Group 1 - The People's Bank of China (PBOC) will conduct a 700 billion yuan reverse repurchase operation on November 5, 2025, to maintain ample liquidity in the banking system, with a term of 3 months (91 days) [2] - In November, there will be 700 billion yuan of 3-month reverse repos maturing, indicating that the operation is a continuation of the same amount [2] - An additional 300 billion yuan of 6-month reverse repos is expected to mature in November, with a high likelihood of another 6-month operation being conducted, suggesting a continuous injection of medium-term liquidity for the sixth consecutive month [2] Group 2 - The PBOC's net purchase of government bonds in October was 20 billion yuan, reflecting a cautious approach to avoid rapid declines in interest rates while stabilizing market expectations [3] - The upcoming maturity of 300 billion yuan in 6-month reverse repos and 900 billion yuan in Medium-term Lending Facility (MLF) suggests that the PBOC may increase net purchases of government bonds to offset the pressure from other monetary tools maturing [3] - The PBOC's policy stance is expected to remain stable yet slightly accommodative, utilizing both reverse repos and MLF to inject medium-term liquidity into the market [3] Group 3 - The introduction of the reverse repurchase agreement by the PBOC in October 2024 has become a key tool for medium to long-term liquidity supply, with net injections from reverse repos surpassing those from MLF this year [4] - The reverse repurchase agreement is primarily targeted at primary dealers in the open market and is conducted monthly with a maximum term of 1 year [4]

Monetary Policy - The People's Bank of China (PBOC) will resume open market operations involving the buying and selling of government bonds [1] - In October 2025, the PBOC's open market operations resulted in a net injection of 20 billion RMB through government bond purchases [1] Regulatory Focus - The PBOC will continue to crack down on speculation in digital currencies to maintain financial order [1] - The PBOC is closely monitoring the development of stablecoins outside of China [1]

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Affected by the central bank's restart of treasury bond trading and the continuation of the Fed's interest - rate cut expectation, treasury bond futures showed a mixed performance yesterday. Overall, the increasing global trade uncertainty adds to the uncertainty of foreign capital inflows. The bond market oscillates between the expectations of stable growth and monetary easing. Short - term attention should be paid to policy signals at the end of the month [3] 3. Summary According to Relevant Catalogs I. Interest Rate Pricing Tracking Indicators - Price indicators: China's CPI (monthly) had a 0.10% month - on - month change and a - 0.30% year - on - year change; China's PPI (monthly) had a 0.00% month - on - month change and a - 2.30% year - on - year change [9] - Monthly economic indicators: The social financing scale was 437.08 trillion yuan, with a month - on - month increase of 3.42 trillion yuan (+0.79%); M2 year - on - year was 8.40%, with a - 0.40% change (-4.55%); the manufacturing PMI was 49.00%, with a - 0.80% change (-1.61%) [10] - Daily economic indicators: The US dollar index was 99.88, with a +0.15 change (+0.15%); the offshore US dollar to RMB exchange rate was 7.1169, with a +0.006 change (+0.09%); SHIBOR 7 - day was 1.41, with a - 0.03 change (-1.88%); DR007 was 1.42, with a - 0.04 change (-2.50%); R007 was 1.53, with a +0.02 change (+1.49%); the 3 - month interbank certificate of deposit (AAA) was 1.56, with a +0.00 change (+0.11%); the AA - AAA credit spread (1Y) was 0.09, with a +0.00 change (+0.11%) [11] II. Overview of the Treasury Bond and Treasury Bond Futures Market - The report presents multiple charts related to the treasury bond and treasury bond futures market, including the closing price trend of the main continuous contracts of treasury bond futures, the price change rate of each variety of treasury bond futures, the precipitation of funds in each variety of treasury bond futures, the position ratio of each variety of treasury bond futures, etc. [15][16][19] III. Overview of the Money Market Liquidity - The report includes charts on the Shibor interest rate trend, the yield - to - maturity trend of interbank certificates of deposit (AAA), the trading statistics of inter - bank pledged repurchase, and the local government bond issuance situation [25][26] IV. Spread Overview - The report shows charts on the inter - period spread trend of each variety of treasury bond futures and the term spread of spot bonds and cross - variety spreads of futures [31][34][35] V. Two - Year Treasury Bond Futures - The report provides charts on the implied interest rate and treasury bond yield - to - maturity of the main contract of two - year treasury bond futures, the IRR of the TS main contract and the funding rate, and the three - year basis and net basis trends of the TS main contract [37][39][48] VI. Five - Year Treasury Bond Futures - The report offers charts on the implied interest rate and treasury bond yield - to - maturity of the main contract of five - year treasury bond futures, the IRR of the TF main contract and the funding rate, and the three - year basis and net basis trends of the TF main contract [50][55] VII. Ten - Year Treasury Bond Futures - The report includes charts on the implied yield and treasury bond yield - to - maturity of the main contract of ten - year treasury bond futures, the IRR of the T main contract and the funding rate, and the three - year basis and net basis trends of the T main contract [57][58] VIII. Thirty - Year Treasury Bond Futures - The report presents charts on the implied yield and treasury bond yield - to - maturity of the main contract of thirty - year treasury bond futures, the IRR of the TL main contract and the funding rate, and the three - year basis and net basis trends of the TL main contract [64][66][70] 4. Strategies - Unilateral: With the decline of repurchase rates and the oscillation of treasury bond futures prices, the 2512 contract is neutral [4] - Arbitrage: Pay attention to the decline of the 2512 basis [4] - Hedging: There is medium - term adjustment pressure, and short - side traders can use far - month contracts for appropriate hedging [4]

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The restart of treasury bond trading is likely to enrich the liquidity injection structure rather than being a signal of further monetary easing. It helps enhance market confidence and avoid exacerbating the structural imbalance in the bond market demand. There is a possibility of the central bank buying long - term bonds for risk - prevention purposes, and the total scale of treasury bond purchases is expected to be lower than the same period last year [3]. - Without the boost of increased expectations of interest rate cuts, the market from November to December may show a downward trend with fluctuations. Interest rate decline space will be anchored at the lows after the interest rate cut in the first half of the year, with the yield floors of 30 - year and 10 - year treasury bonds (old bonds) around 1.9% and 1.7% respectively [3]. 3. Summary According to Related Catalogs 3.1 Important Matters - On October 27, 2025, People's Bank of China Governor Pan Gongsheng announced the restart of treasury bond trading in the open market [6]. - In October, the manufacturing PMI was 49.0%, down 0.8 percentage points from the previous month, indicating a decline in manufacturing prosperity. Sub - indices such as production and new orders also showed a downward trend [7]. - On October 30, 2025, leaders of China and the United States held a meeting, reaching a consensus on resolving important economic and trade issues and promoting cooperation in various fields [11]. 3.2 Money Market 3.2.1 Open Market Operations and Fund Rate Movements - From October 27 to 31, 2025, the central bank injected 206.8 billion yuan through 7 - day reverse repurchase operations, with 86.72 billion yuan maturing, resulting in a net injection of 120.08 billion yuan. It is expected that 206.8 billion yuan of base currency will mature and be withdrawn from November 3 to 7 [13]. - The money market tightened due to the end - of - month effect, and the fund stratification phenomenon intensified. Policy rates and various short - term fund rates showed certain changes [16]. 3.2.2 Certificate of Deposit (CD) Rate Movements and Repurchase Transaction Volume - In the primary market, the issuance scale of inter - bank CDs last week was 734.92 billion yuan, a decrease of 227.42 billion yuan from the previous week. The net financing scale was 170.61 billion yuan, a decrease of 173.84 billion yuan. By the 44th week of 2025, the cumulative issuance scale of inter - bank CDs for the year had reached 28.44 trillion yuan [20]. - The issuance rates of inter - bank CDs of various banks decreased compared with the previous week. In the secondary market, the yields of inter - bank CDs of all tenors showed a downward trend [23][26]. 3.3 Bond Market 3.3.1 Primary Market - In the last week of October, the supply of treasury bonds entered a window period. The total issuance scale of interest - rate bonds was 412.682 billion yuan, with a net financing of 324.196 billion yuan. From January to October, the net financing rhythm of local government bonds was generally faster than that of treasury bonds. As of October 31, 2025, the cumulative net financing scale of various treasury bonds was about 5.40 trillion yuan, and that of local bonds was about 6.15 trillion yuan [29][37]. - The issuance scale of special refinancing bonds as of last week was 2.05 trillion yuan, mainly long - term and ultra - long - term bonds. Regions with relatively large issuance scales include Jiangsu, Sichuan, Shandong, Guizhou, and Henan [41]. 3.3.2 Secondary Market - The restart of treasury bond trading triggered bullish sentiment in the market, with interest rates generally showing a downward trend. The yields of treasury bonds and policy - bank bonds of various tenors changed, and the term spreads of 10Y - 1Y treasury bonds and 10Y - 1Y policy - bank bonds also changed. The implied tax rate of 10 - year policy - bank bonds was slightly compressed [43]. - The daily average turnover rates of the 10 - year treasury bond and 10 - year policy - bank bond active bonds decreased. The average spread between the 10 - year treasury bond active bond and the secondary active bond was 5.4BP, and the spread between the 10 - year policy - bank bond active bond and the secondary active bond slightly widened [47][49]. 3.4 Institutional Behavior Tracking - The scale of leveraged trading decreased last week, maintaining an average level of around 7 trillion yuan on the other four days except for the impact of the month - end factor on Friday. The buying intensity of state - owned banks in the cash bond market weakened, and rural commercial banks accelerated their profit - taking and selling. Securities firms, funds, and insurance companies were the main bond buyers [56][66][69]. - In September 2025, the overall leverage ratio of institutions in the inter - bank market was about 118.68%, with the leverage ratios of commercial banks, securities firms, and other institutions being about 109.85%, 192.23%, and 133.25% respectively [57]. 3.5 High - Frequency Data Tracking - Last week, the settlement price of rebar futures increased by 0.80% week - on - week, wire rod futures decreased by 3.14%, cathode copper futures increased by 0.54%, the cement price index increased by 1.69%, and the Nanhua Glass Index decreased by 0.82%. The CCFI index increased by 2.89%, and the BDI index decreased by 1.26%. Food prices such as pork and vegetables increased, while crude oil prices decreased. The central parity rate of the US dollar against the RMB was 7.09 [77]. 3.6 Market Outlook - The restart of treasury bond trading is mainly to enrich the liquidity injection structure. If there is no increase in expectations of interest rate cuts, the market from November to December may decline with fluctuations. Interest rate decline space will be limited, and the yields of 30 - year and 10 - year treasury bonds (old bonds) are expected to be around 1.9% and 1.7% respectively [81][83]. - It is recommended to keep the portfolio duration in a moderately long range. In terms of allocation, high - quality coupon - bearing assets are preferred, and opportunities in 2 - year AA -/AA - rated credit bonds and 10 - year local bonds can be explored. In terms of trading, attention can be paid to the trading opportunities of medium - duration bonds such as secondary - tier capital bonds that have fallen significantly [84].

Manufacturing Sector - The manufacturing PMI fell to 49.0% in October, down 0.8 percentage points from September and matching the level seen in April 2025, during peak US-China trade tensions[1] - Production and new orders were the largest contributors to the decline, dragging down the PMI by 0.55 and 0.27 percentage points, respectively[1] - The manufacturing prices decreased, with raw material purchase prices and factory prices both dropping by 0.7 percentage points to 52.5% and 47.5%, respectively[2] Service Sector - The service sector's business activity index slightly rebounded to 50.2%, up 0.1 percentage points, but new orders fell by 0.7 percentage points to 46.0%[3] - The gap between the business activity index and new orders widened to 4.2, the highest since October 2024, indicating persistent demand weakness[3] Construction Sector - The construction sector saw new orders rebound by 3.7 percentage points to 45.9%, marking the second consecutive month of increase, although the business activity index fell slightly to 49.1%[4] - The rebound in construction PMI was primarily driven by civil engineering projects related to infrastructure, with business activity index rising over 5 percentage points to above 55%[4] Economic Outlook - The overall composite PMI for October was 50.0%, down 0.6 percentage points from September, the lowest since early 2023[5] - The need for monetary policy support is increasing as the economy shows signs of continued slowdown, with GDP growth at 4.8% in Q3[5] Policy Measures - In October, significant policy measures were implemented, including the rapid deployment of 500 billion yuan in policy development financial tools and the resumption of government bond trading[6] - The likelihood of further monetary easing, including potential rate cuts, is rising, with expectations for a possible reduction in reserve requirements and structural interest rate cuts[6] Market Implications - The liquidity-driven bull market characteristics remain evident, with a lack of momentum for a shift towards cyclical and consumer sectors, suggesting continued focus on technology and dividend stocks[7] - Structural risks persist, with high transaction concentration and elevated stock prices, indicating an increased probability of market volatility[7]

Core Viewpoint - The People's Bank of China (PBOC) has decided to resume the trading of government bonds after a 10-month suspension, indicating a positive shift in the bond market and a need for liquidity support [2][3]. Group 1: Reasons for Resuming Bond Trading - The resumption is attributed to a phase of alleviated interest rate risks in the bond market and the necessity to provide liquidity support [3]. - The initial suspension in January was due to overly optimistic market sentiment and rapid declines in government bond yields, which increased interest rate risks and widened the China-U.S. interest rate differential [3]. - Since July, a shift in risk appetite has led to capital outflows from the bond market, causing a rapid increase in the 10-year government bond yield from 1.6% to over 1.8%, stabilizing around this level for a month [3]. - The macroeconomic environment, including the Federal Reserve's rate cuts and a narrowing of the China-U.S. interest rate differential, has created a favorable context for the PBOC to restart bond trading [3]. Group 2: Market Implications - The resumption of bond trading signals a defined upper limit for bond yields, suggesting limited room for further increases in the 10-year government bond yield [4]. - The PBOC's actions are aimed at enhancing the financial function of government bonds and improving the coordination between monetary and fiscal policies [4]. - The recent rise in short-term bond yields has led to a narrowing of the yield spread between 10-year and 1-year government bonds, indicating a potential steepening of the yield curve [4]. - In the short term, the PBOC's bond purchases may focus on the shorter end of the yield curve, with the long end requiring further observation of the scale of bond purchases and equity market performance [4].

Core Viewpoint - The 30-year Treasury ETF is experiencing a tight balance between bullish and bearish sentiments, with significant trading activity and liquidity observed in recent days [1]. Group 1: Market Activity - As of October 30, 2025, the 30-year Treasury ETF (511090) had a turnover rate of 1.26% during the trading session, with a transaction volume of 398 million yuan [1]. - Over the past month, the average daily trading volume of the 30-year Treasury ETF reached 10.059 billion yuan [1]. - The latest scale of the 30-year Treasury ETF is reported at 31.434 billion yuan, with a total of 264 million shares outstanding [1]. - The net inflow of funds into the 30-year Treasury ETF is recorded at 418 million yuan [1]. Group 2: Monetary Policy and Economic Outlook - On October 30, the central bank conducted a reverse repurchase operation of 342.6 billion yuan with an interest rate of 1.40%, while 212.5 billion yuan of reverse repos were set to mature on the same day [1]. - According to CITIC Securities, the central bank's decision to resume government bond trading is likely aimed at supporting fiscal efforts, ensuring ample liquidity for financial institutions by year-end, and reinforcing the central bank's control over the yield curve [1]. - The short-term outlook for the bond market appears to be downward, although the long-term operational logic remains largely unchanged [1]. - The overall bond market faced pressure in the third quarter, with recent widening of the yield curve attributed to a decline in institutional trading preferences and marginal changes in growth expectations [1].

Group 1 - The central bank announced the resumption of public market treasury bond trading operations, leading to a comprehensive decline in the treasury yield curve over the following two trading days [1] - The purpose of the treasury bond trading is to "enrich the monetary policy toolbox and enhance the financial function of treasury bonds," particularly during the liquidity-sensitive period from the fourth quarter to the Spring Festival [1] - The expectation of continued large purchases of short-term bonds by the central bank, alongside ongoing liquidity support measures for non-banking institutions, is expected to reinforce the certainty of short-term interest rates [1] Group 2 - The Dongcai Treasury Bond ETF (511160), as the only short-term treasury bond ETF in the market, closely tracks the CSI 1-3 Year Treasury Bond Index and is highly correlated with monetary policy operations [1] - In the context of the central bank's resumption of treasury bond trading, short-term treasury bonds are expected to benefit directly, positioning the Dongcai Treasury Bond ETF (511160) for potential gains [1]

Key Points - The report highlights a selection of stocks for October, including companies such as China Southern Airlines (600029.SH) and Contemporary Amperex Technology Co., Ltd. (300750.SZ) [1] - The macroeconomic analysis emphasizes the importance of the "14th Five-Year Plan" period for China's reform and innovation, indicating that it is a critical time for achieving significant progress towards socialist modernization [5] - The fixed income section discusses the recent fluctuations in the bond market, noting that the central bank's actions to pause and then resume government bond trading reflect its intention to stabilize yields [6][7] - The report provides an overview of market indices, showing slight declines in major indices such as the Shanghai Composite Index, which closed at 3988.22, down 0.22% [3] - Industry performance data indicates that the comprehensive index rose by 2.06%, while sectors like non-ferrous metals and beauty care saw declines of 2.72% and 1.51%, respectively [4]

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The central bank's restart of treasury bond trading is expected to cooperate with government bond supply, align with the current bond market yield curve, and supplement long - term liquidity for the banking system [2][13][19]. - The probability of an interest rate cut within the year has increased compared to the third quarter, while the probability of a reserve requirement ratio cut may decrease after restarting treasury bond trading, but it remains a direct option [3][25][26]. - For the subsequent bond market strategy, the decline space of bond interest rates needs further support. Attention can be paid to whether the central bank's bond - buying scale and maturity exceed expectations [4][27]. 3. Summary According to the Directory 1.1 Why Restart Treasury Bond Trading? - **Cooperate with Government Bond Supply and Synergize Fiscal Efforts**: In 2025, the government bond issuance from November to December is expected to be around 4 trillion yuan, similar to the same period in 2024. The net financing scale is about 1.70 trillion yuan, significantly lower than 2.98 trillion yuan in 2024 due to the large maturity of treasury bonds in December. Restarting treasury bond trading helps the central bank cooperate with fiscal efforts [2][14]. - **The Bond Market Yield Curve Meets the Central Bank's Expectations and Market Risks Decline**: Since July 2025, the bond market sentiment has been weak, with the current fund duration at a low level. The 10Y - 1Y and 30Y - 10Y term spreads are both above 35bp, and the yield curve is steep. After restarting treasury bond trading, the short - term interest rate may decline more than the long - term interest rate, and the 30Y - 10Y spread may further compress [2][19]. - **Supplement Long - term Liquidity to the Banking System and Stabilize Liability Expectations**: As of September 2025, the central bank mainly provided medium - term liquidity through MLF and outright reverse repurchase, accounting for 91.52% of the annual net investment. The 1 - year inter - bank certificate of deposit rate has been rising, indicating that banks lack long - term funds [2][21]. 1.2 Will There Be Other Monetary Policy Coordination within the Year? - **Interest Rate Cut**: Externally, the pressure of RMB depreciation has decreased, and the narrowing of the Sino - US interest rate spread has reduced the external constraints on China's interest rate cut. Domestically, economic growth has slowed down, and the policy - makers are determined to stabilize growth. The probability of an interest rate cut within the year has increased compared to the third quarter [3][25]. - **Reserve Requirement Ratio Cut**: Restarting treasury bond trading may reduce the probability of a reserve requirement ratio cut. However, the amount of long - term liquidity provided by treasury bond trading may not meet the banks' demand for long - term funds, so a reserve requirement ratio cut remains a direct option [3][26]. 1.3 How to View the Subsequent Bond Market Strategy? - Since the interest rate has declined significantly, further support is needed to open up the downward space. Attention can be paid to whether the central bank's bond - buying scale and maturity exceed expectations. Currently, the value of chasing and holding active bonds is not strong [4][27]. - **10 - year Treasury Bonds**: The main bond has switched to 250016, and the 250016 - 250011 spread may compress to about 3bp in an optimistic scenario [28]. - **10 - year China Development Bank Bonds**: Continue to focus on 250215. The uncertainty of 250220 becoming the main bond is high [28]. - **30 - year Treasury Bonds**: For short - term trading, focus on 25T6. Consider holding non - active bonds such as 25T5, 24T1, 250002, and 25T3 [28]. - **Long - term Interest - rate Bonds**: Pay attention to 30 - year old bonds and 50 - year treasury bonds with slightly higher interest rates. For short - term trading with high liquidity requirements, focus on 25T6. For 10 - year interest rates, focus on 250016 and 250215. For medium - term interest - rate bonds, focus on 240006, 250007, and 250018 [29].