Key Points Summary Core Viewpoint - The report highlights significant events affecting the Chinese economy, including tariff adjustments and trade data, indicating a mixed outlook for imports and exports, alongside ongoing market dynamics in the A-share and bond markets [2][4][5]. Important Events Review - On November 5, the State Council Tariff Commission announced a suspension of the 24% tariff on U.S. imports starting from November 10, 2025, while maintaining a 10% tariff [2]. - The 8th China International Import Expo commenced on November 5 in Shanghai, showcasing advanced products across various industries, enhancing the event's technological appeal [2]. - Customs data released on November 7 indicated that China's exports in October decreased by 0.8% year-on-year in RMB terms, while imports increased by 1.4%. In USD terms, exports fell by 1.1%, and imports rose by 1.0% [2]. Weekly Market Review - The bond market experienced slight fluctuations, with the central bank's announcement of a 20 billion yuan bond purchase in October falling short of market expectations, leading to a lack of sustained bullish momentum [4]. - The A-share market showed a strong sentiment, with the Shanghai Composite Index fluctuating around the 4000-point mark, indicating a consolidation phase [5].

Core Viewpoint - The latest C50 Wind Index indicates that liquidity pressure in November is expected to increase compared to October, with a liquidity gap around 2 trillion yuan, as many market institutions anticipate seasonal pressures due to the maturity of financial instruments [1][2][3]. Liquidity Conditions - In October, the central bank maintained a relatively proactive liquidity injection strategy, with a net injection of 4,000 billion yuan, the largest monthly value since March 2025 [2]. - The central bank's operations included a 1.1 trillion yuan front-loaded reverse repo to ease the liquidity pressure at the beginning of the month [2]. - The liquidity gap for November is projected to be around 2 trillion yuan, with some institutions suggesting it could exceed 3 trillion yuan [3]. Monetary Policy Outlook - The central bank has restarted open market operations for government bonds, which many institutions believe could replace the need for a reserve requirement ratio (RRR) cut [1][7]. - The necessity for an RRR cut in the fourth quarter is perceived to be lower, with 17 out of 20 institutions indicating a reduced likelihood of such a move [7][8]. - Analysts suggest that the resumption of government bond trading may serve as a substitute for RRR cuts, allowing for continued liquidity support without aggressive monetary easing [8][9]. Market Reactions - The bond market is expected to experience renewed downward trends, with the 10-year government bond yield potentially approaching the low of 1.7% seen in August [9]. - The overall sentiment in the market indicates that while the central bank's easing measures may be less aggressive, the need for monetary policy support remains due to ongoing economic challenges [9].

Report Industry Investment Rating No relevant information provided. Core Viewpoints - Interest rate bonds: Treasury bond yields declined, and the term spread widened. From October 24 to October 31, 2025, the central bank conducted a total of 31,360.00 billion yuan in reverse repurchase operations, with 17,320.00 billion yuan in reverse repurchases maturing, resulting in a net injection of 14,040.00 billion yuan. Most inter - bank funding prices declined. During October 27 - November 02, 2025, the issuance of interest rate bonds was 4,126.82 billion yuan, with a total repayment of 926.90 billion yuan for matured bonds, and a net financing of 3,199.92 billion yuan. Treasury bond yields decreased, and the 10Y - 1Y term spread widened from 37.70BP to 41.28BP [1]. - Credit bonds: Credit bond yields to maturity declined. From October 27 to November 02, 2025, 827 new credit bonds were issued in the primary market, with a total issuance scale of 11,042.87 billion yuan, a decrease of 5,134.02 billion yuan compared to the previous period. The net financing was 1,379.86 billion yuan. The yields to maturity of urban investment bonds and medium - short - term notes decreased [2]. - Big - asset weekly observation: From October 24 to October 31, 2025, the three major US stock indexes rose, while most European stock indexes declined. US Treasury yields increased, the US dollar index strengthened, and non - US currencies weakened. Crude oil and gold prices declined during the week [3]. Summary by Directory 1. Interest Rate Bonds: Treasury Bond Yields Declined, and the Term Spread Widened 1.1 Liquidity Observation: Net Liquidity Injection, Most Funding Prices Declined - From October 24 to October 31, 2025, the central bank's net injection was 14,040.00 billion yuan. Most inter - bank funding prices declined, with DR001 down 0.37BP to 1.3184% and DR007 up 4.41BP to 1.4551%. Most exchange - traded funds also declined [15]. 1.2 Primary Market Issuance: Net Financing Increased, and Local Bond Issuance Rose - From October 27 to November 02, 2025, the primary - market issuance of interest rate bonds was 4,126.82 billion yuan, with a net financing of 3,199.92 billion yuan. There was no treasury bond issuance, policy - based financial bonds raised 1,420.00 billion yuan, and local government bond issuance increased, raising 2,706.82 billion yuan [25]. 1.3 Secondary Market Trading: Treasury Bond Yields Declined, and the Term Spread Widened - From October 24 to October 31, 2025, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds decreased by 8.90BP, 11.48BP, 5.12BP, 9.63BP, and 5.32BP respectively. The 10Y - 1Y term spread widened from 37.70BP to 41.28BP. The yields of China Development Bank bonds also declined, and the 10Y - 1Y term spread narrowed from 35.93BP to 33.84BP [33]. 2. Credit Bonds: Credit Bond Yields to Maturity Declined 2.1 Primary Market Issuance: Issuance Volume Decreased Month - on - Month - From October 27 to November 02, 2025, 827 new credit bonds were issued in the primary market, with a total issuance scale of 11,042.87 billion yuan, a decrease of 5,134.02 billion yuan compared to the previous period. The net financing was 1,379.86 billion yuan. Asset - backed securities had the largest number of issuances, and financial bonds had the highest issuance amount. Newly issued bonds were mainly AAA - rated, and the issuance was mainly in the 5 - 10 - year term. The construction industry had the largest number of issuances [42]. 2.2 Secondary Market Trading: Credit Bond Yields to Maturity Declined - From October 24 to October 31, 2025, the yields to maturity of urban investment bonds and medium - short - term notes declined. The 3 - year AA + and AA - rated urban investment bonds had the largest decline of 10.44BP, and the 5 - year AAA and AA - rated medium - short - term notes had the largest decline of 12.56BP [49]. 2.3 One - Week Credit Default Event Review - From October 27 to November 02, 2025, one enterprise's credit bond defaulted. Rongqiao Group Co., Ltd.'s bond "H0 Rongqiao F1" defaulted on October 31, 2025, with a remaining bond balance of 2.00 billion yuan [53]. 3. Big - Asset Weekly Observation 3.1 Differentiation of European and American Stock Indexes - From October 24 to October 31, 2025, the three major US stock indexes rose, with the Dow up 0.75%, the S&P 500 up 0.71%, and the Nasdaq up 2.24%. Most European stock indexes declined, with the German DAX down 1.16%, the French CAC40 down 1.27%, and the UK FTSE 100 up 0.74%. Most Asian - Pacific stock indexes rose [54]. 3.2 US Treasury Yields Increased - From October 24 to October 31, 2025, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year US Treasury bonds increased by 12.00BP, 11.00BP, 10.00BP, 10.00BP, and 9.00BP respectively [57]. 3.3 The US Dollar Index Strengthened, and Non - US Currencies Weakened - From October 24 to October 31, 2025, the US dollar index rose 0.80%. The British pound against the US dollar fell 1.22%, the euro against the US dollar fell 0.78%, the US dollar against the Japanese yen rose 0.74%, and the US dollar against the Chinese yuan fell 0.07% [59]. 3.4 Crude Oil and Gold Prices Declined During the Week - From October 24 to October 31, 2025, COMEX gold futures prices fell 2.64%, London spot gold prices fell 2.26%, WTI crude oil prices fell 0.85%, and Brent crude oil prices fell 1.32% [65]. 4. Investment Suggestions - Recently, the bond market has strengthened slightly driven by loose policies and risk - aversion sentiment. The central bank's resumption of open - market treasury bond trading on October 27 may stabilize market expectations, supplement liquidity, and optimize the yield curve, which may also catalyze the bullish sentiment in the bond market. With the implementation of new fund sales regulations, the short - term bond market volatility may intensify. It is recommended that investors conduct volatility operations on interest rate bonds to increase returns, the short - duration sinking strategy for urban investment bonds is still cost - effective, and convertible bonds investors can focus on high - elasticity individual bonds and low - premium - rate varieties [67].

Core Viewpoint - The bond market is expected to perform moderately in the fourth quarter, with improved sentiment for long positions following the central bank's announcement to restart government bond trading on October 27, which limits the upward space for bond yields [1][8]. Economic Indicators - The October PMI was reported at 49.0, a decrease of 0.8 from the previous value, indicating continued economic pressure [3]. - Key components of the PMI, such as production (49.7) and new orders (48.8), showed significant declines, reflecting ongoing challenges in effective demand and production expansion [3]. Policy Developments - The central bank's decision to restart government bond trading signals that bond yields are at a desirable level, suggesting limited further increases [8]. - The market sentiment has turned optimistic due to this policy change, although the future impact of the central bank's bond purchases remains to be seen [8][9]. Investment Recommendations - Investors are advised to focus on the ten-year government bond ETF (511260) and the government bond ETF (511010) as potential investment opportunities in the current market environment [1][9].

Investment Rating - The report indicates a positive outlook for the banking wealth management industry, particularly in the context of the nationwide promotion of pension wealth management products [3]. Core Insights - The expansion of pension wealth management trials to a national level marks a significant shift, enhancing the third pillar of the pension system in China [10][11]. - The introduction of a new direct registration system for wealth management products is expected to improve data governance and operational efficiency across the industry [12][13]. - Recent trends show an increase in annualized returns for cash management products, with a recorded rate of 1.29%, reflecting a slight increase from the previous week [14][18]. Summary by Sections Regulatory and Industry Dynamics - The National Financial Regulatory Administration issued a notification promoting the sustainable development of pension wealth management, expanding trials nationwide and increasing the fundraising limits for wealth management companies [10][11]. - The new system implemented by ICBC Wealth Management and Suzhou Wealth Management enhances data reporting and regulatory oversight, improving the management of sales personnel and investor protection [12][13]. Yield Performance - Cash management products saw a near 7-day annualized yield of 1.29%, up 1 basis point from the previous week, while money market funds decreased to 1.16% [14][18]. - The overall bond market remains favorable, although market sentiment is expected to remain subdued due to ongoing uncertainties [16][17]. Net Value Tracking - The net value ratio of banking wealth management products decreased to 0.78%, down 0.32 percentage points, indicating a potential pressure on the net value if credit spreads continue to widen [23][25].

Group 1 - The core view of the report indicates a shift in the bond market from headwinds to tailwinds, with a continued bullish outlook for November [1] - In 2025, the bond market is expected to rely heavily on increased allocations from bank proprietary trading, with a total bond market balance increasing by 16.4 trillion yuan in the first three quarters [2] - Government bonds accounted for a significant portion of this increase, with an increment of 11.4 trillion yuan, while financial bonds increased by 3.0 trillion yuan [2] Group 2 - The report highlights that the growth rate of bond investments by banks has significantly increased, with a year-on-year growth of 21.1% for the four major banks and 17.5% for smaller banks as of September [2] - The report notes that the demand for credit remains weak, leading banks to focus on bond investments as a primary driver for asset scale expansion [2] - The report anticipates that conditions for a further reduction in policy interest rates may be in place, supported by a decline in the cost of interest-bearing liabilities for banks [2] Group 3 - Non-bank institutions are reported to have low bond positions and shorter durations, with a potential increase in bond market sentiment as the central bank resumes government bond trading [2] - The report suggests that there is potential for significant allocation of credit bonds by wealth management products, estimating a potential increase of several trillion yuan [2] - The report predicts that the 10-year government bond yield may return to around 1.65% by the end of the year, with a bullish outlook for the bond market continuing into November [2][3]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the bond market and its dynamics, particularly in the context of recent policy changes by the central bank and macroeconomic indicators [2][3][4]. Core Insights and Arguments - The central bank has restarted government bond trading to enhance the financial function of government bonds and to serve as a pricing benchmark for the yield curve, indicating a potential intention to regulate the yield curve and assist fiscal financing [2][5]. - The fourth quarter is expected to have a favorable fundamental and supply environment for interest rate trends, although macro trends remain unclear. Short-term data may show slight weakening, which could stimulate a wide monetary policy sentiment, providing a good window for the bond market [2][6]. - The manufacturing PMI for October was reported at 49, below expectations, indicating weakening demand that may lead to a slight decline in economic data for the fourth quarter, further supporting the bond market [2][8]. - Investment strategies suggest focusing on short-term rates, which are more certain, while taking trading opportunities in long-term and ultra-long-term bonds. The yield spread between 10-year and 30-year bonds is currently at a reasonable level [2][7]. Important but Overlooked Content - The TLAC non-capital tool is designed to enhance total loss-absorbing capacity and has a repayment order between ordinary bonds and AT1/AT2 instruments. It is crucial for investors to understand the complexities and risks associated with these instruments [2][10]. - The issuance of ordinary bonds globally amounts to approximately $6 trillion, primarily used for liability supplementation, with a significant portion issued in euros [2][9]. - The impact of Deutsche Bank and Credit Suisse events on the subordinate debt market highlights the credit risks associated with AT1 instruments, emphasizing the need for investors to be cautious regarding macroeconomic conditions and individual bank performance [2][13]. Additional Insights - The bond market's performance is influenced by various factors, including seasonal effects and holiday impacts, which investors should be aware of [2][8]. - The global banking sector's capital adequacy remains high, with core Tier 1 capital ratios around 14.52%, although there are regional variations in non-performing loans [2][17]. - Chinese institutions have a relatively low participation in the offshore subordinate debt market, with a significant portion of their debt being ordinary bank debt [2][12]. - The historical context of AT1 bond conversions and write-downs illustrates the potential risks and regulatory differences across jurisdictions, which can affect investment decisions [2][14][15].

Report Industry Investment Rating No relevant content provided. Core View of the Report - The bond market at the end of the year can be more optimistic. For the short - end, there is high configuration and trading value, and inter - bank certificates of deposit rates may decline unexpectedly at the end of the year. For the long - end, with the expansion of the term spread, there is room for repair, and the warming of trading sentiment may drive the long - end to re - price monetary easing, manifested as a limited compression of the term spread [3][5][19]. Summary According to the Directory 1. Can the Upward Trend of the Bond Market Continue? - **View Review**: The bond market in the fourth quarter may move in a volatile manner. The 30 - year minus 10 - year and 10 - year minus 1 - year treasury bond spreads have reflected the repair of risk preference. The liquidity, capital situation, and short - end interest rate valuations are reasonable, and the current bond market has allocation value. Supply pressure is about to ease, there may be an opportunity for monetary easing, and redemption pressure will persist. In a stable and loose capital environment, inter - bank certificates of deposit are in a high - configuration and high - trading value range and may decline unexpectedly at the end of the year [3][11]. - **Unexpected Bond Market Performance in Late October**: The repair of the bond market in the last week of October exceeded expectations. Some investors were surprised that the bond market remained stable after the broader market index stabilized at 4,000 points, and it seems that the buying power of trading accounts is continuously returning [3][11]. - **Central Bank Bond - Buying Restart**: It should be understood from the perspective of "continuation". The scale of net purchases may not exceed last year, and the increase in liquidity and buying power it provides may be limited. It should be understood more from the perspective of expectation repair and signaling. It can be regarded as a turning point for the re - warming of monetary easing expectations, which is a projection of trading sentiment. As the bond market trading sentiment is being repaired and the capital situation remains loose, the trading sentiment can be projected onto the expectation of monetary easing again [3][12][13]. - **Fading Negative Factors in the Bond Market**: The negative factors in the bond market at the end of the year and the beginning of the new year are gradually fading. The expectation of the pulling effect of the broad fiscal policy has been digested. Although the new policy - based financial instruments may have a greater pulling effect on investment demand than before, the bond market's expectation trading may be close to full. The impact of the local government bond scale and the public - offering fee rate new regulations may not be completely exhausted, but there is a basis for the repair of bond market sentiment [4][17][19]. 2. Risk Warning Not included as required.

1. Report Industry Investment Rating - No information provided in the content 2. Core Views of the Report - This week, credit bond yields declined significantly, and spreads showed a divergent trend, with 4 - 5y varieties outperforming. Although the SSE Composite Index breaking through 4000 points had an impact on the bond market, the central bank's announcement of restarting treasury bond trading and the unexpected decline in the October manufacturing PMI led to a relatively strong performance in the bond market. The improvement in institutional sentiment towards credit bond allocation drove the relatively strong performance of 4 - 5y credit varieties, with a large narrowing in spreads, while most 1 - 2y varieties and medium - term notes over 5y widened passively [1][7]. - Key policies and hot events included the release of the "Administrative Measures for Asset Management Trusts (Draft for Comment)" by the Financial Regulatory Administration, Vanke receiving a loan of up to 2.2 billion yuan from its major shareholder Shenzhen Metro Group, Vanke's Q3 2025 report showing a decline in operating income and a net loss, and the central bank's report on the financial work situation indicating a significant reduction in the number of financing platforms and the scale of operating financial debts [1][2][10]. 3. Summaries According to the Table of Contents 3.1 Credit Bond Market Review: Most Yields Declined, 4 - 5y Varieties Performed Better - Credit bond yields declined significantly this week, and spreads showed a divergent trend, with 4 - 5y varieties outperforming. The central bank's announcement of restarting treasury bond trading and the unexpected decline in the October manufacturing PMI led to a relatively strong performance in the bond market. The improvement in institutional sentiment towards credit bond allocation drove the relatively strong performance of 4 - 5y credit varieties, with a large narrowing in spreads, while most 1 - 2y varieties and medium - term notes over 5y widened passively [1][7]. 3.2 Key Policies and Hot Events: Vanke Received Another Loan from Shenzhen Metro Group, and the "Administrative Measures for Asset Management Trusts (Draft for Comment)" was Released - On October 31, the Financial Regulatory Administration released the "Administrative Measures for Asset Management Trusts (Draft for Comment)" to strengthen supervision, prevent risks, and standardize the development of the trust industry [10]. - On October 30, Vanke announced that its major shareholder Shenzhen Metro Group would provide a loan of up to 2.2 billion yuan to repay the principal and interest of its publicly - issued bonds. As of the announcement date, Shenzhen Metro Group had provided a cumulative loan of 26.93 billion yuan (excluding this time) [2][10]. - On October 30, Vanke released its Q3 2025 report. In the first three quarters, the company's total operating income was 161.388 billion yuan, a year - on - year decrease of 26.61%, and the net profit attributable to the parent company was a loss of 28.016 billion yuan, a year - on - year decrease of 56.14%. Although Vanke's self - repayment ability was weak, it had received support from its major shareholder and financial institutions [2][11]. - On October 28, the central bank released the State Council's report on the financial work situation, stating that as of the end of September 2025, the number of national financing platforms and the scale of operating financial debts had decreased by 71% and 62% respectively compared to the end of March 2023, and risks had been significantly mitigated. The central bank emphasized continuing to support the debt - resolution work of financing platforms and their market - oriented transformation [2][12]. 3.3 Secondary Market: Credit Bond Yields Generally Declined, and Credit Spreads Showed a Divergent Trend - Yields of medium - and short - term notes generally declined by 2 - 13BP, with spreads of 4 - 5y varieties narrowing by 4 - 8BP, and spreads of most other maturities widening by 0 - 4BP [14]. - For urban investment bonds, yields of various varieties generally declined by 4 - 11BP, with 4 - 5y varieties performing better. Credit spreads showed a divergent trend, with spreads of most varieties narrowing by 1 - 6BP [14]. - For real estate bonds, except for the 1y and 3y AAA varieties, yields of other varieties generally declined by 3 - 12BP. Spreads of most varieties generally narrowed by 0 - 8BP [15]. - For cyclical bonds, yields of coal bonds generally declined by 2 - 12BP, and spreads of most varieties narrowed by 0 - 9BP. Yields of steel bonds generally declined by 3 - 12BP, and spreads of most varieties narrowed by 0 - 8BP [15]. - For financial bonds, yields of bank secondary capital bonds and perpetual bonds of various maturities declined by 5 - 12BP, and spreads of most varieties narrowed by 1 - 8BP. Yields of securities firm sub - bonds generally declined by 1 - 9BP, and spreads of most varieties generally narrowed by 0 - 3BP. Yields of insurance sub - bonds generally declined by 5 - 11BP, and spreads of most varieties generally narrowed by 1 - 4BP [15]. 3.4 Primary Market: Net Financing of Credit Bonds and Urban Investment Bonds Declined Month - on - Month - This week, the issuance scale of credit bonds was 224.8 billion yuan, a month - on - month decrease of 246.7 billion yuan, and the net financing was - 12.6 billion yuan, a month - on - month decrease of 148.5 billion yuan. The issuance scale of urban investment bonds was 105.6 billion yuan, a decrease of 5.83 billion yuan from last week, and the net financing was - 36.6 billion yuan, a decrease of - 4.96 billion yuan from last week [4]. 3.5 Trading Liquidity: Trading Activity in the Inter - bank Market Decreased, and Trading Activity in the Exchange Market Increased - This week, the trading activity of credit bonds in the inter - bank market decreased, and the trading volume decreased from 586 billion yuan last week to 580.7 billion yuan. The trading activity in the exchange market increased, and the trading volume increased from 381.7 billion yuan last week to 435.8 billion yuan [4]. 3.6 Rating Adjustment: One Entity's Rating was Upgraded, and No Entity's Rating was Downgraded - This week, the rating of one entity was upgraded, and no entity's rating was downgraded [4].

Summary of Key Points from Conference Call Records Industry Overview - **Debt Market**: The focus is on the Chinese debt market, with predictions for financial data in October indicating a continued aggressive stance in the debt market [1][2]. Core Insights and Arguments - **Weak Credit Demand**: Anticipated new loans in October are expected to be negative, around 300 billion, a significant year-on-year decrease of 200 billion. This reflects insufficient corporate financing demand and local government debt control, posing challenges to economic recovery [1][2]. - **M1 Growth Pressure**: M1 growth is projected to decline month-on-month in October, primarily due to seasonal bank wealth management impacts and a low base from the previous year. A significant drop in M1 growth is expected in Q4 as the year-on-year base normalizes, indicating weakened corporate vitality [1][4]. - **Social Financing Growth Slowdown**: The expected social financing increment for October is 980 billion, a year-on-year decrease mainly from credit and net financing of government bonds. By year-end, social financing growth is predicted to fall to around 8.0% [1][5]. - **Real Estate Market Risks**: The real estate market continues to decline, with average housing prices dropping by 50%, potentially triggering financial risks. National banks are generally pessimistic about the economy due to poor performance across various sectors [1][6]. - **Optimism in Debt Market**: Non-bank institutions have shifted to a more optimistic view of the debt market, bolstered by central bank purchases of government bonds, leading to a belief that bond yields have reached a temporary bottom, with a bullish outlook for Q4 [1][8]. - **Banking Sector Dynamics**: The decline in bank funding costs has significantly enhanced their motivation to purchase local bonds. Major banks view local bonds as high cost-performance investments and are actively increasing their government bond investments [3][11]. Additional Important Insights - **Policy Tools Impact**: The injection of 500 billion in policy tools has only partially alleviated local government fiscal pressures, with limited effects on overall credit demand and infrastructure investment growth [1][7]. - **Future Economic Outlook**: The economic outlook for 2026 suggests increasing downward pressure, exacerbated by a real estate crisis and declining consumer subsidies, leading to lower consumption growth and excess inventory [1][10]. - **Long-term Interest Rate Trends**: The long-term downward trend in interest rates is expected to continue, with potential for the 10-year government bond yield to challenge 1.6% if the central bank lowers rates in December [1][13][17]. - **Market Reactions to Regulatory Changes**: New guidelines for public fund performance benchmarks may significantly impact the stock market, leading to a more cautious approach in fund management and potentially benefiting underweighted sectors [1][16][18]. Conclusion - The overall sentiment in the debt market is bullish for the upcoming months, driven by economic pressures, declining bank funding costs, and ongoing central bank policies. Investors are encouraged to increase their positions in government bonds and extend durations to capitalize on favorable market conditions [1][14][19][20].