Group 1: Federal Reserve Actions - The Federal Reserve lowered the federal funds rate target range from 4.00%-4.25% to 3.75%-4.00%, a decrease of 25 basis points[2] - This marks the first consecutive rate cut in a year, following the initial cut earlier this year[2] - The Fed will end its balance sheet reduction on December 1, after three and a half years of contraction, with total assets shrinking from $9 trillion to $6.6 trillion[4] Group 2: Economic Indicators - The labor market shows signs of weakness, with ADP reporting a decrease of 32,000 jobs in September, significantly below the expected increase of 50,000[3] - The September Consumer Price Index (CPI) data was below expectations, alleviating concerns about inflation driven by tariffs[3] - The Fed's Beige Book indicated widespread low demand for labor across various regions and sectors[3] Group 3: Market Liquidity and Risks - Recent liquidity pressures in the money market have led to a rise in repo rates, with the Secured Overnight Financing Rate (SOFR) reaching a high of 4.5%[5] - The total reserves in the banking system have fallen below $3 trillion, indicating a shift from "ample liquidity" to "tight liquidity"[5] - The Treasury's increased issuance of debt has withdrawn significant liquidity from the market, exacerbated by seasonal factors like tax payments[5] Group 4: Future Outlook - There is potential for another rate cut in December, but it is not guaranteed, as some officials advocate for a pause[6][7] - The uncertainty surrounding future rate cuts is heightened by the ongoing government shutdown and its impact on economic data availability[7] - The Fed's policy path in 2026 may depend heavily on economic and employment data trends, with an expected median rate of 3.4% indicating room for about two more cuts[8]

Economic Overview - China's GDP grew by 5.2% year-on-year in the first three quarters, with a 4.8% increase in Q3 alone, accelerating by 0.2 percentage points compared to the full year of 2024[4] - The cumulative industrial added value for the first three quarters increased by 6.2% year-on-year, while the retail sales of consumer goods rose by 4.5% during the same period[4] Monetary Policy - The Loan Prime Rate (LPR) has remained unchanged for five consecutive months, with the 1-year LPR at 3.00% and the 5-year LPR at 3.50%[5] - The People's Bank of China conducted a 7-day reverse repurchase operation of 1890 billion yuan at a fixed rate of 1.40%[11] Real Estate Market - In September, new residential sales prices in first-tier cities fell by 0.3%, with significant declines in Guangzhou and Shenzhen by 0.6% and 1.0% respectively[5] - Second-tier cities saw a 0.4% decrease in new residential sales prices, while third-tier cities experienced the same decline[6] Bond Market Dynamics - The bond market showed weakness, with the yield on the 10-year government bond rising by 2.30 basis points to 1.7680%[15] - The Ministry of Finance announced support operations for government bonds, with a total operation amount of 6.1 billion yuan for various bond types[6] International Market Trends - U.S. Treasury yields showed mixed movements, with the 10-year yield decreasing by 2 basis points to 4.00%[24] - In the European market, the 10-year bond yields varied, with Germany's yield stable at 2.58% while Italy and the UK saw declines of 1 basis point[27]

Economic Developments - China and the U.S. held economic consultations in Kuala Lumpur, focusing on key trade issues including maritime logistics and agricultural trade[3] - The People's Bank of China (PBOC) conducted a 900 billion CNY Medium-term Lending Facility (MLF) operation, marking the eighth consecutive month of increased MLF operations[4] Financial Market Trends - The overall liquidity in the financial market remained balanced, but the bond market weakened due to strong stock market performance[1] - As of October 24, the yield on the 10-year government bond rose by 1.20 basis points to 1.8450%[15] Credit Market Insights - By the end of Q3, the total outstanding loans in RMB reached 270.39 trillion CNY, with a year-on-year growth of 6.6%, down from 7.1% at the end of Q2[7] - The growth rate of loans to small and micro enterprises increased by 12.2%, while loans to technology-based SMEs surged by 22.3%[7] Inflation and Interest Rates - In the U.S., the September Core Consumer Price Index (CPI) rose by 3% year-on-year, with a month-on-month increase of 0.3%, indicating a slower inflation rate than expected[8] - The PBOC's net liquidity injection for October is projected to reach 600 billion CNY, maintaining a high level of monetary policy support[4] Bond Market Activity - On October 24, the bond market saw a general decline, with the 10-year government bond yield increasing by 1.20 basis points[15] - The issuance of government bonds included a 20 billion CNY bond with a bid yield of 1.8049% and a coverage ratio of 3.36[17] Commodity Prices - As of October 24, WTI crude oil futures fell by 0.47% to $61.50 per barrel, while Brent crude oil futures decreased by 0.08% to $65.94 per barrel[10]

Group 1: Report Industry Investment Rating - No information provided Group 2: Core Views - Last week, the bond market adjusted, and long - term bond yields fluctuated upwards. The expected improvement in Sino - US trade relations and the overall boost of the Fourth Plenary Session to the "15th Five - Year Plan" risk preference led to the stock - bond seesaw effect, making the bond market oscillate weakly. Short - term yields rose slightly more than long - term yields, and the yield curve flattened further [2]. - This week (the week of October 27), the bond market will continue the weakly oscillating market. The easing expectation of Sino - US trade relations and the high market risk preference, along with the concern about the bond - fund redemption and asset re - allocation pressure caused by the new regulations on public - fund sales fees, will continue to suppress the bond market. Without trend - driving factors, the bond market needs to digest these negative factors, and the 10 - year Treasury yield will run in the range of 1.70% - 1.80% [2]. Group 3: Summary of Each Section Section 1: Last Week's Market Review 1.1 Secondary Market - Last week, the bond market adjusted, and long - term bond yields rose significantly. The 10 - year Treasury futures main contract fell 0.24% cumulatively. On Friday, the 10 - year Treasury yield rose 2.40bp, and the 1 - year Treasury yield rose 2.82bp compared with the previous Friday, and the term spread continued to narrow [3]. - From October 20 to 24, the bond market showed different trends each day. For example, on October 20, the bond market weakened due to the stock - market rebound and progress in Sino - US talks; on October 21, the bond market oscillated strongly due to the expected interest - rate cut [3]. 1.2 Primary Market - Last week, 107 interest - rate bonds were issued, with an issuance volume of 10763 billion, a net financing of 847 billion. The issuance and net financing of Treasury bonds and local bonds increased, while those of policy - bank bonds decreased [9]. - The subscription demand for interest - rate bonds was generally acceptable. The average subscription multiples of Treasury bonds, policy - bank bonds, and local bonds were 2.61 times, 3.36 times, and 20.42 times respectively [10]. Section 2: Last Week's Important Events - In the third quarter of 2025, GDP growth slowed down to 4.8%. Although the export growth accelerated, domestic investment and consumption decelerated, and the pulling force of domestic demand on economic growth weakened. The slowdown of infrastructure investment, the impact on manufacturing investment confidence, and the decline of real - estate investment led to a significant decline in investment growth, which was the main reason for the GDP growth slowdown [11]. Section 3: Real - Economy Observation - Last week, most high - frequency data on the production side increased, such as the blast - furnace operating rate, semi - steel tire operating rate, and petroleum - asphalt plant operating rate, while the daily average pig - iron output decreased. On the demand side, the BDI index declined, and the CCFI index rose slightly. The sales area of commercial housing in 30 large and medium - sized cities decreased slightly. In terms of prices, pork prices continued to fall, while most commodity prices rose [12]. Section 4: Last Week's Liquidity Observation - Last week, the central bank's open - market net investment was 1981 billion yuan. R007 decreased, DR007 increased, the issuance rate of joint - stock bank certificates of deposit increased, the national - share direct - discount rates of all terms decreased, the volume of pledged - repo transactions fluctuated and decreased, and the inter - bank market leverage ratio continued to decline [23].

Report Industry Investment Rating There is no information provided in the report regarding the industry investment rating. Core Viewpoints - The convertible bond market is expected to follow the equity market and strengthen in an oscillatory manner, but due to increased market volatility and the continuation of the high - price characteristic of convertible bonds, attention should be paid to the defensive attributes of the portfolio and tail risks should be avoided. Layout can be made along the performance clues. The cost - effectiveness of new convertible bond subscriptions or indirect allocation through convertible bond ETFs remains relatively high [3][9]. Summary by Directory Policy Tracking - On October 22, the China Society of Automotive Engineers released the "Energy - Saving and New - Energy Vehicle Technology Roadmap 3.0", which clarifies that global automotive technology will evolve towards low - carbon, electrification, and intelligence. China's automotive industry carbon emissions will peak around 2028 and decline by over 60% by 2040 compared to the peak. By 2040, the market penetration rate of new - energy vehicles needs to exceed 80%, and the intelligent connected infrastructure system integrating vehicles, roads, and clouds will be fully mature [4]. Secondary Market - **Equity Market**: Last week, major equity market indices collectively strengthened. The Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index rose 2.88%, 4.73%, and 8.05% respectively. After the release of the Fourth Plenary Session communique, market sentiment was significantly boosted, and the trading volume on Friday quickly recovered to nearly 2 trillion yuan [5][6]. - **Convertible Bond Market**: The main convertible bond market indices collectively rose, with the CSI Convertible Bond Index, Shanghai Stock Exchange Convertible Bond Index, and Shenzhen Stock Exchange Convertible Bond Index rising 1.47%, 1.56%, and 1.40% respectively. The average daily trading volume was 600.23 billion yuan, a further reduction of 109.27 billion yuan from the previous week. Convertible bond ETFs ended the net redemption trend and had a net subscription of 30.82 billion yuan, supporting the strength of convertible bonds. The small - cap and high - price style in the convertible bond market strengthened again, and most convertible bonds in various industries rose. The valuation of most industries decreased, but the valuation of the light - manufacturing industry rose [7][8][9]. Primary Market - **Issuance and Listing**: Last week, there was no new convertible bond issuance, and Yingliu Convertible Bond was listed. Six convertible bonds were redeemed early and delisted. As of last Friday, the convertible bond market's outstanding scale was 580.96 billion yuan, a decrease of 152.933 billion yuan from the beginning of the year. Five convertible bonds were approved by the CSRC to be issued, totaling 4 billion yuan, and six convertible bonds passed the review committee, totaling 3.581 billion yuan [3]. - **Conversion and Redemption**: Eight convertible bonds had a conversion ratio of over 5%. Some convertible bonds announced early redemption, and some announced that they were about to trigger early redemption conditions or the conditions for conversion price downward adjustment [30][31][33].

Economic Environment - The "15th Five-Year" period faces complex changes in the development environment, with both strategic opportunities and risks present[1] - External challenges include increased tariffs from the US and restrictions on high-tech imports, necessitating a focus on technological self-reliance[1][2] Strategic Planning - The core strategy for the "15th Five-Year" plan is to enhance independent innovation and technological self-reliance, supported by a modern industrial system centered on advanced manufacturing[2][3] - The plan emphasizes the need to expand domestic demand, boost consumption, and reduce reliance on foreign markets[4] Economic Growth Targets - The focus will shift from high-speed growth to high-quality development, with no specific GDP growth targets set for the next five years[5] - The average GDP growth rate during the "14th Five-Year" period was 5.4%, with projections for the "15th Five-Year" period to be between 4.5% and 5.0%[5] Fiscal and Monetary Policy - The fiscal policy will prioritize funding for major national strategies, focusing on modern industrial systems and increasing technology spending[6][7] - Monetary policy will aim for stability and flexibility, with an emphasis on supporting technology-driven sectors and managing economic cycles[8] Immediate Policy Actions - There is an expectation for macroeconomic policies to intensify in the fourth quarter to stabilize growth, including new fiscal measures and potential interest rate cuts[9]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - Last week, affected by the repeated Sino - US trade frictions, the bond market sentiment recovered. The first half of the week saw weak fluctuations in the bond market due to trade news, while the second half strengthened with the stock market decline and increased risk - aversion. Long - term bond yields rose slightly, and the yield curve flattened further as short - term yields rose more significantly [3]. - This week, the bond market will continue the high - volatility and oscillating trend. Although the bond market environment is expected to improve marginally due to increased economic pressure, potential policy easing, and reduced government bond supply in Q4, the current loose market expectations are weak, and there are still negative factors such as the unimplemented public fund sales fee regulations and upcoming events affecting risk preferences. The 10 - year Treasury bond yield is expected to range between 1.70% - 1.80% [3]. 3. Summary by Directory 3.1 Last Week's Market Review - **Secondary Market**: The bond market recovered last week. The 10 - year Treasury bond futures main contract rose 0.31% in the whole week. However, the 10 - year Treasury bond yield rose 0.40bp and the 1 - year yield rose 7.43bp compared to the previous Friday, with the term spread continuing to narrow. The daily performance of the bond market was affected by factors such as stock market movements, trade frictions, and market sentiment [4]. - **Primary Market**: 47 interest - rate bonds were issued last week, 38 less than the previous week. The issuance volume was 450.7 billion yuan, 90.5 billion more, and the net financing was 20.2 billion yuan, 223.7 billion less. The issuance of Treasury bonds and policy - financial bonds increased, while local bonds decreased. The net financing of policy - financial bonds increased, while that of Treasury and local bonds decreased. The overall subscription demand for interest - rate bonds was acceptable [11]. 3.2 Last Week's Important Events - **Foreign Trade**: In September 2025, exports increased by 8.3% year - on - year, and imports increased by 7.4%. The high growth in exports was due to a low base last year, more working days, and strong external demand for some products. However, exports may decline in the future due to US high - tariff policies, and imports may enter negative growth [13]. - **CPI and PPI**: In September, CPI decreased by 0.3% year - on - year, with a seasonal increase in the month - on - month rate. PPI decreased by 2.3% year - on - year, with the decline narrowing mainly due to a lower base last year. The domestic demand was still insufficient, and some export - oriented industries' prices were under pressure [13]. - **Financial Data**: In September, new RMB loans were 1.29 trillion yuan, and new social financing was 3.5338 trillion yuan, both less than the same period last year. M2 growth slowed to 8.4%, and M1 growth accelerated to 7.2%. The factors affecting loan and social financing growth included implicit debt replacement and weak demand [14]. 3.3 Real - Economy Observation - **Production**: High - frequency production data showed mixed performance. The semi - steel tire开工 rate increased significantly, while the asphalt plant开工 rate and daily pig iron output decreased slightly, and the blast furnace开工 rate remained unchanged [15]. - **Demand**: The BDI index continued to rise, the CCFI index continued to decline, and the commercial housing sales area in 30 large and medium - sized cities increased significantly [15]. - **Prices**: Pork prices and most commodity prices, including crude oil, rebar, and copper, declined [15]. 3.4 Last Week's Liquidity Observation - The central bank's open - market operations resulted in a net capital withdrawal of 162.36 billion yuan last week. R007 and DR007 both decreased, the share - holding bank's inter - bank certificate of deposit issuance rate increased, and the pledged repurchase trading volume increased significantly. The inter - bank market leverage ratio fluctuated greatly and decreased slightly overall [24][27][31].

Report Summary 1. Investment Rating The provided text does not mention the industry investment rating. 2. Core Views - Last week, convertible bonds followed the equity market in a volume - shrinking adjustment. High - rated and low - priced convertible bonds outperformed, while high - priced convertible bonds weakened significantly. The net redemption scale of convertible bond ETFs expanded to 2382 million yuan, but convertible bonds showed anti - decline properties compared to the equity market, with the Wind Convertible Bond Weighted Index outperforming the Wind All - A Index by 1.43 pcts. - Currently, the market risk preference is running at a low level. Although Sino - US trade friction is expected to ease gradually, short - term market sentiment depends on the progress of Sino - US game before Trump's new round of tariffs on November 1st. Under uncertainty, the defensive value of convertible bonds in dividend and weighted sectors such as banks, coal, gas, and non - bank finance will be prominent. - Some hard - tech sectors need adjustment to regain cost - effectiveness and open up upward space. The "15th Five - Year Plan" is expected to release positive signals for some sectors, and sectors with outstanding performance advantages are expected to get stronger support during the third - quarter report disclosure period. [2] 3. Summary by Directory Policy Tracking - On October 17, the Ministry of Finance and other three departments issued an announcement to adjust the duty - free shopping policy for Hainan off - island passengers, expanding the scope of duty - free goods from 45 categories to 47 categories, and allowing island residents with off - island records to buy duty - free goods without limit of times under the "buy - and - pick - up - immediately" method. - The same day, the Ministry of Commerce and other five departments released a guidance on improving the overseas comprehensive service system, aiming to build a three - dimensional, full - chain overseas comprehensive service ecosystem, and put forward specific measures in aspects such as optimizing public platforms, integrating local services, extending overseas services, strengthening economic and trade cooperation guarantees, and enhancing the capabilities of overseas - going enterprises. [3][4] Secondary Market - Last week, the main equity market indexes showed mixed performance. The Shanghai Composite Index rose 0.37%, while the Shenzhen Component Index and the ChiNext Index fell 1.26% and 3.86% respectively. Overseas, the US government shutdown and bank credit risks affected market risk preference, and the market started recession trading. - Domestically, the September price data showed that consumption promotion supported CPI, and the low base narrowed the year - on - year decline of PPI. The September export data was better than expected, mainly due to the base effect and the Mid - Autumn Festival date difference. - Affected by global risk events and Sino - US trade frictions, the risk preference of the domestic equity market further weakened, with obvious volume shrinkage and a significant adjustment in the previous strong technology sectors. Funds flowed to dividend and consumer sectors for risk - aversion. - In the convertible bond market, all major indexes declined. High - rated and low - priced convertible bonds were stronger, while high - priced convertible bonds weakened. The net redemption of convertible bond ETFs increased. The valuation of convertible bonds rebounded, and trading activity declined. [6][7][8] Primary Market - Last week, Funeng Convertible Bond and Jinlang Convertible Bond 2 were issued, and no convertible bonds were listed. Some convertible bonds were delisted due to early redemption or maturity. As of October 17, the convertible bond market's outstanding scale was 59.0529 billion yuan, a decrease of 14.3364 billion yuan from the beginning of the year. - Ten convertible bonds had a conversion ratio of over 5%. Some convertible bonds announced price adjustments, early redemptions, or were expected to trigger early redemption conditions. Two convertible bonds were approved by the CSRC and waiting to be issued, with a total of 2.677 billion yuan, and eight convertible bonds passed the review committee, with a total of 5.306 billion yuan. [30][33][34]

Economic Growth - In Q3 2025, GDP growth slowed to 4.8% year-on-year, down from 5.2% in the first three quarters[1] - Fixed asset investment from January to September 2025 decreased by 0.5%, marking a historical low[16] - The average growth rate of social retail sales in Q3 was 3.4%, a decline of 2 percentage points from the previous quarter[14] Industrial Production - In September 2025, industrial added value grew by 6.5% year-on-year, an increase of 1.3 percentage points from the previous month[9] - Cumulative industrial added value from January to September increased by 6.2%, surpassing the GDP growth rate[10] - The manufacturing sector's added value in September rose significantly, driven by a 3.8% increase in export delivery value[9] Investment Trends - Manufacturing investment from January to September 2025 saw a cumulative year-on-year growth of 4.0%, down 1.1 percentage points from the previous value[17] - Real estate investment from January to September 2025 fell by 13.9%, with a widening decline of 1.0 percentage point[19] - Infrastructure investment (excluding electricity) grew by 1.1% year-on-year, a decrease of 0.9 percentage points from the previous value[20] Consumer Behavior - Retail sales in September 2025 grew by 3.0% year-on-year, a decline of 0.4 percentage points from the previous month[11] - The cumulative year-on-year growth of retail sales from January to September was 4.5%, an increase of 1.2 percentage points compared to the previous year[14] - Consumer confidence remains low due to the ongoing adjustment in the real estate market[14]

Group 1: LPR Pricing and Market Expectations - The LPR rates for October remain unchanged at 3.0% for the 1-year and 3.5% for the 5-year, aligning with market expectations[1] - The stability in LPR pricing is attributed to the unchanged policy interest rates and rising financing costs for commercial banks[2] - Recent macroeconomic data shows a decline in consumption, investment, and industrial production due to multiple factors, yet export growth has accelerated[2] Group 2: Future Outlook and Policy Implications - Increased external volatility and the need for stronger growth and employment measures suggest potential LPR rate cuts before year-end[3] - The introduction of 500 billion yuan in new policy financial tools and local government debt limits indicates a push for effective investment and growth[3] - A potential reduction in LPR rates could stimulate loan demand and counteract external demand slowdowns, especially with low current price levels[4] - Further measures to stabilize the real estate market may include targeted reductions in the 5-year LPR to lower mortgage rates and boost housing demand[4]