Group 1: Overall Report Summary - The reading of the bond market micro - trading thermometer increased by 5 percentage points to 48%. Except for the spread congestion, the average quantile of other indicators rose. High - congestion indicators include the purchase volume of ultra - long bonds by funds [2][14]. - The proportion of indicators in the over - heated range increased slightly to 15%. Among 20 micro - indicators, 3 were in the over - heated range (15%), 9 were in the neutral range (45%), and 8 were in the cold range (40%). The TL/T long - short ratio moved from the cold to the neutral range, while the allocation disk strength and the stock - bond ratio moved from the neutral to the cold range [3][19]. Group 2: Indicator Category Analysis Trading Heat Indicators - The proportion of indicators in the over - heated range remained at 17%, in the neutral range increased to 67%, and in the cold range decreased to 17%. The TL/T long - short ratio quantile rose 40 percentage points to 49%, moving from the cold to the neutral range. The 30/10Y and 1/10Y relative turnover rate quantiles rose 24 and 14 percentage points respectively, driving the average trading heat quantile up 13 percentage points [5][21]. Institutional Behavior Indicators - The proportion of indicators in the over - heated range rose to 25%, in the neutral range dropped to 38%, and in the cold range rose to 38%. The allocation disk strength quantile dropped 35 percentage points to 33%, moving from the neutral to the cold range. The average institutional behavior quantile rose slightly by 2 percentage points [6][26]. Spread Indicators - The spread quantile average dropped slightly by 1 percentage point. The market spread dropped 4 percentage points, while the policy spread quantile rose 2 percentage points. The policy spread narrowed slightly by 1bp to 3bp, with the quantile rising to 43% and remaining in the neutral range. The average of credit spread, IRS - SHIBOR 3M spread, and Agricultural Development - National Development spread widened slightly by 1bp to 18bp, with the quantile dropping 4 percentage points to 40% and remaining in the neutral range [4][7]. Comparison Ratio Indicators - The proportion of indicators in the cold range rose to 100%. The stock - bond ratio quantile dropped 2 percentage points to 38%, moving from the neutral to the cold range. The commodity and real - estate comparison ratio quantiles rose 5 and 4 percentage points respectively, remaining in the cold range. The consumer goods comparison ratio remained in the cold range. The average comparison ratio quantile rose 2 percentage points [8][33].

1. Report Industry Investment Rating There is no information provided regarding the report's industry investment rating. 2. Core Viewpoints of the Report - The bond market is expected to remain volatile in the short - term. Although there are uncertain positive factors, the duration of the bond market should be maintained. If the funding rate declines, leverage can be appropriately increased [2][7][13][14]. - The relative loosening of funds lower than expected is the current main line of interest - rate trading. However, the loosening of funds should not be a continuous reason for bulls to be optimistic about the bond market. The significant decline of the funding rate is "unrealistic" according to experience, and if the expectation of loose funds persists, a lower - than - expected situation may lead to a bond - market correction [3][4][13][14]. - To be more bullish on the bond market, the main factors should revolve around the fundamental situation and risk appetite. There are uncertainties in the fundamental situation, such as the possible recurrence of trade frictions and the lower - than - expected results of "front - loading exports" [4][14]. 3. Summaries According to Relevant Catalogs 3.1 This Week's Institutional Behavior Review: What Cards Do Bond Bulls Still Have? - This week, the credit market was strong, but interest rates fluctuated upward. The 3 - year medium - and short - term notes decreased by about 5bp, while the 10 - year Treasury bonds fluctuated up by nearly 5bp, and the credit spread narrowed overall [2][13]. - The relative loosening of funds lower than expected is the current main line of interest - rate trading. The funding rate (DR007) rose from 1.50% to around 1.60% this week, which impacted short - term bonds and caused long - term bonds to fluctuate weakly. After a 10bp interest - rate cut, some lower funding rates have formed a positive carry with many credit - bond varieties, so the credit market performed relatively strongly [3][13]. 3.2 Bond Market Yield Curve and Term Spread 3.2.1 Yield Curve: Yields of Treasury Bonds and China Development Bank Bonds Generally Rose - Treasury bond yields: The 1 - year yield rose 3bp, the 3 - year yield rose 4bp, the 5 - year yield rose 8bp, the 7 - year yield rose 6bp, the 10 - year yield rose 4bp, the 15 - year yield rose 6bp, and the 30 - year yield rose 4bp. The percentile points also increased to varying degrees [17]. - China Development Bank bond yields: The 1 - year yield rose 3bp, the 3 - year yield rose 3bp, the 5 - year yield rose 6bp, the 7 - year yield rose 6bp, the 10 - year yield rose 5bp, the 15 - year yield rose 4bp, and the 30 - year yield rose 4bp. The percentile points also changed accordingly [17]. 3.2.2 Term Spread: The Inversion of Treasury Bond Yield Spreads Eased, while that of China Development Bank Bonds Deepened; Treasury Bond Spreads Widened at the Short End, and China Development Bank Bond Spreads Widened Overall - Treasury bonds: The inversion of interest - rate spreads eased, and the term spread widened at the short end and narrowed at the long end. The 1Y - DR001 interest - rate spread inversion eased by 14bp, and the 1Y - DR007 interest - rate spread inversion eased by 11bp. The 3Y - 1Y spread widened by 3bp, the 5Y - 3Y spread widened by 2bp, the 7Y - 5Y spread narrowed by 1bp, the 10Y - 7Y spread narrowed by 2bp, the 15Y - 10Y spread widened by 1bp, and the 30Y - 15Y spread narrowed by 1bp. The percentile points also changed [18]. - China Development Bank bonds: The inversion of interest - rate spreads deepened, and the term spread widened overall. The 1Y - DR001 interest - rate spread inversion deepened by 11bp, and the 1Y - DR007 interest - rate spread inversion deepened by 7bp. The 3Y - 1Y spread changed by less than 1bp, the 5Y - 3Y spread widened by 3bp, the 7Y - 5Y spread changed by less than 1bp, the 10Y - 7Y spread narrowed by 1bp, the 15Y - 10Y spread changed by less than 1bp, and the 30Y - 15Y spread widened by 1bp. The percentile points also changed [20]. 3.3 Bond Market Leverage and Funding Situation 3.3.1 Leverage Ratio: Maintained at 106.70% From May 12 to May 16, 2025, the leverage ratio first rose and then fell during the week. As of May 16, the leverage ratio was about 106.70%, the same as last Friday and 0.19pct lower than Monday [24]. 3.3.2 This Week's Average Daily Turnover of Pledged Repurchase was 7.1 Trillion Yuan, with an Average Daily Overnight Proportion of 88.36% The average daily repurchase turnover increased compared with last week. From May 12 to May 16, the average daily turnover of pledged repurchase was about 7.1 trillion yuan, an increase of 0.3 trillion yuan from last week. The average overnight repurchase turnover was 6.3 trillion yuan, a month - on - month increase of 0.47 trillion yuan, and the average overnight trading proportion was 88.36%, a month - on - month increase of 2.57pct [29][34]. 3.3.3 Funding Situation: Banks' Fund Lending First Rose and then Fell From May 12 to May 16, the net lending of bank - related funds first rose and then fell. On May 16, the net lending of large - scale and policy banks was 3.24 trillion yuan; joint - stock banks, city commercial banks, and rural commercial banks had an average daily net borrowing of 0.05 trillion yuan, and on May 16, the net borrowing was 0.2 trillion yuan. The net lending of the banking system was 3.05 trillion yuan. The main fund - borrowing party was funds, and the lending of money - market funds first decreased and then increased [35]. 3.4 Duration of Medium - and Long - Term Bond Funds 3.4.1 The Median Duration Decreased to 2.73 Years This week (from May 12 to May 16), the median duration of medium - and long - term bond funds was 2.73 years (de - leveraged) and 2.95 years (including leverage). On May 16, the median duration (de - leveraged) was 2.73 years, a decrease of 0.05 years from last Friday; the median duration (including leverage) was 2.95 years, a decrease of 0.01 years from last Friday [48]. 3.4.2 The Duration of Interest - Rate Bond Funds Rose to 3.90 Years In terms of different types of bond funds, the median duration of interest - rate bond funds (including leverage) rose to 3.90 years, an increase of 0.12 years from last Friday; the median duration of credit - bond funds (including leverage) decreased to 2.64 years, a decrease of 0.03 years from last Friday. The median duration of interest - rate bond funds (de - leveraged) was 3.35 years, a decrease of 0.02 years from last Friday; the median duration of credit - bond funds (de - leveraged) was 2.55 years, a decrease of 0.02 years from last Friday [52]. 3.5 Comparison of Category Strategies 3.5.1 Sino - US Interest - Rate Spread: The Overall Inversion Deepened The inversion of the Sino - US Treasury - bond spread deepened overall. The 1 - year spread inversion deepened by 5bp, the 2 - year by 5bp, the 3 - year by 6bp, the 5 - year spread inversion eased by 2bp, the 7 - year spread changed by less than 1bp, the 10 - year spread inversion deepened by 2bp, and the 30 - year spread inversion deepened by 2bp [54]. 3.5.2 Implied Tax Rate: The Short - End Narrowed, and the Long - End Widened As of May 16, the spread between China Development Bank bonds and Treasury bonds changed by less than 1bp for the 1 - year, narrowed by 1bp for the 3 - year, narrowed by 2bp for the 5 - year, changed by less than 1bp for the 7 - year, changed by less than 1bp for the 10 - year, narrowed by 1bp for the 15 - year, and widened by 1bp for the 30 - year [58]. 3.6 Changes in Bond - Lending Balances - On May 16, the concentration trend of lending for the active 10 - year China Development Bank bonds rose, while that for the active 10 - year Treasury bonds, the second - active 10 - year Treasury bonds, the second - active 10 - year China Development Bank bonds, and the active 30 - year Treasury bonds declined [60]. - In terms of institutions, the lending balance of securities companies increased, while that of large - scale and small - and medium - sized banks decreased [61].