Economic Overview - In early November, the first batch of Q4 fundamental data showed inflation recovery but other indicators like credit, fixed asset investment, and real estate sales were below expectations, highlighting a "weak reality" challenge[1] - The central bank has signaled a cautious "loose monetary" stance, indicating that the marginal effectiveness of further easing has declined significantly[1] Monetary Policy Adaptation - From 2022 to 2025, the central bank's approach has shifted from "preemptive" to "reactive," with rate cuts occurring after risk confirmation rather than before[2] - Current economic conditions suggest that industrial value-added and service production indices need to reach approximately 5.2% year-on-year in November-December to offset October's slowdown and meet the annual growth target of 5%[2] Bond Market Strategy - In the short term, the bond market is expected to focus on spread opportunities until a clear direction in interest rates emerges, prioritizing the relative value between different bond types[3] - The expectation for "loose monetary" policy to continue is still present, with potential rate cuts anticipated at the end of the year or early next year[3] Financial Product Trends - The scale of financial products saw a slight decrease of 307 billion yuan, bringing the total to 33.36 trillion yuan, reflecting typical seasonal fluctuations[29] - The proportion of negative returns in financial products has decreased, with the overall negative return rate dropping to 1.77% for the past week[36] Leverage and Risk Indicators - The average leverage ratio in the interbank market has decreased from 107.53% to 107.08%, indicating a tightening of leverage conditions[55] - The average leverage level for non-bank institutions also fell from 113.22% to 112.18%, suggesting a broader trend of deleveraging[55]

Financial Data Overview - In October, new social financing (社融) was 815 billion yuan, a year-on-year decrease of 597 billion yuan[4] - The stock of social financing grew by 8.5% year-on-year, down from 8.7% previously, a decline of 0.2 percentage points[4] - M2 growth was 8.2% year-on-year, also down by 0.2 percentage points from the previous value[4] - M1 growth was 6.2% year-on-year, a decrease of 1 percentage point from the prior value[4] Loan Performance - New RMB loans in October totaled 220 billion yuan, a year-on-year decrease of 280 billion yuan[6] - Corporate loans decreased primarily due to medium and long-term loans, which saw a net repayment of 40 billion yuan, a year-on-year reduction of 320 billion yuan[6] - New corporate loans amounted to 350 billion yuan, with a year-on-year increase of 220 billion yuan, while short-term loans remained stable compared to last year[7] Policy Impact - The effects of policy financial tools are beginning to show, with new entrusted loans increasing by 1,653 billion yuan, a significant year-on-year increase of 1,872 billion yuan[14] - However, the impact on corporate credit from these tools has not yet materialized, primarily due to the seasonal nature of October being a weak month for corporate loans[14] Deposit Trends - Non-bank deposits followed a seasonal pattern, decreasing at the end of the quarter and rebounding at the beginning, with an increase of 18,500 billion yuan in October, a year-on-year increase of 7,700 billion yuan, the highest level in five years[20] - The shift of funds back into wealth management products in October contributed to the increase in non-bank deposits[21] Future Outlook - The central bank is expected to focus on the health of banks rather than strict credit targets, with potential interest rate cuts anticipated early next year[24][26] - Risks include the possibility that domestic policy measures may not meet expectations, uncertainties in wealth management behaviors, and unexpected changes in overseas policies and geopolitical situations[27]

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - The bond market environment has improved. The negative factors in the bond market have basically been released, and November is a stage of accumulating positive factors. Although there are some uncertain disturbances, considering the central bank's bond - buying operations, the bottom of Treasury bond futures is supported. With the slowdown of economic momentum, the expectation of monetary easing is expected to heat up again. It is recommended to pay attention to this week's economic activity data and the central bank's outright reverse - repurchase operations and seize the opportunity to buy on dips [11][12]. 3. Summary by Relevant Catalogs 3.1行情回顾与操作建议 (Market Review and Operation Suggestions) - **Market Conditions**: The third - quarter monetary policy implementation report released last night sent a signal of monetary easing, and the marginal improvement of the money market today boosted the bond market sentiment, leading to an overall rise in Treasury bond futures. The yields of major term interest - bearing bonds in the inter - bank market declined slightly. The yield of the 10 - year Treasury bond active bond 250016 was reported at 1.7990%, down 0.5bp [8][9]. - **Money Market**: The pressure on the money market has marginally eased. The central bank made a net injection of 1300 billion yuan today. The inter - bank money sentiment index declined slightly, indicating a marginal reduction in capital pressure. The weighted overnight rate of inter - bank deposits fell 9bp to 1.42%, and the 7 - day rate fell 2.22bp to 1.49%. The medium - and long - term funds were stable, and the 1 - year AAA certificate of deposit rate fluctuated narrowly around 1.62 - 1.64% [10]. - **Conclusion**: The domestic economic indicators have been weakening since June, especially the investment sector has accelerated its decline, and the export growth turned negative in October. Although the inflation data rebounded over the weekend, the demand - side improvement was not obvious. Currently, the combination of loose monetary policy and loose fiscal policy has been intensified. The restart of Treasury bond trading has brought direct buying demand to the bond market. The impact of loose fiscal policy on the bond market should be limited in the short term. Overall, the bond market environment has improved, and there is support at the bottom of Treasury bond futures [11][12]. 3.2行业要闻 (Industry News) - The US announced a one - year suspension of the implementation of the export control penetration rule. The Chinese Ministry of Commerce responded that this was an important measure for the US to implement the consensus reached in the China - US economic and trade consultations in Kuala Lumpur. - The central bank's third - quarter monetary policy implementation report pointed out that it will implement a moderately loose monetary policy, keep social financing conditions relatively loose, and continue to improve the monetary policy framework. - The Chinese Minister of Commerce had a video meeting with the German Federal Minister for Economic Affairs and Climate Action to exchange views on China - Germany and China - EU economic and trade issues. - Mexico postponed the increase of tariffs on Chinese goods, and the EU considered forcing member states to remove Huawei and ZTE equipment. The Chinese Ministry of Foreign Affairs urged the EU to provide a fair, transparent, and non - discriminatory business environment for Chinese enterprises. The US announced a one - year suspension of the 301 investigation on China's shipbuilding and other industries, and China announced corresponding counter - measures [13][14]. 3.3数据概览 (Data Overview) - **Treasury Bond Futures Market**: Includes information on the trading data of Treasury bond futures contracts (such as opening price, closing price, settlement price, etc.), the spread between main - contract tenors, the spread between main - contract varieties (e.g., 2 - year vs 30 - year, 10 - year, 5 - year; 5 - year vs 30 - year, 10 - year; 10 - year vs 30 - year), and the trend of main - contract prices [6][15][16]. - **Money Market**: Involves the term - structure changes and trends of SHIBOR, as well as the changes in the weighted average interest rate of inter - bank pledged repurchase and the interest rate of inter - bank deposit - pledged repurchase [28][32]. - **Derivatives Market**: Presents the fixed - rate curves of Shibor3M interest - rate swaps and FR007 interest - rate swaps [34].

Core Viewpoint - The bond market is currently experiencing a sideways trend, with expectations of maintaining this overall oscillation until the end of the year, while fundamental pressures in the fourth quarter may lead to opportunities for gradual duration extension in portfolios [1][7]. Market Performance - On November 11, the majority of government bond futures closed flat, with the 30-year main contract at 116.3, the 10-year contract down 0.01% at 108.475, and the 5-year and 2-year contracts remaining stable [2]. - The interbank yield rates for major bonds remained stable, with slight strength in the short end; the 30-year special government bond yield decreased by 0.05 basis points to 2.146% [2]. Overseas Bond Market - In North America, U.S. Treasury yields rose across the board, with the 2-year yield increasing by 2.92 basis points to 3.591% [3]. - In Asia, Japanese bond yields mostly fell, while the long end continued to rise, with the 10-year yield down 0.7 basis points to 1.692% [3]. - In the Eurozone, the 10-year French bond yield fell by 2.4 basis points to 3.437%, while the German yield rose by 0.2 basis points to 2.666% [3]. Primary Market - The China Development Bank's financial bonds had winning yields of 1.5311%, 1.7181%, and 1.8819% for 2-year, 5-year, and 10-year terms, respectively, with bid-to-cover ratios of 3.66, 3.22, and 4.68 [4]. Funding Conditions - On November 11, the central bank conducted a 7-day reverse repurchase operation with a total of 4038 billion yuan at an interest rate of 1.40%, resulting in a net injection of 2863 billion yuan for the day [5]. - Short-term Shibor rates mostly increased, with the overnight rate rising by 2.9 basis points to 1.508% [5]. Institutional Perspectives - Citic Securities anticipates a mild expansion in fiscal policy and a loose monetary policy in 2026, with a projected range for the 10-year government bond yield between 1.6% and 1.9% [6]. - Huatai Fixed Income suggests that despite seasonal expectations, the fourth quarter may face increased fundamental pressures, leading to limited overall odds in the bond market [7]. - Guosheng Fixed Income notes that credit spreads are compressing, with expectations for further declines in the bond market in November and December, while highlighting the need for structural opportunities in credit bonds [7].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The bond market is in a volatile and weak - trending situation, with the long - end and short - end yields showing different trends. The long - end yields move up and down following multiple logics, while the short - end yields are at a low level and are weakly volatile. The central bank's bond - buying operation may open up the game space for long - term interest rates, but the "rush - ahead" market in the bond market from November to December this year may not necessarily reappear [1][5][6]. - The positioning of the central bank's national debt trading tool is becoming more diversified and three - dimensional, which is an important part of improving the micro - foundation of the bond market and enhancing pricing efficiency. The impact of the scale of bond - buying on liquidity is not the main factor, and the ultimate shape of the yield curve depends on the desired range, which is affected by market expectations, fundamental conditions, and institutional behavior [2][3][12]. 3. Summary by Relevant Catalogs 3.1 Market Review: Bond Market Continues to Seek Direction - This week, the bond market showed a volatile and weak - trending market under the rapid switching of multiple pricing logics. The long - end yields first declined and then rose following the logics of "central bank's bond - buying implementation - stock market strength suppressing - expectation fermentation of the new regulations on fund sales fees implementation", while the short - end yields were at a low level, and the central bank's bond - buying had limited boosting effect, showing a weak - trending volatility. On Friday, the short - end yields continued to correct due to slightly tight funds [1][8]. - At the beginning of the week, the market was mainly pricing around the central bank's restart of bond - buying in October. After the implementation of national debt trading on Tuesday afternoon, the long - end yields first rose and then strengthened. On Wednesday afternoon, the trading logic switched to the "stock - bond seesaw", and the bond market was suppressed by the strong stock market. On Friday, the expectation of the new regulations on fund sales fees implementation dominated the bond market, and the tightened funds also dragged down the market [8]. 3.2 This Week's Focus: How to Price the Yield Curve with the Central Bank's Resumption of Bond - Buying? - On October 27, the central bank mentioned resuming national debt trading, with new information including directly linking national debt trading to guiding the yield curve shape, affirming the current bond market operation, emphasizing two - way trading operations, and believing that national debt trading is beneficial to the reform and development of the bond market and the improvement of financial institutions' market - making and pricing capabilities [2][10]. - In October, the central bank net - bought 20 billion yuan of national debt. There is no need to over - focus on the relationship between the bond - buying scale in October and the operation time. The scale of bond - buying does not have a major impact on liquidity. National debt trading may open up the game space for long - term interest rates, and the market's pricing of the resumption of bond - buying may be nearing the end [3][12][14]. - The scale of bond - buying affects the market through expectations. A higher scale can boost market confidence, while a limited scale may be a short - term negative factor. The final shape of the yield curve depends on the desired range, which is affected by market expectations of interest rate trends, fundamental repair conditions, and institutional behavior [4][15][17]. 3.3 Next Week's Concern: Will There Be a "Rush - Ahead" Market at the End of the Year? - Near the end of the year, the market is turning its attention to the cross - year allocation market. The "rush - ahead" market at the end of last year was the main driving force for the rapid decline of bond market interest rates. However, this year, there are differences. The sustainability of the purchases by allocation - oriented investors such as rural commercial banks, large - scale banks, and insurance companies remains to be observed, and the increase in the purchase scale of wealth management products and funds is mainly driven by the expansion of the liability side, not by the rapid decline of bond market interest rates [5][19]. - It is believed that the "rush - ahead" market in the bond market from November to December this year may not necessarily reappear. The purchases by allocation - oriented investors may be restricted by floating losses and the high - base effect of last year's performance. Additionally, the imagination space for loose monetary policy has shrunk compared to the end of last year [5][22]. 3.4 Outlook for the Future - If the stock market strengthens and concerns about the new fund regulations ferment, it will still suppress the bond market. However, the wave - like recovery of the fundamentals and the central bank's resumption of bond - buying limit the upward adjustment momentum of interest rates. The cross - year allocation market remains to be confirmed, but the game space for long - term interest rates may be opened up. One can try to seize trading opportunities for long - term interest rates but should respond cautiously with a volatile mindset [6][23]. - In terms of spread trading, the current bond - swapping market has generally ended. The further compression space of the "China Development Bank Bond - National Debt" spread needs to be continuously observed based on the purchasing momentum of allocation - oriented investors. The "deposit transfer" may make the scale of wealth management products resilient, and the purchasing power of wealth management products may support medium - and short - term credit bonds. One can focus on medium - and short - duration bonds with coupon value [6][23][24].

Core Viewpoint - The monetary market continues a loose tone into November, with the bond market sentiment gradually recovering, supported by stable fiscal spending and reduced medium to long-term liquidity pressure [1][2]. Group 1: Monetary Market Conditions - The liquidity supply-demand relationship in November shows significant improvement compared to October, with a decrease in medium to long-term liquidity pressure by approximately 100 billion yuan and a reduction in tax payment scale by about 800 billion yuan [2]. - Historical patterns indicate that November is typically a relatively stable period for liquidity, with short-term interest rates expected to remain below policy rates [2][4]. - The central bank is anticipated to continue a gentle "supportive" approach, maintaining a stable and loose liquidity stance through operations like reverse repos and medium-term lending facilities (MLF) [2][4]. Group 2: Bond Market Sentiment - The improvement in liquidity is gradually transmitting to the bond market, with the 30-year government bond futures price rebounding from a low of 113 yuan to above 116 yuan since mid-October, indicating a clear recovery in market sentiment [3][4]. - The recent drop in short-term funding rates, particularly the 1-year interbank certificate of deposit rate to around 1.63%, reflects a stable short-term funding price, which supports the bond market's recovery [4][5]. Group 3: Year-End Market Outlook - Multiple institutions express cautious optimism regarding the overall year-end bond market, predicting that short-term configuration value will stand out while long-term bonds have room for recovery [5][6]. - The current low funding rates and limited funding stratification suggest that institutional demand for configuration will be steadily released, contributing to a gradually improving trading sentiment [5][6].

Core Viewpoint - The monetary market continues a loose tone into November, with the bond market sentiment gradually recovering, supported by stable fiscal spending and reduced medium to long-term liquidity pressure [1][2]. Group 1: Liquidity and Monetary Policy - November is expected to maintain a loose liquidity stance, with a significant improvement in liquidity supply-demand dynamics compared to October, including a decrease in medium to long-term liquidity pressure by approximately 100 billion yuan [1][2]. - The central bank's resumption of government bond trading operations is injecting longer-term, more stable funds into the market, enhancing market confidence [1][2]. - Historical patterns indicate that November typically experiences relatively stable liquidity, with short-term interest rates expected to remain below policy rates [1][2]. Group 2: Bond Market Recovery - The improvement in liquidity is gradually transmitting to the bond market, with the 30-year government bond futures price rebounding from a low of 113 yuan to above 116 yuan since mid-October, indicating a clear recovery in market sentiment [3][4]. - The recent drop in short-term funding rates, particularly the 1-year interbank certificate of deposit rate to around 1.63%, reflects a stable short-term funding price, supporting the bond market's recovery [4][5]. Group 3: Year-End Market Outlook - Multiple institutions express cautious optimism regarding the overall year-end bond market, predicting that short-term configuration value will stand out while long-term bonds have room for recovery [5][6]. - The current low funding rates and limited funding stratification suggest a steady release of institutional configuration demand, with trading sentiment gradually warming [5][6]. - Investment strategies should focus on a balanced approach, emphasizing high-elasticity bonds and short-term bonds, while being prepared for profit-taking as the year-end approaches [6].

Group 1 - The report from CITIC Securities' chief economist indicates that the central bank will resume trading of government bonds, signaling a significant easing of monetary policy in the short term [1] - Following the central bank's operations, a buying signal may emerge, leading to a slight downward adjustment in the 10-year government bond yield [1] - However, in the long term, there are still many uncertainties, and interest rates are expected to maintain a wide range of fluctuations [1]

Core Viewpoint - The central bank's decision to resume the trading of government bonds signals a commitment to balancing economic growth and risk management, with expectations for more flexible operations compared to the previous year [2][3]. Group 1: Market Response - The bond market sentiment has notably improved, with long-term interest rates showing signs of technical stabilization [2][8]. - Institutions believe that the current expectations for a loose monetary policy are yet to be validated, and the medium to long-term trajectory of bond yields will depend on the evolution of fundamentals and policy coordination [2][3]. Group 2: Operational Flexibility - The central bank's approach to bond trading is expected to be more flexible in terms of pace, scale, and maturity structure, reflecting a nuanced policy response to market conditions [3][4]. - The anticipated operations may involve targeted liquidity injections by purchasing government bonds from major banks, aiming to maintain market stability while avoiding excessive volatility [3][5]. Group 3: Long-term Strategy - The resumption of bond trading is viewed as a long-term tool for optimizing the central bank's asset structure, increasing the proportion of "internal assets" on its balance sheet [5][6]. - This strategy aims to reduce reliance on external asset fluctuations and improve operational efficiency by gradually extending the maturity of bond purchases [5][6]. Group 4: Macroeconomic Context - The decision to restart bond trading is seen as a response to current liquidity fluctuations and a proactive measure to create policy space for the future [6][7]. - The central bank's actions are expected to help stabilize market sentiment and smooth out seasonal funding fluctuations, while also serving as a regular policy tool alongside other measures like reserve requirement ratio cuts [6][7]. Group 5: Market Expectations - The market has reacted positively to the policy signals, with a restoration of investor confidence and a potential stabilization of long-term interest rates [8][9]. - However, there are differing opinions on whether this operation will lead to a sustained bullish trend in the bond market, with some institutions cautioning against overestimating its long-term impact [9].

Report Industry Investment Rating No information provided in the given content. Core Viewpoints of the Report - In November, the bond market is expected to break through and start a downward trend, with a higher probability of yield decline. If the market restarts the expectation of interest rate cuts, the long - term interest rate is expected to challenge the low level before the bond market adjustment in July. The 10 - year treasury bond yield may fall to 1.70%, and the 30 - year treasury bond yield may drop to the range of 2.00 - 2.05%. [7][61] - The fundamental data in October may be weak. With the prior implementation of fiscal and quasi - fiscal policies in the fourth quarter, interest rate cuts may become a more flexible incremental stimulus tool, and the bond market may restart the trading of the expectation of "looser monetary policy". [2][30] - The potential negative factors in the bond market in November, such as government bond supply and bond fund redemption fee regulations, may have a lower - than - expected impact due to regulatory and market precautions. [3][34] - Institutional behavior in November may affect the market through two main lines. The short - and long - end assets may be repriced, and the profit - taking power of the allocation disk may slow down the decline of interest rates but is less likely to reverse the upward trend. [6][45] Summary According to the Table of Contents 1. October Bond Market: Calm After the Storm - In October, the long - term interest rate continued the trading logic of September and achieved a "step - down" due to the decline in risk appetite caused by the US tariff pressure. The 10 - year treasury bonds generally showed a "head - and - shoulders top" pattern, indicating that the interest rate may have basically completed the topping process. [1] - The bond market pricing in October was mainly based on three main lines: when the central bank would buy bonds, the evolution of Sino - US relations, and the new regulations on bond fund redemption fees. The market could be divided into three stages. [13] - In terms of various bond market varieties in October, interest - rate bonds recovered, and credit bonds were stronger than interest - rate bonds. The yields of most bonds declined. [17][18] 2. Macro - Narrative Vacuum Period: Rising Expectations of Interest Rate Cuts - In November, before the Politburo meeting and the Central Economic Work Conference in December, the market will enter a macro - narrative vacuum period. Whether the macro - economic data in October can boost the expectation of interest rate cuts will be the key to bond market pricing. [22] - The manufacturing PMI in October was lower than expected, with significant drag from production and new order sub - items, indicating a possible economic slowdown. [22] - The end - of - month bill interest rates approaching zero in October suggest that credit demand may have returned to a low point. [23][24] - High - frequency price data indicates that the year - on - year decline of PPI in October may widen again. [29] 3. Government Bond Supply and Bond Fund Redemption Fee Regulations: Apparent Negative Factors - The potential negative factors in the bond market in November are the significant increase in government bond net supply compared to October and the uncertainty of the official implementation of the new regulations on public bond fund redemption fees. However, the actual impact may be lower than expected due to regulatory and market precautions. [3][34] - The slow issuance of local government bonds in October is likely to be accelerated in November and December. It is estimated that the net supply of government bonds in November and December will be 1.23 trillion and 0.81 trillion yuan respectively. The large - scale supply in November may prompt the central bank to strengthen liquidity support, and the capital market may remain stable. [3][35] - If the new regulations on bond fund redemption fees are strictly implemented as in the solicitation draft, the bond market may experience a short - term shock at the time of implementation, especially credit - type bond funds may be more affected. [5][40] 4. Institutional Behavior: Returning to a Neutral Variable - In November, institutional behavior may affect the market through two main lines. The short - and long - end assets may be repriced. After the central bank announced the resumption of treasury bond trading operations, the market's willingness to price short - term varieties increased, and the long - term interest rate may decline as the negative factors in the bond market are exhausted and institutional investors pursue year - end performance. [6][45] - The profit - taking power of the allocation disk may slow down the decline of interest rates but is less likely to reverse the upward trend. Banks' self - operated institutions may prefer to take profits during the bond market's upward period. [51] 5. Bond Market Breakthrough: Starting a Downward Trend - Currently, the bond market has two characteristics: low duration and limited short - selling power. The risk of trading long - term bonds is relatively controllable. [55][58] - It is predicted that the bond market yield in November is more likely to decline. The bond market strategy in November can consider increasing duration on rallies, and priority can be given to ultra - long treasury bonds or policy - financial bonds with sufficient spread protection. Tax - inclusive bonds may perform better. [7][61]