Report Industry Investment Rating - Not provided in the given content Core Viewpoints of the Report - The Shanghai Stock Exchange piloted the continuous issuance business of corporate bonds, which enriches the issuance methods of corporate bonds, enhances financing flexibility, and promotes the development of the bond market [3][9]. - In April, the growth rates of major economic indicators slowed down, but the economic recovery still showed some resilience. The central bank net - injected funds, and the capital prices showed mixed trends. The issuance of credit bonds in the primary market heated up, while the trading activity in the secondary market declined, and the yields of most bonds decreased [4][5][6][31]. Summary by Relevant Catalogs Market Hotspot - On May 22, 2025, the Shanghai Stock Exchange issued a notice to pilot the continuous issuance of corporate bonds and the expansion of asset - backed securities. The continuous issuance of corporate bonds allows incremental issuance on existing bonds, which has advantages such as improving issuance efficiency and enhancing bond liquidity. Credit rating agencies need to optimize rating methods [3][9][10]. Macroeconomic Data - In April, the growth rates of production, consumption, and investment data slowed down slightly. The year - on - year growth rate of industrial added value was 6.1%, 1.6 percentage points lower than the previous month. The year - on - year growth rate of social retail sales was 5.1%, 0.8 percentage points lower than the previous month. The cumulative year - on - year growth rate of fixed - asset investment from January to April was 4.0%, 0.2 percentage points lower than in the first quarter. However, equipment purchase investment played a leading role [4][12]. Money Market - Last week, the central bank net - injected 960 billion yuan through open - market operations. The overnight and 7 - day pledged repurchase rates decreased by 7bp and 5bp respectively, while the other - term pledged repurchase rates increased by 1 - 5bp. The 3 - month Shibor remained unchanged from the previous week, and the 1 - year Shibor increased by 1bp, with the spread widening to 4bp [5][14]. Primary Market of Credit Bonds - Last week, the issuance of credit bonds heated up, with a scale of 241.311 billion yuan, an increase of 108.134 billion yuan from the previous period. The issuance scales of various bond types and industries increased. The average issuance interest rates of bonds of various terms and grades generally increased, with an increase range of 2bp - 44bp [6][17][18]. Secondary Market of Credit Bonds - Last week, the trading volume of cash bonds in the secondary market was 8.408721 trillion yuan, and the average daily trading volume decreased by 31.2034 billion yuan from the previous period. The yields of interest - rate bonds fluctuated slightly, and the yield of 10 - year treasury bonds increased by 4bp to 1.72%. The yields of credit bonds decreased comprehensively, with a change range of 1 - 7bp. The credit spreads narrowed comprehensively, with a range of 1bp - 9bp, and the rating spreads showed mixed trends [7][31][34]. Regulatory and Market Innovation Dynamics - Multiple regulatory policies were introduced in May 2025, including promoting the construction of a scientific and technological finance system, supporting the issuance of science and technology innovation bonds, and providing policy support such as fee reduction and exemption to encourage innovation in the bond market and support scientific and technological innovation [44][46][47]. Bond Market Credit Risk Events - There were multiple credit risk events in the bond market, including bond principal and interest extensions, defaults, etc., involving companies such as Wuhan Contemporary Technology Investment Co., Ltd. and Guangzhou R & F Properties Co., Ltd. [43].

Market Performance - The three major U.S. stock indices experienced slight gains, with the Dow Jones up 0.43%, S&P 500 up 0.27%, and Nasdaq up 0.09% [1] - Major tech stocks showed mixed performance, with Tesla rising over 4%, Nvidia up 0.75%, Apple up 0.6%, Google up 0.57%, while Amazon fell 0.13%, Microsoft down 0.4%, and Facebook down 0.76% [1] - Chinese concept stocks mostly rose, with ZTO Express up over 9%, Beike up over 6%, Daqo New Energy up over 6%, NIO up over 6%, and Pony.ai up over 6%. In contrast, Brainstorm Cell Therapeutics fell over 4%, Century Internet down over 2%, Kingsoft Cloud down over 2%, and NetEase down over 2% [1] - European stock indices closed mixed, with Germany's DAX down 0.38%, France's CAC40 up 0.3%, and the UK's FTSE 100 up 1.23% [1] Commodity Prices - International precious metal futures generally rose, with COMEX gold futures up 0.36% at $3333.00 per ounce and COMEX silver futures up 2.72% at $37.63 per ounce [1] - International oil prices weakened, with the main U.S. oil contract down 2.21% at $66.87 per barrel and Brent crude down 1.91% at $68.85 per barrel [1] Currency and Bond Markets - At the New York close, the U.S. dollar index rose 0.10% to 97.59, while the offshore RMB against the U.S. dollar increased by 70 basis points to 7.1783 [1] - U.S. Treasury yields collectively rose, with the 2-year yield up 3.13 basis points to 3.870%, 3-year yield up 2.78 basis points to 3.836%, 5-year yield up 3.15 basis points to 3.932%, 10-year yield up 1.78 basis points to 4.348%, and 30-year yield up 0.30 basis points to 4.868% [1] - European bond yields mostly increased, with the UK 10-year yield down 1.6 basis points to 4.593%, while France's 10-year yield rose 3.7 basis points to 3.395%, Germany's 10-year yield up 3.2 basis points to 2.702%, Italy's 10-year yield up 3.5 basis points to 3.557%, and Spain's 10-year yield up 2.6 basis points to 3.316% [1]

Group 1: Current Status of Bond Market Development - China's bond market has achieved significant progress in scale, innovation, and infrastructure, with a total custody balance expected to reach 158.8 trillion yuan by the end of 2024, making it the second largest globally [2][3] - The internationalization of the bond market is accelerating, with foreign institutions holding 4.1 trillion yuan in Chinese bonds, reflecting strong confidence from international investors [2][3] - Shanghai has introduced innovative bond mechanisms, leading to a green bond issuance scale of approximately 1.2 trillion yuan in 2024, positioning it as a global leader [3][4] Group 2: Challenges Facing the Bond Market - The bond market suffers from segmentation, with independent custody and settlement systems for interbank and exchange markets, leading to liquidity issues and a trading share of less than 15% [4][5] - Regulatory coordination is lacking, with multiple departments having inconsistent standards and lengthy approval processes, averaging 45 days [5][6] - The legal framework is underdeveloped, lacking a dedicated "Bond Market Regulation," resulting in lengthy default resolution processes averaging 14 months [6][7] Group 3: Recommendations for Enhancing Bond Market and International Financial Center - Expand market openness by simplifying foreign investment procedures and encouraging the inclusion of Chinese bonds in international indices [8][9] - Improve market liquidity and product diversity by developing high-yield bonds and green bonds, and optimizing trading platforms [8][9] - Optimize market structure by promoting a more integrated approach between interbank and exchange markets to enhance efficiency and risk control [9][10] Group 4: Pathways for Shanghai as an International Financial Center - Promote market integration by establishing a unified custody and settlement system, allowing investors to participate in the entire market with a single account [12][13] - Enhance regulatory coordination by forming a bond market regulatory coordination committee to unify standards and policies [13][14] - Strengthen legal frameworks by legislating a "Bond Market Regulation" to standardize the entire bond issuance and trading process [14][15]

Group 1 - In June, China's manufacturing, non-manufacturing, and composite PMI rose to 49.7%, 50.5%, and 50.7% respectively, indicating a recovery in domestic market sentiment [1] - Domestic consumption policies have been strengthened, with the central government emphasizing the need to address low-price disorderly competition among enterprises, which is expected to boost domestic risk appetite in the short term [1] - Internationally, the US ISM manufacturing PMI increased to 49, and the ISM non-manufacturing index reached 50.8, both slightly above expectations, indicating a positive trend in the US economy [1] Group 2 - The market is currently focused on domestic incremental stimulus policies and trade negotiation progress, with macroeconomic conditions expected to improve in the short term [1] - The Federal Reserve has signaled a potential early interest rate cut, with the probability of a rate cut in September dropping to around 80% [1] - Short-term strategies suggest a cautious approach to A-shares, with a preference ranking of stock indices over government bonds and commodities [1] Group 3 - The bond market is experiencing reduced external risks and lower inflation expectations, leading to a strong short-term performance in bond prices [1] - Commodity markets are showing overall oscillation and rebound, with oil prices rebounding in the short term and non-ferrous metals continuing to show strength [1] - The strategy ranking for commodities is prioritized as precious metals, followed by non-ferrous, energy, and black metals [1]

Core Viewpoint - The public fund's second quarter reports highlight a significant focus on bond fund investment strategies, with many bond funds experiencing growth in both share and asset scale, reflecting a positive outlook for the bond market in the second half of the year [1]. Group 1: Bond Fund Performance - Multiple bond funds have reported substantial increases in total shares, with the Debon Rui Xing Bond Fund reaching 4.462 billion shares, a 65.44% increase from the previous quarter [2]. - The fixed income asset portfolio of the Debon Rui Xing Bond Fund expanded by 49.45% to 6.189 billion yuan, with various asset types showing increased fair value [2]. - Other products, such as the Huian Yongfu 90-day holding period short-term bond fund and Debon short-term bond fund, also saw their total shares double compared to the previous quarter [3]. Group 2: Market Trends and Strategies - The market's increasing demand for coupon-bearing assets indicates a growing recognition of the value of bond assets, as noted by industry experts [4]. - The bond market has experienced fluctuations in interest rates, with the 10-year government bond currently around 1.65%, leading to a more volatile environment [4]. - Fund managers are adopting refined duration management and cautious credit selection strategies to navigate interest rate volatility, adjusting their portfolios dynamically in response to market conditions [4]. Group 3: Future Outlook - Several institutions are optimistic about the bond market in the third quarter, citing supportive fiscal and monetary policies as key factors [6]. - The Debon Rui Xing Bond Fund's report indicates that ongoing domestic demand and fiscal stimulus measures are likely to create a favorable environment for the bond market [6]. - Expectations for monetary policy easing, including potential interest rate cuts, are anticipated to further drive down bond yields in the second half of the year [6].

Group 1 - The core viewpoint of the report indicates that major domestic stock indices have risen across the board, with the CSI 300, SSE 50, and SSE Composite Index showing increases of 1.54%, 1.21%, and 1.40% respectively, while mid and small-cap indices like the CSI 500, CSI 1000, and ChiNext Index increased by 0.81%, 0.56%, and 1.50% respectively [1][8] - The report highlights that the comprehensive ETF trading volume was 51.026 billion yuan, a decrease of 23.162 billion yuan from the previous week, with large-cap style ETFs accounting for 27.178 billion yuan and small-cap style ETFs for 24.225 billion yuan [1][27] - The average weekly return of 32 thematic ETFs was 0.98%, with large-cap style ETFs averaging 1.32% and small-cap style ETFs averaging 0.73% [2][28] Group 2 - The report identifies the top-performing comprehensive ETFs, with the top three being the Shen 100 ETF, ChiNext 50, and 300 ETF, which had returns of 1.99%, 1.79%, and 1.79% respectively, while the bottom three were the Double Innovation 50 ETF, 1000 ETF, and 500 ETF, with returns of 0.55%, 0.71%, and 0.90% [3][33] - In the thematic ETF sector, the steel ETF, bank ETF, and biomedicine ETF were the top performers with returns of 5.41%, 3.74%, and 3.03% respectively, while the bottom performers included the chip ETF, semiconductor ETF, and semiconductor 50 ETF, with returns of -1.40%, -1.06%, and -1.05% [3][33] - The report notes that there was a significant inflow of funds into the brokerage and military industry sectors, while the semiconductor sector continued to see inflows as investors looked to buy at lower prices [3][33] Group 3 - The report provides a detailed analysis of the trading activity of domestic stock ETFs, indicating that the trading volume of comprehensive ETFs was 51.026 billion yuan, with a notable decrease in trading activity compared to the previous week [27][28] - The report also tracks the market performance of various sectors, indicating that the financial, cyclical, consumer, growth, and stability style indices had weekly changes of 1.86%, 1.16%, 1.64%, 0.91%, and 0.92% respectively [1][8] - The report emphasizes the importance of monitoring the trading activity and fund flows in ETFs as indicators of market sentiment and potential investment opportunities [24][25]

Group 1 - The 30-year government bond ETF (511090) has been adjusted with a latest quote of 124.87 yuan as of July 8, 2025 [1] - The trading volume for the 30-year government bond ETF was 35.88 billion yuan with a turnover rate of 22.61%, indicating active market trading [1] - The average daily trading volume for the 30-year government bond ETF over the past month was 61.65 billion yuan as of July 7 [1] Group 2 - The latest scale of the 30-year government bond ETF reached 15.883 billion yuan [2] - The CEO of Hong Kong Stock Exchange stated that the Bond Connect has become the preferred channel for international investors to participate in China's interbank bond market over the past eight years, reflecting the growing demand for connectivity between global and domestic markets [2] - Despite the current challenges in the bond market, there are opportunities for growth as new funds from insurance, wealth management, and banks are expected to flow in July, potentially leading to a gradual decrease in interest rates [2] Group 3 - The 30-year government bond ETF closely tracks the China Bond 30-Year Government Bond Index, which consists of publicly issued and tradable 30-year government bonds with a remaining maturity of 25-30 years [2]

Group 1: Open Market Operations - The central bank conducted a 7-day reverse repurchase operation on July 7, with a fixed rate and quantity tendering, amounting to 106.5 billion yuan at an interest rate of 1.40% [1] - On the same day, 331.5 billion yuan of reverse repos matured, resulting in a net withdrawal of 225 billion yuan [1] Group 2: Funding Conditions - The funding environment remains loose, but short-term funding rates are beginning to stabilize, with overnight pledged repo rates slightly rising to 1.31% and 7-day pledged repo rates increasing by over 4 basis points to 1.46% [3] - The latest overnight financing rate in the U.S. stands at 4.40% [3] Group 3: Interbank Certificates of Deposit - The latest transaction rate for one-year interbank certificates of deposit among major banks is around 1.59%, showing little change from the previous day [6] Group 4: Bond Yield Trends - The yield spreads for AAA-rated local government bonds across various maturities have been detailed, with specific rates provided for 1Y, 2Y, 5Y, 7Y, 10Y, and ultra-long bonds [10] - The 30-year main contract for government bonds closed down by 0.04%, while the 10-year contract remained unchanged [11] Group 5: Key Economic Indicators - As of the end of June, China's foreign exchange reserves reached 3.3174 trillion USD, an increase of 32.2 billion USD or 0.98% from the end of May, influenced by macroeconomic policies and asset price changes [12] - The Ministry of Finance plans to issue two tranches of book-entry treasury bonds totaling 124 billion yuan for 2-year and 3-year maturities on July 11 [12] Group 6: Global Economic Context - Japan's long-term government bonds have seen a decline, with the 20-year yield reaching its highest level since early June, amid concerns over potential increased fiscal spending following the upcoming Senate elections [14]

Group 1 - The funding environment turned loose after the quarter-end, with overnight and 7-day funding rates dropping to 1.3% and 1.4% respectively, indicating potential for further decline in short-term rates [1] - The manufacturing and non-manufacturing PMI for June showed a rebound, suggesting a stable economic foundation, while long-term rates may continue to fluctuate [1][10] - The bond market experienced a mixed performance, with the 10-year government bond yield showing slight fluctuations throughout the week, ultimately down by 0.5 basis points [2][5] Group 2 - A total of 47 bonds were issued last week, amounting to 513.2 billion yuan, with government bonds accounting for 28 billion yuan [6] - The upcoming week is expected to see the issuance of 51 bonds totaling 268.79 billion yuan, with no government bonds planned for issuance [6] - The U.S. Treasury yields rose overall, with the 10-year yield increasing by 7 basis points to 4.35%, reflecting a shift in market expectations [7] Group 3 - The bond market is currently in a favorable window for long positions, but the potential for profit is limited, suggesting a focus on yield spread trading [13] - The current market dynamics indicate a shift, with increased activity in long-duration bonds reflecting strong investor sentiment [14] - The central bank's supportive stance on liquidity and the continued decline in money market rates are seen as key certainties for the market [14]

Report Summary 1. Report Industry Investment Rating Regarding the bond market in July, the report is relatively optimistic and suggests maintaining medium to high durations [3][52][53]. 2. Core Viewpoints - The bond market in July is expected to undergo a transformation from quantitative to qualitative changes, driven by the accumulation of favorable factors in the fundamental, liquidity, and policy aspects, leading to new lows in yields [3][7][52]. - The main risk in the bond market in July is whether the equity market will experience a continuous upward trend. However, as long as the equity market does not rise significantly and continuously, its impact on the bond market may be mainly at the emotional level and may not affect the market trend [3][52]. 3. Summary by Directory Short - term Interest Rates Have Not Fully Priced in Potential Easing - Since June, the funding price has been continuously loose, with DR001 dropping to around 1.35%. However, the performance of short - and medium - term interest rates has been relatively moderate, not fully pricing in potential rate cuts and central bank bond purchases [8]. - The central bank's policy orientation is somewhat unclear due to conflicting policy goals. It has gradually downplayed explanations of liquidity operations, but since March, its policy of prioritizing cost reduction remains unchanged. The funding price in June did not reach the steady - state level within the current policy framework, and further rate declines are expected in July [7][10][12]. - The probability of a rate cut in Q3 cannot be ruled out, but it is likely to occur after August. The funding in July is likely to remain loose. Although the current funding price may be approaching the equilibrium level, it is still necessary to focus on whether DR001 can break through the 1.3% lower limit or the stable state of DR007. As the funding remains loose and the expectation of a Q3 rate cut intensifies, it will drive short - term interest rates lower [3][13][18]. Allocation Demand Is Expected to Be Gradually Released - In June, the demand from allocation players was insufficient, which was the main reason why long - term bonds did not break through significantly. However, factors dragging down allocation demand may gradually fade in July [19]. - From the perspective of banks, the top of the certificate of deposit (CD) rate appeared in early June, and the CD rate continued to decline, indicating that the banks' liability pressure has been significantly relieved. However, banks' willingness to allocate bonds has not significantly increased, which may be affected by the half - year - end factor and the limited returns from allocating long - term bonds in a flat yield curve environment. As the impact of the previous deposit rate cut gradually emerges and short - term interest rates are expected to decline further, banks' allocation willingness is expected to gradually increase after the half - year - end [27]. - Although the central bank did not restart bond purchases in June, the large - scale banks continued to increase their net purchases of short - term bonds in the secondary market. The expectation that this is a precursor to the central bank's bond purchases cannot be refuted, which is expected to bring potential downward pressure on short - term interest rates [30]. - In June, the allocation willingness of insurance institutions and wealth management products for interest - rate bonds was weak, but they increased their allocation of credit bonds and commercial bank perpetual bonds. With the possible further decline in the insurance policy - setting rate in Q3 and the expected decline in wealth management product yields, the constraints on their allocation behavior are expected to ease. If the funding remains loose in July and institutional liability costs continue to decline, allocation demand is expected to be gradually released [31][35]. The Downward Pressure on the Fundamentals May Further Appear in Q3 - Since Q2, the domestic economic momentum has declined, but it still maintains some resilience. The market's expectation of further policy easing has weakened, which is an important reason for the narrow - range fluctuation of long - term interest rates. However, the downward pressure on the fundamentals in Q3 may further emerge [36]. - In terms of exports, although the China - US trade negotiations are ongoing, the probability of a short - term adjustment to the tariff rate is limited. The boost from the front - loading of exports is gradually weakening, and the downward pressure on export growth may increase after July [37]. - In terms of domestic demand, consumption growth may slow down marginally due to the over - consumption in May and the withdrawal of consumption subsidies in June. Real estate investment growth may remain relatively low, and although the issuance of new special bonds has accelerated, its increase may be limited. Manufacturing investment growth has also declined since Q2 [39]. - The control of capacity expansion may have a short - term negative impact on economic sentiment if there is no incremental demand. The June manufacturing PMI index, although rising for the second consecutive month, is still below the boom - bust line, and the sub - items reflect that business entities are still cautious about the future situation. If the policy maintains a "supporting but not boosting" tone, the pressure on the fundamentals in Q3 may further increase [47][48]. The Bond Market in July Is Expected to Undergo a Transformation from Quantitative to Qualitative Changes; Pay Attention to the Risk Appetite Changes in the Equity Market - With the accumulation of favorable factors in the fundamental, funding, and policy aspects, the bond market in July is expected to experience a transformation from quantitative to qualitative changes, driving yields to new lows. - As long as the equity market does not rise significantly and continuously, its impact on the bond market may be mainly at the emotional level and may not affect the market trend. The report is relatively optimistic about the bond market in July, expecting the yield curve to continue to steepen downward. It is recommended to maintain a combination of 3 - year policy - bank bonds, long - term and ultra - long - term interest - rate bonds, and 5 - year credit bonds, and to pay attention to old 3 - 5 - year policy - bank bonds and medium - and long - term secondary perpetual bonds [3][52][53].