1. Report Industry Investment Rating No information regarding the report industry investment rating is provided. 2. Core Views of the Report - **Hua'an's View**: The bond market is favorable, but the odds of further decline in interest rates are limited. It is still advisable to adopt a trading mindset. The current market sentiment is rising, with investors both bullish and taking action. The fundamental factors still support the bond market, but the potential for interest rate decline is limited. Given the historical performance of the bond market in June, it is recommended to approach it with a trading perspective [2]. - **Seller's View**: More than half of the fixed - income sellers are bullish on the bond market, with a significant increase in sentiment this week [3]. - **Buyer's View**: The buyer sentiment is relatively cautious, with nearly 60% holding a neutral view. Overall, the fixed - income buyer's view is neutral with a slight bullish bias [3]. 3. Summary by Relevant Catalogs 3.1 Seller and Buyer Markets 3.1.1 Seller Market Sentiment Index and Interest - rate Bonds - The weighted sentiment index this week is 0.43, indicating a predominantly bullish view, up from last week. The unweighted index is 0.54, an increase of 0.12 from last week. Among the institutions, 16 are bullish, 12 are neutral, and 1 are bearish. 55% of the institutions are bullish, 41% are neutral, and 3% are bearish [10]. 3.1.2 Buyer Market Sentiment Index and Interest - rate Bonds - This week's buyer sentiment index is 0.23, showing a neutral - with - a - slight - bullish view, down 0.12 from last week. Among the institutions, 10 are bullish, 16 are neutral, and 1 is bearish. 37% of the institutions are bullish, 59% are neutral, and 4% are bearish [11]. 3.1.3 Credit Bonds - Market hot topics include quarter - end wealth management repatriation and central bank monetary policy. Quarter - end wealth management repatriation poses resistance to credit spread compression and disturbs the credit market in the short term. Monetary policy easing may drive interest rate changes, but the room for further spread compression is limited [16]. 3.1.4 Convertible Bonds - This week, institutions generally hold a neutral - with - a - slight - bullish view. One institution is bullish and 11 are neutral. 8% of the institutions are bullish, and 92% are neutral [17]. 3.2 Treasury Bond Futures Tracking 3.2.1 Futures Trading - As of June 13, the prices of TS/TF/T/TL contracts increased. The contract prices were 102.46 yuan, 106.18 yuan, 109.02 yuan, and 120.5 yuan respectively, up 0.01 yuan, 0.03 yuan, 0.09 yuan, and 0.72 yuan from last Friday. The contract holdings increased, while the trading volumes and trading - to - holding ratios decreased [19][20]. 3.2.2 Spot Bond Trading - On June 13, the turnover rate of 30Y treasury bonds was 3.62%, up 0.06 pct from last week and 0.10 pct from Monday, with a weekly average of 4.33%. The turnover rate of 10Y China Development Bank bonds was 5.90%, up 0.04 pct from last week. The weekly average turnover rate of interest - rate bonds decreased to 0.92% on June 13, down 0.07 pct from last week [31]. 3.2.3 Basis Trading - As of June 13, except for the TF contract, the basis of other contracts narrowed. The net basis of the TS contract narrowed, while that of others widened. The IRR of the TS contract decreased, while that of others increased [36][39]. 3.2.4 Spread Trading - As of June 13, except for the TL contract, the inter - delivery spread of other contracts narrowed. The inter - variety spreads of all main contracts widened [45].

1. Report Industry Investment Rating The document does not mention the industry investment rating. 2. Core Viewpoints of the Report - Last week, the yield of long - term bonds increased slightly, and the yield curve steepened. Factors such as positive May Day holiday consumption data, rising expectations of Sino - US trade war easing, and better - than - expected April import and export data, along with the full pricing of loose monetary policy in long - term bonds before, led to the increase in long - term bond yields. The short - end interest rates decreased significantly due to the implementation of interest rate and reserve requirement ratio cuts and the overall loose funding situation [1]. - This week (the week of May 12), the bond market is expected to continue the volatile pattern. The better - than - expected April import and export data had a certain negative impact on the bond market, but subsequent tariff impacts will be more evident, and the weak price data and less - than - expected April financial data support the bond market. The implementation of the reserve requirement ratio cut on Thursday will inject about 1 trillion yuan of long - term liquidity into the banking system, and a new round of large - scale banks will lower deposit interest rates. The resumption of treasury bond trading operations is also expected to open up the downward space for the short - end and gradually transmit to the medium - and long - end. However, the progress of Sino - US trade negotiations and the recovery of risk appetite will have a negative impact on the long - end bond yields. Overall, the 10 - year treasury bond yield will fluctuate between 1.6% - 1.7%, may rise slightly, the short - end interest rates will further decline, and the yield curve is expected to continue to steepen [1]. 3. Summary by Relevant Catalogs 3.1 Two - week Market Review 3.1.1 Secondary Market - Last week, the bond market was volatile, and the yield of long - term bonds increased slightly. The 10 - year treasury bond futures main contract rose 0.01% for the whole week. The 10 - year treasury bond yield increased by 1.08bp compared with the previous Wednesday, and the 1 - year treasury bond yield decreased by 4.05bp, with the term spread widening significantly [2]. - From April 28 to May 9, the bond market showed different trends on each trading day due to various factors such as policy announcements, economic data releases, and trade negotiations. For example, on May 7, long - term bond yields increased due to Sino - US trade negotiations and the less - than - expected scale of interest rate and reserve requirement ratio cuts, while short - term bond yields decreased significantly [4]. 3.1.2 Primary Market - Last week, 50 interest - rate bonds were issued, an increase of 18 compared with the previous week. The issuance volume was 578.6 billion yuan, an increase of 443.5 billion yuan, and the net financing was 235.3 billion yuan, an increase of 100.6 billion yuan. The issuance volumes of treasury bonds, policy - financial bonds, and local bonds all increased compared with the previous week. The net financing of treasury bonds increased, while that of local bonds and policy - financial bonds decreased [10]. - The subscription demand for interest - rate bonds last week was generally acceptable. Among them, the average subscription multiple of treasury bonds (excluding 2 certificate - type treasury bonds) was 3.06 times, that of policy - financial bonds was 3.99 times, and that of local bonds was 26.38 times [11]. 3.2 Last Week's Important Events - The official manufacturing PMI in April decreased significantly. The manufacturing PMI index in April was 49.0%, a 1.5 - percentage - point decrease from March, mainly due to the US tariff increase and seasonal factors. The non - manufacturing business activity index also declined [11][13]. - The CPI in April continued to be at a low level. The CPI in April decreased by 0.1% year - on - year, the same as the previous month. The PPI decreased by 2.7% year - on - year, a larger decline than the previous month. The current domestic price level is stable and weak, providing space for expanding consumption [13]. - The impact of the tariff war in April began to show, but the intensity was lower than expected. The export volume in April increased by 8.1% year - on - year, with a slowdown in growth, mainly due to the decline in exports to the US. The import volume decreased by 0.2% year - on - year, with a narrowing decline, mainly driven by the increase in imports from non - US economies. In the future, May's import and export may be negatively affected [13][14]. 3.3 Real - Economy Observation - Last week, the high - frequency data on the production side showed mixed trends. The blast furnace operating rate and daily hot metal output continued to rise, while the operating rates of petroleum asphalt plants and semi - steel tire plants decreased. On the demand side, the BDI index and the export container freight rate index CCFI both decreased, and the sales area of commercial housing in 30 large and medium - sized cities continued to decline [15]. - In terms of prices, the pork price continued to rise slightly, and most commodity prices increased. Crude oil and copper prices rose, while the rebar price declined significantly [15]. 3.4 Last Week's Liquidity Observation - Last week, the central bank's open - market operations had a net capital withdrawal of 781.7 billion yuan [28][29]. - Last week, R007 and DR007 decreased significantly, the issuance interest rate of joint - stock bank inter - bank certificates of deposit decreased significantly, the national - share direct - discount interest rates of all terms decreased, the trading volume of pledged repurchase increased significantly, and the inter - bank market leverage ratio decreased significantly [30][31][34].

每日观点 简评：虽然国际输入性因素对部分行业价格产生一定下拉影响，但我国经济基础稳、韧性强，各项宏观 政策协同发力，高质量发展扎实推进，部分领域如食品制造业等消费品行业以及高技术产业相关行业价 格呈现积极变化。整体来看，4月物价低位运行，近期降准降息等一揽子金融政策出台，有望为后续价 格合理回升提供支撑，CPI有望保持温和，PPI在外部影响下或仍将承压。 【博时市场点评5月12日】关税预期缓和，两市放量上涨 今日A股三大指数上涨，创业板涨幅超2%，两市成交较前一交易日放量至1.34万亿。据央视消息，中美 在日内瓦举行的经贸高层会谈达成重要共识，并取得实质性进展。双方一致同意建立中美经贸磋商机 制，双方将尽快敲定相关细节，并将于今日发布会谈达成的联合声明。受此影响，今日市场风险偏好有 所提升，此次瑞士接触，是推动问题解决的重要一步，后续双边互征的关税可能有所下降，但问题的最 终解决仍需耐心和战略定力。4月的出口数据好于预期，同比增长8.1%，其中对美出口大幅下跌21%， 对东南亚出口提升，表现出明显的"抢转口"特征。4月CPI同比下跌0.1%，PPI同比下跌2.7%，后续CPI 有望保持温和，PPI或在外部影响 ...

Economic Overview - In Q1 2025, China's GDP grew by 5.4%, exceeding market expectations despite a high base from the previous year[2] - The trade war initiated in April 2025 has increased economic uncertainty, leading to downward revisions in GDP growth forecasts by international institutions[3] Monetary Policy Response - The People's Bank of China (PBOC) has implemented a comprehensive financial policy package, including a 0.5 percentage point reduction in the reserve requirement ratio, releasing approximately 1 trillion yuan in liquidity[4] - The PBOC also lowered the benchmark interest rate for 7-day reverse repos from 1.5% to 1.4%, potentially reducing the Loan Prime Rate (LPR) by about 0.1 percentage points[10] Sector-Specific Measures - The reserve requirement ratio for auto finance and financial leasing companies has been reduced from 5% to 0%, aimed at stimulating auto consumption and reducing manufacturing costs[10] - The interest rate for personal housing provident fund loans has been cut by 0.25 percentage points, with the first home rate now at 2.6%[10] Consumer Behavior and Market Trends - In March 2025, retail sales grew by 5.9% year-on-year, indicating improved consumer sentiment[17] - The consumer spending propensity reached 63.1% in Q1 2025, the highest for the first quarter since 2020, reflecting a positive trend in consumer confidence[17] Trade War Impact - The trade war could potentially reduce China's GDP growth by approximately 2 percentage points if high tariffs lead to a complete halt in trade with the U.S.[18] - However, the actual impact is expected to be less severe, with the IMF estimating a drag of only 0.6% on GDP growth due to the ability to reroute exports to non-U.S. markets[18] Future Outlook - The PBOC is expected to maintain a moderately loose monetary policy, with significant room for further easing if economic conditions worsen due to the trade war[12] - The combination of monetary and fiscal policies is anticipated to support domestic demand, countering external uncertainties[16]

Monetary Policy Measures - The central bank announced a comprehensive package of ten policy measures, including a 0.5 percentage point reduction in the reserve requirement ratio and a 0.1 percentage point cut in policy interest rates, along with a 0.25 percentage point decrease in the rates for structural monetary policy tools and provident fund loans [1][2] - The reduction in reserve requirements is expected to release 1 trillion yuan in liquidity, which will help alleviate the pressure on banks' liabilities and lower borrowing costs [1][3] Economic Context - The macroeconomic environment is characterized by external demand pressure, internal demand differentiation, and structural support, with the manufacturing PMI in April dropping to 49.0%, indicating weakening economic conditions [2][4] - The recent "reciprocal tariffs" imposed by the U.S. have significantly impacted global trade and China's export outlook, serving as a core trigger for the recent monetary policy easing [2][4] Market Implications - The dual reduction in reserve requirements and interest rates is expected to lead to a downward trend in funding rates, particularly benefiting short-term rates while long-term rates may face challenges due to pricing pressures [1][4] - The 10-year government bond yield is currently around 1.62%, with expectations that it could approach 1.5% as the market adjusts to the new monetary policy landscape [5] Future Outlook - The upcoming LPR quotation on May 20 will be crucial; a significant reduction in the 5-year and above LPR could open up trading opportunities in long-term bonds [5] - The government's new urbanization strategy is projected to create approximately 4 trillion yuan in investment demand, indicating ongoing fiscal support alongside monetary easing [2][3]

Report Industry Investment Rating No investment rating information is provided in the report. Core Viewpoints - Short - term bullish steepening logic in the bond market is not sound. It is expected to fluctuate in the short - term. The main line of loose monetary policy remains unchanged in the medium - term. After the implementation of reserve requirement ratio cut and interest rate cut, the curve bullish steepening will open up further downward space for long - term bond yields [1][3][29]. Summary by Related Catalogs Why the short - term bullish steepening logic is not sound - From April 11th to April 16th, 2025, after the bond market priced in the hedging of tariff shocks by stable - growth policies, it turned to a fluctuating state. The yield curve showed a mixed flat trend. The yield of the 10 - year active treasury bond fluctuated between 1.63% - 1.67%. The yield of the 2 - year active treasury bond rose from 1.38% to 1.425%. The long - term and ultra - long - term bond buying sentiment was suppressed, and the gaps in treasury bond futures TL and T contracts were nearly filled. The money market rate started to rise on April 11th [10]. - **Difference 1: Central bank's attitude and policy implementation rhythm** - Under RMB exchange - rate pressure, the central bank's current attitude is restrained. In 2020, during the public health event, the central bank quickly used reserve requirement ratio and interest rate cut tools, resulting in a rapid decline in money market rates. This time, due to RMB depreciation pressure, the central bank has net - withdrawn liquidity in the open market in the past two weeks. The overnight and 7 - day money market rates are still above the policy rates, and the money market is in an overall balanced state [11]. - In the next stage, monetary policy may be more coordinated with fiscal policy, and the implementation rhythm of reserve requirement ratio and interest rate cut expectations may be slow. The central bank's restrained loosening restricts the downward space of short - term bond yields and also limits the downward space of long - term and ultra - long - term bond yields due to the low term spread and flat curve [11][12]. - **Difference 2: External environment and domestic economic situation** - The current external environment is more complex and severe, but China's ability to handle trade frictions has improved. The average contribution rate of domestic demand to economic growth in the past five years has exceeded 80%. The proportion of exports to the US in total exports has dropped from 19.2% in 2018 to 13.5% in the first three months of 2025. China's economic dependence on external demand and the dependence of external demand on US exports have both declined [17]. - The economy had a good start in Q1, with domestic demand continuously warming up under policy promotion. Many economic indicators such as social financing, consumption, and industrial added value exceeded market expectations. The impact of tariff negotiations on the Q2 economy needs further observation. Policies in Q2 are expected to focus on boosting consumption, expanding investment, and stabilizing employment [17][18]. - **Difference 3: Uncertainty of tariff policy** - In 2020, the impact of the public health event on the capital market showed a "double - bottom" feature. In this tariff shock, the US's counter - tariffs and China's counter - measures basically occurred at the same time, and the market on April 7th had fully reflected this expectation. However, due to the unpredictability of Trump's policies and the complexity of tariff negotiations, whether there will be a secondary impact of tariffs on asset prices remains to be seen [25]. - **Strategy thinking** - Considering the exchange - rate stability constraint, the central bank's operations are currently restrained. Before the implementation of reserve requirement ratio and interest rate cuts, the possibility of a significant loosening of the money market is low. The current long - term and ultra - long - term bond yields are close to their previous lows. The bond market may fluctuate in the short - term. In the medium - term, after the implementation of the double cuts, the curve bullish steepening will open up further downward space for long - term bond yields [3][29].

Core Insights - The report indicates a mixed performance in the stock market, with the Shanghai Composite Index rising by 0.05% and the CSI 300 Index declining by 0.08% on April 2, 2025, reflecting a state of low trading volume and volatility [2] - The bond market is experiencing a downward trend in yields, with 10-year and 30-year government bond yields decreasing by 2.2 basis points and 3.8 basis points to 1.79% and 1.99% respectively, suggesting a shift towards a more accommodative monetary policy [2][4] - Commodity prices are showing varied trends, with gold prices experiencing fluctuations ahead of tariff announcements, while industrial metals like copper are seeing gains, indicating a complex pricing environment influenced by external factors [3] Market Performance - The stock market is characterized by a cautious sentiment, with trading volumes decreasing significantly, indicating a wait-and-see approach among investors as they await clarity on U.S. tariff policies [6][7] - Small-cap stocks are outperforming large-cap stocks, with the CSI 1000 and Wind Micro-cap indices rising by 0.28% and 0.32% respectively, while the CSI 300 index saw a decline [7] - The Hong Kong stock market is also in a state of flux, with the Hang Seng Index down by 0.02% and the Hang Seng Tech Index up by 0.35%, reflecting sector-specific dynamics and investor sentiment [8] Liquidity and Monetary Policy - The liquidity environment has shifted to a more relaxed state, with overnight rates for non-bank institutions declining to around 1.55-1.60%, indicating a potential easing of monetary policy [4][5] - The report suggests that the bond market is entering a downward trend in yields, driven by expectations of further monetary easing measures such as reserve requirement ratio cuts or bond purchases by the central bank [5] Future Outlook - The report highlights the importance of upcoming tariff announcements, which could significantly impact market sentiment and trading strategies. A minimal increase in tariffs may lead to a stronger stock market, while a substantial increase could heighten risk aversion and push bond yields lower [5][8] - The report emphasizes that the current market dynamics differ from previous years, with a focus on substantial breakthroughs in the technology sector, suggesting that the mid-term outlook remains positive despite short-term uncertainties [8]