与时舒卷，终返其真

1. Report Industry Investment Rating - The rating for Treasury bonds is "Oscillation" [6] 2. Core Viewpoints of the Report - M1 is expected to peak and decline, and the inflation level will remain low. Although the PPI year - on - year reading will rise due to the low base, the overall inflation in Q4 will stay at a low level [1][19] - The main theme of the Q4 market is likely to return to reality. After the stock market gradually evaluates policies and fundamentals, the negative impact on the bond market will be cleared [2] - The impact of monetary policy is mild, and the bond market valuation is reasonable. Even with limited incremental monetary benefits, the bond market can strengthen as it returns to fundamental trading [3] - The Q4 bond market is expected to oscillate and recover. It is recommended to wait for market sentiment to stabilize, then take long positions on dips, continue to hold short - hedging strategies and close them after sentiment stabilizes, and consider curve - flattening strategies [4][82][83] 3. Summary According to the Table of Contents 3.1 2025 Q1 - Q3 Treasury Bond Trend Review - The first stage (early - March mid - late): The central bank guided the tightening of the capital market, and the bond market oscillated weakly [13] - The second stage (end of March - end of June): Monetary policy and the capital market gradually loosened, and the bond market gradually recovered. After the tariff implementation in early April, Treasury bond futures rose rapidly, and the bond market oscillated at a high level from April to May, then strengthened in June [13] - The third stage (July - September): Anti - involution policies led to a rise in market risk appetite, the stock and commodity markets rose rapidly, and Treasury bond futures fell [13] 3.2 M1 Peaks and Declines, Inflation Remains Low 3.2.1 The Current M1 Growth Recovery is Unique and May Lack Sustainability - The current M1 growth recovery is different from previous ones. It is mainly due to the low base, fiscal stimulus creating corporate deposits, improved SME payment cycles, increased corporate settlement willingness, and the revival of household deposit currentization [20][21] - The economic nature of the current M1 growth recovery is limited, and the M1 growth rate is likely to decline in Q4 due to the rising base and potential reduction in fiscal policy intensity [24][25] 3.2.2 The Year - on - Year Inflation Reading Rises, but the Month - on - Month Price Increase Momentum is Weak - The current M1 growth recovery has limited ability to drive inflation. The anti - involution policy has not been fully implemented, and the domestic supply - demand imbalance persists. The Q4 inflation will remain low, and the PPI year - on - year reading will rise due to the low base [19] - It is difficult to reduce supply in Q4 as the anti - involution policy is different from the supply - side structural reform, and the high - tech manufacturing production growth is relatively fast [28][29] - Domestic demand remains weak. The real estate market is difficult to stabilize, Q4 consumption growth is challenging, and although external demand has some resilience, it also faces downward pressure [31][32][36] 3.3 Q4 Market Main Theme Expected to Return to Reality 3.3.1 Capital Drives Stock Market Up, Bond Market Follows Down - The rise of the stock market in Q3 was mainly driven by capital. Factors include high stock - bond return ratios, increased global risk appetite, policy incentives, and increased corporate settlement willingness [39][43][51] - The stock market's bull run in Q3 significantly suppressed the bond market. As the bond market has priced in the existing monetary benefits, the stock market's rise became the key factor suppressing the bond market [53] 3.3.2 When Will the Negative Impact of the Stock Market be Cleared? - Overseas risk appetite may fluctuate in Q4 due to potential inflation risks in the US and geopolitical uncertainties [56] - The stock - bond return ratio approached its 10 - year average in mid - September, and the stock market's upward pace slowed down, indicating a possible return to fundamental trading [59] - Policy incentives are expected to fade away in mid - late October, and the stock market is likely to turn to real - world trading. The bond market and the stock market are expected to gradually return to fundamental trading in Q4 [60][63] 3.4 Monetary Impact is Mild, Bond Market Valuation is Reasonable 3.4.1 No Negative Monetary Factors, Limited Incremental Benefits - Monetary policy and the capital market are likely to remain unchanged. Although there is a need for interest rate cuts, the probability is low, and the market's expectation of continuous interest rate cuts is also low [64][71] - The central bank is not in a hurry to restart open - market bond trading. Even if the policy is implemented, its positive impact on the bond market will be weaker than last year [75] 3.4.2 Bond Market Valuation is Basically Reasonable with Room for Strengthening - The short - end and long - end interest rates in the bond market are gradually approaching reasonable levels. The bond market's sensitivity to negative news will gradually decrease as the valuation becomes more reasonable [76][77] 3.5 Treasury Bond Market Outlook and Strategies - The Q4 bond market is expected to oscillate and recover. It will start with low - level oscillations, then turn upward, and may face fluctuations at the end of the year [82][83] - Strategies include taking long positions on dips after market sentiment stabilizes, continuing to hold short - hedging strategies and closing them after sentiment stabilizes, and considering curve - flattening strategies when the bond market sentiment improves [83]