Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The bond market is affected by a combination of bullish and bearish factors, with bond yields expected to maintain a range - bound oscillation. Trading positions can take the opportunity to close when interest rates decline, and allocation positions can enter the market when prices are high. Medium - and long - term bonds have better allocation value [3][121]. - In the fourth quarter, the pressure to achieve the annual economic goal is relatively small, and the space for incremental policies such as reserve requirement ratio cuts and interest rate cuts may be limited. The central bank may prefer to use open - market operations such as outright repurchases to reduce the cost of banks' liability side, and structural monetary policies will play a greater role in stabilizing growth and foreign trade [2][88]. Summary by Directory 1. Macroeconomy: Domestic Demand Continues to Decline, and Inflation Rises Slowly - **Demand: Domestic demand continues to decline, and production maintains resilience** - The cumulative year - on - year GDP growth rate in the first three quarters is 5.2%, reducing the pressure to stabilize growth in the fourth quarter, and the probability of policy intensification in the short term is low [7][8]. - From January to September, the cumulative year - on - year growth rate of fixed - asset investment was - 0.5%, with the growth rate turning negative. The growth rates of real estate, manufacturing, and infrastructure investment all declined, dragging down fixed - asset investment [9]. - From January to September, real estate development investment and sales growth rates continued to decline. Real estate is still in the process of bottom - seeking, and real estate investment is expected to remain at a low level [10]. - In September, the consumption growth rate continued to decline to 3%. Affected by the withdrawal of subsidies and weak catering consumption, it is expected to further decline below 3% in October [15][18]. - In September, the national urban survey unemployment rate decreased slightly after the graduation season. The employment demand of large, medium, and small enterprises all increased, alleviating some employment pressure [19]. - From January to September, the cumulative year - on - year export growth rate was 6.1%, and the import growth rate increased significantly. The trade surplus narrowed in September and is expected to continue narrowing [23][27][28]. - High - frequency data shows that the daily coal consumption of power plants decreased in October, the steel and coking enterprise start - up rates were differentiated, and the truck tire start - up rate decreased [33][35][39]. - **Production: Production shows strong resilience** - From January to September, the cumulative year - on - year growth rate of the added value of large - scale industries was 6.2%. In September, the added value of industries increased by 6.5% year - on - year, indicating strong production resilience [44]. - **CPI remains negative, and the decline of PPI continues to narrow** - In September, CPI increased slightly but remained negative, and PPI increased year - on - year. It is expected that CPI will gradually recover in the fourth quarter [47][55]. - The year - on - year decline of PPI narrowed by 0.6 percentage points. Some industries showed positive price changes, and the impact of anti - involution policies was significant [57][62]. 2. Liquidity and Monetary Policy: The Central Bank Conducts Outright Repurchase Operations with Increased Volume, and the Liquidity is Expected to be Balanced and Slightly Loose - **Liquidity review: The central bank conducts outright repurchase operations with increased volume, and short - term interest rates return to stability after the quarter** - Since October, the liquidity has remained loose, and DR007 mostly operates within 5bp above the policy rate. The central bank conducts outright repurchase operations with increased volume, and the large - scale banks' fund lending is mostly above 4 trillion [2][64]. - The long - term fund price has changed little, and the pressure on inter - bank certificates of deposit repayment in October has decreased [70][72]. - **Financial data: New credit increases less year - on - year, the growth rate of social financing declines, and the growth rate of M1 exceeds expectations** - In September, new credit increased less year - on - year, mainly due to the weak credit demand of residents and enterprises. Social financing also increased less year - on - year, mainly dragged down by government bonds and RMB loans [79][83]. - In September, M2 increased by 8.4% year - on - year, a decrease of 0.4%. M1 increased by 7.2% year - on - year, and the gap between M1 and M2 narrowed [84]. - **Next - stage liquidity outlook: The bond supply pressure in the fourth quarter eases, and the liquidity is expected to be balanced and slightly loose** - Since October, the liquidity has remained loose, and the central bank conducts outright repurchase operations with increased volume. Although the supply - demand contradiction in the first half of the fourth quarter is relatively large, the liquidity disturbance is expected to be limited [2][88]. - The central bank may prefer to use open - market operations to reduce the cost of banks' liability side, and structural monetary policies will play a greater role [88]. 3. Interest - Rate Bond Strategy: A Combination of Bullish and Bearish Factors, with Interest Rates Oscillating within a Range - **Interest - rate bond trend review** - Bond yields first rose and then fell. The 10 - year treasury bond yield is around 1.85%, and the 10 - year CDB bond yield rose to around 2.01%. The yield curve first steepened and then flattened [90]. - Since September, the implicit tax rate has generally increased, with the 1Y and 3Y implicit tax rates being relatively high [100]. - **Analysis of interest - rate bond influencing factors** - **Economic fundamentals**: Domestic demand continues to decline, but the bond market is more sensitive to bearish fundamentals [103]. - **Inflation**: Inflation is gradually recovering from a low level, but the impact on the bond market is currently small [104]. - **Broad liquidity**: Social financing and loans increase less year - on - year, while M1 continues to rise [105]. - **Narrow liquidity**: The central bank of funds is stable, and the repurchase trading volume increased in October [109][111]. - **Sino - US interest rate spread**: The inversion amplitude has narrowed, and the exchange rate is relatively stable, not restricting monetary policy [112][113]. - **Stock - bond ratio**: It continues to decline, and the allocation value of bonds increases [114][116]. - **Bond supply and demand**: The overall supply pressure has decreased, but the supply of policy - based financial bonds is expected to increase slightly [117]. - **Interest - rate bond strategy: A combination of bullish and bearish factors, with interest rates oscillating within a range** - Bond yields are expected to maintain a range - bound oscillation. Trading positions can close when interest rates decline, and allocation positions can enter the market when prices are high. Medium - and long - term bonds have better allocation value [121].

Report Industry Investment Rating The provided content does not mention the report industry investment rating. Core Views of the Report - Overseas markets: Since August, the US has raised tariffs, with its economy remaining resilient, inflation rising, and employment slowing unexpectedly. The Fed has hinted at rate cuts, leading to a decline in US Treasury yields and a slight depreciation of the US dollar. The eurozone economy is showing signs of improvement, with inflation remaining moderate, and the euro is expected to appreciate slightly against the US dollar. Japan's economy presents a mixed picture, with tariffs suppressing exports and core inflation cooling, and the yen is expected to fluctuate slightly against the US dollar. The narrowing of the Sino-US yield spread, the release of domestic entities' foreign exchange settlement demand, and the inflow of foreign capital into the domestic stock market have led to a slight appreciation of the RMB against the US dollar, and it is expected to continue to appreciate slightly in the short term [3]. - Macroeconomic fundamentals: In July, both demand and production converged, with the demand side experiencing a larger decline, partly due to falling prices. The production side showed a slight decline, indicating the implementation of anti-involution policies, but overall, it remained resilient. Export data slightly exceeded expectations, but there is downward pressure in the future. The bond market has largely anticipated the weakness in aggregate demand but is sensitive to the upward shift in the price center. As the inflation center rises, the bottom of bond yields will gradually increase [3]. - Monetary policy and liquidity: Since August, the central bank has made net injections, and the short-term capital price center has shifted downward. Looking ahead, the stock market may experience short-term fluctuations, and there are concerns about market overheating and capital idling. The supply of government bonds will remain high, and there will be pressure on the maturity of interbank certificates of deposit, leading to fluctuations in the end-of-quarter capital market. Overall, although there are more disturbances in the capital market, the downward trend in financing costs continues, and liquidity does not have a basis for a trend tightening [4]. - Interest rate bond strategy: Since August, bond yields have first declined and then risen due to fluctuations in industrial product prices under anti-involution policies. Looking ahead, aggregate demand remains weak, but the bond market's reaction to fundamentals is gradually dulling. There are increasing interference factors in the bond market, including the impact of anti-involution policies on prices, the stock market's rise, and the increase in bond interest income tax. However, given the weak demand, the possibility of a significant increase in interest rates is low, and the interest rate center is expected to rise, with the oscillation range also shifting upward. Trading desks can seize repair opportunities when interest rates rise, while allocation desks can intervene when interest rates reach the upper limit of the range, and medium- and long-term bonds are more valuable for allocation [4]. - Credit bond strategy: In August, the "stock-bond seesaw" effect continued to suppress the bond market, and the redemption pressure of funds intensified the volatility of long-term interest rates. As the bond market adjusts, the cost-effectiveness of medium- and high-grade credit bonds with a maturity of three years has increased, but the credit spread is still relatively low. It is recommended to focus on defensive strategies, appropriately reduce duration, and pay attention to coupon opportunities for bonds with a maturity of less than three years. The central bank has taken measures to maintain a balanced and loose liquidity environment, and the pressure on further significant price increases for certificates of deposit may be controllable [5]. Summary by Relevant Catalogs Part I: Overseas Markets - US economic situation: Since August, the US manufacturing and service sectors have expanded significantly. However, the employment market has slowed unexpectedly, and core inflation has continued to rise. The Fed is likely to implement a preventive 25-basis-point rate cut in September. The Fed has been gradually reducing its balance sheet, leading to a marginal convergence of US dollar liquidity. The primary demand for US Treasury bonds has weakened again, and long-term Treasury bond yields face upward pressure. The US dollar is expected to depreciate slightly in the short term [8][10][16]. - Eurozone economic situation: The eurozone economy is showing signs of improvement, with inflation remaining moderate. The euro has appreciated against the US dollar and is expected to continue to appreciate slightly in the short term [31][34]. - Japanese economic situation: Japan's economy presents a mixed picture, with external challenges increasing and core inflation cooling. The yen has appreciated against the US dollar and is expected to fluctuate slightly in the short term [39][44]. - RMB exchange rate situation: Since July, the inversion of the Sino-US Treasury yield spread has gradually decreased, and domestic entities' foreign exchange settlement demand has continued to be released. The RMB has appreciated slightly against the US dollar and is expected to continue to appreciate slightly in the short term [49][55]. - Gold market situation: In August, the price of gold fluctuated upward within a range. Non-commercial net long positions decreased slightly, while gold ETFs continued to flow in. Emerging central banks continued to purchase gold, supporting the medium- and long-term price of gold. It is expected that the price of gold will fluctuate at a high level in the short term [58][65]. Part II: Domestic Macroeconomy - Investment situation: From January to July, the growth rate of fixed asset investment continued to decline, with the growth rates of real estate, infrastructure, and manufacturing investment all falling. Real estate investment is still in the process of bottoming out, and the growth rate of real estate sales has slightly rebounded, while the land transaction premium rate has decreased. The downstream demand for steel is weak, and the price increase is not well supported [71][75][80]. - Consumption situation: In July, the growth rate of consumption continued to decline, mainly due to the diminishing effect of subsidies and the decline in automobile consumption [83]. - Export situation: From January to July, the cumulative year-on-year growth rate of exports was 6.1%, and the growth rate in July was 7.2%, showing strong resilience. However, due to factors such as the increase in tariffs and the overdraft effect of pre-exporting, the export growth rate is expected to decline in the future [86]. - Production situation: From January to July, the cumulative year-on-year growth rate of industrial added value was 6.3%, showing a slight slowdown. The operating rates of the steel and coal industries have generally increased [90][93]. - Employment situation: In July, the urban surveyed unemployment rate increased seasonally, and the employment demand of small and medium-sized enterprises decreased rapidly [96]. - Inflation situation: In July, the year-on-year growth rate of CPI was 0%, and the year-on-year growth rate of core CPI was 0.8%, showing an upward trend. The year-on-year growth rate of PPI stopped falling, and it is expected that the decline will gradually narrow in the future [99][102]. - VAT new policy: Since August 8, 2025, the interest income of newly issued government bonds, local government bonds, and financial bonds will be subject to VAT. This policy will lead to an increase in the spread between new and old bonds, benefit interbank certificates of deposit and credit bonds, and have an impact on financial institutions [103][104][106]. Part III: Liquidity and Monetary Policy - Liquidity review: In August, the central bank made net injections, and the short-term capital price center shifted downward, while the long-term capital price center changed little. The trading volume of pledged repurchase decreased in the middle and late August. The growth rate of M1 and M2 exceeded expectations, and the growth rate of social financing increased [116][121][130]. - Liquidity outlook: In September, the supply of government bonds is expected to remain high, and the maturity pressure of interbank certificates of deposit is large, leading to increased disturbances in the end-of-quarter capital market. However, given the weak demand, the downward trend in financing costs continues, and liquidity does not have a basis for a trend tightening [133]. Part IV: Interest Rate Bond Strategy - Interest rate bond trend: Since August, bond yields have generally shown an upward trend, mainly due to the rise of the stock market and the increase in bond interest income tax. The yield curve has become steeper, and the medium- and long-term spreads are relatively large [137][138][142]. - Investment strategy: Trading desks can seize repair opportunities when interest rates rise, while allocation desks can intervene when interest rates reach the upper limit of the range, and medium- and long-term bonds are more valuable for allocation [4].

Economic Overview - In June, the economy showed weak demand but strong production, with GDP growth at 5.3% for the first half of the year, easing pressure to achieve a full-year target of 5%[2] - Domestic demand is under significant pressure, with real estate, infrastructure, and manufacturing investments continuing to decline, while consumption growth has also slowed[5] - Export growth has increased due to a "rush to export" effect, providing some support to the economy[2] Investment and Consumption - Fixed asset investment growth for January to June was 2.8%, down 0.9 percentage points from the previous value, with real estate investment down 11.2%[9] - Retail sales growth in June was 4.8%, a decrease of 1.6 percentage points from the previous month, primarily due to reduced subsidy effects and a decline in dining consumption[16] - Real estate sales growth continued to decline, with a 3.5% drop in sales and a 6.2% decrease in funding sources[12] Monetary Policy and Liquidity - The central bank's monetary policy emphasizes "stabilizing prices," with liquidity expected to remain balanced and slightly loose[3] - The average interbank repo rates have decreased, with DR007 fluctuating within 10 basis points above the policy rate[3] - The central bank conducted a 1.4 trillion yuan reverse repo operation in mid-July, indicating a loose monetary stance[4] Bond Market Strategy - Bond yields have slightly adjusted due to rising stock markets and marginal increases in funding rates, but rates are unlikely to rise significantly without improvements in the economic fundamentals[4] - The bond market is expected to experience low volatility, with strategies focusing on high-entry points for bond purchases[6] Inflation and Price Trends - CPI growth turned positive in June at 0.1%, driven by rising industrial consumer goods prices, particularly oil[46] - PPI continued to decline, with a year-on-year drop of 3.6%, influenced by falling energy prices and pressures on export prices[52]

Economic Outlook - In September, fixed asset investment growth was stable at 3.4% year-on-year, with infrastructure investment showing the most significant increase, indicating accelerated fiscal spending[5] - Real estate development investment growth improved slightly to -10.2%, with sales continuing to show an upward trend, suggesting a gradual stabilization[7] - Consumer spending growth in September rose to 3.4%, exceeding expectations, driven by appliance subsidies and increased consumer confidence[10] Inflation and Price Trends - The Consumer Price Index (CPI) growth in September was 0.4%, down 0.2 percentage points from the previous month, primarily due to falling non-food prices[26] - The Producer Price Index (PPI) continued to decline, with a year-on-year decrease of 2.8% in September, reflecting weak overall demand[30] Monetary Policy and Liquidity - Since the end of September, the interbank funding rates have eased, with the DR007 falling below the policy rate by 5 basis points, indicating a more relaxed liquidity environment[35] - The People's Bank of China has implemented a series of monetary easing measures, including a 20 basis point cut in policy rates, to support economic growth[36] Bond Market Dynamics - Bond yields have rebounded from low levels, influenced by changing market expectations following government announcements, leading to increased volatility in the bond market[1] - The upcoming decisions regarding debt issuance limits and central government deficits are expected to increase supply pressure in the government bond market[1] Financial Data Insights - M1 growth has recorded six consecutive months of negative growth, while social financing growth has reached a new low, indicating weak internal demand[41] - Short-term and medium-term loans have decreased year-on-year, reflecting ongoing challenges in consumer and corporate credit demand[41]

Summary of Conference Call Company or Industry Involved - The conference call is organized by Huatai Securities Research Institute and Xingzhi Private Equity, indicating a focus on investment and financial services industry [1] Core Points and Arguments - The call welcomes investors, suggesting an emphasis on investor relations and engagement [1] Other Important but Possibly Overlooked Content - No specific financial data, industry trends, or detailed company insights were provided in the excerpt [1]

Summary of Conference Call Company/Industry Involved - The conference call is focused on Nanjing Bank, a recommended stable value stock by Zheshang Securities [1] Core Points and Arguments - The call begins with a welcome message and a reminder about the silent mode during the breakfast meeting [1] - The host indicates that the meeting will proceed after the announcement is completed [1] Other Important but Possibly Overlooked Content - There is a formal declaration at the beginning of the call, which is standard practice for such meetings [1]

Economic Overview - Demand remains weak, with real estate investment and consumption growth below market expectations, while high-tech production shows significant recovery[5] - In April, CPI rose to 0.3%, up 0.2 percentage points from the previous month, indicating a slight recovery in price levels, although inflation remains low[20] - Fixed asset investment growth for January-April was 4.2%, down 0.3 percentage points from the previous value, with real estate investment declining by 9.8%[58] Monetary Policy and Liquidity - Since May, the central bank has maintained a stable liquidity environment, with the average interbank repo rate (DR007) fluctuating within a 10 basis points range above the policy rate[27] - The central bank conducted 11 operations of 7-day reverse repos, injecting a total of 220 billion yuan, while net liquidity withdrawal reached 438 billion yuan in early May[27] - The issuance of special government bonds is expected to accelerate, alleviating previous allocation pressures in the bond market[10] Interest Rate Strategy - Bond yields have rebounded from low levels, primarily due to increased government bond issuance and supportive policies following the Politburo meeting[10] - The anticipated continuation of a loose monetary policy suggests limited upward pressure on interest rates, with expectations for potential rate cuts in the second quarter[10] - The average rates for interbank certificates of deposit and Shibor have decreased, with 1-month Shibor at 1.94%, down 7 basis points from April[50] Real Estate Market - Real estate sales in April showed a slight recovery but fell again in May, with daily average transaction area growth declining from -38.9% in April to -49.06% in May[91] - The average land transaction premium rate in May was 1.67%, down from April, indicating continued caution among developers[92] - New construction starts showed a significant rebound in April, but overall real estate investment growth remains negative, reflecting ongoing market challenges[72] Trade and Export - In the first four months, exports grew by 1.5%, with April's growth exceeding market expectations, driven by high-tech product exports[67] - The trade surplus in April was $72.35 billion, indicating a strengthening of trade dynamics despite ongoing pressures from high U.S. Treasury yields and capital outflow risks[84]

Economic Overview - Despite the narrowing of the China-US interest rate spread, it remains wide, with foreign institutions increasing their holdings of Chinese bonds by $10.2 billion in April, a decrease from earlier in the year[1] - The RMB depreciated to around 7.2 against the USD, limiting the space for further domestic monetary policy easing due to exchange rate and capital account pressures[1] Investment and Consumption - Fixed asset investment growth for January-April was 4.2%, down 0.3 percentage points from the previous value, indicating a decline in investment across all three major sectors[12] - Real estate investment growth for January-April was -9.8%, with new construction, completion, and sales all showing negative growth, reflecting ongoing weakness in the real estate sector[14] Monetary Policy and Liquidity - The central bank has continued to implement policies to support the real estate sector, with a focus on maintaining stable liquidity in the financial system[93] - As of mid-May, the central bank had conducted 11 reverse repo operations, injecting a total of $22 billion, while also maintaining a net withdrawal of $438 billion in the first half of May[93] Inflation and Price Trends - April's CPI increased to 0.3% year-on-year, up 0.2 percentage points from the previous value, while PPI's year-on-year decline narrowed to -2.5%[87] - Core CPI, excluding food and energy, rose by 0.7% year-on-year, indicating a potential upward trend in inflation[90] Trade and Export Performance - In the first four months, exports grew by 1.5% year-on-year, with April's export growth rebounding by 9 percentage points compared to March, driven by automotive and high-tech product exports[70] - The trade surplus for April was $72.35 billion, continuing to support the currency despite ongoing pressures from the interest rate differential with the US[75]