Industry Investment Rating - The investment rating for Treasury bonds is "Oscillation" [1] Core Viewpoints - China's economic growth in April maintained resilience, with fixed - asset investment and consumption slightly falling short of expectations, while industrial production and exports were better than market expectations [1] - After the Sino - US economic and trade talks in Geneva on May 12, there was a "rush to ship" in US - bound shipping. After the central bank cut the reserve requirement ratio and interest rates in May, it is unlikely to do so again in the short to medium term [1] - The 90 - day window period reached in the Sino - US economic and trade talks brought a brief respite to the market, but this temporary measure did not eliminate long - term uncertainties [1] - Last Friday, the prices of Treasury bond futures contracts showed a slight decline and then a rebound, closing slightly higher for the day, forming a seesaw with the trend of the Wind All - A Index. Treasury bond futures may continue to oscillate in the short term [1] Summary by Directory Market Review - Last Friday, the 2 - year and 5 - year Treasury bond futures opened flat, while the 10 - year and 30 - year varieties opened lower. They fluctuated downward in the morning, bottomed out in the afternoon and then rose, and fluctuated horizontally in the second half of the afternoon. As of the close, the 30 - year Treasury bond futures contract TL2509 rose 0.04%, the 10 - year T2509 rose 0.04%, the 5 - year TF2509 rose 0.07%, and the 2 - year TS2509 rose 0.04% [1] Important Information - Open market: Last Friday, the central bank conducted 142.5 billion yuan of 7 - day reverse repurchase operations, with 106.5 billion yuan of reverse repurchases maturing on the same day, resulting in a net injection of 3.6 billion yuan [1] - Money market: Last Friday, short - term interest rates in the inter - bank money market rose compared with the previous trading day. The weighted average of DR001 for the whole day was 1.57% (1.48% the previous trading day), and the weighted average of DR007 for the whole day was 1.59% (1.57% the previous trading day) [1] - Cash bond market: Last Friday, the closing yields of inter - bank Treasury bonds fluctuated narrowly compared with the previous trading day. The yield to maturity of 2 - year Treasury bonds fell 0.54 basis points to 1.47%, the 5 - year rose 0.01 basis points to 1.57%, the 10 - year rose 0.22 basis points to 1.72%, and the 30 - year rose 0.20 basis points to 1.89% [1] - The US President said on May 24 that it was "bad" that US cars could not be sold in the EU and planned to impose a 50% tariff on the EU starting from June 1. On Sunday, the US President agreed to extend the deadline for the 50% tariff on the EU to July 9 [1] Market Logic - China's economic data in April showed that fixed - asset investment and consumption were slightly below expectations, while industrial production and exports were better than market expectations, indicating that the Chinese economy maintained resilience in April [1] - After the Sino - US Geneva economic and trade talks on May 12, there was a "rush to ship" in US - bound shipping. After the central bank cut the reserve requirement ratio and interest rates in May, it is unlikely to do so again in the short to medium term [1] - The 90 - day window period from the Sino - US economic and trade talks brought a short - term respite but did not eliminate long - term uncertainties. The prices of Treasury bond futures contracts on Friday showed a slight decline and then a rebound, closing slightly higher, and may continue to oscillate in the short term [1] Trading Strategy - Traders should conduct band operations [2]

Report Summary 1. Industry Investment Rating - The report gives a “slightly long” rating for Treasury bonds in the macro and financial sector [1] 2. Core View - The first - quarter economic data of China is good with GDP growing 5.4% year - on - year, better than the expected 5.2%. However, due to the US tariff increase, the Chinese economy will face challenges in the second quarter, and domestic incremental hedging policies may be introduced. Treasury futures may fluctuate in the short - term, and trading - type investors are advised to conduct band operations [3] 3. Summary by Relevant Catalogs 3.1 Market Review - On Thursday, Treasury futures opened higher across the board. After rising in the morning, they declined. By the close, the 30 - year Treasury futures main contract TL2506 fell 0.08%, the 10 - year T2506 fell 0.09%, the 5 - year TF2506 fell 0.11%, and the 2 - year TS2506 fell 0.05% [1] 3.2 Important Information - **Open market**: On Thursday, the central bank conducted 2180 billion yuan of 7 - day reverse repurchase operations, with 2455 billion yuan of reverse repurchases maturing, resulting in a net withdrawal of 275 billion yuan [1] - **Funds market**: On Thursday, the overnight interest rate in the inter - bank funds market declined slightly. The weighted average of DR001 was 1.60% (1.63% the previous day), and the weighted average of DR007 was 1.72% (1.65% the previous day) [1] - **Cash bond market**: On Thursday, the closing yields of inter - bank Treasury bonds fluctuated narrowly. The 2 - year yield rose 0.56 BP to 1.48%, the 5 - year rose 0.91 BP to 1.55%, the 10 - year rose 0.29 BP to 1.66%, and the 30 - year rose 0.48 BP to 1.93% [1] - **Treasury bond issuance**: On April 24, the Ministry of Finance issued three special Treasury bonds, including 165 billion yuan of 5 - year bonds with a weighted winning yield of 1.45%, 50 billion yuan of 20 - year bonds with a weighted winning yield of 1.98%, and 71 billion yuan of 30 - year bonds with a weighted winning yield of 1.88% [1] - **Sino - US trade**: As of April 24, there were no Sino - US economic and trade negotiations. The US should cancel all unilateral tariffs on China through equal dialogue [1] - **MLF operation**: The central bank will conduct 600 billion yuan of 1 - year MLF operations on April 25, with 100 billion yuan of MLF maturing this month, resulting in a net injection of 500 billion yuan [1][3] 3.3 Market Logic - The good first - quarter economic data is due to policy support and export rush. But the US tariff increase will pose challenges to the Chinese economy in the second quarter. The issuance of special Treasury bonds on April 24 did not significantly impact the funds market. The Wande All - A Index fell slightly on Thursday, and Treasury futures declined in the afternoon. The high Sino - US tariffs are difficult to resolve in the short - term [3] 3.4 Trading Strategy - Trading - type investors are advised to conduct band operations [3]