 - year Treasury bond yield rose 0.22bp, and the 10 - year Treasury bond futures main contract rose 0.06%. [4] - On December 11, the Central Economic Work Conference's statement on maintaining liquidity drove the bond market to continue to recover. The 10 - year Treasury bond yield decreased by 0.43bp, and the 10 - year Treasury bond futures main contract rose 0.09%. [4] - On December 12, concerns about bond supply pressure led to a weak bond market. The 10 - year Treasury bond yield decreased slightly by 0.08bp, and the 10 - year Treasury bond futures main contract fell 0.13%. [4][5] 1.2 Primary Market - Last week, 97 interest - rate bonds were issued, an increase of 19 compared to the previous week. The issuance volume was 12959 billion, a significant increase of 8652 billion, and the net financing was 3953 billion, an increase of 4751 billion. The issuance volume of Treasury bonds increased significantly, while that of policy - bank bonds and local bonds decreased. The net financing of all three types of bonds increased. [12] 2. Last Week's Important Events - In November, export growth rebounded unexpectedly, with a year - on - year increase of 5.9%, 7.0 percentage points faster than in October. Import growth was 1.9%, 0.9 percentage points faster than in October. [14] - The Politburo meeting on December 8 analyzed and studied the 2026 economic work, affirming the current economic situation and setting goals for next year. It is estimated that the 2025 GDP growth target will be set between 4.5% and 5.0%. [14] - In November, CPI increased by 0.7% year - on - year, up 0.5 percentage points from the previous month, mainly due to rising vegetable prices and international gold prices. PPI decreased by 2.2% year - on - year, with a slightly wider decline due to a higher base. [14][15] - In November, new RMB loans were 3900 billion, 1900 billion less than the same period last year, mainly due to weak domestic and external demand. New social financing was 24885 billion, 1597 billion more than the same period last year, mainly driven by increased corporate bond financing. [16] - The Central Economic Work Conference from December 10 - 11 set the tone for 2026's macro - policies, maintaining continuity and stability. It is expected that the low - price situation will ease, and there is room for macro - policies to stimulate growth. [16] 3. Real - Economy Observation - Last week, high - frequency production data showed mixed trends. Blast furnace operating rates and daily hot - metal production declined, while asphalt plant operating rates and semi - steel tire operating rates increased. [18] - From the demand side, the BDI index dropped significantly, the CCFI index rebounded slightly, and the sales area of commercial housing in 30 large and medium - sized cities rebounded slightly. [18] - In terms of prices, pork prices continued to decline slightly, and most commodity prices fell, including steel and oil, while copper prices rose. [18] 4. Last Week's Liquidity Observation - The central bank's net open - market investment last week was 47 billion. [30] - R007 and DR007 both increased, the issuance rate of joint - stock bank certificates of deposit decreased slightly, and the discount rates of national and joint - stock banks' direct bills increased. [31] - The trading volume of pledged repurchase continued to increase, and the inter - bank market leverage ratio increased significantly. [31][32]

Monetary Policy - The Federal Reserve lowered the federal funds rate by 25 basis points to a range of 3.50%-3.75%[9] - There is increasing internal disagreement within the Fed regarding inflation and employment risks, with 3 out of 12 officials voting against the rate cut[9] - The probability of a 25 basis point rate cut in January 2026 is 24.4% according to CME FedWatch[11] Economic Data - The U.S. JOLTS job openings rose to 7.67 million in October, the highest in five months, while initial jobless claims increased by 44,000, marking the largest rise since 2020[17] - The U.S. fiscal deficit decreased, with November fiscal revenue up 23.75% year-on-year, while spending decreased by 23.82%[17] - Japan's Q3 GDP was revised down from -1.8% to -2.3%, indicating a more significant economic contraction than previously expected[25] Market Trends - The 10-year U.S. Treasury yield rose by 5 basis points to 4.19%[27] - European bond markets saw overall declines, with the 10-year UK bond yield increasing by 3.9 basis points to 4.52% and the German yield rising by 7 basis points to 2.85%[27] - The Nikkei 225 index in Japan increased by 0.68% year-to-date, reflecting a 27.43% annual growth[6]

Domestic Economic Indicators - China's November CPI increased by 0.7% year-on-year, up from 0.2% in October, with a cumulative CPI of 0.0% from January to November[3] - November PPI decreased by 2.2% year-on-year, slightly worse than the previous month's decline of 2.1%, with a cumulative PPI decline of 2.7% from January to November[3] Monetary Policy and Market Reactions - The Federal Reserve lowered the federal funds rate by 25 basis points to a range of 3.50%-3.75%, marking the third consecutive rate cut[5] - The Fed plans to purchase $40 billion in government bonds over the next 30 days to maintain sufficient reserve supply[6] Bond Market Dynamics - The 10-year government bond yield remained stable at 1.8350%, while the 10-year policy bank bond yield fell by 1.25 basis points to 1.9035%[13] - On December 10, the central bank conducted a reverse repurchase operation of 189.8 billion yuan, resulting in a net injection of 110.5 billion yuan into the market[9] International Market Trends - U.S. Treasury yields generally declined, with the 2-year yield down 7 basis points to 3.54% and the 10-year yield down 5 basis points to 4.13%[23] - Major European economies saw a rise in 10-year government bond yields, with Germany's yield increasing by 1 basis point to 2.86%[26] Commodity Price Movements - WTI crude oil futures rose by 0.95% to $58.87, while Brent crude increased by 0.91% to $62.58[7]