Group 1 - The report indicates that the stock market is expected to continue fluctuating around the 4000-point mark of the Shanghai Composite Index, with a notable acceleration in style and sector rotation [2][12] - It is suggested to maintain a cautious approach, focusing on opportunities in technology, new energy, and electricity sectors during the fluctuations and rotations [2][12] - The bond market is anticipated to remain in a range-bound oscillation, with insufficient momentum for sustained buying and limited downward space for interest rates [1][12] Group 2 - Recent market events include the suspension of a 24% tariff on U.S. imports, effective from November 10, 2025, which may influence trade dynamics [9] - The report highlights that the A-share market has shown strong sentiment, with various sectors such as banking, coal, electricity, and chemicals performing well [10] - The report notes that the average daily trading volume in the market has decreased to 20,124 billion yuan, reflecting a rise in cautious sentiment among investors [19]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The bond market is likely to continue to fluctuate. The central bank's restart of buying and selling government bonds is positive for bond market sentiment in the short - term. In the medium - term, the bond market in the fourth quarter is mainly affected by fundamentals, the implementation time of the new fund fee regulations, and institutional allocation power. Overall, the supply - demand pattern of the bond market in the fourth quarter may improve, and the market may maintain a volatile trend under the background of weak domestic demand recovery and improved inflation expectations. The bond market is expected to recover with fluctuations, and the long - term strategy is to buy on dips [14][15]. Summary by Directory 1. Monthly Assessment and Strategy Recommendation - **Economic and Policy Situation**: In October, the manufacturing PMI was lower than expected, with both supply and demand under pressure. The non - manufacturing PMI met expectations and showed a slight improvement. The "anti - involution" has boosted price expectations, but the coordination between demand and production needs further observation. In terms of exports, October's export data was lower than expected, with exports to the US declining and non - US exports maintaining resilience. The Fourth Plenary Session emphasized achieving the annual economic and social development goals, and as the economic growth rate in the first three quarters was relatively high, the pressure to achieve the goal this year is not large. Policy may focus more on policies for the connection with next year, and there is no strong need for additional measures in the fourth quarter. Overseas, the Fed cut interest rates in October, and subsequent inflation and employment data will indicate whether there will be a rate cut in December [11]. - **Major Events**: The People's Bank of China and the Bank of Korea renewed the bilateral local currency swap agreement with a scale of 400 billion yuan/70 trillion won for five years. On November 5, the Ministry of Finance issued 4 billion US dollars of sovereign bonds in Hong Kong, which were well - received by the market. The State Council Tariff Commission adjusted the tariff measures on US - originated goods. Some Fed officials expressed their views on interest rate cuts, and US financial system liquidity was approaching a dangerous level. China's October export and import data were released, and the foreign exchange reserve scale increased slightly [11][12][13]. - **Liquidity**: This week, the central bank conducted 495.8 billion yuan of reverse repurchase operations, with 2.068 trillion yuan of reverse repurchases maturing, resulting in a net withdrawal of 1.5722 trillion yuan. The DR007 interest rate closed at 1.43% [14]. - **Interest Rates**: The latest 10 - year Treasury yield was 1.81%, up 1.14 BP week - on - week; the 30 - year Treasury yield was 2.16%, up 1.00 BP week - on - week; the latest 10 - year US Treasury yield was 4.11%, unchanged week - on - week [14]. - **Trading Strategy**: The recommended strategy is to buy on dips for a 6 - month period, with a profit - loss ratio of 3:1. The core driving logic is loose monetary policy and the difficulty of credit improvement [16]. 2. Futures and Spot Markets - **Contract Performance**: Presented the closing prices, annualized discounts, settlement prices, and net basis of T, TL, TF, and TS contracts, as well as the closing prices and trading volumes of TS, TF, T, and TL contracts [19][23][26][29][31][36]. 3. Main Economic Data - **Domestic Economy** - **GDP and PMI**: In the third quarter of 2025, the actual GDP growth rate was 4.8%, exceeding market expectations. In October, the manufacturing PMI was 49.0%, down 0.8 percentage points from the previous value, while the service PMI was 50.2%, up 0.1 percentage point [41]. - **Manufacturing PMI Sub - items**: In October, both supply and demand in the manufacturing industry were under pressure. The production index decreased by 2.2 percentage points to 49.5%, and the new order index decreased by 0.9 percentage points. Domestic demand recovery was still insufficient [47]. - **Price Index**: In September, CPI同比 decreased by 0.3%, core CPI同比 increased by 1.0%, and PPI同比 decreased by 2.3%. In terms of month - on - month data, CPI环比 was 0.1%, core CPI环比 was 0.0%, and PPI环比 was 0.0% [50]. - **Export and Import**: In October 2025, China's import and export data were slightly lower than expected. Exports (in US dollars) decreased by 1.1% year - on - year, and imports increased by 1.0% year - on - year. Exports to the US decreased by 25.1% year - on - year, while exports to ASEAN maintained a relatively high growth rate of 10.9% year - on - year [53]. - **Industrial and Consumption Data**: In September, the year - on - year growth rate of industrial added value was 6.4%, and the year - on - year growth rate of social consumer goods retail sales was 3.0%, down 0.4 percentage points from the previous value [56]. - **Investment and Real Estate**: From January to September, the cumulative year - on - year growth rate of fixed - asset investment was - 0.5%, and the cumulative year - on - year growth rate of real estate investment was - 13.9%. In September, the month - on - month growth rate of second - hand housing prices in 70 large and medium - sized cities was - 0.6%, and the year - on - year growth rate was - 5.2% [59]. - **Foreign Economy** - **US Economy**: In the second quarter, the US GDP at current prices on an annualized basis was 3.0331 trillion US dollars, with an actual year - on - year growth rate of 1.99% and a quarter - on - quarter growth rate of 3.0%. In September, the US CPI and core CPI data were released, and the ISM manufacturing and non - manufacturing PMI data were also reported. In August, the order amount of durable goods increased by 7.63% year - on - year, and the number of non - farm payrolls increased by 22,000 [68][71][74]. - **EU and Eurozone Economy**: In the third quarter, the EU GDP increased by 1.5% year - on - year and 0.3% quarter - on - quarter. In September, the eurozone CPI and core CPI data were released, and in October, the manufacturing and service PMI data were reported [74][77]. 4. Liquidity - **Money Supply and Social Financing**: In September, the M1 growth rate was 7.2%, and the M2 growth rate was 8.4%. The M1 - M2 gap continued to narrow. The social financing increment was 3.53 trillion yuan, with a year - on - year decrease of 233.9 billion yuan. The growth of social financing mainly came from government bonds [82]. - **Social Financing Sub - items**: In September, the year - on - year growth rate of government bonds in social financing slowed down, and the financing of the real - economy sector remained stable. The social financing growth rate of the household and enterprise sectors was 5.94%, and the growth rate of government bonds was 20.20% [85]. - **MLF and Reverse Repurchase**: In September, the MLF balance was 5.85 trillion yuan, with a net injection of 300 billion yuan. This week, the central bank conducted 2.068 trillion yuan of reverse repurchase operations, with 867.2 billion yuan of reverse repurchases maturing, resulting in a net injection of 1.2008 trillion yuan. The DR007 interest rate closed at 1.46% [88]. 5. Interest Rates and Exchange Rates - **Interest Rate Changes**: Presented the latest interest rates, daily, weekly, and monthly changes of various types of interest rates, including repurchase rates, Treasury bond yields, and US Treasury bond yields [92]. - **Interest Rate and Exchange Rate Charts**: Presented charts of Treasury bond yields, inter - bank pledged repurchase rates, US Treasury bond yields, Treasury bond yields of the UK, France, Germany, and Italy, the Fed's target interest rate, and exchange rates [95][97][100].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market institutions reached re - balance under the policy events in October after the redemption panic before October. The current bond market has fully priced in the resumption of treasury bond trading, and the central bank's move is mainly to support fiscal efforts and supplement bank liquidity, with a neutral impact on the bond market in the medium - to - long - term [1][8][10]. - In October, the bond market yield declined rapidly under Trump's tariff measures, but the decline was much smaller than in April. After the Sino - US economic and trade consultations, the bond market yield did not show an obvious rebound. Investors have certain "learning ability", and the bond market prices faster but with a smaller decline in yield. The long - position sentiment in the bond market has recovered, but institutions are more cautious compared to April [1][17][18]. - The bond market is likely to maintain a volatile trend. It is recommended to adopt a dumbbell - shaped strategy, appropriately control the duration level in trading, seize trading opportunities from oversold rebounds, and pay attention to reverse operations [1][22]. 3. Summary According to the Directory 3.1 11 - month Bond Market Outlook - The expectation of the central bank's resumption of treasury bond trading started when large banks continuously bought short - term bonds in the secondary market and was realized after Governor Pan Gongsheng's announcement. The bond market yield generally declined on the day of the announcement, and institutions' behavior in bond trading has changed compared to 2024 [8][9]. - The central bank's move is to support fiscal efforts and supplement bank liquidity. It helps the central bank make more policy reserves, enhances the flexibility of central bank regulation, and eases the pressure on banks' liability side [10]. - The tariff measures in October had a different impact on the bond market compared to April. Investors have become more rational, and institutions' bond - buying behavior has changed. The bond market is expected to be volatile, affected by factors such as the new regulations on public fund redemption fees and the equity market [17][18][22]. 3.2 10 - month Bond Market Review 3.2.1 Bond Market Trend Review - In the first week, the 10 - year treasury bond rate declined to 1.82%. In the second week, it fluctuated narrowly and closed at 1.82%. In the third week, it rose to 1.85%. In the fourth week, it declined to 1.80%. The market was affected by factors such as tariff games, policy expectations, and the resumption of treasury bond trading [24][25][26]. 3.2.2 Funding Situation - The central bank net - injected 47 billion yuan through four major tools. The funding situation was balanced and loose in October. The average monthly values of R001, R007, DR001, and DR007 declined, and the 3 - month inter - bank certificate of deposit issuance rate and other rates showed different trends [27][28]. 3.2.3 Secondary Market Trend - The long - term interest rate had a ceiling and a floor. Except for the 1 - year treasury bond, the yields of other key - term treasury bonds declined, and most of the term spreads narrowed [35]. 3.2.4 Bond Market Sentiment - In October, the weekly turnover rate of 30 - year treasury bonds decreased compared to September. The 30Y - 10Y treasury bond spread narrowed, the bank - to - bank leverage ratio declined, and the median duration of bond funds increased [43]. 3.2.5 Bond Supply - The net financing of interest - rate bonds continued to decline in October, while the net financing of inter - bank certificates of deposit increased significantly. The issuance scale of treasury bonds, local government bonds, and policy - financial bonds changed compared to September and 2024 [54][56][60]. 3.3 Economic Data - In October, the manufacturing supply and demand weakened, while the service industry expanded rapidly. The real - estate transaction was weak year - on - year, and travel performance was stronger than the seasonal average. Industrial production improved marginally, and infrastructure and price high - frequency data showed different trends [62][63][67]. 3.4 Overseas Bond Market - The Federal Reserve cut interest rates again in October, and there were internal disagreements. The UK and German bond markets rose, and most emerging markets also showed an upward trend. The 10 - year Sino - US treasury bond yield spread narrowed [74][75][77]. 3.5 Major Asset Performance - In October, the Shanghai Gold and Shanghai Copper strengthened, while live pigs and crude oil weakened. The performance order of major assets was: Shanghai Gold > Shanghai Copper > US Dollar > Rebar > Chinese - funded US Dollar Bonds > Chinese Bonds > Convertible Bonds > CSI 300 > CSI 1000 > Crude Oil > Live Pigs [80]. 3.6 Policy Review - Multiple policies and events occurred in October and November, including the APEC meeting, the Sino - US leaders' meeting, and the release of policies related to funds, trusts, and the "15th Five - Year Plan". Future attention should be paid to the implementation and impact of these policies [84][85][90].

Core Viewpoint - The bond market is experiencing a downward trend in yields due to the People's Bank of China's (PBOC) upcoming resumption of open market operations for government bonds, which is expected to benefit the financial system's liabilities in the short term, although the preference for risk among investors may limit the extent of interest rate declines [1][2]. Group 1: Market Dynamics - As of October 30, the interbank bond market yields have shown a downward trend, with the 3-month government bond yield decreasing by 2 basis points to 1.30%, the 2-year yield stabilizing around 1.41%, and the 10-year yield falling by 1 basis point to 1.81% [2]. - The resumption of government bond trading by the PBOC, which had been paused for 10 months, is expected to significantly impact the market, especially in the context of increased issuance of government and local bonds [2][3]. - Analysts suggest that the current yield curve may have adjusted to a level acceptable to the PBOC, with limited interest rate risk and potential for further steepening of the curve [2][3]. Group 2: Investor Sentiment - There is a cautious optimism among institutions regarding the extent of the bond market's upward movement, as the expectation of the PBOC's actions had already been priced in by the market [3][4]. - The market is advised to remain rational about the potential for further declines in interest rates, particularly for long-term bonds, as the impact of the PBOC's bond purchases may already be reflected in current yield levels [3][4]. - The focus for investors will shift to the potential for further monetary easing, with discussions around whether the resumption of bond purchases signals a broader easing of monetary policy [2][3]. Group 3: Strategic Recommendations - Institutions are encouraged to monitor potential adjustment pressures following the positive news regarding bond purchases, as the market may switch to a support logic for short-term bonds [4]. - It is suggested that investors consider small-scale operations in response to the PBOC's bond purchase news, with a more favorable market environment anticipated towards the end of the year [4]. - The bond market is expected to remain in a volatile range, with the 10-year government bond likely oscillating between 1.8% and 1.9%, and investors may consider reverse interest rate strategies [4].

Report Industry Investment Rating - The report does not provide an industry investment rating [1][3] Core Viewpoints - The central bank's suspension and resumption of treasury bond trading may reflect its policy intention to maintain yield stability, and the bond market's long - term yield may fluctuate within a range in the next stage [1][3] - The price discovery significance of treasury bond trading operations is stronger than the liquidity adjustment significance, and the current interest rate and spread levels may be within the central bank's desirable range [3] - If the base money injection scale formed by treasury bond trading is close to or higher than the same period last year, it may replace reserve requirement ratio cuts [3] Summary by Related Content Reasons for the Central Bank's Actions - At the beginning of this year, considering the large imbalance pressure in the bond market supply - demand and accumulated market risks, the central bank suspended treasury bond trading. Now, with the change in supply - demand contradictions, the central bank will resume the operation. On the supply side, the proportion of government bonds in social financing has been increasing; on the demand side, due to the blocked decline in interest rates and higher expected returns in the stock market, the bond market has lost its previous strong position among major asset classes [3] Impact on M2 Growth - As of September this year, the year - on - year growth rate of China's base money injection was 1.86%. Assuming the year - end base money year - on - year growth rate remains at 1.86% and the money multiplier reaches 8.9 (the highest in August this year), the corresponding M2 year - on - year growth rate is only 6.4% (Scenario 1) [3] - If an additional 50 billion yuan of base money is injected on the basis of Scenario 1, the year - end M2 year - on - year growth rate will reach 7.8% (Scenario 2), lower than the 9 - month growth rate (8.4%) but higher than the 2024 M2 growth rate (7.3%) [3] - To keep the year - end M2 year - on - year growth rate at 8.4% (the same as in September) without reserve requirement ratio cuts, an additional 70 billion yuan of base money needs to be injected on the basis of Scenario 1 (Scenario 3) [3]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The current uncertainty in tariff progress is high, and the short - term decline in market risk appetite is conducive to the repair of the bond market. In the fourth quarter, the bond market still needs to focus on the fundamentals and institutional allocation power. The bond market is expected to maintain an overall shock under the background of weak domestic demand recovery and improved inflation expectations. If the stock market cools down and the allocation power gradually increases, the bond market is expected to repair shockingly [11]. - The economic growth rate in the third quarter slightly exceeded expectations. Exports were resilient in September, and the growth rate of industrial added value exceeded expectations. However, the growth rates of consumption and investment continued to slow down. In the future, attention should be paid to the driving effect of new policy - based financial instruments and the incremental debt balance limit of 500 billion yuan on the growth rate in the fourth quarter [11]. Summary According to Relevant Catalogs 1. Weekly Assessment and Strategy Recommendation Economic and Policy Situation - The GDP growth rate in the third quarter exceeded expectations, showing a pattern of strong supply and weak demand. In September, industrial added value remained resilient, while the consumption and investment sectors continued to recover weakly. The "anti - involution" has boosted price expectations, but the coordination between demand and production still needs to be observed. The Fourth Plenary Session emphasized achieving the annual economic and social development goals, and the pressure to achieve the goals this year is not great. Policy may focus more on the connection with next year, and there is no strong need for additional measures in the fourth quarter. Overseas, the US inflation data in September was slightly lower than expected, strengthening the logic of further interest rate cuts [10]. - In the first three quarters, China's GDP was 1,015,036 billion yuan, with a year - on - year increase of 5.2% at constant prices. In September, social consumer goods retail sales were 419.71 billion yuan, a year - on - year increase of 3.0%. From January to September, national fixed - asset investment (excluding rural households) was 3,715.35 billion yuan, a year - on - year decrease of 0.5%. In September, the added value of large - scale industries increased by 6.5% year - on - year [10]. - From January to September, the sales area of newly built commercial housing in China was 658.35 million square meters, a year - on - year decrease of 5.5%. National real estate development investment was 677.06 billion yuan, a year - on - year decrease of 13.9%. The funds in place for real estate development enterprises were 722.99 billion yuan, a year - on - year decrease of 8.4% [10]. - The new Japanese Prime Minister is preparing an economic stimulus plan worth more than 13.9 trillion yen (about $92.19 billion) [10]. - In the first three quarters of this year, China's total foreign - related payments and receipts reached $11.6 trillion, a record high for the same period. Cross - border capital inflows were $119.7 billion, and the bank settlement and sales surplus was $63.2 billion, both higher than the same period last year. In September, the cross - border income and expenditure of non - bank sectors such as enterprises and individuals totaled $1.37 trillion, a month - on - month increase of 7% [10]. - On the morning of October 25, the economic and trade teams of China and the United States began economic and trade consultations in Kuala Lumpur, Malaysia [10]. - In September, the US unadjusted CPI increased by 3% year - on - year, lower than the expected 3.1%. The core CPI increased by 3% year - on - year, also lower than the expected 3.1% [10]. - The preliminary value of the US S&P Global Manufacturing PMI in October was 52.2, and the service PMI preliminary value was 55.2, both exceeding expectations [10]. Liquidity - This week, the central bank conducted 867.2 billion yuan in reverse repurchase operations, with 789.1 billion yuan in reverse repurchases maturing, resulting in a net investment of 78.1 billion yuan. The DR007 interest rate closed at 1.41% [11]. Interest Rates - The latest 10 - year treasury bond yield was 1.85%, a week - on - week increase of 2.52 BP; the 30 - year treasury bond yield was 2.21%, a week - on - week increase of 1.20 BP. The latest 10 - year US treasury bond yield was 4.02%, with no week - on - week change [11]. Summary - The current bond market is expected to maintain an overall shock. In terms of rhythm, attention should be paid to the seesaw effect between stocks and bonds. If the stock market cools down and the allocation power gradually increases, the bond market is expected to repair shockingly [11]. 2. Futures and Spot Markets - The report presents the closing prices, annualized discounts, settlement prices, and net basis of T, TL, TF, and TS contracts, as well as the closing prices and trading volumes of TS and TF contracts [16][22][25][28]. 3. Main Economic Data Domestic Economy - In the second quarter of 2025, China's GDP actual growth rate was 5.4%, exceeding market expectations. In September, the manufacturing PMI was 49.8%, an increase of 0.4 percentage points from the previous value, while the service PMI was 50.1%, a decrease of 0.4 percentage points from the previous value [45]. - In September, the CPI decreased by 0.3% year - on - year, and the core CPI increased by 1.0% year - on - year. The PPI decreased by 2.3% year - on - year. In terms of month - on - month data, the CPI increased by 0.1%, the core CPI remained unchanged, and the PPI remained unchanged [54]. - In September, China's exports increased by 8.3% year - on - year, and imports increased by 7.4% year - on - year. Exports to the US decreased by 27.0% year - on - year, while exports to ASEAN increased by 15.6% year - on - year [57]. - In September, the industrial added value increased by 6.4% year - on - year, and the social consumer goods retail sales increased by 3.0% year - on - year [60]. - From January to September, fixed - asset investment decreased by 0.5% year - on - year, real estate development investment decreased by 13.9% year - on - year, infrastructure investment (excluding electricity) increased by 1.1% year - on - year, and manufacturing investment increased by 4.0% year - on - year [63]. - In September, the new construction area of houses decreased by 18.9% year - on - year, and the construction area of houses decreased by 9.4% year - on - year [66]. - In September, the completion - end data decreased by 15.45% year - on - year, and the new - house sales data in 30 large - and medium - sized cities weakened recently [69]. Foreign Economy - In the second quarter, the US GDP nominal annualized figure was $3,033.1 billion, with an actual year - on - year growth rate of 1.99% and a quarter - on - quarter growth rate of 3.0%. In September, the US unadjusted CPI increased by 3% year - on - year [72]. - In August, the US durable goods orders were $312.4 billion, a year - on - year increase of 7.63%. The seasonally - adjusted non - farm employment population increased by 22,000, and the unemployment rate was 4.3% [75]. - In September, the US ISM manufacturing PMI was 49.1, and the non - manufacturing PMI was 50. In the second quarter, the EU GDP increased by 1.5% year - on - year and 0.2% quarter - on - quarter [78]. - In September, the eurozone CPI increased by 2.2% year - on - year, the core CPI increased by 0.1% month - on - month. The manufacturing PMI was 49.8, and the service PMI was 51.3 [81]. 4. Liquidity - In September, the M1 growth rate was 7.2%, and the M2 growth rate was 8.4%. The M1 - M2 scissors difference continued to narrow. The social financing increment was 3.53 trillion yuan, a year - on - year decrease of 233.9 billion yuan [86]. - In September, the growth rate of social financing in the government bond segment slowed down, while the financing of the real - economy sector remained stable. The social financing growth rate of residents and enterprises was 5.94%, and the government bond growth rate was 20.20% [89]. - In September, the MLF balance was 5.85 trillion yuan, and the net MLF investment was 300 billion yuan. This week, the central bank conducted 867.2 billion yuan in reverse repurchase operations, with a net investment of 78.1 billion yuan, and the DR007 interest rate closed at 1.41% [92]. 5. Interest Rates and Exchange Rates - The report presents the changes in various market interest rates including repurchase rates, treasury bond yields, and US treasury bond yields [95]. - The report also shows the trends of treasury bond yields, bank - to - bank pledged repurchase rates, US treasury bond yields, and exchange rates [99][102][104].

Market Overview - The bond market continued to consolidate on October 22, with most government bond futures slightly rising, and interbank bond yields fluctuating within 0.5 basis points [1][2] - The People's Bank of China conducted a net injection of 94.7 billion yuan in the open market, leading to a decline in funding rates [1][6] Bond Futures Performance - The closing prices for government bond futures showed an increase: the 30-year main contract rose by 0.10% to 115.61, the 10-year contract increased by 0.02% to 108.145, and the 5-year contract went up by 0.04% to 105.735 [2] - The yields on various government bonds showed slight declines, with the 30-year government bond yield down by 0.1 basis points to 2.179% [2] International Bond Market Trends - In North America, U.S. Treasury yields collectively fell, with the 2-year yield down by 0.64 basis points to 3.445% and the 10-year yield down by 2.49 basis points to 3.953% [3] - In Asia, Japanese bond yields mostly decreased, with the 10-year yield down by 0.7 basis points to 1.648% [4] - In the Eurozone, yields on 10-year bonds also fell, with French yields down by 2 basis points to 3.341% and German yields down by 2.5 basis points to 2.550% [4] Primary Market Activity - Agricultural Development Bank's financial bonds had the following yields: 1.5091% for 1.074 years, 1.7911% for 3 years, and 1.9537% for 10 years, with bid-to-cover ratios indicating strong demand [5] Funding Conditions - The central bank conducted a 138.2 billion yuan reverse repo operation at a rate of 1.40%, with a net injection of 94.7 billion yuan after accounting for maturing repos [6] - Short-term Shibor rates mostly declined, with the overnight rate rising slightly by 0.1 basis points to 1.318% [6] Institutional Insights - Huatai Fixed Income noted that the current operation mechanism for policy financial tools is similar to 2022, with a broader focus on funding areas and an initial scale of 500 billion yuan, potentially expanding further [7] - Dongwu Fixed Income highlighted opportunities in the newly expanded Sci-Tech Bond ETF, suggesting that inclusion in the ETF could lead to price increases and create arbitrage opportunities [8] - CITIC Securities indicated that the bond market sentiment may have reached a low point, with a cautious but more positive trading approach recommended, while maintaining a neutral position [8]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market is expected to show a warming trend in the fourth quarter compared to the third quarter, but it is still a relatively weak asset and is likely to be dominated by a volatile market. Investors are advised to be cautiously optimistic and flexibly seize trading opportunities [5][58]. - In the short term, the resurgence of trade frictions provides some support for the bond market, but the conflict may still fluctuate. Attention should also be paid to the potential short - term disturbances caused by the reform of public fund sales fees and the potential selling pressure from banks [5][58]. - It is recommended to prioritize the layout of medium - and short - term bond varieties, such as 5 - 6 - year policy financial bonds and local bonds, and 7 - year and 10 - year China Development Bank bonds, which have sufficient spread protection [5][58]. 3. Summary by Directory 3.1 Bond Market Weekly Review - From October 13th to 17th, the bond market showed a volatile pattern under the influence of multiple factors such as tariff disturbances, fundamental data, policy signals, and market sentiment, with the yield curve shifting downward overall. The yield of the 10 - year Treasury active bond decreased by about 0.5bp to 1.7475% [2][8]. - Treasury yield performance was differentiated, and most of the key - term spreads of Treasury bonds narrowed [10][14]. 3.2 Bond Market Data Tracking 3.2.1 Funding Situation - From October 13th to 17th, the central bank's open - market operations had a net withdrawal of 49.79 billion yuan. The next week's reverse - repurchase maturity is 67.31 billion yuan, less than the previous week. The funding rate has increased, and the funding situation remains in a tight balance [16][17]. - The SHIBOR rate showed a differentiated performance, with the overnight, 1 - week, 2 - week, 1 - month, and 3 - month rates changing by 0.40bp, 1.20bp, - 2.10bp, 0.10bp, and - 0.10bp respectively as of October 17th compared to October 11th [28]. 3.2.2 Supply Side - From October 13th to 17th, the total issuance of interest - rate bonds increased, with the net financing amount also increasing. The government bond issuance scale increased month - on - month, while the net financing amount decreased month - on - month. The issuance scale of inter - bank certificates of deposit increased, with the net financing amount increasing month - on - month and the issuance rate rising [34][35][43]. 3.3 Next Week's Outlook - The supply pressure of Treasury bonds will increase next week. The planned issuance of Treasury bonds is 633 billion yuan, and the planned issuance of local government bonds is 196.7 billion yuan [3][56]. - The funding situation is likely to remain relatively loose. Before the tax - payment period disturbance, the funding situation is expected to maintain a relatively loose state [4][57]. 3.4 Bond Market Strategy - The bond market is expected to remain in a volatile pattern in the fourth quarter. It is recommended to prioritize the layout of medium - and short - term varieties and look for varieties with similar maturities and wider spreads [5][58]. 3.5 Global Asset Classes - The U.S. Treasury yield curve steepened. The 10Y - 2Y term spread widened by 3bp to 56bp [59]. - The U.S. dollar index declined slightly, and the central parity rate of the U.S. dollar against the RMB was lowered. The prices of gold and silver rose significantly, while the price of crude oil declined slightly [59][60][63].

Core Viewpoint - The article discusses the recent performance and outlook of fixed income products, highlighting a recovery in the bond market and the varying performance of different types of fixed income investments amid changing economic conditions and market sentiment [1][2]. Summary by Sections Fixed Income Product Performance - In the past month, the bond market has shown signs of recovery, with net values of fixed income products increasing. The leading performers include rights-embedded fixed income products, followed by short-duration assets like interbank certificates of deposit and short-term bond funds [3][10]. - As of October 17, the monthly returns for various products were as follows: rights-embedded bond funds at 0.21% (previously 0.54%), high-grade interbank certificates at 0.15% (previously 0.13%), short-term bond funds at 0.12% (previously 0.05%), and medium to long-term bond funds at 0.12% (previously -0.07%) [3][8]. Bond Market Review - The bond market experienced a phase of warming, with short-duration bonds outperforming long-duration ones. The yield curve initially steepened before flattening, influenced by factors such as the escalation of the US-China trade conflict and a weak economic backdrop [10][11]. - Key observations include: - The one-year government bond yield rose by 5 basis points to 1.44%, while the ten-year yield fell by 1 basis point to 1.83% [16][20]. - The average rates for three-month and one-year AAA interbank certificates increased slightly, indicating a stable liquidity environment [11][20]. Market Outlook - Short-term expectations suggest a stable interbank rate with potential for slight decreases, while medium-term projections indicate a continuation of a range-bound market for bonds, with a possible mild widening of yield spreads [1][32]. - The anticipated range for the ten-year government bond yield is between 1.6% and 2.0% [1][32]. Investment Strategies - For investors focused on liquidity management, maintaining cash-like products and considering stable low-volatility investments such as short-term bond funds is recommended. Long-term trends indicate a decline in cash product yields [39][42]. - For conservative investors, holding pure bond products while cautiously extending duration is advised, with a focus on high-grade long-duration bonds when yields exceed 1.8% [43][44]. - For more aggressive investors, a strategic allocation to fixed income plus products, including convertible bonds and equity assets, is suggested, leveraging the current favorable liquidity conditions [44][45].

Group 1 - The core viewpoint indicates that the bond market continues to experience a weak and volatile trend, with pure bond funds underperforming, as evidenced by the average monthly return of medium to long-term pure bond funds being negative as of September 28 [1][2] - The highest yield for bond funds in September reached 5.57%, with "fixed income +" funds outperforming pure bond funds significantly, highlighting a growing disparity in performance [2][10] - Despite the overall weak performance of pure bond funds, "fixed income +" products have shown resilience, with some top-performing products achieving returns exceeding 5% in September [2][3] Group 2 - The bond market sentiment remains cautious as the end of the quarter approaches, with credit bond rates rising and credit spreads widening, raising concerns about the lack of incremental funds in the market [4][5] - Analysts express that the impact of new regulations on bond funds is likely to be temporary and not indicative of a long-term decline in demand, as there remains strong allocation demand from wealth management and insurance funds [5] - The performance of pure bond funds has been lackluster, with the total index for bond funds rising by only 1.5% this year compared to a mere 0.39% increase for pure bond funds, indicating a shift in investor preference towards more flexible and risk-controlled strategies [3][4] Group 3 - The average monthly return for medium to long-term pure bond funds was reported at -0.18%, while short-term bond funds had a marginally positive return of 0.004% as of September 28 [2] - The top-performing pure bond funds in September had yields ranging from 0.559% to 1.642%, indicating a significant underperformance compared to "fixed income +" funds [7] - The top short-term bond funds yielded between 0.214% and 0.499%, further illustrating the challenges faced by pure bond funds in the current market environment [9]