Report Investment Rating No investment rating information is provided in the report. Core Viewpoints - In the next week, funds will cross the month, but the central bank is expected to maintain net injections, potentially reducing the pressure on fund fluctuations. If the central bank provides sufficient support, there is a high probability of a smooth transition across the month, with DR001 likely to fluctuate between 1.35% - 1.55% [1][2]. - In the past week, funds experienced significant frictions due to factors such as the equity market absorbing inter - bank liquidity, large net government bond payments, and the central bank's continuous net withdrawals after the tax period. The tightening of funds was mainly driven by pressures within the banking system [2]. - The maturity pressure of certificates of deposit (CDs) will significantly decrease in the next week, with a maturity scale of only 37.67 billion yuan. If the pressure on the funds eases, CD rates may slightly decline when crossing the month [2]. - In the past week, funds sold off bonds across all varieties, with a rapid shift in sentiment. However, the willingness of allocation - oriented investors such as banks, insurance companies, and wealth management firms to absorb bonds is not weak, suggesting that the current market adjustment may present investment opportunities [3]. Summary by Directory 1 Liquidity Tracking 1.1 Central Bank Operations - In the past week (7/21 - 7/25), the central bank's open - market operations resulted in a net liquidity injection of 10.95 billion yuan, including 20 billion yuan in long - term liquidity and a net withdrawal of 9.05 billion yuan in short - term liquidity. As of 7/25, the central bank's reverse repurchase balance was 1.66 trillion yuan, slightly higher than the seasonal average [10]. - In the next week (7/28 - 8/1), 1.66 trillion yuan of reverse repurchases will mature. Considering the month - end period, the central bank may maintain a small net injection [10]. - In July, the central bank injected a total of 30 billion yuan in long - term liquidity, including 10 billion yuan in net MLF injections and 10 billion yuan each in 3M and 6M outright reverse repurchases [11]. 1.2 Government Bond Issuance - In the past week, the expected net government bond payment was 27.1 billion yuan, with treasury bonds contributing 1.07 billion yuan and local government bonds 26.02 billion yuan. In the next week, the expected net payment is 28.76 billion yuan, with a smaller overall pressure. Treasury bond net payment is expected to be - 2 billion yuan, while local government bonds will contribute 30.76 billion yuan. The net payment pressure will be higher on Tuesday, with a single - day net payment of 12.67 billion yuan [13]. 1.3 Bill Market - In the past week, bill rates declined significantly. As of 7/25, the 3M direct and transfer discount rates for national - owned banks were 1.25% and 1.10% respectively, down from 1.30% and 1.23% on 7/18. The 6M rates were 0.79% and 0.72% respectively, down from 0.87% and 0.81% on 7/18. Currently, bill rates are still significantly weaker than the seasonal average, indicating slow credit demand recovery [22]. 1.4 Fund Review - In the past week, fund fluctuations increased significantly, with daily frictions intensifying. After the tax period, the central bank continuously withdrew funds. Although the funds were relatively loose on Monday and Tuesday, with DR001 closing at 1.3144% on Tuesday, the situation fluctuated rapidly from Wednesday to Friday. The fund sentiment index reached a maximum of 58 on Thursday morning and 57 on Friday morning, but funds eased significantly in the late afternoon on Thursday and after 10 am on Friday [24]. - Inter - bank fund price fluctuations were larger than those in the exchange market, and the 7 - day fund price fluctuations were greater than overnight. On 7/25, DR001 rose 6.08bps to 1.52%, DR007 rose 14.56bps to 1.65%, R001 rose 6.41bps to 1.55%, and R007 rose 18.65bps to 1.69% [29]. - The term spread widened, and the market spread narrowed. Compared to 7/18, on 7/25, the R007 - R001 spread rose 12.24bps to 14.15bps, the R007 - DR007 spread rose 4.09bps to 4.14bps, and the GC007 - R007 spread fell 4.45bps to - 5.67bps [30]. - The proportion of overnight fund transactions in the inter - bank market decreased significantly as the month - end approached. The net lending of the banking system decreased significantly, with large banks experiencing the most significant decline. The net borrowing demand of core non - bank institutions also decreased significantly, while the net lending of core non - bank net lenders increased [35][38]. 1.5 Certificates of Deposit - In the past week (7/21 - 7/27), the total issuance of CDs was 51.67 billion yuan, with a net financing of - 55.98 billion yuan. The net financing scale declined significantly. As of 7/27, the cumulative net financing of CDs for the year was 1.32 trillion yuan [50]. - The issuance scale of CDs by different entities in the past week ranked as follows: city commercial banks (17.48 billion yuan)> state - owned banks (16.38 billion yuan)> joint - stock banks (12.92 billion yuan)> rural commercial banks (4.15 billion yuan). The weighted issuance term of CDs decreased to 0.61 years from 0.69 years last week [50]. - The issuance rates of CDs for national - owned and joint - stock banks increased across all tenors. The secondary - market CD yields also adjusted significantly. On 7/25, the 1 - year AAA CD yield rose 5.75bps to 1.6750% compared to 7/18 [53]. - In the next four weeks, the CD maturities will be 37.67 billion yuan (7/23 - 8/3), 59.82 billion yuan (8/4 - 8/10), 90.71 billion yuan (8/11 - 8/17), and 79.47 billion yuan (8/18 - 8/24) respectively, indicating controllable maturity pressure. In the next week, the maturity pressure will be higher on Tuesday and Wednesday [55]. 2 Institutional Behavior Tracking 2.1 Secondary Market Transactions - Large banks slightly increased their purchases of short - term treasury bonds. In the past week, funds net sold 20.76 billion yuan of interest - rate bonds, while rural commercial banks net bought 25.73 billion yuan of interest - rate bonds [60]. - Wealth management subsidiaries and other products were the main buyers of CDs, while city commercial banks, rural commercial banks, funds, and securities firms were the main sellers [60]. - Funds quickly switched from buying to selling credit bonds, while the buying power of other institutions such as wealth management firms remained relatively stable. Insurance companies were the main buyers of credit bonds with a maturity of over 5 years [60]. - Funds' net selling of secondary - tier bonds also increased rapidly. For secondary - tier bonds with a maturity of less than 2 years, funds switched to large - scale net selling on Friday, with a net selling of 370 million yuan in the past week. For 2 - 5 - year secondary - tier bonds, funds' demand also declined significantly [60]. 2.2 Institutional Duration - The median duration of medium - and long - term bond funds fluctuated. On 7/25, the 10 - day moving average of the median duration was 4.18 years, slightly higher than 4.13 years on 7/18, but it declined significantly on Friday [62]. - The trading duration of general credit bonds decreased, while that of secondary - tier bonds increased. On 7/25, the 5 - day moving average of the trading duration of urban investment bonds decreased to 2.43 years, and that of industrial bonds decreased to 3.51 years, while the trading duration of secondary - tier bonds increased to 3.16 years [66]. 2.3 Institutional Leverage - The bond market leverage ratio was estimated to be 107.16% in the past week, basically unchanged from last week's 107.04% [68].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market has been in a sideways trend for three months. After the equal - tariff disturbance in early April, the yield of the 10 - year Treasury bond dropped to 1.65% and has since fluctuated between 1.65% and 1.70% [2][10]. - There are four changes in institutional behavior during the sideways period of the bond market, including changes in the behavior of large banks, the actions of funds and other asset management products, the allocation preferences of insurance institutions, and the change in the lending volume of 10 - year Treasury bonds [2][3][10]. 3. Summary According to the Directory 3.1 This Week's Institutional Behavior Review - **Four Changes in Institutional Behavior during the Sideways Period of the Bond Market** - Large banks not only increase their purchases of short - term Treasury bonds but also their demand for certificates of deposit. Their weekly demand for certificates of deposit has rebounded to over 100 billion yuan since late May, indicating improved liability - side pressure. After the mid - month tax period disturbance, the liquidity may further loosen [2][10]. - Funds extend the duration of their bond holdings, and asset management products such as trusts increase their purchases. The median duration of interest - rate bond funds has risen to 3.92 years, about 1 year higher than at the beginning of the sideways period, suggesting that non - bank institutions are holding bonds in anticipation of price increases [3][10]. - Insurance institutions have almost stopped buying Treasury bonds in the secondary market and mainly allocate local government bonds, especially 30 - year and 20 - year ones [3][11]. - The lending volume of 10 - year Treasury bonds has significantly declined, while the lending volume of 10 - year China Development Bank bonds has remained flat. The decrease in Treasury bond borrowing by securities firms may be due to limited space for reverse arbitrage strategies in the futures market [3][11]. - **Yield Curve**: The yields of Treasury bonds and China Development Bank bonds have generally declined. For Treasury bonds, the 1Y yield dropped 2bp, the 3Y about 2bp, etc. For China Development Bank bonds, the 1Y yield dropped about 1bp, the 5Y about 2bp, etc [12]. - **Term Spread**: The spread between Treasury bonds and China Development Bank bonds has increased. For Treasury bonds, the term spread has generally widened; for China Development Bank bonds, the medium - and long - term spreads have widened [15][16]. 3.2 Bond Market Leverage and Liquidity - **Leverage Ratio**: It has dropped to 107.09%. From July 14 to July 18, 2025, the leverage ratio first increased and then decreased during the week [19]. - **Pledged Repurchase**: The average daily trading volume of pledged repurchase this week was 7.2 trillion yuan, with an average daily overnight trading volume accounting for 88.54%. The average daily trading volume decreased by 0.97 trillion yuan compared with last week [25]. - **Liquidity**: Banks' net lending has fluctuated upwards. As of July 18, the net lending of large banks and policy banks was 4.18 trillion yuan; the average daily net lending of joint - stock banks and city and rural commercial banks was 0.77 trillion yuan, and they had a net borrowing of 0.75 trillion yuan on July 18 [29]. 3.3 Duration of Medium - and Long - Term Bond Funds - **Median Duration**: The median duration of medium - and long - term bond funds remained at 2.87 years (de - leveraged) and 3.22 years (leveraged). On July 18, the de - leveraged median duration was the same as last Friday, while the leveraged median duration increased by 0.01 year [42]. - **Duration of Interest - Rate Bond Funds**: The median duration of interest - rate bond funds (leveraged) remained at 3.92 years, and the median duration of credit - bond funds (leveraged) rose to 2.99 years, an increase of 0.01 year compared with last Friday [46]. 3.4 Comparison of Category Strategies - **Sino - US Yield Spread**: It has generally narrowed. The 1Y spread narrowed by 5bp, the 2Y by 7bp, etc [52]. - **Implied Tax Rate**: The short - term implied tax rate has widened, while the medium - and long - term rates have shown differentiation [53]. 3.5 Changes in Bond Lending Balance On July 18, the lending concentration of the active bonds of 10 - year Treasury bonds, 10 - year China Development Bank bonds, and 30 - year Treasury bonds showed an upward trend, while that of the second - active bonds of 10 - year Treasury bonds and 10 - year China Development Bank bonds showed a downward trend. Except for securities firms, the lending concentration of all other institutions increased [54].

1. Report Industry Investment Rating Not provided in the given content. 2. Core View of the Report It is expected that with the combined cooperation of the central bank's short - term reverse repurchase and outright reverse repurchase, the funds' volatility during the tax period may be small. The past week saw a slight tightening of funds, and in the coming week, attention should be paid to the disturbances of government bond net payments and tax period outflows. The trading demand from trading desks has weakened, and the net buying of general credit bonds and Tier 2 capital bonds by major non - bank buyers has significantly decreased. In the future, the disturbances from funds and the equity market to the bond market will increase, and recently, the market may return to active bond trading to avoid liquidity risks during adjustments [1][2]. 3. Summary According to Relevant Catalogs 3.1 Liquidity Tracking 3.1.1 Central Bank Operations - In the past week (7/7 - 7/11), the central bank's open - market operations led to a net liquidity withdrawal of 2265 billion yuan. As of 7/11, the central bank's reverse repurchase balance was 4257 billion yuan, significantly lower than that on 6/30 but still higher than the seasonal level in previous years. In the next week (7/14 - 7/18), the central bank's reverse repurchase will mature 4257 billion yuan, with a relatively small maturity scale evenly distributed daily. In July, the central bank has 1.5 trillion yuan of MLF and outright reverse repurchase maturing, including 3000 billion yuan of MLF, 7000 billion yuan of 3 - month outright reverse repurchase, and 5000 billion yuan of 6 - month outright reverse repurchase [9][10]. 3.1.2 Government Bond Issuance - In the past week, the government bond net payment was 2961 billion yuan, with 1849 billion yuan for national bonds and 1112 billion yuan for local bonds. In the next week, the expected government bond net payment is 3985 billion yuan, with 2761 billion yuan for national bonds and 1224 billion yuan for local bonds. The net payment pressure is relatively large on Monday and Tuesday. As of 7/11, the net financing progress of national bonds is 56.7%, and the remaining net financing space in 2025 is about 2.89 trillion yuan; the issuance progress of new local bonds is 51.8%, with a remaining issuance space of 2.51 trillion yuan; the issuance progress of refinancing special bonds is 89.8%, with a remaining issuance space of 2041 billion yuan. The supply of government bonds accelerated in the second week of July, and the issuance pressure is relatively large in August and September of the third quarter [17][18][20]. 3.1.3 Bill Market - In the past week, bill interest rates showed a divergent trend, with the 3 - month bill interest rate rising and the 6 - month bill interest rate falling. Seasonally, the current bill interest rate trend is still significantly weaker than the seasonal level, indicating that the recovery of credit demand remains slow [25]. 3.1.4 Funds Review - Funds tightened slightly, showing a trend of first loosening, then slightly tightening, and finally relaxing. The funds were the loosest at the opening on 7/7 and the tightest at the opening on 7/10. Most fund interest rates increased, and the term and market stratifications mostly converged [27][30][31]. 3.1.5 Inter - bank Certificates of Deposit - In the past week (7/7 - 7/13), the total issuance of certificates of deposit was 4271 billion yuan, with a net financing of - 833.9 billion yuan. The issuance scale increased compared with the previous week, but the net financing scale declined. As of 7/13, the cumulative net financing of certificates of deposit for the whole year was 1.73 trillion yuan. The issuance weighted term decreased. In the next week, the maturity scale is 8028 billion yuan, and the maturity pressure is relatively large from Tuesday to Friday [50][55]. 3.2 Institutional Behavior Tracking 3.2.1 Secondary Market Transactions - The trading demand from trading desks has weakened, and the net buying of general credit bonds and Tier 2 capital bonds by major non - bank buyers has decreased. Different types of bonds have different buying and selling situations among various institutions. For example, large banks' purchases of short - term national bonds have increased, and the net buying of credit bonds by major non - bank buyers has significantly decreased [61]. 3.2.2 Institutional Duration - The median duration of medium - and long - term bond funds has oscillated upwards. The 10 - day moving average of the median duration of medium - and long - term bond funds on 7/11 was 4.04 years, up from 3.96 years on 7/4. The secondary market trading duration of credit bonds showed mixed trends, with the 5 - day moving average of urban investment bond trading duration rising and that of Tier 2 capital bond trading duration falling [59][64]. 3.2.3 Institutional Leverage - The calculated bond market leverage ratio in the past week was 107.65%, a significant decrease compared with the previous week (107.96%) [66].

1. Report Industry Investment Rating No information provided in the content about the report industry investment rating. 2. Core Views of the Report - The trend of loose funds is strong, and there is no need to worry about short - term liquidity, but there may be sporadic disturbances at times such as tax payment periods [1]. - In the past week, the trading volume of trading desks was high, and the sentiment of funds to extend duration remained strong. The duration of medium - and long - term bond funds reached a new high this year, and there was a trend of extending duration in credit bonds, secondary bonds, and interest - rate bonds. In the future, the short - term market is driven by trading desks, so it is necessary to closely monitor the ebb and flow of buying in ultra - long non - active interest - rate bonds and long - term credit bonds [2]. 3. Summary by Relevant Catalogs 3.1 Liquidity Tracking 3.1.1 Central Bank Operations - In the past week (6/30 - 7/4), the central bank's open - market operations resulted in a net liquidity withdrawal of 13753 billion yuan. As of 7/4, the central bank's reverse - repurchase balance was 6522 billion yuan, significantly lower than on 6/30 but still higher than the seasonal level in previous years. In the next week (7/7 - 7/11), 6522 billion yuan of reverse - repurchases will mature, with the maturity pressure distributed as Monday > Tuesday > Wednesday > Thursday > Friday [9]. - In July, a total of 1.5 trillion yuan of MLF and outright reverse - repurchases will mature, including 3000 billion yuan of MLF, 7000 billion yuan of 3 - month outright reverse - repurchases, and 5000 billion yuan of 6 - month outright reverse - repurchases [10]. 3.1.2 Government Bond Issuance - In the past week, the net payment of government bonds was 341 billion yuan, with a net payment of - 401 billion yuan for treasury bonds and 742 billion yuan for local bonds. In the next week, the expected net payment of government bonds is 2511 billion yuan, with 1399 billion yuan for treasury bonds and 1112 billion yuan for local bonds. The net payment pressure is relatively large on Monday, about 2174 billion yuan, and relatively small from Tuesday to Friday [14]. - As of 7/4, the net financing progress of treasury bonds is 53.8%, with a remaining net financing space of 3.08 trillion yuan in 2025; the issuance progress of new local bonds is 50.3%, with a remaining issuance space of 2.58 trillion yuan; the issuance progress of refinancing special bonds is 89.8%, with a remaining issuance space of 204.1 billion yuan. The supply of government bonds is slow in July, and the issuance pressure is large in August and September in the third quarter [16][18]. 3.1.3 Bill Market - In the past week, the bill interest rates showed a divergent trend. The 3 - month direct - discount and transfer - discount interest rates of state - owned and joint - stock banks increased, while the 6 - month rates decreased. Seasonally, the current bill interest rates are still significantly weaker than the seasonal level, indicating that the recovery of credit demand is still slow [24]. 3.1.4 Fund Review - After the quarter - end, funds became significantly looser. From 7/2 - 7/4, the fund sentiment index stabilized in the range of 45 - 50. Most fund interest rates declined, and the fund prices moved closer to the policy interest rates. The term and market stratifications mostly converged [26][28][29]. - In the past week, the total trading volumes of DR/R/GC were 12.10 trillion yuan, 37.99 trillion yuan, and 107.87 million lots respectively. The trading volumes of DR001/R001/GC001 were 11.64 trillion yuan, 34.05 trillion yuan, and 93.67 million lots respectively. On 7/4, the overnight trading volume ratios were 97%, 91%, and 89% respectively, all higher than on 6/27 [35]. - The net lending of the banking system was basically stable, and the net lending of large - scale banks increased. The net borrowing demand of core non - banking institutions decreased slightly. In terms of maturity, large - scale banks mainly lent overnight funds, while funds and securities firms mainly borrowed overnight funds, and insurance and other products mainly borrowed 7 - day funds [39]. 3.1.5 Inter - bank Certificates of Deposit - In the past week (6/30 - 7/6), the total issuance of certificates of deposit was 243.7 billion yuan, with a net financing of - 2.08 billion yuan. The issuance scale decreased compared with the previous week, but the net financing scale increased. By entity, the issuance scale of inter - bank certificates of deposit was ranked as joint - stock banks > state - owned banks > city commercial banks > rural commercial banks. By maturity, the weighted issuance maturity increased significantly [46]. - In the past week, the issuance prices of certificates of deposit of joint - stock banks at various maturities decreased significantly. On 7/4, the yield to maturity of 1 - year AAA certificates of deposit was 1.5929%, down 4.21bps from 6/27. In the next three weeks, 510.5 billion yuan (7/7 - 7/13), 802.8 billion yuan (7/14 - 7/20), 1076.5 billion yuan (7/21 - 7/27), and 376.7 billion yuan (7/23 - 8/3) will mature respectively. The maturity pressure is large in late July [48][52]. 3.2 Institutional Behavior Tracking 3.2.1 Secondary Transactions - The funds' demand for credit bonds is stronger than that for interest - rate bonds, and the trend of extending the duration of credit bonds is obvious [56]. 3.2.2 Institutional Duration - On 7/4, the median of the 10 - day moving average of the duration of medium - and long - term bond funds was 3.96 years, further increasing compared with 6/27 (3.91 years). The 5 - day moving average of the trading duration of urban investment bonds, secondary bonds increased, while that of industrial bonds decreased [57][61]. 3.2.3 Institutional Leverage - In the past week, the calculated bond - market leverage ratio was 107.96%, slightly higher than the previous week (107.93%), and the upward trend slowed down [63].

Key Points Summary 1. Report Industry Investment Rating - The report does not provide an overall industry investment rating. However, it gives rating criteria for different types of bonds: - **Interest - rate bonds**: Based on the net price change of interest - rate bonds within 3 months after the report date. "Increase holding" means interest risk decreases and net price has room to rise; "Neutral" means interest risk is stable and net price has minor fluctuations; "Reduce holding" means interest risk increases and net price has room to fall [40]. - **Credit bonds**: Based on the net price change of credit bonds within 3 months after the report date. "Increase holding" means credit risk decreases and net price has room to rise; "Neutral" means credit risk is stable and net price has minor fluctuations; "Reduce holding" means credit risk increases and net price has room to fall [41]. - **Convertible bonds**: Based on the change of convertible bond price relative to the CSI Convertible Bond Index within 3 months after the report date. "Increase holding" means convertible bonds perform better than the index; "Neutral" means performance is the same as the index; "Reduce holding" means performance is worse than the index [42]. 2. Core Viewpoints - **Funds**: In the next week, the net financing scale of government bonds will decline, and the central bank is expected to withdraw funds as usual at the beginning of the month. The funds market is likely to maintain a balanced operation and cross the month smoothly [1]. - **Certificates of Deposit (CDs)**: In the next week, the maturity scale of CDs is about 0.25 trillion yuan, and the supply pressure will decrease. The funds market at the beginning of the month is expected to return to a balanced and loose state, and CD yields may show a volatile trend [1]. - **Institutional Behavior**: Funds, rural commercial banks, and other products are the main buyers of interest - rate bonds, and the net buying power of rural commercial banks has significantly rebounded [1]. 3. Summary by Relevant Catalogs 3.1 Weekly Liquidity Tracking 3.1.1 Funds Review - **Central Bank's Operations**: From June 23 - 27, 2025, the central bank had a net funds injection of 1267.2 billion yuan. This month, the net injection of MLF was 118 billion yuan, and the net injection of outright repurchase was 20 billion yuan. The OMO stock increased to 2027.5 billion yuan [10]. - **Exchange Rate Movement**: During the statistical period, the RMB depreciated by 1.62 basis points against the US dollar due to uncertainties in US tariffs and the increasing expectation of Fed rate cuts [10]. - **Government Bond Progress**: In the past week, the net financing of national bonds was 111 billion yuan, and the net financing since the beginning of the year was 3350.16 billion yuan, completing 50.3% of the annual plan. The issuance of new local bonds was 479.467 billion yuan, and the issuance since the beginning of the year was 2558.12 billion yuan, completing 49.2% of the annual plan. As of June 27, the issuance of special refinancing bonds for replacing implicit debts was 1.8 trillion yuan, completing 89.8% of the annual plan [13]. - **Funds Structure**: During the statistical period, the lending scale of national and joint - stock banks exceeded 5 trillion yuan, the lending scale of money market funds and wealth management products decreased, and the overall borrowing scale of non - bank institutions decreased significantly. Due to the strong demand for cross - month funds, the core funds rate increased marginally, and the R - series and DR - series moved basically in sync, with an obvious increase in liquidity stratification [16]. 3.1.2 CD Review - **Primary Market**: From June 23 - 27, 2025, the net financing of inter - bank CDs was - 411.35 billion yuan, and the issuance totaled 736.46 billion yuan, with a maturity volume of 1137.81 billion yuan. The average primary issuance rate was 1.6409% (previous value: 1.6556%). In the next three weeks, the maturities of inter - bank CDs will be 245.79 billion, 510.52 billion, and 802.81 billion yuan respectively [19]. - **Secondary Market**: During the statistical period, large banks, money market funds, and wealth management products continued to increase their holdings, while insurance companies and other product accounts continued to hold. Joint - stock banks changed from buying to selling. City and rural commercial banks were still the largest counterparties. The secondary market yield of CDs fluctuated slightly upward, the yield curve remained inverted, and the curve above 3M steepened. The yields of 1M/3M/6M/9M/1Y CDs changed by 3.37BP/0.50BP/1.00BP/0.35BP/0.85BP respectively [21]. 3.1.3 Next Week's Focus - **Funds**: The central bank continued to over - renew MLF in June, and has been renewing MLF for 4 consecutive months to inject liquidity, combined with a net injection of 20 billion yuan in outright repurchase. The funds market was in a balanced and loose state. In the next week, the net financing scale of government bonds will decline, and the central bank is expected to withdraw funds as usual at the beginning of the month. The funds market is likely to maintain a balanced operation and cross the month smoothly [25]. - **CDs**: In the past month, the net financing of CDs remained negative. The central bank's increased open - market operations effectively relieved the banks' liability pressure, and the central level of primary CD rates decreased. In the next week, the maturity scale of CDs is about 0.25 trillion yuan, and the supply pressure will decrease. The funds market at the beginning of the month is expected to return to a balanced and loose state, and CD yields may show a volatile trend [26]. 3.2 Weekly Institutional Behavior Tracking - **Long - term Bond Funds' Duration**: On June 27, the median of the 10 - day rolling average duration of long - term bond funds was 3.91 years, a slight increase from the previous period [31]. - **Institutional Bond - Buying Behavior** - **Large Banks' Bond - Buying**: In the past week, large banks bought 28.7 billion yuan of national bonds (previous week: 51.7 billion yuan), a slight decline [31]. - **Interest - rate Bond Buyers**: Funds, rural commercial banks, and other products are the main buyers. Rural commercial banks' net buying power has significantly rebounded. In the past week, funds' net buying of interest - rate bonds was 89 billion yuan (previous week: 141.3 billion yuan), rural commercial banks' net buying was 47.3 billion yuan (previous week: - 127.2 billion yuan), and other products' net buying was 23.6 billion yuan (previous week: 42.8 billion yuan) [31]. - **CD Buyers**: Large banks, money market funds, wealth management products, and insurance companies are the main buyers. The net buying power of large banks and money market funds has significantly increased, while that of wealth management products and other products has decreased. In the past week, large banks' net buying of CDs was 73.2 billion yuan (previous week: 33.7 billion yuan), money market funds' net buying was 57.3 billion yuan (previous week: 41.6 billion yuan), wealth management products' net buying was 48.4 billion yuan (previous week: 80.9 billion yuan), and insurance companies' net buying was 23.5 billion yuan (previous week: 28 billion yuan) [31]. - **Credit Bond Buyers**: The net buying scale of major non - bank buyers of credit bonds has slightly declined. For credit bonds over 5 years, the net buying scale of non - bank buyers remained basically the same. Overall, funds, wealth management products, other products, money market funds, and insurance companies all participated in buying credit bonds, showing a balanced situation. For credit bonds over 5 years, insurance companies, wealth management products, and other products had strong buying power [31]. - **Secondary Bond Buyers**: The overall net buying demand is not strong. The net buying power of secondary bonds within 2 years has declined, and wealth management products are still the main net buyers. The demand for secondary bonds between 2 - 5 years and over 5 years has also declined significantly [31]. - **Institutional Leverage Level**: In the past week, the bond market leverage ratio was 107.93%, a continued increase from the previous period [32]. - **Key Spreads**: On June 27, the 10Y CDB - 10Y national bond term spread was 3.63bp, and the spread was converging; the 1Y CDB - R001 spread was 5.41BP, and the spread between short - term bond yields and funds prices widened slightly [34].

Group 1 - The core viewpoint of the article highlights the anxiety surrounding the recent IPO acceleration policy announced at the Lujiazui Forum, particularly in light of the 44% decline in the new stock index over the past four years, which has served as a lesson in risk for investors [1][2] - The fear of IPO expansion is rooted in the stark contrast between the slight decline of the Shenzhen Composite Index and the significant drop of 44% in the new stock index since 2020, indicating that the burden of the past four years of IPO activity has fallen on secondary market investors [2] - Interestingly, new stocks often perform exceptionally well in the initial phase of IPO reboots, akin to promotional sales in retail, suggesting that initial enthusiasm can lead to temporary price increases before stabilizing [4] Group 2 - A contrarian perspective suggests that after adjustments in IPO pacing, new market hotspots tend to emerge within three months, driven by the natural flow of new capital seeking investment opportunities [5] - The article emphasizes the importance of understanding institutional behavior through quantitative data, which serves as a direct communication tool for engaging with the market [7] - Observations indicate that stocks with potential often show active institutional behavior at lower levels during periods of volatility, suggesting a calculated approach by institutional investors before significant price movements occur [9] Group 3 - A notable trend in the current market is the increase in institutional lock-up behavior despite overall index adjustments, indicating that large funds are preparing for the next market rally [10] - The essence of investing is framed as a probability game, where the use of quantitative tools can help mitigate information asymmetry, allowing investors to better understand institutional strategies and uncover potential opportunities amidst perceived market risks [12]

Market Performance - The performance of government bond futures showed divergence, with the 30-year main contract rising by 0.35% and the 10-year main contract increasing by 0.09%, while the 5-year and 2-year main contracts remained unchanged [1] Funding Conditions - The central bank announced a 173.8 billion yuan reverse repurchase operation on June 9, with a fixed rate of 1.40%, resulting in a net injection of 173.8 billion yuan for the day. The overnight pledged repo rate fell below 1.4%, indicating a more relaxed funding environment [2] Economic Fundamentals - In May, the CPI decreased by 0.2% month-on-month and by 0.1% year-on-year, while the core CPI rose by 0.6% year-on-year. The PPI fell by 0.4% month-on-month and by 3.3% year-on-year. Exports in May increased by 4.8% year-on-year, while imports decreased by 3.4%, resulting in a trade surplus of 103.22 billion USD [3] Operational Recommendations - The low inflation data and weaker-than-expected export figures suggest a cautious outlook. The market is expected to focus on future tariff negotiations and fundamental changes. The bond market may strengthen due to a more relaxed funding environment, with the 10-year government bond yield projected to fluctuate between 1.60% and 1.75% and the 30-year yield between 1.80% and 1.95% [4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - This week (from June 3rd to June 6th), the money market rate declined, the average daily net lending of large - scale banks increased, and the leverage ratio of funds slightly rose. The net financing of certificates of deposit decreased, and the yields to maturity of certificates of deposit with different maturities showed differentiation. In the cash bond trading, the main buyers were other product types, mainly increasing holdings of certificates of deposit. Rural commercial banks switched to increasing holdings of certificates of deposit, insurance companies increased holdings of ultra - long - term interest - rate bonds with maturities of 15 - 30 years, funds increased holdings of interest - rate bonds across all maturities, and large - scale banks bought interest - rate bonds with maturities of 1 - 3 years. [3] 3. Summaries Based on Relevant Catalogs 3.1 Money and Capital Market - A total of 1602.6 billion yuan of reverse repurchase expired this week. The central bank conducted reverse repurchases of 454.5 billion, 214.9 billion, 126.5 billion, and 135 billion yuan from Tuesday to Friday, with a total injection of 930.9 billion yuan and a net liquidity withdrawal of 671.7 billion yuan for the whole week. [5][10] - As of June 6th, R001, R007, DR001, and DR007 were 1.45%, 1.55%, 1.41%, and 1.53% respectively, with changes of - 11.9BP, - 14.58BP, - 6.98BP, and - 13.22BP compared to May 30th, and were at the 19%, 9%, 16%, and 3% historical quantiles respectively. [5][12] - The net borrowing scale of the main fund lenders increased. The main lending institutions (large - scale commercial/policy banks and joint - stock commercial banks) had a net borrowing of - 341.2 billion yuan for the whole week, an increase of 284.3 billion yuan compared to the previous week. [5][17] - The trading volume of pledged repurchase increased, with an average daily trading volume of 7.5 trillion yuan and a maximum single - day trading volume of 7.86 trillion yuan, a 15.42% increase compared to the previous week's average daily volume. The proportion of overnight repurchase transactions increased, with an average daily proportion of 87.5% and a maximum single - day proportion of 90.4%, a 3.61 - percentage - point increase compared to the previous week's average daily proportion. [5][24] - The leverage ratio of broad - based funds slightly increased. As of June 6th, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 103.3%, 202.5%, 127.1%, and 105.4% respectively, with changes of 0.41BP, 14.27BP, - 0.68BP, and 0.1BP compared to May 30th, and were at the 17%, 17%, 60%, and 39% historical quantiles respectively. [5][28] 3.2 Certificates of Deposit and Bills - This week, the issuance scale of certificates of deposit decreased, and the net financing amount decreased compared to the previous week. The total issuance was 585.59 billion yuan, a decrease of 82.91 billion yuan compared to the previous week; the total maturity was 664.37 billion yuan, an increase of 11.64 billion yuan compared to the previous week. The net financing amount was - 78.78 billion yuan, a decrease of 94.55 billion yuan compared to the previous week. [5][32] - By bank type, city commercial banks had the highest issuance scale. This week, the issuance scales of certificates of deposit by state - owned banks, joint - stock banks, city commercial banks, and rural commercial banks were 151.88 billion, 161.56 billion, 223.54 billion, and 44.51 billion yuan respectively, with changes of - 214.34 billion, 69.4 billion, 45.4 billion, and 14.02 billion yuan compared to the previous week. [32] - By maturity type, the 6 - month issuance scale was the highest. The issuance scales of 1 - month, 3 - month, 6 - month, 9 - month, and 1 - year certificates of deposit were 44.1 billion, 133.53 billion, 236.64 billion, 88.58 billion, and 122.43 billion yuan respectively, with changes of - 311.5 billion, 443.3 billion, 929.5 billion, 806.6 billion, and - 2697 billion yuan compared to the previous week. [33] - This week, the issuance interest rates of certificates of deposit by different banks and with different maturities showed differentiation. By bank type, as of June 6th, the issuance interest rates of 1 - year certificates of deposit by joint - stock banks and city commercial banks changed by 0BP and - 2.83BP respectively compared to May 30th, and were at the 2% and 1% historical quantiles. By maturity, as of June 6th, the issuance interest rates of 1 - month, 3 - month, and 6 - month certificates of deposit changed by 2.64BP, 4.13BP, and - 5.23BP respectively compared to May 30th, and were at the 6%, 2%, and 1% historical quantiles. [41] - This week, the Shibor rates generally declined. As of June 6th, the overnight, 1 - week, 2 - week, 1 - month, and 3 - month Shibor rates changed by - 6BP, - 11.7BP, - 15.1BP, - 0.1BP, and - 0.1BP respectively compared to May 30th, reaching 1.41%, 1.5%, 1.59%, 1.62%, and 1.65%. [43] - This week, the yield - to - maturity curve of certificates of deposit flattened. As of June 6th, the yield - to - maturities of AAA - rated ChinaBond commercial bank certificates of deposit with maturities of 1 month, 3 months, 6 months, 9 months, and 1 year were 1.63%, 1.66%, 1.65%, 1.68%, and 1.68% respectively, with changes of 8.49BP, - 0.52BP, - 3BP, - 3BP, and - 2.75BP compared to May 30th. [45] - This week, the bill interest rates showed differentiation. As of June 3rd, the 3 - month direct discount rate, 3 - month transfer discount rate, 6 - month direct discount rate, and 6 - month transfer discount rate of state - owned shares were 1.15%, 1.02%, 1.14%, and 1.09% respectively, with changes of - 5BP, - 14BP, 0BP, and 3BP compared to May 30th. [46] 3.3 Institutional Behavior Tracking - This week, the main buyers of cash bonds were other product types, with a net purchase of 8.92 billion yuan, a decrease compared to the previous week's purchase scale; the main sellers were joint - stock banks, with a net sale of 22.38 billion yuan, an increase compared to the previous week's sale scale. [5][48] - This week, funds had a net purchase of 7.84 billion yuan of cash bonds, including an increase of 5.3 billion yuan in interest - rate bonds, 1.5533 billion yuan in credit bonds, 750 million yuan in other (including Tier 2 and perpetual bonds), and 210 million yuan in certificates of deposit. By maturity, interest - rate bonds were mainly increased in the 3 - 5 - year range, and credit bonds were mainly increased within 1 year. [5][48] - This week, wealth management products had a net purchase of 4.61 billion yuan of cash bonds, including an increase of 720 million yuan in interest - rate bonds, 1.04 billion yuan in credit bonds, 850 million yuan in other (including Tier 2 and perpetual bonds), and 2 billion yuan in certificates of deposit. By maturity, interest - rate bonds and credit bonds were mainly increased within 1 year. [5][50] - This week, rural financial institutions had a net purchase of 3.99 billion yuan of cash bonds, including a decrease of 2.19 billion yuan in interest - rate bonds, an increase of 80 million yuan in credit bonds, 360 million yuan in other (including Tier 2 and perpetual bonds), and 5.73 billion yuan in certificates of deposit. By maturity, interest - rate bonds were mainly decreased in the 1 - 3 - year range, and credit bonds were mainly increased within 1 year. [50] - This week, insurance companies had a net purchase of 4.31 billion yuan of cash bonds, including an increase of 3.23 billion yuan in interest - rate bonds, 380 million yuan in credit bonds, a decrease of 210 million yuan in other (including Tier 2 and perpetual bonds), and 900 million yuan in certificates of deposit. By maturity, interest - rate bonds were mainly increased in the 20 - 30 - year range, and credit bonds were mainly increased in the 3 - 5 - year range. [50]

Group 1: Report Overview - The report is titled "2025 April Institutional Behavior Thinking: Improving Liquidity Environment, Slow Supply of New Special Bonds" and is written by the Fixed Income Team of Ping An Securities Research Institute [1] Group 2: Investment Rating - No industry investment rating is provided in the report Group 3: Core Views - In April 2025, the bond custody balance increased at a year - on - year rate of 15.5%, 0.6 percentage points higher than in March. The monthly new custody scale was 1.7 trillion yuan, remaining at a high level in the same historical period [3][4] - It is expected that the bond supply in May will increase compared to April. The new special bond issuance is slower than in previous years, and there is still supply pressure [39][40] - Banks are expected to maintain their bond - increasing strength, but their ability to absorb supply depends on the central bank's liquidity injection. Insurance is expected to adjust its bond - allocation rhythm according to local government bond supply. The capital increment of asset management accounts is expected to recover [3][43][51] Group 4: Bond Custody Scale - In April 2025, the bond custody balance had a year - on - year growth rate of 15.5%, up 0.6 percentage points from March. The new custody scale was 1.7 trillion yuan, which, although showing a marginal decline month - on - month, was at a high level in the same historical period [3][4] Group 5: Bond Supply by Type - Government bonds and inter - bank certificates of deposit (CDs) increased more than the seasonal average, while treasury bonds increased less. In April, local government bonds and inter - bank CDs increased by 5218 billion yuan and 1668 billion yuan more than the seasonal average respectively, and treasury bonds increased by 825 billion yuan less [8] - The total supply of government bonds (treasury bonds + local bonds) in April was close to 1 trillion yuan, showing a seasonal decline compared to March. However, both treasury bonds and local bonds were higher than the previous year [11] - The net supply of inter - bank CDs in April was 377.9 billion yuan, a significant decline from March, indicating an improvement in banks' asset - liability situation. The supply of corporate credit bonds was 224.2 billion yuan, returning to a high level in previous years [14] Group 6: Bond Allocation by Institutions - Banks and asset management accounts were the main institutions increasing bond holdings. Commercial banks increased their holdings by 797.5 billion yuan. After adjusting for the central bank's reverse repurchase scale in April, the actual purchase amount was in line with the seasonal pattern. Insurance increased holdings by 167.3 billion yuan, 70.9 billion yuan more than the seasonal average, mainly adding local government bonds. Asset management accounts increased holdings by 1.1 trillion yuan, 408.9 billion yuan more than the seasonal average, mainly increasing inter - bank CDs. Foreign investors increased holdings by 88.1 billion yuan, 120.8 billion yuan more than the seasonal average, mainly adding treasury bonds. Securities firms increased holdings by 183.5 billion yuan, 394.7 billion yuan more than the seasonal average, mainly adding treasury bonds [3][18] - Within asset management accounts, wealth management products concentrated on increasing inter - bank CDs from March to April, while funds showed a growing preference for credit bonds [29] Group 7: Outlook - It is expected that the bond supply in May will increase compared to April. The issuance of new special bonds is slower than in previous years, and there is still supply pressure [39][40] - Banks are expected to maintain their bond - increasing strength, but their ability to absorb supply depends on the central bank's liquidity injection. Insurance is expected to adjust its bond - allocation rhythm according to local government bond supply. The capital increment of asset management accounts is expected to recover. If the liquidity injection remains loose, the scale of wealth management products is expected to continue to grow steadily, and funds may still have room to increase bond holdings through leverage [3][43][51]

Group 1 - The financial sector has shown signs of improvement, with indices rising quickly, attributed by some to the new fund regulations, although the validity of this claim is debated [1][4] - A significant number of fund managers have managed to outperform benchmarks this year, with over 60% of fund managers currently beating their benchmarks, particularly the CSI 300 [2][6] - The new fund regulations have provided opportunities for financial stocks to capitalize on the market dynamics, leading to a potential rally in the sector [4][5] Group 2 - The market has experienced a prolonged period of stagnation, particularly in the banking sector, which has been flat for over a year and a half, but recent movements indicate a potential for a larger market rally [5] - The current market environment presents challenges for retail investors, as they struggle to identify which stocks will break out amidst the volatility, with institutional investors often having the upper hand in this dynamic [9][11] - The concept of "institutional shaking" is highlighted, where institutions may sell off stocks to create buying opportunities, making it difficult for retail investors to discern true market movements [9][13] Group 3 - The analysis of trading behaviors through quantitative models has become more sophisticated, allowing for better identification of institutional trading patterns, which can indicate future stock movements [9][14] - The "panoramic K-line" data visualization technique is introduced, which combines various trading metrics to provide a clearer picture of market dynamics and institutional involvement [15]