Group 1 - The market showed mixed performance with the Shanghai Composite Index slightly up by 0.2% while the Shenzhen Component Index fell by 0.28% [1] - Military stocks experienced a significant surge, indicating that the movement is not merely a defensive strategy but driven by underlying factors [1][3] - The trading volume decreased to 932.3 billion, down by 75.7 billion from the previous day, suggesting a strategic maneuver by major players [3] Group 2 - The military sector's rally is attributed to two main factors: a substantial increase in orders and ongoing asset restructuring [3] - A report indicated that the procurement volume for hypersonic missile components has doubled year-on-year, with a notable contract worth 370 million as an initial indicator [3] - Central enterprise restructuring is imminent, with several companies in the AVIC group expected to suspend trading, hinting at accelerated military asset securitization [3] Group 3 - The rise in gold stocks, such as a 4.2% increase in Chifeng Gold, correlates with a 75% probability of a Federal Reserve rate cut in September [3] - The gaming sector is also showing signs of activity, suggesting potential policy relaxation regarding game approvals, as indicated by recent developments in the approval process for new games [3] Group 4 - The innovative pharmaceutical sector faced a sharp decline due to new pricing regulations implemented on August 8, which could lead to price cuts exceeding 50% for heart stents [4] - Institutions are preemptively reducing their positions in response to these regulatory changes, although there are indications that some leading companies may be undervalued [4] Group 5 - Key signals for the afternoon trading session include monitoring military stocks for increased order volumes, observing brokerage activity for potential market shifts, and identifying opportunities in the innovative pharmaceutical sector at historical low price-to-earnings ratios [5] - The current market environment suggests that policy-driven trading is becoming more significant than performance-based trading, with military stock movements serving as an initial indicator of broader market trends [5]

Group 1 - The core viewpoint of the articles highlights the increasing pressure on the Federal Reserve to lower interest rates, driven by President Trump's calls for significant rate cuts, which could impact the strength of the US dollar [2] - Market expectations for a rate cut in September have surged, with the CME FedWatch tool indicating a 68% probability, suggesting that continued pressure from Trump could lead to more liquidity easing, directly affecting the dollar's value [2] - The overnight reverse repo scale has dropped to $435 billion as of July 25, raising concerns about short-term liquidity and the potential for the Fed to halt its balance sheet reduction, which would increase dollar liquidity in the market [2] Group 2 - The Bloomberg Dollar Index is approaching a critical support level of 107.5 as of July 26, and a breach of this level could trigger accelerated programmatic selling [2] - The articles emphasize the importance of monitoring US Treasury yields, particularly the 2-year yield, as rising rate cut expectations could lower these yields, creating a compounded negative effect on the dollar [3] - The current SOFR rate stands at 5.32%, and any significant movements in this rate could signal tightening in the interbank funding market, potentially forcing the Fed to act sooner [3]

Core Viewpoint - The bond futures market has experienced a decline since late June, influenced by factors such as tightening liquidity, rising risk appetite, and increased bond supply. However, as the fundamentals remain weak and liquidity is expected to be loose, the bond market may gradually strengthen in July [1][2]. Group 1: Market Dynamics - The bond futures market has seen a pullback due to a tightening of the funding environment, with interbank market rates rising significantly, particularly DR007 which increased from around 1.5% to over 2%, marking a new high in over a month [1]. - The A-share market's continuous rise has created a "see-saw effect" with the bond market, as major indices reached yearly highs, leading to a shift of funds from the bond market to the stock market, particularly affecting long-term government bond futures [1]. - The issuance of bonds surged in June, with local government special bonds and ultra-long-term treasury bonds contributing to supply shocks in the bond market. The net financing of local government special bonds reached 529.2 billion yuan in the last week of June, a record high for the year [1]. Group 2: Future Expectations - Analysts expect that as the basic economic pressures increase and liquidity remains loose, the bond market is likely to strengthen in July. The anticipated decline in domestic demand and the weakening momentum of enterprises in the third quarter will further transmit pressure to the economy [2]. - The central bank's recent monetary policy meeting indicated a shift towards a more flexible approach to policy implementation, suggesting that the expectation of loose liquidity will gradually rise, which is favorable for the bond market [2]. - Key areas to monitor in July include changes in monetary policy and market liquidity, the impact of fiscal policy and bond supply, and economic data and expectations [3].

1. Report Industry Investment Rating - The investment rating for government bonds is "Oscillation" [1] 2. Core Viewpoints of the Report - The bond market is expected to perform stronger next week as PMI data is predicted to weaken marginally and liquidity at the beginning of the quarter is expected to loosen, with institutional willingness turning more active. However, the bullish trend of the bond market may not be smooth, as there is a lack of substantial incremental positive factors, and disturbances such as a strong stock market may occur from time to time [2][14] - Entering Q3, the pressure on the fundamental situation will increase, and the expectation of loose liquidity is difficult to be falsified. It is expected that the bond market will gradually strengthen. But the pace of the bond market's strengthening may be bumpy due to factors such as the bond market's full awareness of the fundamental environment, high bond market valuations, uncertainty about the implementation of loose policies by the central bank, and the interference of the stock market [15] - It is recommended to continue holding the strategy of steepening the yield curve, as the short - end varieties may still outperform the long - end ones [16] 3. Summary by Directory 3.1 One - Week Review and Views 3.1.1 This Week's Trend Review - From June 23 - 29, government bond futures adjusted slightly, and the yield curve steepened. Various factors such as marginal tightening of funds, strong stock market performance, and institutional profit - taking intentions affected the daily performance of government bond futures. As of June 27, the settlement prices of the main contracts of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures were 102.546, 102.265, 109.070, and 120.940 yuan respectively, with changes of +0.020, +0.010, - 0.070, and - 0.320 yuan compared to last weekend [13] 3.1.2 Next Week's View - The bond market is expected to be stronger than this week, but the bullish trend may not be smooth. It is recommended to continue holding the strategy of steepening the yield curve, and also suggests strategies such as long - position holding, mid - line long - position layout on dips, and paying attention to positive arbitrage opportunities in government bond futures [2][14][16] 3.2 Weekly Observation of Interest - Rate Bonds 3.2.1 Primary Market - This week, 177 interest - rate bonds were issued, with a total issuance volume of 8676.40 billion yuan and a net financing amount of 7806.52 billion yuan. The net financing amount of local government bonds increased, while that of inter - bank certificates of deposit decreased [22] 3.2.2 Secondary Market - Government bond yields showed a divergent trend. As of June 27, the yields of 2 - year, 5 - year, 10 - year, and 30 - year government bonds were 1.35%, 1.51%, 1.65%, and 1.85% respectively, with changes of - 1.50, +0.32, +0.46, and +1.05 bp compared to last weekend. The spreads of 10Y - 1Y, 10Y - 5Y, and 30Y - 10Y all widened [28] 3.3 Government Bond Futures 3.3.1 Price, Trading Volume, and Open Interest - Government bond futures adjusted slightly, and the yield curve steepened. As of June 27, the settlement prices of the main contracts of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures changed compared to last weekend. The trading volumes and open interests of different - maturity government bond futures also had corresponding changes [37][40] 3.3.2 Basis and IRR - Positive arbitrage opportunities were not obvious this week. The funds were generally balanced and loose, the futures basis generally fluctuated within a narrow range, and the IRR of the CTD bonds of each main contract was around 1.8%. There were relatively few short - term IRR strategies [44] 3.3.3 Inter - delivery and Inter - variety Spreads - As of June 27, the inter - delivery spreads of 2 - year, 5 - year, 10 - year, and 30 - year government bond futures contracts 2509 - 2512 had corresponding changes compared to last weekend [47] 3.4 Weekly Observation of the Funding Situation - This week, the central bank's open - market operations had a net injection of 12672 billion yuan. As of June 27, R007, DR007, SHIBOR overnight, and SHIBOR 1 - week increased compared to last weekend. The average daily trading volume of inter - bank pledged repurchase decreased, and the overnight proportion was slightly lower than the previous week [53][56][58] 3.5 Weekly Overseas Observation - The US dollar index weakened, and the yield of 10Y US Treasury bonds declined. As of June 27, the US dollar index fell 1.52% to 97.2612 compared to last weekend, and the yield of 10Y US Treasury bonds dropped 9BP to 4.29%. The Sino - US 10Y Treasury bond yield spread was inverted by 264.5BP. The easing of the Middle East conflict and the divergence of Fed officials' statements affected the market [64] 3.6 Weekly Observation of High - Frequency Inflation Data - This week, industrial product prices showed mixed performance, and agricultural product prices generally declined. As of June 27, the South China Industrial Product Index, Metal Index, and Energy and Chemical Index changed compared to last weekend, and the prices of pork, 28 key vegetables, and 7 key fruits also had corresponding changes [68] 3.7 Investment Suggestions - It is recommended to take a bullish approach. Specific strategies include continuing to hold long positions, considering mid - line long - position layout on dips, moderately paying attention to positive arbitrage opportunities in government bond futures, and continuing to hold the strategy of steepening the yield curve (such as the 2TS - T strategy) [17][18][19]