Group 1 - The central bank has increased liquidity withdrawal after the quarter-end, but the central tendency of funding rates continues to decline, with the one-year AAA interbank certificate of deposit (CD) yield dropping below 1.6% [1][2] - Market optimism regarding future funding conditions is rising, supported by accelerated fiscal spending and increased demand for CDs from wealth management and money market funds [1][3] - Concerns about banks' liability pressure and the potential for increasing CD issuance limits have emerged as the interbank CD registration quota usage accelerates [1][7] Group 2 - The central bank's recent operations included a net withdrawal of over 10 billion yuan, while the funding rates continued to decline, with DR001 and DR007 falling to 1.31% and 1.42% respectively [2][3] - Analysts expect the one-year AAA CD yield to have further downward potential, with a lower limit around 1.50%, influenced by fiscal spending and weak credit [3][4] - The current valuation of one-year CDs is slightly high, with the central bank considering the impact of CD rates on banks' net interest margins and loan issuance [5][6] Group 3 - As of the end of May, the disclosed CD issuance plans from banks reached a cumulative total of 33 trillion yuan, with a significant increase compared to previous years [6][7] - The issuance pace of CDs varies among different types of banks, with state-owned banks showing a higher usage ratio compared to joint-stock banks [6][7] - The upcoming months will see a substantial amount of CDs maturing, with approximately 14.75 trillion yuan due from July to December, raising concerns about banks' liability management [7][8]

Market Overview and Analysis - The primary market saw the issuance of government bonds, local bonds, and policy financial bonds amounting to 280.1 billion, 72.1 billion, and 161.0 billion respectively, with net financing of 199.9 billion, 21.6 billion, and 155.0 billion [1] - Non-financial credit bonds had a total issuance of 208.2 billion, with a net financing amount of 84.3 billion [1] - One new convertible bond was issued, expected to raise 0.7 billion [1] Secondary Market Review - Interest rates declined last week, influenced by factors such as the lowest funding rates of the year, the return of wealth management funds, reduced government bond issuance, and the stock-bond relationship [2] Liquidity Tracking - The net withdrawal through Open Market Operations (OMO) was 1.4 trillion, but fiscal spending supplemented liquidity, leading to a noticeable easing of funds at the beginning of the month [3] - Anonymous funds dropped to 1.3%, and one-year government stock certificates fell below 1.6% [3] Policy and Fundamentals - The Central Financial Committee emphasized the need for lawful governance of enterprises to curb low-price disorderly competition [4] - The manufacturing PMI for June recorded at 49.7, surpassing expectations and previous values [4] Overseas Market - The U.S. Congress passed the "Great Beauty" tax reduction bill, and non-farm employment numbers for June exceeded expectations [5] - The S&P 500 rose by 1.7% over the week, while the 10-year U.S. Treasury yield increased by 6 basis points [5] Equity Market - The A-share market saw most broad-based indices rise, driven by strong bank sector performance and favorable news in the innovation drug sector [6] - The Wind All A index increased by 1.22%, the CSI 300 rose by 1.54%, and the ChiNext surged by 1.50% [6] - Daily average trading volume decreased to 1.44 trillion, with a weekly average trading volume drop of 130.2 billion [6] - As of July 3, 2025, the total financing balance for All A reached 1,846.38 billion, an increase of 19.847 billion compared to June 26, marking nine consecutive trading days of net growth [6] Bond Market Strategy Outlook - The government bond supply pressure remains high in Q3, and the overall liquidity is expected to remain loose to support government bond issuance and stabilize growth [7] - Economic growth risks are increasing due to weakened export demand, a downturn in the real estate cycle, and reduced support from new policies [7] - Current bond investments have a high probability of success, but the potential for returns depends on the realization of fundamental expectations [7] - Convertible bonds face supply-demand contradictions, with liquidity remaining relatively loose, but the convertible bond index has reached new highs, indicating a need for careful selection of underlying assets [7]

Report Industry Investment Ratings Not provided in the documents. Core Viewpoints of the Report - The drivers of commodity futures are differentiated, with coking coal being relatively strong and lithium carbonate and PTA being relatively weak [1]. - Stock indices are in a period of consolidation, and their medium - to long - term upward trend is clear. The bond market is running at a high level, and gold is oscillating at a high level [1]. Summary by Related Catalogs Stock Indices - Last week, the A - share market oscillated strongly, with the Shanghai Composite Index hitting a new high. The trading volume of the two markets was about 1.4 trillion yuan, slightly lower than the previous week. The steel, banking, and building materials sectors led the gains, while the comprehensive finance and computer industries led the losses. The four major stock index futures showed differentiated trends, with IF and IH strengthening, and IC and IM oscillating at high levels [1]. - In the short term, stock indices may maintain high - level consolidation. In the medium - to long - term, with clear policy support and improved fundamental expectations, the inflow of medium - to long - term funds continues, and the upward trend of stock indices is clear. Overseas, attention should be paid to the progress of US tariff negotiations. Domestically, during the interim report season, the earnings of IF and IH constituent stocks are more certain, and their trends may be stronger [1]. Bonds - Last week, the bond market rose slightly and remained at a high level. The US is in trade negotiations with many countries, and there is still high uncertainty. The central bank continued its net capital withdrawal operation at the beginning of the month, but the capital market remained loose, and the inter - bank capital cost declined across the board [1]. - Although the bond issuance pressure has increased, the market's expectation of liquidity remains optimistic. Overall, the macro - environment has strong uncertainty and limited trend drivers. The bond market remains at a high level, but there is still high - valuation pressure, and attention should be paid to the performance of the equity market [1]. Gold and Silver - The suspension period of US reciprocal tariffs is about to end, and short - term policy uncertainty has increased again. However, there are more signals of strong US economic resilience, which is conducive to restoring market risk appetite. The short - term probability of a Fed rate cut has decreased, and the factors favorable to the gold price in the long - term need further fermentation [1]. - In the short term, the driving force for the gold price to break through upwards is insufficient, and it will continue to oscillate at a high level in July. The gold - silver ratio is high, and there is a possibility of repair. The silver price has strong technical support below after the breakthrough. It is recommended to hold the sold out - of - the - money put option positions of the gold and silver 08 contracts until expiration [4]. Non - ferrous Metals Copper - Last week, Shanghai copper was strong in the first half of the week and fell back in the second half, returning below 80,000 yuan. The US is in trade negotiations with many countries, and there is still high uncertainty. The supply at the mine end remains tight, and attention should be paid to the development of the Peruvian copper mine incident [3][4]. - The demand remains cautiously expected, and the off - season and high prices have restricted the downstream to a certain extent. The inventories of domestic and overseas exchanges have increased across the board, and the LME spot premium has significantly declined. The financial attribute still supports the copper price in the medium - to long - term, and the low - inventory pattern is expected to remain unchanged before the copper tariff is implemented. However, the short - term positive factors may weaken [4]. Aluminum and Alumina - The US trade negotiation uncertainty remains high. The concern about ore disturbances in alumina has not subsided, but the domestic bauxite inventory is still high, and the short - term supply shortage concern is limited. The alumina production capacity is expanding rapidly, and the downstream demand has little room for growth, so the surplus pattern is difficult to change [3][4]. - For Shanghai aluminum, the supply constraint is still clear, and the import profit remains inverted. The demand is still cautious due to the off - season, and the inventory shows signs of accumulation. Overall, the alumina surplus pattern is difficult to change, and the price is under pressure. The medium - term upward trend of Shanghai aluminum remains unchanged, but the short - term demand and inventory have certain drags, and the influence of tariffs has increased [4]. Nickel - The supply of Philippine nickel ore has recovered seasonally, the port inventory has increased significantly, and the nickel ore price has weakened marginally. The supply of nickel iron is abundant, but the downstream acceptance is limited, and the price is under pressure [4]. - The production capacity of intermediate products is still expanding. The refined nickel production decreased in June, but the inventory remained oscillating at a high level. Overall, the demand is weak, the nickel supply has increased seasonally, and the surplus pattern is clear. As the macro - sentiment fades, the nickel price is under pressure. It is recommended to adopt the strategy of selling call options [4]. Energy and Chemicals Lithium Carbonate - The lithium ore price has stabilized, which has increased the cost support. However, the surplus pattern of the lithium salt market has not been substantially improved. The weekly output of lithium carbonate remains at a relatively high level of over 18,000 tons, while the downstream demand has insufficient growth, and the inventory is still in the accumulation cycle [6]. - The current periodical rebound can be used to short at high prices [6]. Industrial Silicon - The number of open furnaces in the industrial silicon market has increased this week. Some manufacturers in the southwest region have resumed production due to the implementation of the wet - season subsidy electricity price, and the market supply has increased [6]. - Since the warehouse receipts are still being depleted, the near - month contracts are strongly supported. Attention should be paid to the implementation of anti - involution production cuts on the supply side [6]. Steel and Ore Rebar - The spot price of rebar was stable to slightly lower over the weekend, and the spot trading was generally weak. The "anti - involution" concept has boosted market expectations, but the improvement at the spot level is limited. The speculative demand has recovered, but the rigid demand has weakened seasonally, and the marginal inventory reduction speed of rebar has gradually slowed down [6]. - It is expected that the rebar futures price has strong bottom support but is subject to double pressure from the electric - furnace cost and the sustainability of spot price increases. It is recommended to continue holding the sold out - of - the - money put option positions (RB2510P2900) [6]. Hot - Rolled Coil - The spot price of hot - rolled coil was generally stable over the weekend, with slight declines in some areas, and the spot trading was generally weak. The "anti - involution" concept has boosted market expectations, but the follow - up power at the spot level is insufficient. The supply and demand of hot - rolled coils are both strong, and the inventory has increased [6]. - It is expected that the hot - rolled coil futures price has strong bottom support but is subject to pressure from export costs and the sustainability of spot price increases during the off - season. It is recommended to temporarily wait and see on the single - side and consider participating in the arbitrage strategy of compressing profits for the 01 contract [6]. Iron Ore - Last week, the daily output of molten iron in the Steel Union sample decreased but remained above 2.4 million tons. Under the background of high molten iron output and low steel mill raw material inventory, the supply - demand contradiction of imported ore in July is limited [6]. - The "anti - involution" concept has boosted market expectations, and the steel futures and spot prices have risen in resonance. It is expected that the iron ore price will continue to oscillate strongly. It is recommended to continue holding the sold out - of - the money put option I2509 - P680 and consider participating in the 9 - 1 positive spread when the spread is low [6]. Coal and Coke Coking Coal - The raw coal inventory in coal mines has continued to decline, the pit - mouth transaction atmosphere has improved, and the enthusiasm of steel, coke enterprises, and trading links for raw material procurement and inventory has increased. The transaction rate has reached a new high for the year, and the short - term supply - demand mismatch has pushed up the coal price [8]. - It is recommended to continue holding the long - position strategy and pay attention to the coal mine production increase progress after the safety production month and the sustainability of downstream procurement [8]. Coke - Hebei steel mills may have production restrictions, but the daily output of molten iron is at a relatively high seasonal level, which supports the rigid demand for coke. The actual demand performance is good, while the coke oven operation is restricted by profit factors and is difficult to significantly increase production. Coke plants are actively reducing inventory, and there is an expectation of price increases in the spot market [8]. Soda Ash and Glass Soda Ash - The fundamentals of soda ash are clear. The daily output of soda ash remained unchanged at 99,300 tons on Friday, and Kunshan and Qinghai Fatou will resume production one after another this week. The demand for light soda ash is difficult to offset the reduction in heavy soda ash demand [8]. - The supply of soda ash is relatively loose, and the continuous passive inventory accumulation trend of alkali plants remains unchanged. In the short term, the soda ash price oscillates at a low level, and the near - month contracts are weaker than the far - month contracts due to the selling - hedging pressure. It is recommended to hold the short positions of the soda ash 09 contract with a stop - profit line and patiently hold the strategy of going long on glass 01 and short on soda ash 01 [8]. Float Glass - The operating capacity of float glass is temporarily stable, and the demand is difficult to digest both the supply and the existing inventory at the same time. The glass factory inventory fluctuates slightly, and it is difficult to reduce the high inventory [8]. - The "anti - involution" concept has promoted the recovery of market expectations, but the short - term implementation probability is low, and the cold - repair drive of glass factories is still accumulating. It is recommended to pay attention to the opportunity of going long on the 01 contract at low prices after the basis widens and continue to hold the arbitrage strategy of going long on glass 01 and short on soda ash 01 [8]. Crude Oil - OPEC+ has decided to increase production by 548,000 barrels per day in August, and the US "Big and Beautiful" Act has been passed by both houses of Congress, which may increase US crude oil production. The EIA weekly data shows an unexpected inventory accumulation, which is generally bearish [8]. - Overall, the OPEC+ production increase decision may increase the supply pressure, and the short - term oil price will oscillate weakly [8]. PTA - The cost - end crude oil OPEC+ continues to significantly increase production, and the oil price is expected to move down, providing weak support for energy - chemical products. In addition, the PTA supply side will face the pressure of new production capacity and the resumption of existing maintenance capacity in the third quarter, and the inventory - reduction pattern will turn into inventory accumulation [11]. - It is expected that the price will show an oscillating downward trend [11]. Methanol - Most Iranian methanol plants have restarted, but the operating load is low. The operating rate of overseas methanol plants has increased by 11% to 64%. Many plants in the northwest started maintenance last week, and the output will decrease by about 5% in the next month, and the factory inventory will also decrease passively [10]. - The monthly arrival volume has decreased more than expected, and the weekly volume is expected to not exceed 300,000 tons. Although the downstream demand has entered the off - season, the total demand has not changed significantly. Therefore, the supply will be tight in July, and the methanol price is supported. It is recommended to sell out - of - the - money put options or at - the - money straddles for the 08 options contract [10]. Polyolefins - OPEC+ is accelerating production increases, with an increase of 548,000 barrels per day starting in August and considering another increase of 548,000 barrels per day in September. The crude oil supply is increasingly surplus, and the price will continue to decline [10]. - In the second quarter, new polyolefin plants were successfully put into operation. In the second half of the year, PE will have 3.1 million tons of new production capacity, and PP will have 2.1 million tons of new production capacity, resulting in large supply pressure. It is recommended to go long on the L - PP spread and short on PP 3MA [10]. Cotton - The domestic cotton output in the 2025/26 season is expected to be 6.784 million tons, a slight year - on - year decrease, and the expectation of tight supply and demand in the current season has strengthened. The third quarter is the critical growth period of cotton, and any adverse weather conditions may cause final yield losses and push up the weather premium [10]. - The downstream textile enterprises are performing well, the terminal clothing consumption has remained basically unchanged year - on - year, and the commercial inventory has continued to decline. It is recommended to continue holding the previous long positions [10]. Rubber - The rubber tapping operations in domestic and Southeast Asian main producing areas have progressed smoothly, the impact of climate factors has weakened, and the expected seasonal increase in raw material supply has been realized. The downstream tire enterprises have difficulty in depleting finished - product inventory, which has dragged down the production line operation rate [10]. - The inventory at the port is accelerating accumulation, indicating an increase in supply and a decrease in demand in the fundamentals. The rubber price is likely to continue the weak - oscillation pattern, and it is recommended to hold the strategy of selling call options [10].

Core Viewpoint - The market is influenced by various unpredictable stories, making it difficult to forecast future trends based on past events or factors [1]. Group 1: Market Conditions - The central bank conducted a 1,065 billion yuan 7-day reverse repurchase operation, with 3,315 billion yuan of reverse repos maturing today, resulting in a net withdrawal of 2,250 billion yuan [2]. - The funding environment remains balanced and loose, with the DR001 rate around 1.31% and the DR007 rate around 1.47% [2]. - The bond market showed mixed movements, with the 10-year government bond yield fluctuating around 1.64% [4]. Group 2: Economic Events - Trump signed 12 trade letters and announced that countries aligned with anti-American policies in BRICS would face an additional 10% tariff [4]. - The bond market experienced low trading activity, with the total number of transactions for 10-year government bonds being less than 1,200 and the price fluctuations being minimal [4]. - Despite the mixed signals from Trump regarding trade policies, the global market seems to be trading based on the expectation that he may backtrack on his threats [4].

Group 1 - The People's Bank of China (PBOC) conducted a 7-day reverse repurchase operation of 106.5 billion yuan at a stable interest rate of 1.40%, resulting in a net liquidity withdrawal of 225 billion yuan due to 331.5 billion yuan of reverse repos maturing on the same day [1] - The central bank's net liquidity withdrawal in the previous week was 1.3753 trillion yuan, with daily net withdrawals exceeding 250 billion yuan, indicating a tightening of the funding environment [1] - Despite the accelerated pace of net withdrawals by the central bank, the funding market is showing a seasonal trend of easing, with overnight and 7-day funding rates hitting new lows for the year [1] Group 2 - The upcoming week (July 7-11) will see a decrease in the scale of reverse repos maturing to 652.2 billion yuan, with government bond net payments expected to rise to 251.1 billion yuan, primarily concentrated on Monday [2] - The market is anticipated to experience a "stable period" in funding prices, with overnight rates expected to fluctuate around the OMO ±5 basis points range and 7-day funding rates likely to remain below 1.5% [2] - The central bank has not announced any buyout reverse repos or government bond trading operations for June, with 1.2 trillion yuan of buyout reverse repos maturing in July, creating a potential funding gap [3] Group 3 - The market may face a 1.3 trillion yuan medium- to long-term funding gap until the MLF renewal on July 25, making the central bank's decision on whether to conduct buyout reverse repo auctions a key variable for the funding market [3] - The expectation is that the supply of government bonds in July will not significantly increase compared to June, and the central bank's desire to prevent long-term yields from declining unilaterally remains [3] - The central bank's proactive stance on liquidity and the continued decline in money market rates are seen as the most certain factors, with short-term rates potentially having further room to decline [4]

Group 1 - The report emphasizes that the liquidity environment is currently stable and loose, with the first week of July being the most favorable window for liquidity in the third quarter. Factors such as tax payments and government bond issuances later in July may cause seasonal fluctuations, but overall liquidity is expected to remain stable [3][11][18] - The report indicates that the interbank deposit rates have reached a downtrend, with the one-year NCD rates stabilizing around 1.6%. The expected range for these rates is between 1.4% and 1.8%, with a midpoint of 1.6% [16][19] - The report suggests that public fund positions and durations have risen to high levels, indicating a lack of incremental funds to support further increases. This leads to a strategy of "riding the tiger," where institutions are cautious about making significant changes to their positions [17][18] Group 2 - The report reiterates that if long-term interest rates decline towards the end of the third quarter, it may lead to a "central downtrend market." However, if this occurs earlier, it is likely to be a "trading market." The main themes for the bond market in the third quarter are liability repair and yield recovery [4][20][21] - The report advises institutions to hold positions and wait for potential gains, particularly during the liquidity easing period in early July and the policy negotiation period at the end of the month. The one-year government bond yield is expected to stabilize around 1.3% [5][23] - The report highlights that a significant downward breakthrough in long-term rates requires an "inverted yield curve" scenario, where major banks or the central bank provide incremental buying support for short-term bonds, allowing the one-year government bond yield to drop below 1.3% [5][23][24]

Summary of Conference Call Records Industry Overview - The conference call discusses the impact of currency fluctuations, particularly the appreciation of the Renminbi (RMB) against the US dollar, on the financial market and liquidity conditions in China. The overall trend indicates a loosening of monetary conditions driven by external factors rather than seasonal variations [1][2][5]. Key Points and Arguments 1. **Monetary Policy and Liquidity** - The People's Bank of China (PBOC) has been guiding liquidity conditions, leading to a significant drop in overnight and 7-day repurchase rates, which are at record lows. This indicates a trend of decreasing funding costs [1][3][4]. 2. **Impact of Currency Appreciation** - The passive appreciation of the RMB is primarily influenced by the depreciation of the US dollar and external economic policies, which have resulted in a more favorable liquidity environment in China [1][5][9]. 3. **Expectations for Future Interest Rates** - There is an expectation that short-term interest rates (DR001 and R007) will continue to decline, potentially reaching levels as low as 1.2. This trend is expected to benefit short-term financial instruments such as certificates of deposit and credit bonds [11][12]. 4. **Market Sentiment and Economic Outlook** - The current liquidity conditions are seen as a positive signal for the economy, with expectations of continued support for the bond market despite a lack of significant improvement in the underlying economic fundamentals [13][14]. 5. **External Factors and Market Dynamics** - The weakening of confidence in the US dollar due to recent US government policies has led to a shift in capital flows towards non-USD currencies, including the RMB. This shift is expected to further influence domestic liquidity and market conditions [8][17]. 6. **Potential for Future Rate Cuts** - If external economic conditions change, the PBOC may need to implement earlier and more substantial interest rate cuts to manage the appreciation of the RMB. Current market pricing does not fully reflect these potential rate cuts [3][16]. 7. **Investor Recommendations** - The period from July to September is anticipated to be favorable for interest rates, with expectations of significant returns across the yield curve. Investors are encouraged to seize opportunities in the upcoming issuance of long-term government bonds [18]. Other Important Insights - The PBOC's recent policy adjustments indicate a more proactive stance on managing exchange rates and liquidity, reflecting a shift in their approach to monetary policy [10]. - The market's optimistic outlook is supported by increased borrowing demand and the stability provided by major banks, despite temporary liquidity tightness observed at the end of the first half of the year [15].

Core Insights - The report highlights a rare phenomenon of "crowded" trading in a volatile market, where trading activity has increased despite stable interest rates and unclear market direction [3][8] - The micro trading sentiment index has risen from 36% to 58% over the past 20 trading days, indicating a significant increase in trading enthusiasm [8][27] - The report questions whether the rising trading heat necessarily indicates valuation imbalance, suggesting that high trading activity does not inherently mean that pricing is unreasonable [5][16] Trading Characteristics - Recent market trading behavior shows a clear warming trend, particularly in two dimensions: consistent duration extension and consistent yield spread compression [4][14] - The market is exhibiting a unified behavior of extending duration, with fund durations rising to high levels and a decrease in the divergence of holding durations [4][14] - There is a notable shift of funds towards less active bonds, leading to a significant increase in their trading volume, reflecting a strong trading willingness despite limited downward space for interest rates [4][14] Valuation Assessment - The report argues that high trading heat does not equate to pricing imbalance, emphasizing that the rationality of interest rate pricing is based on macro fundamentals, liquidity, and policy expectations [5][16] - Current interest rates have not broken previous lows, indicating that the market retains a degree of caution regarding fundamental directions and policy expectations [5][16] - The report's constructed micro trading indicators show significant differences in crowdedness metrics, with trading heat indicators at 63% and pricing matching indicators at only 26%, suggesting that the risk of significant pricing imbalance is manageable [17][24] Liquidity and Market Dynamics - Marginal improvements in liquidity provide a foundation for interest rate compression, with a notable decline in funding costs since June [6][19] - The report indicates that the current round of yield spread convergence is not solely due to trading "involution," but is supported by an improved funding environment [6][19] - The relationship between funding prices and economic marginal trends has been highlighted, with a successful signal identification model showing a high success rate in predicting funding rate directions based on PMI data [20][21] Historical Context - The report draws parallels to the 2022 interest rate fluctuation phase, where high trading heat coexisted with reasonable pricing, suggesting that current trading characteristics may not trigger systemic adjustments [27][28]

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints - The inter - bank market's funding situation remained loose on Thursday, with overnight rates oscillating at a low level around 1.36%. The 7 - day weighted average rate dropped 3.79bp to 1.4674%. The central bank's liquidity injection is expected to stay loose due to external uncertainties from trade frictions, but the scope for further loosening of the funding situation is limited as long - term bond yields are relatively low and the inter - bank bond market leverage ratio has risen above 108% [4]. - The stock index continued to fluctuate and rise. The US - Vietnam trade agreement may have a negative impact on China's re - export trade, while the lifting of export restrictions on China by three US chip design software suppliers will boost the relevant A - share electronics sector. In the short term, the stock index may present a volatile pattern due to shrinking trading volume and lackluster domestic and foreign positive factors. In the long term, the Politburo meeting in late July will set the policy tone for the second half of the year. Given the possible deterioration of real estate sales and investment and the overall weakness of consumption, policies are expected to further support domestic demand. Additionally, the uncertain US tariff policy, the approaching Fed rate - cut time, and changes in overseas liquidity and geopolitical patterns will bring phased trading opportunities for the stock index [6]. 3. Summary by Related Catalogs 3.1 Macro - financial Data - **Interest Rates**: DR001 closed at 1.51, down 4.43bp; DR007 at 1.91, down 3.79bp; GC001 at 1.15, down 20.00bp; GC007 at 1.49, down 1.50bp; SHBOR 3M at 1.61, down 1.35bp; LPR 5 - year remained at 3.50; 1 - year treasury bond at 1.34, down 0.50bp; 5 - year treasury bond at 1.49, up 0.50bp; 10 - year treasury bond at 1.65, up 0.10bp; 10 - year US treasury bond at 4.30, up 4.00bp [3]. - **Central Bank Operations**: The central bank conducted 572 billion yuan of 7 - day reverse repurchase operations, with 5093 billion yuan of reverse repurchases maturing, resulting in a net withdrawal of 4521 billion yuan [3]. 3.2 Stock Index Market - **Index Performance**: The CSI 300 closed at 3968, up 0.62%; SSE 50 at 2725, up 0.07%; CSI 500 at 5923, up 0.50%; CSI 1000 at 6343, up 0.53%. The trading volume of the Shanghai and Shenzhen stock markets was 13098 billion yuan, a decrease of 672 billion yuan from the previous day. Most industry sectors closed higher, with consumer electronics, biopharmaceuticals, electronic components, chemical pharmaceuticals, batteries, and traditional Chinese medicine sectors leading the gains, while shipbuilding and mining sectors leading the losses [5]. - **Futures Contracts**: IF当月 closed at 3947, up 0.7%; IH当月 at 2708, up 0.2%; IC当月 at 5874, up 0.3%; IM当月 at 6279, up 0.3%. IF trading volume was 73590, up 3.9%, and its open interest was 238967, down 0.2%; IH trading volume was 34173, down 8.3%, and its open interest was 80640, down 2.3%; IC trading volume was 64956, down 0.8%, and its open interest was 220451, up 0.7%; IM trading volume was 162960, down 1.7%, and its open interest was 321768, up 0.8% [5]. - **Premium and Discount Situation**: IF升贴水 was 13.16% for the current - month contract, 8.57% for the next - quarter contract, 5.90% for the current - quarter contract, and 4.85% for the next - month contract; IH升贴水 was 1.87% for the current - month contract; IC升贴水 was 14.74% for the current - month contract, 12.12% for the next - quarter contract, 10.16% for the current - quarter contract, and 19.99% for the next - month contract; IM升贴水 was 13.19% for the current - month contract, 15.26% for the next - quarter contract, 24.26% for the current - quarter contract, and 18.07% for the next - month contract [7].

Market Performance - The majority of government bond futures closed higher, with the 30-year main contract down 0.02% at 121.130, the 10-year main contract flat at 109.105, the 5-year main contract up 0.01% at 106.255, and the 2-year main contract up 0.01% at 102.514 [1] - The yields on major interbank bonds mostly declined, with the 30-year government bond yield rising by 0.35 basis points to 1.8485%, and the 10-year government development bond yield also rising by 0.35 basis points to 1.7150% [1] - The 2-year government bond yield decreased by 0.25 basis points to 1.3575%, while the 3-year and 5-year government bond yields fell by 1 basis point and 0.55 basis points respectively [1] Funding Conditions - The central bank announced a fixed-rate reverse repurchase operation of 572 billion yuan for 7 days at an interest rate of 1.40%, with 509.3 billion yuan of reverse repos maturing on the same day, resulting in a net withdrawal of 452.1 billion yuan [2] - The funding environment appears more relaxed, with overnight pledged repo rates falling over 4 basis points to around 1.31%, and 7-day pledged repo rates down over 3 basis points to approximately 1.46% [2] - The issuance scale of government bonds in July is slightly lower, but the maturity of certificates of deposit is significant, and July is a month with high tax payments, which may cause fluctuations in the funding environment [2] Operational Recommendations - With funding rates continuing to decline, bond futures are experiencing narrow fluctuations with most varieties slightly rising, supported by a relaxed funding environment [3] - The short-term strategy suggests accumulating long positions during adjustments, while being cautious of profit-taking near previous highs, and monitoring economic data and funding trends [3] - The curve strategy may continue to focus on steepening opportunities, while the interest rate risk (IRR) is gradually increasing, suggesting a focus on positive spread strategies [3]