1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - Since the second quarter, the bond market has been in a sideways shock. After the double - cut in May, the interest rate increased slightly, with the 10Y Treasury bond yield rising from 1.62% to 1.72%. During this period, there are two characteristics of institutional behavior: banks' bond allocation reached a record high, and institutions' overall willingness to hold bonds is strong [3]. - In May, the bond allocation of banks reached a record high, mainly due to the peak of supply and changes in the caliber. The net financing of Treasury bonds exceeded 90 billion yuan, and commercial banks' holdings of Treasury bonds increased by over 90 billion yuan, with the increase in all bond types reaching about 1.72 trillion yuan, a record high for commercial banks. Adjusting for the caliber change, the high increase in banks' bond holdings in May may indicate that their willingness to sell bonds to adjust floating profits in the second quarter is relatively controllable [3]. - Institutions' overall willingness to hold bonds is strong, different from previous months. In previous months when interest rates rose, non - bank institutions such as broad - based funds usually reduced or decreased their bond allocation. However, in May, the bond allocation scale of broad - based funds was still significant, with a monthly托管 increase of over 90 billion yuan. Broad - based funds are showing trading characteristics of allocating to certificates of deposit, reducing holdings of Tier 2 capital bonds, buying local government bonds, and conducting band - trading on Treasury bonds and policy - financial bonds. Insurance institutions had a relatively low overall allocation scale in May, securities companies slightly reduced their positions, and foreign investors' holdings of certificates of deposit declined [4]. 3. Summary by Relevant Catalogs 3.1 Bank - to - Bank and Exchange Custody Volume Overview - In May 2025, the month - on - month increase in the bank - to - bank bond custody volume rose to 1.31%, while that of the exchange decreased to 0.59%. The bond custody volumes of the bank - to - bank market (China Central Depository & Clearing Co., Ltd. and Shanghai Clearing House) and the exchange (Shanghai Stock Exchange and Shenzhen Stock Exchange) were 166 trillion and 22 trillion yuan respectively, totaling 188 trillion yuan [12][18]. 3.2 By Bond Type 3.2.1 Interest - Rate Bonds - The overall custody scale of interest - rate bonds was 117 billion yuan, with a month - on - month increase of 1.72 trillion yuan. In May, the balances of Treasury bonds, local government bonds, and policy - financial bonds continued to increase, and the total increase of Treasury bonds and policy - financial bonds was higher than that of the previous month. The custody scale of Treasury bonds increased by 91.12 billion yuan month - on - month, local government bonds increased by 52.57 billion yuan, and policy - financial bonds increased by 28.22 billion yuan [20][21]. 3.2.2 Credit Bonds - The total custody volume of credit bonds in May was 33 trillion yuan, with a month - on - month increase of 8.61 billion yuan. The scale of short - term financing bonds and enterprise bonds continued to decline, while the scale of medium - term notes and corporate bonds continued to rise. The custody scale of enterprise bonds decreased by 2.46 billion yuan, the total custody volume of association products increased by 2.64 billion yuan, and the custody scale of corporate bonds increased by 8.43 billion yuan [20][29]. 3.2.3 Certificates of Deposit - In May, the custody scale of certificates of deposit was 22 trillion yuan, with a month - on - month increase of 26.94 billion yuan. Policy - banks and broad - based funds' holdings continued to increase, while those of commercial banks, securities companies, and insurance institutions continued to decrease, and the increase in foreign institutions' custody scale turned from positive to negative [38]. 3.2.4 Financial Bonds - In May, the custody scale of financial bonds was 12 trillion yuan, with a month - on - month increase of 22.49 billion yuan. Insurance institutions' holdings continued to decrease, while those of commercial banks, broad - based funds, securities companies, and foreign institutions continued to increase, and the increase in policy - banks' custody scale turned from negative to positive [44]. 3.3 By Institution - The custody volume of allocation - oriented investors increased significantly, while that of securities companies decreased. In May, policy - banks' holdings increased by 3.66 billion yuan, commercial banks' by 172.76 billion yuan, broad - based funds' by 92.23 billion yuan, securities companies' decreased by 15.81 billion yuan, insurance institutions' increased by 0.3 billion yuan, and foreign institutions' decreased by 9.5 billion yuan [48].

Core Viewpoint - Since May, with the reduction of policy interest rates, the liquidity has further eased, but after the reserve requirement ratio (RRR) cut, the funding rates have risen instead. The article discusses the expected government bond supply in June and the liquidity gap, questioning whether the funding environment will tighten or loosen further [1] Group 1: Market Interest Rates - Funding rates continued to decline in May, with the average R007 and DR007 down by 16.1 basis points and 14.5 basis points to 1.61% and 1.58% respectively. Various SHIBOR and interbank certificate of deposit rates also decreased compared to the previous month [4][5] - After the RRR cut on May 15, the funding environment began to tighten, and the central bank's operations shifted to small net injections towards the end of the month, with a total liquidity injection of around 1 trillion yuan [5][6] Group 2: Government Bond Supply - In June, the government is expected to issue approximately 1.38 trillion yuan in national bonds, with a net financing scale of around 490 billion yuan. Local government bonds are projected to total nearly 900 billion yuan, leading to a combined government bond issuance of about 2.3 trillion yuan and a net financing scale of approximately 920 billion yuan [2][22] Group 3: Funding Pressure and Liquidity - The net financing pressure is alleviated due to the increase in government bond maturities in June, with expectations of a decrease in government deposits by about 1.1 trillion yuan. The seasonal increase in bank reserve requirements is expected to consume around 290 billion yuan of excess reserves [3][32] - The central bank's monetary policy remains a crucial variable, with limited room for further easing in the short term due to reduced liquidity pressure and the recent rise in long-term bond rates [3][32]

Group 1 - The article discusses the April 2025 bond custody data, indicating a slight month-on-month decrease in total bond custody, with policy banks significantly reducing their bond holdings while other institutions increased their bond investments [4] - The IEA and EIA have raised their global oil demand forecasts for 2025, with IEA projecting an increase of 10000 barrels per day to 74000000 barrels per day, driven mainly by emerging economies, despite a decline in demand from OECD countries [5] - In April 2025, exports of electrical equipment showed significant growth, with inverter exports reaching $810 million, up 17% year-on-year and 28% month-on-month, while transformer exports increased by 34% year-on-year [6] Group 2 - The engineering machinery industry is experiencing steady growth, supported by favorable policies from the Two Sessions, indicating a sustained recovery in demand [7] - The snack retail leader, Mingming Hen Mang, is rapidly expanding its business through a franchise model, with a total of 14394 stores by the end of 2024, covering 28 provinces and achieving a GMV of 55.5 billion yuan [9]

1. Report Industry Investment Rating No information provided on the industry investment rating in the report. 2. Core Viewpoints of the Report - In April 2025, the total bond custody scale increased by 160.77 billion yuan month - on - month, a significant decrease of 104.79 billion yuan compared to March, mainly due to the sharp contraction of net financing of various interest - rate bonds and inter - bank certificates of deposit (NCDs). The custody stocks of credit bonds and commercial bank bonds turned upward month - on - month [3][6]. - In April, under the influence of the continued escalation of Sino - US trade frictions in the first half of the month, the bond market strengthened significantly. After the middle of the month, as the trade war tension eased, the bond market returned to a volatile state. Overall, the yield curve showed a bull - flattening trend. Institutional behavior still featured strong demand from trading desks and weak demand from allocation desks, but there were differences compared to March [3][8]. - In April, the repurchase balance continued to rise, and the bond market leverage ratio increased by 0.2 percentage points to 107.1% month - on - month, but it was still significantly lower than the level before January this year. The leverage ratio of commercial banks decreased, while that of non - bank institutions increased but remained at a historically low level [3][43]. 3. Summary by Relevant Catalogs 3.1同业存单与利率债净融资明显下滑 4 月债券托管增量大幅收缩 - In April, the net financing of NCDs and interest - rate bonds declined significantly, leading to a sharp contraction in the bond custody increment. The custody increments of various interest - rate bonds and NCDs decreased month - on - month. The custody stocks of credit bonds and commercial bank bonds turned upward month - on - month [6]. - Specifically, for interest - rate bonds, the custody increment of treasury bonds decreased to 26.6 billion yuan, local government bonds to 70.69 billion yuan, and policy - bank bonds to 1.32 billion yuan. For credit bonds, the custody increment of medium - term notes (MTNs) increased to 11 billion yuan, and short - term commercial papers (CPs) increased from a decrease of 2.78 billion yuan in March to an increase of 3.36 billion yuan. The custody scales of enterprise bonds and private placement notes (PPNs) continued to decline. The custody increment of NCDs decreased significantly to 37.79 billion yuan, while that of commercial bank bonds turned from a decrease of 0.53 billion yuan to an increase of 18.89 billion yuan [6]. 3.2 4 月交易盘继续增持利率债 保险公司减持金融债券 - In April, influenced by the significant decline in NCD rates, the allocation demand for NCDs from broad - based funds, securities companies, and other institutions decreased, while the trading desks' willingness to increase holdings of interest - rate bonds continued to strengthen. The insurance institutions' willingness to increase holdings weakened, especially the significant increase in the reduction of holdings of financial bonds on the Shanghai Clearing House, possibly due to some institutions realizing floating profits in anticipation of subsequent accounting standard adjustments [3][8]. - **Broad - based funds**: The custody increment decreased significantly to 115.56 billion yuan, mainly due to the sharp decline in the increase of NCD holdings. The increase in holdings of local government bonds, policy - bank bonds decreased, while that of financial bonds on the Shanghai Clearing House, treasury bonds, and CPs increased. The reduction of holdings of commercial bank bonds decreased [14]. - **Securities companies**: The bond custody increment increased slightly to 11.24 billion yuan, remaining at a historically high level. They turned to reduce holdings of NCDs and MTNs, but the increase in holdings of treasury bonds reached a record high, and the increase in holdings of policy - bank bonds and financial bonds on the Shanghai Clearing House also rose [20]. - **Insurance companies**: The bond custody increment decreased significantly to 0.99 billion yuan. They turned to reduce holdings of financial bonds on the Shanghai Clearing House, treasury bonds, NCDs, and policy - bank bonds, and the increase in holdings of local government bonds decreased [23]. - **Overseas institutions**: The bond custody increment decreased to 9.54 billion yuan. The increase in holdings of NCDs dropped significantly from a historical high, but they turned to increase holdings of policy - bank bonds and financial bonds on the Shanghai Clearing House, and the increase in holdings of treasury bonds increased slightly [28]. - **Other institutions**: The bond custody volume decreased by 74.29 billion yuan month - on - month, reaching a historical high. This was mainly affected by the central bank's shift from a net investment of 10 billion yuan in repurchase in March to a net withdrawal of 50 billion yuan in April. They turned to reduce holdings of local government bonds and increased the reduction of holdings of treasury bonds, but turned to increase holdings of NCDs and MTNs [31]. - **Commercial banks**: The bond custody increment increased to 77.06 billion yuan, affected by the return of some repurchase underlying assets to commercial banks after the net withdrawal of repurchase in April. If the impact of repurchase is excluded, the scale of bond - buying decreased. The reduction of holdings of policy - bank bonds and NCDs increased, and the increase in holdings of treasury bonds decreased [35]. - **Credit unions**: The bond custody volume turned from a decrease of 1.9 billion yuan in March to an increase of 0.05 billion yuan in April, mainly due to the shift to increase holdings of NCDs, but they turned to reduce holdings of treasury bonds and policy - bank bonds [39]. 3.3 4 月非银杠杆率继续回升 但仍处于历史低位附近 - In April, the repurchase balance continued to rise, and the bond market leverage ratio increased by 0.2 percentage points to 107.1% month - on - month, still significantly lower than the level before January this year. The leverage ratio of commercial banks decreased by 0.2 percentage points to 103.1%, reaching a historically second - lowest level. The leverage ratio of non - bank institutions increased by 0.9 percentage points to 116.8%, remaining near the low point since 2022 [43]. - Among non - bank institutions, the leverage ratio of securities companies increased significantly by 13.4 percentage points to 214.1%, returning to a neutral level. The leverage ratio of insurance and non - legal person products increased by 0.6 percentage points to 113.4%, remaining near a recent low. In broad - based funds, the repurchase balances of money market funds and non - money products of fund companies increased significantly, but their absolute values were still low. The repurchase balances of insurance companies and other products increased, approaching the historical high in December last year, while that of wealth management products slightly declined, remaining near a historical low [43].

1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report In March 2025, the leverage ratio of the inter - bank bond market increased month - on - month but was slightly lower than the historical average. The total bond custody scale of China Central Depository & Clearing Co., Ltd. (CCDC) and Shanghai Clearing House increased. Different institutions had different investment preferences for various bond types, with commercial banks significantly increasing their allocation of interest - rate bonds and broad - based funds increasing their allocation of inter - bank certificates of deposit [1][2][4]. 3. Summary According to the Directory 3.1 Bank - Inter Leverage Ratio: Up Month - on - Month, Lower than the Same Period in Previous Years At the end of March, the inter - bank bond market leverage ratio was 107.03%, up 0.8 pct from 106.23% at the end of the previous month, and slightly lower than the historical average [1][12]. 3.2 Custody Data Overview In March 2025, the total bond custody scale of CCDC and Shanghai Clearing House was 166.22 trillion yuan, a month - on - month increase of 2655.6 billion yuan. CCDC's custody scale increased by 1308.9 billion yuan, and Shanghai Clearing House's increased by 1346.7 billion yuan. Treasury bonds, local government bonds, policy - bank bonds, medium - term notes, and inter - bank certificates of deposit contributed to the increase, while enterprise bonds, short - term financing bonds, and private placement notes contributed to the decrease [2][15]. 3.3 By Bond Type: Net Financing of Treasury Bonds and Inter - bank Certificates of Deposit Increased, Credit Bonds Had Net Repayment - **Interest - rate Bonds**: In March 2025, the total custody scale of major interest - rate bonds was 109.14 trillion yuan, a month - on - month increase of 1584.1 billion yuan. Commercial banks and broad - based funds were the main buyers, increasing their holdings by 814.8 billion yuan and 401.4 billion yuan respectively. For treasury bonds, commercial banks were the main buyers; for policy - bank bonds, broad - based funds were the main buyers; for local government bonds, commercial banks and broad - based funds increased their holdings [3][17][48]. - **Credit Bonds**: The total custody scale of major credit bonds was 15.54 trillion yuan, a month - on - month decrease of 1.01 billion yuan. Broad - based funds and commercial banks increased their holdings. For enterprise bonds, all institutions reduced their holdings; for medium - term notes, commercial banks were the main buyers; for short - term financing bonds, broad - based funds were the main buyers; for ultra - short - term financing bonds, multiple institutions reduced their holdings [3][29][48]. - **Inter - bank Certificates of Deposit**: The custody scale was 21.18 trillion yuan, a month - on - month increase of 1115 billion yuan. Broad - based funds were the main buyers, increasing their holdings by 1306.6 billion yuan, while commercial banks were the main sellers, reducing their holdings by 264.8 billion yuan [3][45][48]. 3.4 By Institution: Commercial Banks Significantly Increased Allocation of Interest - rate Bonds, Broad - based Funds Increased Allocation of Inter - bank Certificates of Deposit - **Commercial Banks**: The custody scale of major bonds was 80.04 trillion yuan, a month - on - month increase of 561.1 billion yuan. They increased their holdings of interest - rate bonds and credit bonds by 814.8 billion yuan and 11.1 billion yuan respectively, and reduced their holdings of inter - bank certificates of deposit by 264.8 billion yuan. They increased their allocation of treasury bonds and local government bonds in interest - rate bonds and medium - term notes in credit bonds [4][49]. - **Broad - based Funds**: The custody scale of major bonds was 35.53 trillion yuan, a month - on - month increase of 1729.7 billion yuan. They increased their holdings of interest - rate bonds, credit bonds, and inter - bank certificates of deposit by 401.4 billion yuan, 21.8 billion yuan, and 1306.6 billion yuan respectively. They increased their allocation of local government bonds, treasury bonds, and policy - bank bonds in interest - rate bonds and medium - term notes and short - term financing bonds in credit bonds [4][49]. - **Overseas Institutions**: The custody scale of major bonds was 4.20 trillion yuan, a month - on - month increase of 146.5 billion yuan. They increased their holdings of interest - rate bonds, inter - bank certificates of deposit, and credit bonds by 3.2 billion yuan, 141.1 billion yuan, and 2.2 billion yuan respectively. They mainly increased their allocation of treasury bonds in interest - rate bonds and slightly increased their allocation of medium - term notes, short - term financing bonds, and ultra - short - term financing bonds in credit bonds [4][53]. - **Insurance Institutions**: The custody scale of major bonds was 4.03 trillion yuan, a month - on - month increase of 93.5 billion yuan. They increased their holdings of interest - rate bonds and inter - bank certificates of deposit by 93.1 billion yuan and 1.3 billion yuan respectively, and reduced their holdings of credit bonds by 1 billion yuan. They mainly increased their allocation of local government bonds and treasury bonds in interest - rate bonds and slightly reduced their allocation of medium - term notes and enterprise bonds in credit bonds [4][53]. - **Securities Companies**: The custody scale of major bonds was 2.76 trillion yuan, a month - on - month increase of 118.1 billion yuan. They increased their holdings of interest - rate bonds, credit bonds, and inter - bank certificates of deposit by 88.7 billion yuan, 3.3 billion yuan, and 26.1 billion yuan respectively. They mainly increased their allocation of treasury bonds in interest - rate bonds and increased their allocation of medium - term notes in credit bonds [4][53]. - **Credit Unions**: The custody scale of major bonds was 1.89 trillion yuan, a month - on - month decrease of 14.8 billion yuan. They increased their holdings of interest - rate bonds by 21.6 billion yuan and reduced their holdings of credit bonds and inter - bank certificates of deposit by 0.63 billion yuan and 35.8 billion yuan respectively. They increased their allocation of treasury bonds, policy - bank bonds, and local government bonds in interest - rate bonds [5][54].

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - In March, the total bond custody scale increased by 265.56 billion yuan month - on - month, with the increment mainly contributed by inter - bank certificates of deposit (CDs), which reached a record high of 1.12 trillion yuan. However, the custody increments of various interest - rate bonds and credit bonds decreased slightly compared to the previous month [4][7]. - After a mid - to - early - month correction, the bond market recovered in late March. Due to looser funds, the demand for CDs from broad - based funds soared, leading to a significant increase in net financing of CDs despite a high maturity volume, and CD rates peaked and declined. The increased purchases of interest - rate bonds by trading institutions such as broad - based funds and securities firms, along with a marginal decrease in government bond supply, alleviated the pressure on commercial banks' asset - side to undertake primary issuance, and thus eased their liability pressure. However, the demand for credit bonds from trading desks remained weak, the bond purchases by insurance companies slightly decreased, and overseas institutions also significantly increased their CD holdings, with the overall bond purchase volume reaching a new high since August last year [4][9]. - In March, the repo balance increased significantly, and the bond market leverage ratio rose by 0.6 pct month - on - month to 106.8%. Although the increase was similar to the historical average for the same period, it remained at a low level since 2022. By institution, the leverage ratios of commercial banks and non - bank institutions both increased but were still at relatively low levels [4][38]. 3. Summary by Directory 3.1. Inter - bank CD Supply Surge Drove a 2.7 - Trillion - Yuan Increase in March Bond Custody Volume - The total bond custody scale in March increased by 265.56 billion yuan month - on - month, with the increment mainly from inter - bank CDs, reaching 1.12 trillion yuan. The custody increments of other interest - rate bonds and credit bonds decreased slightly. For interest - rate bonds, the net financing and net payment of treasury bonds increased, but the custody increment decreased slightly; the custody increment of local bonds decreased as the issuance of replacement bonds slowed; and the custody increment of policy - bank bonds decreased due to an increase in the maturity volume. For credit bonds, the custody increments of medium - term notes and short - term commercial paper decreased, and the custody scales of enterprise bonds and PPNs continued to decline [7]. - The commercial bank bond custody volume decreased by 53 billion yuan from an increase of 120 billion yuan in the previous month, while the non - bank bond custody increment increased by 338 billion yuan to 448 billion yuan. The custody scale decline of credit - asset - backed securities narrowed to 130 billion yuan. The issuance scale of inter - bank CDs in March reached a record high, with the custody increment rising by 634.4 billion yuan to 1.115 trillion yuan, which was the main reason for the increase in March's custody increment [7]. 3.2. In March, Trading Desks Massively Increased Holdings of Inter - bank CDs and Interest - Rate Bonds, Significantly Easing Commercial Banks' Liability Pressure - **Broad - based Funds**: The custody increment of broad - based funds increased significantly by 158.5 billion yuan to 170.5 billion yuan. They increased their holdings of inter - bank CDs, government bonds, local bonds, and policy - bank bonds, and reduced their holdings of credit bonds and commercial bank bonds. Relative to the stock, they increased their allocation of bonds, mainly inter - bank CDs and various interest - rate bonds [13]. - **Securities Firms**: The bond custody scale of securities firms increased by 1.145 billion yuan from a decrease of 560 million yuan in the previous month, mainly by increasing their holdings of treasury bonds. Relative to the stock, they also increased their allocation of bonds, mainly treasury bonds [17]. - **Insurance Companies**: The bond custody increment of insurance companies slightly decreased by 1.48 billion yuan to 9.64 billion yuan. They reduced their holdings of medium - term notes and increased their holdings of local bonds, among others. Relative to the stock, their bond - allocation strength weakened slightly [20]. - **Overseas Institutions**: The bond custody increment of overseas institutions increased by 7.19 billion yuan to 14.18 billion yuan, reaching a new high since August last year. They significantly increased their holdings of inter - bank CDs and increased their holdings of treasury bonds but reduced their holdings of policy - bank bonds. Relative to the stock, they increased their bond - allocation strength [26]. - **Other Institutions**: The bond custody increment of other institutions decreased from an increase of 60.18 billion yuan in the previous month to a decrease of 990 million yuan, mainly affected by the reduction in the net investment of central bank's outright reverse repurchase. They reduced their holdings of local bonds, policy - bank bonds, and treasury bonds and also reduced their holdings of inter - bank CDs, medium - term notes, and short - term commercial paper. Relative to the stock, they reduced their bond allocation [28]. - **Commercial Banks**: The bond custody scale of commercial banks increased by 58.17 billion yuan, with a decrease of 83.66 billion yuan compared to the previous month. They significantly reduced their holdings of inter - bank CDs, and also reduced their holdings of policy - bank bonds, short - term commercial paper, and commercial bank bonds. Relative to the stock, they reduced their bond allocation [31]. - **Credit Unions**: The bond custody volume of credit unions decreased from an increase of 8.67 billion yuan in the previous month to a decrease of 1.9 billion yuan, mainly due to a large - scale reduction in inter - bank CD holdings. Relative to the stock, they reduced their bond allocation [34]. 3.3. In March, the Bond Market Leverage Ratio Seasonally Rebounded but Remained at a Low Level Since 2022 - In March, the repo balance increased significantly, and the bond market leverage ratio rose by 0.6 pct month - on - month to 106.8%. The increase was similar to the historical average for the same period but remained at a low level since 2022. By institution, the leverage ratio of commercial banks rose by 0.6 pct to 103.2%, only higher than that in January - February this year; the non - bank institution leverage ratio rose by 0.5 pct to 115.9%, still at a relatively low level since April 2022. Among non - bank institutions, the leverage ratios of securities firms and non - legal - person products increased to 200.7% and 114.4% respectively, remaining near historical lows [38]. - In broad - based funds, the repo balances of various institutions rebounded. The repo balances of money market funds and wealth management products increased significantly but were still near historical lows. The repo balances of insurance companies and other products with relatively stable liabilities were close to the high in January this year, and the repo balance of non - money market products of fund companies was relatively stable, still below the pre - March 2023 level [38].