1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market has been in a volatile and weakening pattern this week (7/7 - 7/11), with the stock - bond "seesaw" effect being the main trigger for market adjustments, along with tightened regulatory expectations and a convergent capital market in the second half of the week [1][6]. - In the past two weeks, the bond market has been in a volatile pattern. Although the market remains in a long - term mindset, the "fear of high prices" has not been alleviated. The trading logic mainly revolves around the capital market and the stock market, and the market is waiting for new signals [2][15]. - Looking ahead, factors such as the stock - bond linkage effect, the stability of capital interest rates, next week's economic and financial data, the July Politburo meeting, and the supply - demand game in the bond market are worthy of attention. In the third quarter, the bond market is still in a favorable environment, with long - term interest rates expected to fluctuate narrowly around 1.65%, and there is no need to overly worry about credit risks [3][28][29]. 3. Summary by Relevant Catalogs 3.1 Bond Market Volatility and Weakening - This week, the bond market was under pressure. The stock - bond "seesaw" was the main adjustment logic, and regulatory expectations and capital convergence also suppressed the market. From Monday to Friday, bond yields showed different changes, with short - term adjustments being more significant, and the yield curve flattened slightly. Most yields of certificates of deposit (CDs) also increased [1][6]. 3.2 Capital Interest Rates - This week, the capital market was first loose and then tight, with capital interest rates rising moderately. After the cross - quarter period, the capital interest rate center entered a downward channel, and DR001 still ran below the policy interest rate. The average weekly values of DR001, R001, DR007, and R007 changed compared to the previous week, and the capital stratification remained at a low level, although overnight capital stratification increased in the second half of the week [8][10]. 3.3 Profit - Taking or Re - Layout Opportunity - In the past two weeks, the bond market has shown different trends. Last week, it was volatile and relatively strong, while this week it was volatile and weak due to the shift of the capital market to a neutral state and the rise of the stock market, leading to some short - term profit - taking [15]. - There are several characteristics: 1) When the capital interest rate "stepped down", the market did not follow. Except for the 50 - year Treasury bond, other long - term bond yields were mostly in a sideways state, and the spreads between 10 - year and 30 - year Treasury bonds and DR007 reached relatively high levels since the second quarter [16]. 2) The volatility of credit - type assets was greater than that of interest - rate bonds. Last week, different assets compressed spreads, but this week they entered an adjustment phase, with Tier 2 and perpetual bonds having a greater adjustment amplitude [21]. 3) Behind the "V" - shaped trend of credit - type assets, the trading desks mainly composed of funds shifted from increasing allocations to taking profits. Last week, funds bought credit and Tier 2 and perpetual bonds, but this week, their buying power weakened, and they started to reduce holdings in the second half of the week [22]. - The bond market's volatile pattern is due to the balance of long and short forces. The fundamental structural repair supports the bond market, while the monetary policy is in a dynamic balance between "moderate" and "loose". Although there are expectations for overall easing policies in the second half of the year, the probability of short - term implementation is relatively low [26]. 3.4 Factors to Watch in the Future - Stock - bond linkage effect: If the stock market is supported by factors such as tariff game mitigation, policy strengthening, or fundamental improvement, it will affect the bond market through changes in institutional liability and allocation power, increasing market volatility [3][28]. - Capital interest rates: Whether capital interest rates can remain at a low level needs to be observed. Next week, there will be more "variables" in the capital market, and how the central bank responds to various factors will be an important determinant of the stability of capital interest rates [3][28]. - Economic and financial data and the July Politburo meeting: Next week's economic and financial data and the July Politburo meeting may release incremental signals, which are important windows for macro - policy adjustment [29]. - Supply - demand game in the bond market: In the third quarter, there may be a surge in government bond supply, which may disrupt the bond market, but considering the current coordination between monetary and fiscal policies, there may be no need for excessive concern. The allocation situation of configuration desks such as bank self - operations and insurance companies also needs attention [3][28][29]. 3.5 Next Week's Focus - Next week, a series of economic and financial data from China, Germany, the EU, the US, the UK, and Japan will be released, including import and export amounts, social financing scale, GDP, CPI, and PPI, which are worthy of attention [31].

Core Viewpoint - The report from CITIC Securities indicates that while the year-on-year CPI has shown a temporary positive change, the domestic demand remains weak, and there is no significant turning point in sight for the economy. The downward pressure on PPI due to overseas tariff impacts continues, suggesting that the weak inflation environment will not significantly change the support structure for the bond market [1]. Group 1 - The CPI has shown a stage-wise positive change year-on-year, but the domestic demand environment remains weak [1]. - There is significant downward pressure on PPI due to overseas tariff impacts, which contributes to the weak inflation scenario [1]. - The bond market is expected to maintain a narrow fluctuation trend in the short term [1]. Group 2 - Future focus will be on the macro policy responses following the end of the tariff suspension period and how external demand shocks manifest in data [1]. - Attention is drawn to the policy direction set during the July Politburo meeting as a potential trading focus for the next phase [1].

Core Viewpoint - The bond market is experiencing slight differentiation in performance, with economic data having minimal impact on market movements. The overall environment has not shown a significant turning point, leading to expectations of narrow fluctuations in the bond market in the short term [1][9]. Market Performance - Government bond futures closed mostly higher, with the 30-year main contract up 0.19% at 121.090, the 10-year main contract up 0.05% at 109.050, and the 5-year main contract up 0.03% at 106.160. The 2-year main contract remained flat at 102.464 [2]. - The yield on major interbank bonds generally rose slightly, with the 30-year government bond yield increasing by 0.25 basis points to 1.8635%, and the 10-year government bond yield rising by 0.3 basis points to 1.646% [2]. Overseas Market Trends - In North America, U.S. Treasury yields rose across the board, with the 10-year yield increasing by 2.38 basis points to 4.401% [3]. - In Asia, Japanese bond yields, except for ultra-long maturities, generally increased, with the 10-year yield rising by 0.9 basis points to 1.498% [4]. Primary Market Activity - Gansu Province's local bond auction results showed bid multiples exceeding 26 times, with the 20-year bond yielding 2.04% and the 10-year bond yielding 1.74% [5]. - Jilin Province's local bond auction also had bid multiples over 26 times, with the 7-year bond yielding 1.65% [5]. Funding Conditions - The central bank conducted a 755 billion yuan reverse repo operation at a rate of 1.40%, resulting in a net withdrawal of 230 billion yuan for the day [6]. - Shibor rates showed mixed performance, with the overnight rate rising by 0.1 basis points to 1.313% and the 7-day rate increasing by 0.9 basis points to 1.464% [6]. Economic Indicators - June CPI rose by 0.1% year-on-year, marking a shift from four consecutive months of decline, while PPI fell by 3.6% year-on-year [7][8]. - The increase in CPI was primarily driven by a reduction in the decline of industrial consumer goods prices, which narrowed from a 1.0% drop to 0.5% [8]. Institutional Insights - Citic Securities noted a certain degree of preemptive positioning in the bond market, with overall trading density decreasing compared to June. The market lacks short-term catalysts, and the potential for rate declines may be limited [9]. - Huatai Fixed Income suggested a slightly bullish outlook for the bond market, although the space for growth is limited due to low credit spreads [9].

Core Viewpoint - The bond market in the first half of 2025 is characterized by significant issuance expansion and interest rate volatility, with expectations of a fluctuating market in the second half [1][2][4]. Group 1: Market Issuance and Structure - The total issuance in the bond market exceeded 27 trillion yuan in the first half of 2025, with a year-on-year increase of nearly 24% [2]. - Interest rate bonds accounted for nearly 40% of the total issuance, with government bonds at 7.89 trillion yuan and local government bonds at 5.49 trillion yuan [2]. - The issuance of special bonds accelerated, reaching 2.16 trillion yuan, with a progress rate of 49.11%, which is 10.82 percentage points faster than the same period last year [2]. - The net financing scale of interest rate bonds surged, with government bonds net financing reaching 3.4 trillion yuan, approximately double that of the previous year [2]. Group 2: Interest Rate Trends - The 10-year government bond yield rose by 30 basis points in the first quarter, reaching a high of 1.89% before falling to around 1.65% by the end of the second quarter, forming a "V" shape [3]. - The interbank 7-day pledged repo rate (DR007) decreased from approximately 2.3% at the beginning of the year to below 1.7%, indicating a shift from a "tight balance" to a "relatively loose" liquidity environment [3]. Group 3: Market Outlook for the Second Half - The bond market is expected to maintain a fluctuating pattern in the second half, with the 10-year government bond yield projected to fluctuate between 1.5% and 1.8% [4]. - Analysts suggest that the balance between supply pressure from interest rate bonds and expectations of monetary policy easing will influence market dynamics [4]. - The net financing scale of interest rate bonds in the second half is estimated to be around 6.88 trillion yuan, with a monthly average of 1.15 trillion yuan, close to the levels of the same period in 2023 [4]. Group 4: Investment Strategies - Institutions recommend a balanced investment approach, focusing on both short-term liquidity and long-term value in interest rate bonds, while capturing opportunities in a flattening yield curve [5]. - In the credit bond market, there is a positive trend with a focus on high-quality local government bonds, financially stable state-owned real estate companies, and stable city commercial bank secondary capital bonds [5]. - Investors are advised to maintain flexibility in their portfolios, managing duration risk while seizing structural opportunities across different varieties and maturities [5].

Report Summary 1. Investment Rating The report does not provide an investment rating for the bond market. 2. Core Views - Last week, the bond market showed a warm and volatile trend, with the yield curve becoming steeper. Despite some negative factors, the market was supported by loose liquidity and reduced treasury bond issuance, leading to a slight decline in long - term bond yields. Short - term rates continued to fall due to "spread - chasing" trades, further steepening the yield curve [1]. - This week, the bond market is expected to continue its volatile trend. The upcoming June inflation data is likely to improve marginally but remain at a low level, with limited negative impact on the bond market. If liquidity remains loose, short - term bond rates may decline further. Long - term rates will likely continue to fluctuate, and the yield curve is expected to keep steepening [1]. 3. Summary by Sections 3.1 Last Week's Market Review 3.1.1 Secondary Market - The bond market was warm and volatile last week, with long - term bond yields falling slightly. The 10 - year treasury bond futures main contract rose 0.03% for the week. The 10 - year treasury bond yield decreased by 0.29bp, and the 1 - year yield dropped by 0.90bp compared to the previous Friday, widening the term spread [3]. - Daily trends: On June 30, the bond market weakened initially but recovered slightly at the end. From July 1 - 3, the market was generally positive due to loose liquidity and "spread - chasing" trades. On July 4, short - term bonds were strong, while long - term bonds weakened slightly due to the stock - bond seesaw effect [3]. 3.1.2 Primary Market - A total of 47 interest - rate bonds were issued last week, 130 fewer than the previous week. The issuance volume was 513.2 billion yuan, a decrease of 354.4 billion yuan, and the net financing was 376.6 billion yuan, a significant reduction of 404.1 billion yuan. Treasury and policy - bank bond issuance and net financing increased, while local government bond issuance and net financing decreased significantly [11]. - The subscription demand for interest - rate bonds was generally acceptable. The average subscription multiples for treasury bonds, policy - bank bonds, and local government bonds were 4.21 times, 3.38 times, and 21.15 times respectively [12]. 3.2 Last Week's Important Events - In June, China's macro - economic sentiment continued to recover. The manufacturing PMI rose 0.2 percentage points to 49.7%, and the non - manufacturing business activity index increased by 0.2 percentage points to 50.5%. The improvement was due to the effects of growth - stabilizing policies and eased trade tensions. The service PMI decreased by 0.1 percentage points to 50.1%, in line with seasonal patterns [13]. 3.3 Real - Economy Observation - On the production side, most high - frequency data declined last week, including blast furnace operating rates, semi - steel tire operating rates, and daily hot - metal production, while the asphalt plant operating rate increased slightly. - On the demand side, the BDI index and the CCFI index both decreased, and the sales area of commercial housing in 30 large and medium - sized cities dropped significantly. - In terms of prices, pork prices rebounded slightly, and most commodity prices rose, including crude oil, copper, and rebar [14]. 3.4 Last Week's Liquidity Observation - The central bank conducted a net withdrawal of 137.53 billion yuan from the open market last week. - R007 and DR007 both declined significantly, the inter - bank certificate of deposit issuance rate of joint - stock banks decreased, the 3 - month national - share direct - discount rate dropped, and the volume of pledged repurchase increased significantly. The inter - bank market leverage ratio fluctuated slightly and remained basically the same as the previous week [24].

Market Review - The bond market experienced narrow fluctuations last week, with long-term bond yields slightly rising. The 10-year government bond futures main contract fell by 0.11% over the week, while the 10-year bond yield increased by 0.66 basis points compared to the previous week [1][4][13] - The bond market was influenced by external factors, including the easing of tensions in the Middle East, which initially boosted the stock market and weakened the bond market. However, market sentiment improved on Thursday after the National Development and Reform Commission's press conference did not announce any new policies, leading to a slight recovery in the bond market [1][5][6] Key Events - The central bank significantly increased the amount of Medium-term Lending Facility (MLF) operations, conducting a 300 billion yuan MLF operation on June 25. This move aims to maintain liquidity in the banking system amid large-scale government bond issuances and high maturity of interbank certificates of deposit [13][15] Economic Observations - The production data showed mixed results, with an increase in the operating rate of asphalt plants and daily iron output, while the operating rate of semi-steel tires continued to decline. The demand side indicated a significant drop in the Baltic Dry Index (BDI) and an increase in the export container freight index (CCFI) [16][19] Liquidity Observations - The central bank's net liquidity injection last week was 1.2672 trillion yuan, reflecting a proactive approach to manage liquidity in the market [30]

Core Viewpoint - The central bank is increasingly focusing on the bond market, particularly on the changes in long-term yields, as it navigates a shift from a bull market to a more volatile environment in 2025 [1][3][6]. Group 1: Monetary Policy and Market Dynamics - The People's Bank of China (PBOC) is expected to maintain a "moderately loose" monetary policy, with room for further rate cuts and reserve requirement ratio (RRR) reductions [1][6][7]. - The PBOC's second-quarter monetary policy meeting emphasized the need to enhance the guidance of policy interest rates and improve the transmission mechanism of market interest rates [3][7]. - Analysts predict that while bond yields are likely to trend downward, a significant unilateral decline is unlikely due to external risks and the need for economic stability [6][8]. Group 2: Bond Market Performance - In the first half of 2025, the bond market experienced significant volatility, with long-term yields initially rising before declining, influenced by changes in central bank attitudes and liquidity conditions [4][5]. - The 10-year government bond yield fluctuated from approximately 1.6% to 1.9% in early 2025, reflecting a cautious liquidity stance from the central bank [4]. - As of June 30, 2025, major interbank bond yields showed slight increases, indicating a mixed market sentiment [5]. Group 3: Future Outlook - Analysts foresee that the bond market will continue to experience fluctuations, with the 10-year government bond yield expected to remain within the range of 1.5% to 1.8% [6][7]. - The market is particularly attentive to the timing of potential RRR cuts and interest rate reductions, which could influence bond market volatility [7][8]. - The overall expectation is that the bond market will not replicate the previous year's bull run, but rather remain in a state of oscillation due to various economic pressures [6][8].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - Last week, the bond market fluctuated narrowly, and the yield curve continued to steepen. The bond market first declined and then rose. Due to the stock - bond seesaw effect and other factors, long - term bond yields first increased and then decreased, with a slight overall increase, while short - term interest rates continued to decline [1]. - This week, the bond market is expected to continue the volatile trend. Although the fundamentals and capital situation are still favorable to the bond market, the removal of the direct mention of "timely reserve requirement ratio and interest rate cuts" in the second - quarter regular meeting announcement of the Monetary Policy Committee has postponed the market's interest rate cut expectations, and the bullish momentum of the bond market may be insufficient. In the context of crowded market trading, bond market volatility may increase [1]. Summary by Directory 1. Last Week's Market Review 1.1 Secondary Market - The bond market fluctuated narrowly last week, with long - term bond yields rising slightly. The main contract of the 10 - year Treasury bond futures fell 0.11% cumulatively, the 10 - year Treasury bond yield rose 0.66bp compared with the previous Friday, and the 1 - year Treasury bond yield fell 1.00bp, with the term spread continuing to widen [2]. - From June 23rd to June 25th, affected by factors such as the stock - bond seesaw effect and market expectations of policy announcements, the bond market was generally weak; on June 26th, the bond market warmed up slightly due to the lack of incremental policies at the press conference; on June 27th, the bond market continued to be strong in the morning and adjusted slightly in the late session [2]. 1.2 Primary Market - Last week, 177 interest - rate bonds were issued, an increase of 94 compared with the previous week. The issuance volume was 867.6 billion yuan, a slight increase of 13.1 billion yuan, and the net financing amount was 780.7 billion yuan, a significant increase of 457.7 billion yuan [9]. - In terms of bond types, the issuance volume of local bonds increased significantly, while the issuance volume of Treasury bonds and policy - financial bonds decreased. The net financing amount of policy - financial bonds and local bonds increased, while that of Treasury bonds decreased [9]. - The overall subscription demand for interest - rate bonds last week was acceptable. The average subscription multiples of Treasury bonds, policy - financial bonds, and local bonds were 4.12 times, 3.28 times, and 20.35 times respectively [12]. 2. Last Week's Important Events - On June 25th, the central bank conducted 300 billion yuan of Medium - term Lending Facility (MLF) operations through interest - rate tender. In June, the central bank continued to increase the volume of MLF renewals, with a net injection of 118 billion yuan. This was to maintain the liquidity of the banking system and strengthen counter - cyclical adjustment. In the second half of the year, the MLF is expected to continue to be renewed with an increased volume [13]. 3. Real - Economy Observation - Last week, high - frequency data on the production side showed mixed trends. The operating rates of petroleum asphalt plants and daily pig iron output increased, while the operating rate of semi - steel tires continued to decline, and the blast furnace operating rate remained the same as the previous week [14]. - From the demand side, the BDI index continued to decline significantly, the China Containerized Freight Index (CCFI) continued to rise, and the sales area of commercial housing in 30 large and medium - sized cities continued to increase slightly [14]. - In terms of prices, pork prices fell slightly, and most commodity prices declined. Crude oil and rebar prices fell, while copper prices continued to rise [14]. 4. Last Week's Liquidity Observation - Last week, the central bank's open - market operations had a net capital injection of 126.72 billion yuan. The R007 and DR007 both increased significantly, the issuance interest rate of inter - bank certificates of deposit of joint - stock banks increased significantly, the interest rates of national and stock - backed direct discounts for various terms increased, and the trading volume of pledged repurchase continued to increase. The leverage ratio of the inter - bank market fluctuated slightly downward [26][27][33].

Report Industry Investment Rating - The rating for treasury bonds is "oscillation" [5] Core Viewpoints of the Report - Economic data in May showed a mixed performance, with external demand weakening but government subsidies taking effect. While the economy demonstrated resilience in Q2, facing a growth target of 5% is not difficult, but pressure on the fundamentals will gradually emerge in Q3, making it necessary to introduce incremental policies. The bond market is desensitized to the fundamentals and will maintain an oscillatory pattern in the short term [1][2][3] Summary by Relevant Catalogs 1. External Demand Weakens but Government Subsidies Take Effect, Economic Data Shows Mixed Performance - **Production Side: Industrial Production Weakens, Service Industry Strengthens** - In May, the year-on-year growth rate of industrial added value was 5.8%, lower than expected and the previous value, with external demand weakening and persistently low prices being the main reasons. The growth rate of the service industry production index was 6.2%, an increase of 0.2 percentage points from the previous value, due to policy support and holiday demand [1][13][14] - Looking ahead, the production growth rate is likely to maintain a resilient decline, with structural differentiation continuing. Industrial production will face downward pressure, but the year-on-year reading of industrial added value will not decline significantly. The growth rate of the service industry production may weaken, but will not decline sharply either [19] - **Demand Side: Manufacturing, Real Estate, and Infrastructure Growth Rates All Decline** - From January to May, the cumulative investment growth rate in manufacturing was 8.5%, continuing to decline. External demand weakening, the domestic supply-demand imbalance, and policy factors have affected corporate investment willingness, but policy support has maintained a certain level of resilience [22] - From January to May, the cumulative growth rate of general infrastructure was 10.42%, showing a slight decline. The slow issuance of local special bonds is the main reason. In the short term, infrastructure growth may face downward pressure, but it will rise again with policy support [26][30] - Most real estate data continued to weaken. The willingness of the residential sector to purchase homes with debt remains low, and real estate companies are facing increasing financial pressure. Policy aims to stabilize the real estate market while accelerating industry transformation [31][32][33] - **Demand Side: Retail Sales Growth Rate Exceeds Expectations and Rebounds** - In May, the growth rate of total retail sales of consumer goods was 6.4%, higher than the previous value. Holiday factors and government subsidies have stimulated consumer demand, but the sustainability of consumption improvement needs to be observed. In Q3, incremental policies are expected to boost consumption [36][37][39] 2. The Bond Market is Desensitized to the Fundamentals and Maintains an Oscillatory Pattern in the Short Term - The fundamental environment is still favorable for the bond market, but market participants are well aware of this, so fundamental news is unlikely to drive the bond market to strengthen further. The yield curve is relatively flat, and the upward space for long-term bonds mainly depends on the performance of short-term bonds [40][41] - Short-term bonds are currently overvalued, and their upward movement requires confirmation of a continuous loosening of the money supply. In the short term, the market will be oscillatory, and the bond bull market may show a "stop-and-go" rhythm [42] - Strategies include paying attention to mid - line long positions on dips, noting that the opportunities for futures positive spreads have significantly decreased, and initial opportunities for steepening the yield curve have emerged, requiring close attention to changes in liquidity expectations [43][44][45]

Market Overview - The bond market continued to consolidate on June 9, with narrow fluctuations in interbank bond yields and mixed performance in government bond futures [1] - The People's Bank of China (PBOC) continued to provide liquidity support through net injections in the open market, leading to a more relaxed funding environment [5] - Overnight pledged repo rates for deposit-taking institutions fell over 3 basis points, dropping below 1.4% [5] Bond Futures Performance - The 30-year main contract rose by 0.35%, while the 10-year main contract increased by 0.09%, with 5-year and 2-year contracts remaining unchanged [2] - The yield on the 30-year government bond "25超长特别国债02" decreased by 0.50 basis points to 1.8700%, while the 10-year government bond "25附息国债11" saw an increase of 0.25 basis points to 1.6550% [2] International Bond Market - In North America, U.S. Treasury yields rose across the board, with the 10-year yield increasing by 11.11 basis points to 4.506% [3] - In Asia, Japanese bond yields mostly increased, with the 10-year yield rising by 1.3 basis points to 1.467% [3] - In the Eurozone, yields on 10-year bonds in France, Germany, Italy, and Spain all saw slight declines [3] Primary Market - The Agricultural Development Bank of China issued financial bonds with varying yields, with the 3-year bond yielding 1.3286% and a bid-to-cover ratio of 2.23 [4] Funding Conditions - On June 9, the PBOC conducted a 7-day reverse repo operation with a fixed rate of 1.40%, injecting 173.8 billion yuan into the market [5] - The funding environment remains increasingly relaxed, with a significant net injection following a previous large-scale reverse repo operation [5] Economic Indicators - In May, China's Producer Price Index (PPI) fell by 3.3% year-on-year, while the Consumer Price Index (CPI) decreased by 0.1% [8] - China's exports in May increased by 4.8% year-on-year, while imports fell by 3.4%, resulting in a trade surplus of 103.22 billion USD [8] Institutional Perspectives - Huatai Fixed Income suggests that attention should be paid to tariffs and fundamental developments, with expectations of a slight increase in risk appetite due to U.S.-China tariff negotiations [9] - Guosheng Fixed Income anticipates that interest rates may reach new lows, driven by changes in fundamentals and improved market supply-demand dynamics [9]