稳增长预期略升温，两会前债市震荡

Report Industry Investment Rating - The investment rating for government bonds is "oscillation" [4] Core Viewpoints of the Report - The bond market is expected to oscillate before the Two Sessions. The real - estate stabilization policies in Shanghai are a limited negative for the bond market. The market's expectation of policy strength during the Two Sessions has slightly increased, but the probability of further large - scale policy stimulus is low, and geopolitical conflicts have led to continuous risk - aversion sentiment [2][11]. - After the Two Sessions, attention should be paid to the supply pressure of government bonds and the trend of the equity market. In the long run, inflation recovery and technological progress are the main trading themes for various assets this year, and the bond market remains a weak asset with adjustment risks [2][12][13]. - In terms of strategies, a unilateral strategy should be cautious about bond market adjustment risks; a short - hedging strategy is recommended; and in the long term, the spread of 3T - TL should be widened [2][14][15]. Summary by Directory 1. One - Week Review and Views 1.1 This Week's Trend Review - From February 23 to March 1, government bond futures declined slightly. On Tuesday, the LPR quote remained stable, the stock market rose as expected, and government bond futures outperformed spot bonds. On Wednesday, Shanghai introduced real - estate relaxation policies, the stock market continued to rise, and some bond market institutions took profits, causing government bond futures to decline. On Thursday, with a quiet market and strong profit - taking willingness, government bond futures continued to decline. On Friday, the bond market sentiment improved, and most government bond futures contracts rose. As of February 27, the settlement prices of the 06 contracts of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures were 102.448, 105.985, 108.390, and 112.120 yuan respectively, down 0.042, 0.120, 0.125, and 0.750 yuan from the previous weekend [1][10]. 1.2 Next Week's View - The bond market is expected to oscillate before the Two Sessions. The real - estate policies in Shanghai are a limited negative for the bond market. The market's expectation of policy strength during the Two Sessions has slightly increased, but the deficit rate is likely to remain at 4%, and the probability of further large - scale policy stimulus is low. Geopolitical conflicts have led to continuous risk - aversion sentiment. After the Two Sessions, attention should be paid to the supply pressure of government bonds and the trend of the equity market. In the long run, the bond market is a weak asset with adjustment risks [2][11][12]. 2. Weekly Observation of Interest - Rate Bonds 2.1 Primary Market - This week, 46 interest - rate bonds were issued, with a total issuance of 787.42 billion yuan and a net financing of 368.289 billion yuan, an increase of 787.42 billion yuan and 551.673 billion yuan respectively from last week. 27 local government bonds were issued, with a total issuance of 256.42 billion yuan and a net financing of 190.429 billion yuan, an increase of 256.42 billion yuan and 211.813 billion yuan respectively from last week. 298 inter - bank certificates of deposit were issued, with a total issuance of 460.37 billion yuan and a net financing of - 206.29 billion yuan, an increase of 460.37 billion yuan and a decrease of 130.85 billion yuan respectively from last week [18]. 2.2 Secondary Market - Government bond yields rose. As of February 27, the yields of 2 - year, 5 - year, 10 - year, and 30 - year government bonds were 1.36%, 1.55%, 1.82%, and 2.29% respectively, up 0.45, 1.04, 2.32, and 4.60 basis points from the previous weekend. The spreads of 10Y - 1Y, 10Y - 5Y, and 30Y - 10Y widened by 2.03, 1.28, and 2.28 basis points respectively [24]. 3. Government Bond Futures 3.1 Price, Trading Volume, and Open Interest - Government bond futures declined slightly. As of February 27, the settlement prices of the 06 contracts of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures were 102.448, 105.985, 108.390, and 112.120 yuan respectively, down 0.042, 0.120, 0.125, and 0.750 yuan from the previous weekend. The trading volumes of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures this week were 52,831, 98,584, 173,293, and 128,349 lots respectively, with changes of - 769, - 10,029, + 29,223, and + 17,974 lots from last week. The open interests were 71,309, 186,444, 324,967, and 174,690 lots respectively, with changes of - 2,129, - 9, - 18,953, and - 11,948 lots from last week [31][34]. 3.2 Basis and IRR - The basis of TL widened, while the basis of T, TF, and TS oscillated narrowly. There are no obvious arbitrage opportunities at present. In the short term, risks such as policy stimulus and increased government bond supply should be watched out for. In the long run, the bond market still faces adjustment pressure, and a short - hedging strategy is recommended [38]. 3.3 Inter - delivery and Inter - variety Spreads - As of February 27, the inter - delivery spreads of the 2603 - 2606 contracts of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures were + 0.002, - 0.095, + 0.040, and - 0.250 yuan respectively, with changes of + 0.058, + 0.030, + 0.080, and - 0.110 yuan from the previous weekend. This week, long - position holders led the roll - over first, followed by short - position holders [43]. 4. Weekly Observation of the Funding Situation - This week, the central bank conducted 1.641 trillion yuan of 7 - day reverse repurchase operations. With 2.2524 trillion yuan of 7 - day reverse repurchases and 300 billion yuan of 1 - year MLF maturing, the net withdrawal was 911.4 billion yuan. As of February 27, R007, DR007, SHIBOR overnight, and SHIBOR 1 - week were 1.36%, 1.34%, 1.36%, and 1.47% respectively, up 7.37, 5.46, 8.70, and 4.40 basis points from the previous weekend. The average daily trading volume of inter - bank pledged repurchase was 7.79 trillion yuan, 1.06 trillion yuan more than last week, and the overnight proportion was 74.44%, lower than last week [46][48]. 5. Weekly Overseas Observation - The US dollar index declined slightly, and the yield of 10 - year US Treasury bonds decreased. As of February 27, the US dollar index fell 0.10% to 97.6443 compared with February 20, and the yield of 10 - year US Treasury bonds was 3.97%, down 11 basis points from February 20. The yield spread between Chinese and US 10 - year government bonds was inverted by 215.1 basis points. Due to some dovish statements from Fed officials, the expectation of interest - rate cuts increased, and the US dollar index weakened slightly. Concerns about AI impact led to an adjustment in US technology stocks and a decline in US Treasury bond yields [51]. 6. Weekly Observation of High - Frequency Inflation Data - Industrial product prices rose this week. As of February 27, the Southern China Industrial Product Index, Metal Index, and Energy and Chemical Index were 3,694.04, 7,225.54, and 1,603.56 points respectively, up 88.95, 214.49, and 33.59 points from the previous weekend. Agricultural product prices fell. As of February 27, the prices of pork, 28 key vegetables, and 7 key fruits were 17.70, 5.30, and 7.91 yuan per kilogram respectively, down 0.51, 0.28, and 0.15 yuan per kilogram from the previous weekend [54]. 7. Investment Suggestions - The bond market is currently oscillating, but risks of future adjustments should be watched out for [55]