Report Industry Investment Rating No information provided. Core Viewpoints of the Report - The bond market started with a positive performance, with all treasury bond futures closing higher. However, bond market sentiment is fragile, and the recovery of risk appetite suppresses the bond market. Meanwhile, the expectation of continued interest rate cuts by the Federal Reserve and the increase in global trade uncertainty add to the uncertainty of foreign capital inflows. Overall, the bond market oscillates between stable growth and easing expectations, and short - term attention should be paid to policy signals at the end of the month [1][3] - In terms of strategies, for the unilateral aspect, the repurchase rate has declined, and treasury bond futures prices are oscillating; for the arbitrage aspect, attention should be paid to the decline of the basis of the 2512 contract; for the hedging aspect, there is medium - term adjustment pressure, and short - sellers can use far - month contracts for appropriate hedging [4] Summary by Relevant Catalogs I. Interest Rate Pricing Tracking Indicators - **Price Indicators**: China's CPI (monthly) had a 0.00% month - on - month change and a - 0.40% year - on - year change; China's PPI (monthly) had a 0.00% month - on - month change and a - 2.90% year - on - year change [9] - **Monthly Economic Indicators**: The social financing scale was 433.66 trillion yuan, with an increase of 2.40 trillion yuan (0.56% month - on - month); M2 year - on - year was 8.80%, with a 0.00% month - on - month change; the manufacturing PMI was 49.80%, with a 0.40% (0.81% month - on - month) increase [9] - **Daily Economic Indicators**: The US dollar index was 99.39, up 0.54 (0.55% day - on - day); the offshore US dollar - to - RMB exchange rate was 7.1296, down 0.003 (- 0.04% day - on - day); SHIBOR 7 - day was 1.50, up 0.09 (6.41% day - on - day); DR007 was 1.51, up 0.07 (4.85% day - on - day); R007 was 1.53, up 0.02 (1.49% day - on - day); the 3 - month interbank certificate of deposit (AAA) was 1.58, up 0.05 (3.57% day - on - day); the AA - AAA credit spread (1Y) was 0.09, up 0.00 (3.57% day - on - day) [9] II. Overview of the Treasury Bond and Treasury Bond Futures Market - Multiple figures are presented, including the closing price trend of the main continuous contracts of treasury bond futures, the price change rates of various treasury bond futures varieties, the precipitation funds trend of various treasury bond futures varieties, the position ratio of various treasury bond futures varieties, the net position ratio of the top 20 in various treasury bond futures varieties, the long - short position ratio of the top 20 in various treasury bond futures varieties, the spread between China Development Bank bonds and treasury bonds, and the treasury bond issuance situation [13][16][19][22] III. Overview of the Money Market Funding Situation - Figures show the Shibor interest rate trend, the yield - to - maturity trend of interbank certificates of deposit (AAA), the trading statistics of inter - bank pledged repurchase, and the local government bond issuance situation [27] IV. Spread Overview - Figures display the inter - term spread trend of various treasury bond futures varieties and the term spread of spot bonds and cross - variety spreads of futures (4*TS - T, 2*TS - TF, 2*TF - T, 3*T - TL, 2*TS - 3*TF + T) [27][28][29] V. Two - Year Treasury Bond Futures - Figures include the implied interest rate and the treasury bond yield - to - maturity of the main contract of two - year treasury bond futures, the IRR of the TS main contract and the funding rate, the three - year basis trend of the TS main contract, and the three - year net basis trend of the TS main contract [31][34][41] VI. Five - Year Treasury Bond Futures - Figures show the implied interest rate and the treasury bond yield - to - maturity of the main contract of five - year treasury bond futures, the IRR of the TF main contract and the funding rate, the three - year basis trend of the TF main contract, and the three - year net basis trend of the TF main contract [43][48] VII. Ten - Year Treasury Bond Futures - Figures present the implied yield and the treasury bond yield - to - maturity of the main contract of ten - year treasury bond futures, the IRR of the T main contract and the funding rate, the three - year basis trend of the T main contract, and the three - year net basis trend of the T main contract [50][54][51] VIII. Thirty - Year Treasury Bond Futures - Figures include the implied yield and the treasury bond yield - to - maturity of the main contract of thirty - year treasury bond futures, the IRR of the TL main contract and the funding rate, the three - year basis trend of the TL main contract, and the three - year net basis trend of the TL main contract [57][59][63]

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Views of the Report - In Q3, the bond market was mainly affected by anti - involution policies, the stock market, and new fund redemption rules, showing a continuous upward trend. The adjustment in Q3 was characterized by more long - end adjustments, fewer short - end adjustments, fewer low - grade credit adjustments, slightly more high - grade credit adjustments, more adjustments in secondary and perpetual bonds, and fewer adjustments in general credit bonds. In terms of investment returns, credit bonds with a maturity of 2 years or less performed well, while those with a maturity of 3 years or more mostly had negative returns [2]. - Currently, the interest rate may have fully priced in policy and fundamental disturbances. The pattern of weak fundamentals and weak financing demand remains unchanged, and the further upward space of the bond market may be limited [3]. - Historically, the bond market often declines in Q4, and credit spreads usually fluctuate. This year, due to weak bond fund returns and the importance of Q4 performance for the whole - year product performance, market gaming will be more intense, increasing market volatility. For credit bonds in Q4, it is still recommended to focus on coupons, be cautious about duration, and conduct periodic gaming [4][5]. - For different bond varieties, 2 - year short - term bonds are still a solid base and may perform well in the short - term after the holiday. Trading opportunities for secondary and perpetual bonds have emerged again, requiring quick entry and exit in the short - term, and depending on interest rate trends in the long - term. Institutions with unstable liability ends should be cautious about ultra - long - term credit bonds, but their trading volume has increased and shareholding banks have net - bought, indicating a recovery in allocation value, and trading strategies can be tried cautiously [6]. Group 3: Summary by Related Catalogs 1.1 How was the performance in Q3? - The bond market was affected by anti - involution policies, the stock market, and new fund redemption rules, showing a continuous upward trend. In July, anti - involution policies were further implemented, and the bond market rose significantly; in August, the stock market rose strongly, suppressing bond market sentiment; in September, new fund redemption rules were introduced, and various news such as good industrial enterprise profits in August, progress in Sino - US negotiations, and the cancellation of fund tax exemption impacted the market [13]. - The Q3 adjustment showed characteristics of more long - end adjustments, fewer short - end adjustments, fewer low - grade credit adjustments, slightly more high - grade credit adjustments, more adjustments in secondary and perpetual bonds, and fewer adjustments in general credit bonds [15]. - In terms of investment returns, 2 - year and shorter - term credit bonds performed well with positive returns, while bonds with a maturity of 3 years or more had poor investment returns, and the longer the maturity, the worse the performance. For example, the investment return of the 30 - year treasury bond in Q3 was only - 7.818% [19]. 1.2 Will the downward trend continue? - In August, the year - on - year growth rate of industrial enterprise profits was 20.4%, mainly driven by industries such as power, heat production and supply, and metal smelting and processing. However, the sustainability of the profit recovery is limited due to factors such as the continuous decline in futures prices and weak social demand. The growth rates of both social financing and core social financing are declining, and the further upward space of the social financing growth rate is limited [21]. - Currently, the market interest rate has fully reflected the marginal changes in fundamentals and inflation. Considering the term spread of interest - rate bonds and the comparison between long - term interest rates and certificates of deposit, the further upward space of interest rates is limited, and there may be a downward trend at the end of the year [22][31]. 1.3 How to view credit spreads? - If interest rates do not rise further, credit spreads will likely fluctuate. Historically, credit spreads in Q4 mostly fluctuate. If the capital interest rate can remain stable, the pricing logic system of capital - certificates of deposit - credit will be more stable. Currently, the comparison between medium - term notes and certificates of deposit has risen significantly but is expected to fall back, and the term spread of credit bonds has reached a relatively high level in the past two years and is expected to have limited further upward space [35][40]. 1.4 How to understand the seasonality of the bond market and institutional psychology? - The bond market tends to decline in Q4. In the past 9 years from 2016 to now, interest - rate bonds rose only in 2016, 2017, and 2022, and declined in other years. Credit bonds generally perform worse than interest - rate bonds of the same maturity in Q4. This year, due to the poor performance of medium - and long - term bond funds, market gaming in Q4 will be more intense, increasing market volatility. Products with good performance may focus on controlling drawdowns, while those under performance pressure may more aggressively play the long - duration strategy [43][47][49]. 1.5 How to construct a portfolio? - Medium - and short - term credit bonds should still focus on defense. Holding credit bonds with a maturity of less than 2 years until the end of Q4 can withstand an upward range of more than 30bp, and appropriate credit risk exposure can also lead to good coupon performance [52]. - Ultra - long - term credit bonds: Their credit spreads are close to the high point in the past two years, and their trading volume has increased, and shareholding banks have net - bought, indicating that they have allocation value. Currently, the comparison between secondary and perpetual bonds and general credit bonds has risen to a high level, presenting trading opportunities [56][58][59]. 2.1 It is recommended to focus on medium - and long - term secondary and perpetual bonds - At the end of September, the comparison between 5 - year secondary and perpetual bonds and medium - term notes rose rapidly. The comparison advantages of 5 - year secondary capital bonds of all grades over 5 - year medium - term notes increased significantly, and the comparisons of AAA, AA +, and AA grades are currently 9.96bp, 9.08bp, and 4.08bp respectively, still at a high level this year. The comparisons of 1 - year secondary bonds of all grades with medium - term notes are all negative [63]. - The comparison between short - end urban investment bonds and medium - term notes has declined significantly, breaking through the low point of the year, and the cost - performance of medium - and low - grade bonds is relatively low, so entry still needs to wait. The comparison between long - end weak - quality urban investment bonds and medium - term notes has increased [65]. 2.2 Focus on high - coupon assets with a maturity of about 2 years - Currently, the proportion of urban investment bonds with a valuation of over 2.3% is 38.0%, that of non - financial industrial bonds is 24.5%, and that of secondary and perpetual bonds is 33.3%. Bonds with a maturity of about 2 years and a valuation of over 2.3% have good value and are worth attention [67]. - For urban investment bonds, long - end bonds can combine coupon and band operations, and short - duration high - coupon varieties can still be participated in. It is recommended to focus on bonds with a maturity of about 2 years issued by companies such as Xi'an High - tech, Henan Aviation Port, and Zhuhai Huafa [68]. - For industrial bonds, among real - estate enterprises, it is recommended to focus on bonds of important local state - owned real - estate enterprises with a maturity of about 2 years, such as Shoukai, Jianfa, and CCCC Real Estate. Among non - real - estate industrial entities, focus on bonds with a maturity of less than 2 years issued by enterprises such as Jizhong Energy and AVIC Industry Finance, and bonds with a maturity of about 2 years issued by enterprises such as HBIS and Yunnan Investment [72]. 3.1 How was the market performance? - On September 29 - 30, credit bonds generally recovered, and spreads generally widened. Credit bond yields declined slightly, with short - end secondary and perpetual bonds performing more significantly, while 10Y secondary and perpetual bonds continued to rise. Credit spreads widened overall, and the spreads of secondary and perpetual bonds showed a differentiated trend, with short - end spreads declining and long - end spreads widening [74].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In September 2025, the manufacturing PMI increased by 0.4 pct month - on - month to 49.8%, slightly exceeding expectations but still below the boom - bust line, while the non - manufacturing PMI dropped by 0.3 pct to 50.0%. The supply - demand relationship needs optimization, and whether production is "front - loaded" remains to be seen. External demand is stable, domestic demand recovers slowly, and the gap between the "purchase price of major raw materials - ex - factory price" continues to widen, putting pressure on enterprise profit restoration. Small - scale enterprise sentiment has significantly improved, and the sentiment of emerging manufacturing industries has also improved. Service industry sentiment has declined, and the construction industry has improved but is still at a relatively low level. The sustainability of PMI restoration needs to be observed. The bond market priced the fundamentals further on the day the data was released, and it is expected that as the pricing power of fundamentals on the bond market gradually increases, the bond market performance in the fourth quarter may be better than that in the third quarter [2][7]. 3. Summary by Related Catalogs 3.1 Event Description - In September 2025, the manufacturing PMI was slightly better than expected but below the boom - bust line, rising 0.4 pct month - on - month to 49.8% (Bloomberg consensus forecast: 49.6%), basically in line with seasonality. The non - manufacturing PMI dropped 0.3 pct to 50.0% (Bloomberg consensus forecast: 50.2%), remaining at a seasonal low. Among them, the service industry PMI dropped 0.4 pct to 50.1%, and the construction industry PMI rose slightly by 0.2 pct to 49.3%, both weaker than seasonality [5]. 3.2 Event Comment - **Manufacturing Industry** - Manufacturing sentiment has moderately recovered, but the supply - demand relationship needs optimization, and whether production is "front - loaded" remains to be seen. In September, the manufacturing PMI improved more than expected, rising 0.4 pct to 49.8%. The production index rose 1.1 pct to 51.9%, reaching a new high since Q2 this year, while the new order index only increased 0.2 pct to 49.7%. The gap between the "production - new order" index widened to 2.2 pct, indicating that the supply recovery intensity may be greater than the demand improvement. Enterprises' willingness to replenish inventory has increased, but there are signs of inventory accumulation, and production may be "front - loaded" [7]. - There are differentiations in external and internal demand and price structure. External demand is stable, domestic demand recovers slowly, and the price indicators have generally improved, but the gap between the "purchase price of major raw materials - ex - factory price" continues to widen, which may still restrict enterprise profit restoration. In September, the purchase price index of major raw materials remained in the expansion range of 53.2%, while the ex - factory price index dropped to 48.2%, and the gap between the two widened to 5.0 pct. External demand remained resilient, with the new export order index rising to 47.8%, while domestic demand recovery was still relatively slow, with the new order index only increasing 0.2 pct to 49.7% [7]. - Small - scale enterprise sentiment has significantly improved, and the sentiment of emerging manufacturing industries has also improved. In September, the PMI of large - scale enterprises reached 51.0%, remaining in the expansion range. Small - scale enterprises improved significantly, with the PMI rising 1.6 pct month - on - month, while the sentiment of medium - scale enterprises declined. In terms of industries, the PMI of the equipment manufacturing and high - tech manufacturing industries remained in the high - sentiment range above 51%, with significant improvements in industries such as automobiles and railway, ship, and aerospace equipment. The PMI of the consumer goods industry also rose to 50.6% [7]. - **Non - manufacturing Industry** - Service industry sentiment has declined, and the construction industry has improved but is still at a seasonal low. In September, the non - manufacturing business activity index dropped 0.3 pct to 50.0%, and the service industry index dropped 0.4 pct to 50.1%. The end of the summer vacation effect is an important factor, with the sentiment of consumer - related industries such as catering and cultural and entertainment significantly declining, while modern service industries such as finance and telecommunications maintained high sentiment. The business activity index of the construction industry rose slightly by 0.2 pct, but the absolute level of 49.3% was still below the boom - bust line, indicating that real estate and infrastructure investment may continue to be under pressure [7]. - **Bond Market Outlook** - The sustainability of PMI restoration needs to be observed. On the day the data was released, the bond market priced the fundamentals further, with the yield of the 10 - year active treasury bond dropping 2 BP. A series of growth - stabilizing policies have been implemented recently, and the investment of 500 billion yuan in new policy - based financial instruments may support infrastructure investment. The expectation of optimizing real estate market regulation policies in many places has increased, but whether the economy will continue to improve in an environment of weak domestic demand and prices remains to be seen. It is expected that as the pricing power of fundamentals on the bond market gradually increases, the bond market performance in the fourth quarter may be better than that in the third quarter [7].

Group 1 - The core viewpoint of the report highlights that the cloud service business has turned profitable, driving overall profit growth for the company in the first half of 2025 [3][4] - The company reported a revenue of 4.343 billion yuan for the first half of 2025, representing a year-on-year increase of 4.88%, while the net profit attributable to shareholders reached 183 million yuan, up 73.26% year-on-year [3][4] - The gross profit margin for the first half of 2025 improved significantly to 23.37%, an increase of 1.35 percentage points year-on-year, primarily driven by the rapid growth of the cloud service business [4] Group 2 - The cloud service revenue for the first half of 2025 was 1.274 billion yuan, reflecting a year-on-year increase of 29.96%, while the management software and IoT solutions reported revenues of 1.198 billion yuan and 1.872 billion yuan, showing slight declines of 0.34% and 4.46% respectively [4] - The operating profit from the cloud service business was 20 million yuan in the first half of 2025, a turnaround from a loss of 71 million yuan in the same period last year [4] - The company has launched the Haiyue Model V3.0, which enhances the intelligence of cloud service products and has been applied in various enterprises, including Beijing Tongrentang [6][7] Group 3 - The company has signed contracts with major state-owned enterprises for its management software, indicating a successful penetration into the market [8] - The IoT solutions focus on equipment manufacturing, smart manufacturing, and communication information, with significant projects signed in these areas [9] - The company forecasts revenues of 9.076 billion yuan, 10.022 billion yuan, and 10.996 billion yuan for 2025, 2026, and 2027 respectively, with net profits projected at 541 million yuan, 653 million yuan, and 893 million yuan [9]

Core Viewpoint - The fundamental and supply conditions for bonds have entered a favorable phase since October, with stable funding conditions and ongoing room for interest rate cuts and bond purchases [1] Group 1: Market Outlook - The bond market is expected to experience weak fluctuations after the holiday, with attention on the 15th Five-Year Plan, the implementation of new public fund sales regulations, and potential institutional behavior that may lead to slight rebound opportunities [1] - The ten-year government bond old coupon is recommended for adjustment allocation when yields exceed 1.8% [1] Group 2: Investment Strategy - It is suggested to maintain positions in bonds with maturities of 5-7 years and below, as well as medium-short term credit bonds, while avoiding ultra-long bonds [1] - The medium-term curve is expected to slightly steepen [1]

Group 1 - The overall bond market saw an increase in yields across all varieties in September, with the 10-year national development bond experiencing the highest rise [3][9] - In the credit bond sector, long-term varieties showed a significant widening of credit spreads, particularly the 5-year AAA, AA, and AA- credit bonds, which increased by 16 basis points, 14 basis points, and 14 basis points respectively [9][18] - The default amount in September slightly decreased to 6.79 billion, indicating a minor improvement in credit risk [27] Group 2 - The U.S. economy is showing signs of a slowdown, with weak employment performance and a slight increase in inflation expectations, as evidenced by a 2.9% year-on-year rise in CPI in August [33][37] - In contrast, the European and Japanese economies continue to expand, with stable inflation rates of 2.0% and 2.7% respectively in August [40] - Domestic economic growth in China has significantly declined, with the monthly GDP growth rate dropping to approximately 3.8% in August, which is 0.5 percentage points lower than July [3][61] Group 3 - The monetary policy in September continued to show a net withdrawal in the open market, with a total net withdrawal of 187.2 billion [98] - The MLF (Medium-term Lending Facility) operations in September resulted in a net injection of 300 billion, maintaining the same level as August [102] - The report emphasizes the need for a proactive monetary policy to support sectors such as technology innovation, consumption, and small and micro enterprises [106] Group 4 - The report highlights the importance of analyzing the internal structure of CPI, particularly the trends in non-food prices, as they are more indicative of demand-driven price changes [159] - The correlation between the 10-year government bond yield and non-food price growth has increased significantly since 2015, suggesting a shift in the factors influencing bond yields [159] - The report suggests that understanding the divergence between food and non-food prices is crucial for accurately interpreting inflation trends and their impact on monetary policy [159]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market sentiment is weak, with all treasury bond futures closing lower. The bond market is volatile between the expectations of stable growth and monetary easing, and short - term attention should be paid to policy signals at the end of the month. The recovery of risk preference suppresses the bond market, and the expectation of the Fed's continued interest rate cuts and the increase in global trade uncertainty add to the uncertainty of foreign capital inflows [1][3]. 3. Summary According to Catalogues I. Interest Rate Pricing Tracking Indicators - Price indicators: China's CPI (monthly) has a 0.00% month - on - month change and a - 0.40% year - on - year change; China's PPI (monthly) has a 0.00% month - on - month change and a - 2.90% year - on - year change [9]. - Monthly economic indicators: The social financing scale is 433.66 trillion yuan, with a monthly increase of 2.40 trillion yuan and a growth rate of 0.56%. M2 year - on - year is 8.80%, with no change. The manufacturing PMI is 49.40%, with a 0.10% increase and a growth rate of 0.20% [10]. - Daily economic indicators: The US dollar index is 97.94, down 0.25 or 0.25%. The US dollar against the offshore RMB is 7.1237, down 0.017 or 0.24%. SHIBOR 7 - day is 1.52, up 0.03 or 1.74%. DR007 is 1.59, up 0.03 or 2.04%. R007 is 1.51, down 0.05 or 3.26%. The 3 - month inter - bank certificate of deposit (AAA) is 1.58, down 0.01 or 0.43%. The AA - AAA credit spread (1Y) is 0.09, with a - 0.43% change [11]. II. Overview of Treasury Bonds and Treasury Bond Futures Market - Relevant figures include the closing price trend of the main continuous contracts of treasury bond futures, the price change rate of each variety of treasury bond futures, the precipitation funds trend of each variety of treasury bond futures, the position ratio of each variety of treasury bond futures, the net position ratio of the top 20 in each variety of treasury bond futures, the long - short position ratio of the top 20 in each variety of treasury bond futures, the spread between China Development Bank bonds and treasury bonds, and the issuance of treasury bonds [15][16][18]. III. Overview of the Money Market Funding Situation - Relevant figures include the Shibor interest rate trend, the yield - to - maturity trend of inter - bank certificates of deposit (AAA), the transaction statistics of inter - bank pledged repurchase, and the issuance of local government bonds [33][27]. IV. Spread Overview - Relevant figures include the inter - period spread trend of each variety of treasury bond futures, the spread between the spot bond term spread and the futures cross - variety spread (4*TS - T), (2*TS - TF), (2*TF - T), (3*T - TL), (2*TS - 3*TF + T) [31][35][36]. V. Two - year Treasury Bond Futures - Relevant figures include the implied interest rate of the main contract of two - year treasury bond futures and the treasury bond yield to maturity, the IRR of the TS main contract and the funding rate, the three - year basis trend of the TS main contract, and the three - year net basis trend of the TS main contract [48][42][51]. VI. Five - year Treasury Bond Futures - Relevant figures include the implied interest rate of the main contract of five - year treasury bond futures and the treasury bond yield to maturity, the IRR of the TF main contract and the funding rate, the three - year basis trend of the TF main contract, and the three - year net basis trend of the TF main contract [53][58]. VII. Ten - year Treasury Bond Futures - Relevant figures include the implied yield of the main contract of ten - year treasury bond futures and the treasury bond yield to maturity, the IRR of the T main contract and the funding rate, the three - year basis trend of the T main contract, and the three - year net basis trend of the T main contract [60][65][62]. VIII. Thirty - year Treasury Bond Futures - Relevant figures include the implied yield of the main contract of thirty - year treasury bond futures and the treasury bond yield to maturity, the IRR of the TL main contract and the funding rate, the three - year basis trend of the TL main contract, and the three - year net basis trend of the TL main contract [67][72][73]. Strategies - Unilateral strategy: The repurchase rate is volatile, and the price of treasury bond futures is also volatile. - Arbitrage strategy: Pay attention to the decline of the basis of the 2512 contract. - Hedging strategy: There is medium - term adjustment pressure, and short - side investors can use far - month contracts for appropriate hedging [4].

Group 1: Report Overview - The report is the Bond Research Weekly for the 4th week of September 2025, focusing on bond market analysis from the perspective of institutional behavior [2][9] Group 2: Investment Rating - Not provided in the report Group 3: Core Viewpoints - The behavior of funds is crucial in the bond market, with their net purchases strongly correlated with interest rate trends. The instability of funds' liability side has increased due to the new sales fee regulations, and the impact of the regulations' implementation should be closely monitored [4][15] - The three institutional behavior changes (funds having nothing left to sell, brokerages closing short positions, and banks "picking up bargains") are favorable for the bond market. Future interest rates may decline due to funds repurchasing bonds, banks increasing allocations, and brokerages closing positions. Currently, interest rate products have a higher probability of success than Tier 2 and credit bonds [4][15] Group 4: Summary by Directory 1. Re - examination after Interest Rate Breakthrough 1.1 Three Changes in Institutional Behavior and Future Outlook - Funds are "sold out": Since Q3, funds have continuously reduced duration. As of September 26, 2025, the median duration of medium - and long - term bond funds (including leverage) dropped to 2.8 years, and the cumulative net purchase of ultra - long treasury bonds (over 10Y) by funds has been negative since early September [3][9] - Brokerages are closing short positions: The borrowing volume of the top three active 10Y treasury bonds remains volatile, while that of 10Y CDB bonds has decreased, indicating brokerage short - position closing before the holiday [10] - Banks are "picking up bargains": Since August, joint - stock banks have continuously bought old 10Y treasury bonds, acting as a "buffer" during the bond market correction. Recently, Tier 2 and perpetual bonds have corrected rapidly, and funds are selling Tier 2 bonds more aggressively [3][14] 1.2 Yield Curve - Treasury bond yields generally increased. On a week - on - week basis, the 1Y yield decreased by 1bp, the 3Y yield increased by 3bp, the 5Y yield changed less than 1bp, the 7Y yield increased by 1bp, the 10Y yield changed less than 1bp, the 15Y yield increased by 1.5bp, and the 30Y yield increased by 2bp. In terms of percentiles, the 1Y dropped to the 10% percentile, and others had various percentile changes [16][18] - CDB bond yields also generally increased. The 1Y yield decreased by 0.5bp, the 3Y yield increased by 2bp, the 5Y yield increased by about 2.3bp, the 7Y yield increased by 4.6bp, the 10Y yield increased by 1.1bp, the 15Y yield increased by about 4.6bp, and the 30Y yield increased by 4.9bp. Percentiles also had corresponding changes [18] 1.3 Term Spread - The spread between treasury bonds and CDB bonds (1Y - DR001, 1Y - DR007) showed a differentiated trend, and the term spread generally widened [19] 2. Bond Market Leverage and Funding Situation 2.1 Leverage Ratio - From September 22 to September 26, 2025, the leverage ratio fluctuated and decreased. As of September 26, it was about 107.06%, up 0.32pct from last Friday and down 0.04pct from Monday [23] 2.2 Repurchase Transactions - From September 22 to September 26, the average daily trading volume of pledged repurchase was about 7.3 trillion yuan, up 0.1 trillion yuan from last week. The average daily trading volume of overnight pledged repurchase was 5.55 trillion yuan, down 0.72 trillion yuan month - on - month. The average overnight trading volume ratio was 75.72%, down 11.92pct month - on - month [27][28] 2.3 Funding Situation - From September 22 to September 26, bank - based fund lending first increased and then decreased. On September 26, the net lending of large and policy banks was 4.09 trillion yuan, and joint - stock, city, and rural commercial banks had a net borrowing of 0.28 trillion yuan. The main fund borrowers were brokerages, and money market funds' lending decreased. DR007, R007, 1YFR007, and 5YFR007 all fluctuated and increased, with different changes compared to last Friday [30] 3. Duration of Medium - and Long - Term Bond Funds 3.1 Overall Duration - From September 22 to September 26, the median duration of medium - and long - term bond funds was 2.68 years (de - leveraged) and 2.79 years (including leverage). On September 26, the median duration (de - leveraged) remained unchanged from last Friday, and the median duration (including leverage) decreased by 0.01 year [41] 3.2 Duration by Bond Fund Type - As of September 26, the median duration of interest - rate bond funds (including leverage) dropped to 3.53 years, down 0.01 year from last Friday; the median duration of credit bond funds (including leverage) dropped to 2.52 years, up 0.01 year from last Friday. The de - leveraged durations also had corresponding changes [44] 4. Category Strategy Comparison - As of September 26, the Sino - US spread generally narrowed, and the implied tax rate (10Y CDB - treasury bond spread) narrowed at the short end and widened at the medium - and long - ends [48] 5. Bond Lending Balance Changes - On September 26, the lending concentration of active 10Y treasury bonds and 10Y CDB bonds increased, that of secondary active 10Y CDB bonds and active 30Y treasury bonds decreased, and that of secondary active 10Y treasury bonds remained unchanged. Except for brokerages, all other institutional lending concentrations increased [50]

Core Viewpoint - The bond market is experiencing a significant correction, but there is potential for stabilization and partial recovery in the near term, particularly in the fourth quarter, despite a generally weak long-term trend [1][2][3]. Group 1: Market Dynamics - The bond market has shown a comprehensive pullback, with notable declines in high-elasticity instruments such as 30-year government bonds and 10-year policy bank bonds, alongside a deeper drop in credit bonds, particularly those heavily held by funds [1]. - Historical patterns suggest that the bond market typically exhibits a "weak first, strong later" trend in the fourth quarter, but the situation in 2025 may differ, with expectations of no new policies leading to a "not weak, not strong" scenario [1][2]. - Recent actions by the central bank, including liquidity injections and major banks actively purchasing bonds, indicate a supportive stance towards current bond market pricing [1]. Group 2: Fund and Credit Market Influences - The recent bond market correction is partly attributed to discussions surrounding the adjustment of fund fee rates, which has led to "preventive redemptions" affecting public funds [2]. - The potential impact of fund fee adjustments may not be as immediate as anticipated, with a transition period likely, and no significant redemption signs currently observed in bank wealth management products [2]. - Insurance funds are gradually showing interest in long-duration bonds, particularly as the market stabilizes, with a preference for stable coupon bonds despite a potential decrease in demand for ultra-long bonds in 2025 [3]. Group 3: Future Outlook - The bond market is expected to enter a short-term stabilization phase, with previous negative factors already priced in, and a reduced likelihood of rapid declines [3]. - The outlook for October suggests a probable platform period for the bond market, with certain bond types, such as policy bank bonds and specific credit bonds, potentially experiencing recovery opportunities [3]. - Future attention should focus on the marginal changes in risk assets and allocation forces as the year-end approaches [3].

Group 1: Report Summary - The bond market may move forward in a volatile manner in the fourth quarter [3][5][16] - There is still an opportunity for overall easing in monetary policy, and the period around the important meeting in October is a crucial time window [3][10] - The "redemption pressure" has become long - term and complex, which may still impact the bond market in the fourth quarter [4][12][14] Group 2: Core Views Short - and Medium - term Views - In the short term, the bond market is still under pressure. It is important to verify that the rebound high of long - term interest rates is gradually decreasing. If it is verified that around 1.8% is the relatively top level of the 10 - year Treasury bond, the bond - bull logic of the downward - trending yield can still be maintained. In the medium term, the recovery of risk preference is more reflected in the term spread premium, and in extreme cases, it may return to the level of 50 - 60BP [3][10] Monetary Policy Views - The third - quarter monetary policy meeting did not release clear incremental policy signals. But considering factors such as the Fed's interest rate cut, the adjustment of liability interest rates after the previous reserve requirement ratio and interest rate cuts, the policy demand to maintain economic improvement, and the marginal cooling of the equity market sentiment, there is still an opportunity for overall easing. The period around the important meeting in October is a crucial time window [3][10] Redemption Pressure Views - The new regulations on public fund redemption fees are about to be implemented. The redemption game around the systematic adjustment of the product liability side is ongoing. The institutional - end redemption may be more orderly, which may lead to a stage where the upward risk of yields is controllable but difficult to decline significantly. However, there may also be a stage of concentrated release of negative - feedback risks [4][12][14] Seasonal, Valuation, and Factor Analysis - Seasonally, since 2010, in 15 years, the 10 - year yield has accumulated an increase in 8 years and a decrease in 7 years in the fourth quarter. Considering the cumulative decline in the first three quarters, the bond market in the fourth quarter is seasonally weak and in need of adjustment. In terms of valuation, the bond market has allocation value. Considering factors such as the slowdown of supply pressure, the possible occurrence of monetary easing opportunities, and the continuous existence of redemption pressure, the bond market may alternate between recovery and adjustment [5][16] Group 3: Content Summarized by Directory Fourth - Quarter Bond Market Outlook - Short - term pressure remains, and it is necessary to verify the decline of long - term interest rate rebound highs. Medium - term risk preference recovery affects term spreads. There is an opportunity for monetary easing around the October meeting. The redemption pressure is long - term and complex, and the bond market may move forward in a volatile manner, alternating between recovery due to allocation value and adjustment due to redemption pressure [3][4][5] Comparison of Monetary Policy Meetings in Q3 and Q2 of 2025 - The assessment of the economic situation has not changed significantly. The monetary policy emphasizes continuity, stability, flexibility, and foresight. It aims to maintain liquidity, guide credit investment, reduce financing costs, and support key areas [11][12][13] Impact of Redemption Pressure on the Bond Market - The new regulations on public fund redemption fees are about to be implemented. The institutional - end redemption demand is increasing, the asset - end selection space after redemption is limited, and there is time for adjustment during the transition period. This may lead to a complex impact on the bond market [4][12][14]