Report Industry Investment Rating No information provided in the content. Core Viewpoints - Last week, the bond market adjusted, with the yield curve steepening and shifting upward. The long - term bond yields first rose and then fell, showing an overall increase. The short - term interest rates had a smaller increase than the long - term ones. This week, the bond market may stabilize, but a trend - based recovery is unlikely. The 10 - year Treasury yield is expected to fluctuate between 1.75% - 1.80% [3]. Summary by Directory 1. Last Week's Market Review 1.1 Secondary Market - The bond market adjusted last week. The 10 - year Treasury futures main contract fell 0.19% cumulatively. The 10 - year Treasury yield rose 4.10bp, and the 1 - year Treasury yield rose 0.41bp compared to the previous Friday, with the term spread widening [4]. - On September 8th, the bond market was weak due to a strong stock market and concerns about bond fund scale reduction. The 10 - year Treasury yield rose 2.54bp, and the 10 - year futures main contract fell 0.21% [4]. - On September 9th, the bond market remained weak due to concerns about redemption fees and tightened liquidity. The 10 - year Treasury yield rose 1.27bp, and the 10 - year futures main contract fell 0.06% [4]. - On September 10th, although the morning sentiment improved due to lower - than - expected inflation data, the bond market weakened significantly in the afternoon. The 10 - year Treasury yield rose 3.51bp, and the 10 - year futures main contract fell 0.27% [4]. - On September 11th, the bond market recovered due to improved liquidity and rumors of the central bank restarting bond purchases. The 10 - year Treasury yield fell 2.49bp, and the 10 - year futures main contract rose 0.07% [4]. - On September 12th, the bond market was slightly bullish due to loose liquidity, a falling stock market, and the central bank's over - renewal of repurchase agreements. The 10 - year Treasury yield fell 0.73bp, and the 10 - year futures main contract rose 0.06% [4]. 1.2 Primary Market - Last week, 83 interest - rate bonds were issued, with a total issuance of 1034.5 billion yuan, a net financing of 435 billion yuan. The issuance and net financing of Treasury bonds and local bonds increased, while the net financing of policy - financial bonds decreased [10]. - The subscription demand for interest - rate bonds was generally good. The average subscription multiples for Treasury bonds, policy - financial bonds, and local bonds were 3.37, 2.92, and 20.81 times respectively [11]. 2. Last Week's Important Events - In August, the export growth rate declined. The export value increased 4.4% year - on - year, 2.8 percentage points lower than in July. The import value increased 1.3% year - on - year, also 2.8 percentage points lower than in July. The export slowdown was mainly due to a higher base and a significant decline in exports to the US [12]. - In August, the CPI turned negative year - on - year, falling 0.4%. The PPI fell 2.9% year - on - year, with a flat month - on - month rate. The CPI decline was mainly due to a high food price base last year, and the PPI's flat month - on - month rate was affected by policies and international commodity prices [12]. - In August, new RMB loans returned to positive growth, with 590 billion yuan in new loans. New social financing was 2569.3 billion yuan. M2 grew 8.8% year - on - year, and M1 grew 6.0% year - on - year. The growth in new loans was due to improved economic sentiment and increased credit demand [12][13]. 3. Real - Economy Observation - Last week, most high - frequency production data increased, including the semi - steel tire, blast furnace, and asphalt plant operating rates, as well as daily hot - metal production. On the demand side, the BDI index rose, while the CCFI continued to decline. The 30 - city property sales area decreased. Pork and most commodity prices rose, except for the fluctuating decline in rebar prices [14]. 4. Last Week's Liquidity Observation - Last week, the central bank's open - market operations had a net capital injection of 196.1 billion yuan. The R007 and DR007, inter - bank certificate of deposit rates, and national and stock direct - discount rates all rose. The inter - bank market leverage ratio fluctuated downward [24][26][30].

Group 1 - The bond market has been experiencing a continuous decline, leading to significant redemption pressure on certain pure bond funds, with over 20 funds facing large redemptions in the past month [2] - As of September 12, more than 10 pure bond funds have seen their net value drop by over 3% since the beginning of the second half of the year, with some funds experiencing declines exceeding 5% [1][2] - The main reasons for the bond market adjustment include the strong performance of the stock market attracting funds away from bonds, and rising inflation expectations due to the implementation of "anti-involution" policies [2] Group 2 - The 30-year and 10-year government bond futures have seen consecutive declines over the past two and a half months, with the 30-year futures down by 0.89% and the 10-year futures down by 0.19% in the last week [1] - Specific funds such as Huatai Baoxing Zunyi Rate Bond and Minsheng Jianyin Ruixia One-Year Open Bond have reported significant net value declines, indicating a broader trend among long-term rate bonds [1] - Fund companies have adjusted the net asset value precision for certain funds to protect the interests of fund holders amid the ongoing market adjustments [2]

Report Industry Investment Rating - No relevant information provided Core View - The adjustment of the bond market is mainly due to the disappointment in 2024 and the change in the macro - narrative. Considering the desensitization of stocks and bonds since late August and the entry into the window period of August economic data, it is expected that the trading mainline of the bond market will shift to the fundamentals, and the bond market is expected to rebound in the short term after an over - decline [2][3][12] Summary by Directory Weekly Review Ultra - long Bond Review - Last week, the draft for soliciting opinions on the new regulations for fund sales fees was released, leading to an increase in the redemption volume of some bond funds and a certain negative feedback in the bond market. In addition, inflation in August was still low, financial data was weak, and the capital side tightened marginally. The central bank announced a 600 - billion - yuan 6 - month outright reverse repurchase. The ultra - long bonds tumbled throughout the week and rebounded slightly on Friday. In terms of trading volume, the trading activity of ultra - long bonds rebounded slightly last week and was very active. In terms of spreads, the term spread of ultra - long bonds widened, and the variety spread narrowed [1][11] Ultra - long Bond Investment Outlook - 30 - year Treasury Bonds: As of September 12, the spread between 30 - year and 10 - year Treasury bonds was 32BP, at a historically low level. The domestic economy in July still faced downward pressure, with the estimated year - on - year GDP growth rate in July at about 4.3%, a significant decline from the growth rate in the first half of this year. In terms of inflation, the CPI in August was - 0.4%, and the PPI was - 2.9%, indicating the existence of deflation risks. The current bond market decline features stable short - term bonds and an enlarged term spread. The bond market is expected to rebound in the short term [2][12] - 20 - year CDB Bonds: As of September 12, the spread between 20 - year CDB bonds and 20 - year Treasury bonds was 4BP, at a historically extremely low position. Similar to the situation of 30 - year Treasury bonds, the domestic economy faced downward pressure in July, and deflation risks existed. The bond market is expected to rebound in the short term [3][13] Ultra - long Bond Basic Overview - The balance of outstanding ultra - long bonds exceeds 23.3 trillion yuan. As of August 31, the total amount of ultra - long bonds with a remaining maturity of more than 14 years was 23.3878 trillion yuan (excluding asset - backed securities and project revenue notes), accounting for 14.9% of the total bond balance. Local government bonds and Treasury bonds are the main varieties of ultra - long bonds. By variety, Treasury bonds account for 26.9%, local government bonds 67.3%, etc. By remaining maturity, the 30 - year variety has the highest proportion [14] Primary Market Weekly Issuance - The issuance volume of ultra - long bonds increased significantly last week. From September 8 to 12, 2025, a total of 200.6 billion yuan of ultra - long bonds were issued. Compared with the previous week, the total issuance volume of ultra - long bonds increased significantly. By variety, Treasury bonds were 35 billion yuan, local government bonds 145.6 billion yuan, etc. By term, 14 billion yuan was issued with a 15 - year term, 44.6 billion yuan with a 20 - year term, etc. [19] This Week's Pending Issuance - The announced issuance plan for ultra - long bonds this week totals 224.2 billion yuan. By variety, ultra - long Treasury bonds are 117 billion yuan, ultra - long local government bonds 97.2 billion yuan, and ultra - long financial bonds 10 billion yuan [21] Secondary Market Trading Volume - The trading of ultra - long bonds was very active last week. The trading volume of ultra - long bonds was 1.2793 trillion yuan, accounting for 14.6% of the total bond trading volume. By variety, the trading volume of ultra - long - term Treasury bonds was 1.0486 trillion yuan, accounting for 41.9% of the total Treasury bond trading volume; the trading volume of ultra - long - term local bonds was 213.3 billion yuan, accounting for 49.0% of the total local bond trading volume; the trading volume of ultra - long - term policy - financial bonds was 10.6 billion yuan, accounting for 0.4% of the total policy - financial bond trading volume; the trading volume of ultra - long - term government agency bonds was 700 million yuan, accounting for 32.6% of the total government agency bond trading volume. The trading activity of ultra - long bonds increased slightly last week [24][25] Yield - Due to the release of the draft for soliciting opinions on the new regulations for fund sales fees and other factors, the ultra - long bonds tumbled throughout the week and rebounded slightly on Friday. For Treasury bonds, the yields of 15 - year, 20 - year, 30 - year, and 50 - year bonds changed by 9BP, 8BP, 7BP, and 8BP respectively to 2.07%, 2.18%, 2.18%, and 2.22%. For CDB bonds, the yields of 15 - year, 20 - year, 30 - year, and 50 - year bonds changed by 11BP, 9BP, 7BP, and 5BP respectively to 2.16%, 2.22%, 2.26%, and 2.40%. For local bonds, the yields of 15 - year, 20 - year, and 30 - year bonds changed by 8BP, 10BP, and 10BP respectively to 2.30%, 2.36%, and 2.36%. For railway bonds, the yields of 15 - year, 20 - year, and 30 - year bonds changed by 7BP, 7BP, and 5BP respectively to 2.24%, 2.26%, and 2.38% [33] Spread Analysis - Term Spread: The term spread of ultra - long bonds widened last week, with an absolute low level. The spread between 30 - year and 10 - year Treasury bonds was 32BP, a change of 4BP compared with the previous week, at the 14% quantile since 2010 [40] - Variety Spread: The variety spread of ultra - long bonds narrowed last week, with an absolute low level. The spread between 20 - year CDB bonds and Treasury bonds was 4BP, and the spread between 20 - year railway bonds and Treasury bonds was 8BP, changing by 0BP and - 3BP respectively compared with the previous week, at the 6% and 5% quantiles since 2010 [46] 30 - year Treasury Bond Futures - Last week, the main contract of 30 - year Treasury bond futures, TL2512, closed at 115.27 yuan, with a decline of 0.93%. The total trading volume of 30 - year Treasury bond futures was 417,000 lots (- 355,481 lots), and the open interest was 160,600 lots (17,947 lots). The trading volume decreased significantly compared with the previous week, while the open interest increased slightly [51]

Core Insights - The current bond market is in a bottoming phase characterized by a converging triangle pattern and insufficient long positions, suggesting investors should wait patiently for opportunities to gradually accumulate positions when the 10-year government bond yield is in the range of 1.80-1.85% [1][2][27] Historical Context of Bond Market Bottoming - Historically, the bond market has experienced a smooth downward trend followed by prolonged bottoming phases, as seen in early 2015 and before 2019, which eventually led to new downward trends in yields. The current situation in 2025 shows similarities but lacks the stability in high and low points seen in previous bottoming phases, indicating a converging range and insufficient long positions [1][9][11] Current Stage of the Bond Market - The bond market is currently at a stage where the converging triangle pattern indicates a lack of momentum for further price movement in either direction, suggesting a potential re-evaluation of direction. Positive signals include the duration of the current bottoming phase, which has lasted about 7 months, and a recovery in long sentiment in government bond futures as of September 11 [2][28][27] Technical Analysis and Market Signals - The technical analysis indicates that the converging triangle pattern typically signifies a lack of strong momentum, leading to a potential directional choice ahead. The bond market has shown signs of recovery in trading volume and sentiment, with a notable increase in positions across various futures contracts [2][28][30] Economic and Monetary Policy Context - The economic environment in 2025 is comparable to that of early 2015 and 2019, with a slow recovery in the economy and weak financing demand from both households and enterprises. The GDP growth is expected to remain around 5%, supporting a downward trend in bond yields. Additionally, the monetary policy remains accommodative, with recent rate cuts and liquidity injections providing a supportive backdrop for the bond market [13][19][27] Equity Market Performance - The equity market has shown structural differentiation, with growth stocks outperforming value stocks across different periods. In 2025, the market has seen significant gains in mid and small-cap sectors, indicating a trend where growth outperforms traditional sectors, which aligns with historical patterns observed in previous years [23][27]

Core Viewpoint - The recent changes in public fund fee regulations have significantly impacted the bond market, leading to a sharp rise in bond yields and a decline in bond fund returns, particularly affecting short-term bond funds [1][2][3]. Group 1: Bond Market Reaction - The yield on 10-year government bonds rose sharply from 1.74% on September 4 to a peak of 1.83% on September 10, while the 30-year government bond yield increased to around 2.10% [1]. - As of September 11, there were signs of stabilization in the bond market, with a divergence in performance between long and short-term bonds [1]. - In the past week, 751 out of 930 short-term pure bond funds reported negative returns, and 2926 out of 3571 medium to long-term pure bond funds also had negative returns [1]. Group 2: Impact of New Fund Fee Regulations - The new fund fee regulations, which adjust redemption fees for bond funds, have led to a significant decline in the attractiveness of bond investments, particularly for short-term bond funds [2][3]. - The regulations encourage long-term holding of bond funds, which may alter the investment strategies of institutions that previously used bond funds for liquidity management [7][8]. - The new redemption fee structure requires investors to pay fees based on the duration of their holdings, which could deter short-term trading and negatively impact fund returns [4][5]. Group 3: Shifts in Investment Preferences - The changes in the bond market dynamics may lead to a shift in investor preferences, with banks and wealth management products potentially becoming more attractive as alternatives to bond funds [6][9]. - The demand for different types of bonds may change, with banks favoring short to medium-term bonds and wealth management products leaning towards short-term credit bonds [7][8]. - The absence of liquidity management functions in bond funds may result in increased interest in bond ETFs as a substitute for managing liquidity [9].

Report Industry Investment Rating - No relevant content provided Core Viewpoints - The current bond market decline features stable short - term bonds and widening term spreads. The adjustment is due to the disappointment in 2024 expectations and the change in the macro - narrative. As the bond and stock markets have gradually become desensitized since late August and entered the August economic data window period, the trading focus of the bond market is expected to shift to fundamentals, and the bond market is expected to rebound from the oversold level in the short term. Attention should be paid to the August economic growth data released on September 15 [2] Summary by Related Catalogs Review of the Bond Market Decline - The upward adjustment of bond yields started at the end of June. From June 30 to September 10, almost all bond yields rebounded significantly, with an average increase of 12BP (only the 3 - year AA - variety yield decreased by 5BP). Long - term bonds had a more significant increase, with the average increase of treasury bonds, government - sponsored bonds, and local government bonds being 15BP, 17BP, and 11BP respectively. The 30 - year treasury bond yield increased by 34BP. Most credit spreads narrowed, with an average narrowing of 5BP, and the narrowing of low - grade credit spreads was more significant [3] Reasons for the Bond Market Adjustment - The adjustment is mainly due to two reasons: the disappointment in 2024 expectations, as the 7 - day reverse repurchase rate in 2025 was only cut by 10BP, less than the average cut of over 20BP in the past three years, and the GDP growth rate in the first half of 2025 was better than the pessimistic expectations at the end of 2024; and the change in the macro - narrative, including the anti - involution movement dispelling deflation expectations and the strong performance of the stock market leading to the redemption of bonds [2][6] Desensitization of Bond and Stock Markets - From August 18 to September 8, the bond market was mainly sideways, while the stock market rose (CSI 300 rose 5.4% and CSI 500 rose 4.9%). The correlation between bonds and stocks weakened compared with July. The trading rhythm of the bond market began to lead the stock market to some extent. The bond market is gradually desensitizing to the stock market, which is related to the structural differentiation of the stock market's rise. The performance of A - share industries has been significantly different this year, and the stock market's sharp rise does not mean a comprehensive improvement in the Chinese economy [9][10] Bond Market Outlook - The trading focus of the bond market is expected to return to fundamentals. Historically, important turning points in the bond market often occur during the release of economic data. The current economic fundamentals are still weak, and the GDP growth rate in the third quarter is expected to decline. The bond market is expected to rebound from the oversold level in the short term. Attention should be paid to the August economic growth data released on September 15 [2][16][20]

Core Viewpoint - The recent changes in public fund fee regulations have significantly impacted the bond market, leading to a sharp rise in bond yields and a decline in bond fund returns [1][2][3] Group 1: Market Reaction - The yield on 10-year government bonds rose from 1.74% on September 4 to a peak of 1.83% on September 10, while the 30-year bond yield increased to around 2.10% [1] - As of September 11, 751 out of 930 short-term pure bond funds reported negative returns over the past week, and 2926 out of 3571 medium to long-term bond funds also showed negative returns [1] - The CNEX bond divergence index indicates that fund institutions have been major sellers in the current bond market downturn [2] Group 2: Regulatory Changes - The new fund fee regulations, effective from September 5, adjust redemption fees for bond funds, encouraging long-term holding and impacting liquidity management strategies [3][4] - The new redemption fee structure includes a minimum of 1.5% for holdings under seven days, 1% for holdings between seven and thirty days, and 0.5% for holdings between thirty days and six months [4][5] Group 3: Investment Strategy Shifts - The new regulations are expected to alter the asset allocation logic for fixed-income products, with a shift towards longer holding periods and different preferences for bond types among institutional investors [7][8] - As funds exit bond funds, there may be a preference for short-term credit bonds and mid-duration bonds, while demand for long-term government bonds may weaken [8][9] - The absence of liquidity management functions in bond funds may lead to increased interest in bank wealth management products, which do not have redemption fees [6][9] Group 4: Market Dynamics - The bond market is experiencing a unique adjustment, with no significant cross-market linkage observed, primarily due to the new redemption fee adjustments and the historical low yields following last year's bond bull market [2][3] - The new fee structure may lead to a preference for bond ETFs as a substitute for liquidity management, as financial institutions seek to adapt to the changing landscape [9][10]

Core Insights - The total scale of credit bond ETFs has decreased to 356 billion yuan, with a daily decline of 0.8 billion yuan, indicating a challenging market environment for these financial instruments [1] - The liquidity in the market remains robust, with an overall transaction amount of 63.1 billion yuan and an average single transaction amount of 2.99 million yuan [1] - The performance of Ping An Company Bond ETF (511030) stands out, showing a net inflow of 456 million yuan over the past week, contrasting with the general trend of outflows in the market [1] Liquidity - The company bond ETF experienced a turnover of 0.5% during the trading session, with a transaction volume of 114 million yuan [2] - Over the past week, the average daily transaction volume for the company bond ETF reached 2.192 billion yuan [2] Scale and Fund Flows - The latest scale of the company bond ETF is 22.848 billion yuan, with fund inflows and outflows remaining balanced [3] - In the last five trading days, the ETF attracted a total of 97.7382 million yuan in net inflows, indicating continued interest from leveraged funds [3] Performance Metrics - The company bond ETF has seen a net value increase of 13.60% over the past five years, with a maximum monthly return of 1.22% since inception [3] - The ETF has a historical profitability rate of 100% for three-year holdings, with a monthly profitability probability of 79.33% [3] Drawdown and Fees - The maximum drawdown for the company bond ETF in the last six months is 0.19%, which is slightly higher than the benchmark's drawdown of 0.08% [4] - The management fee for the company bond ETF is set at 0.15%, while the custody fee is 0.05% [5] Tracking Accuracy - The tracking error for the company bond ETF over the past month is 0.013%, indicating a high level of precision in tracking its benchmark [6] Index Tracking - The company bond ETF closely tracks the China Bond - Medium and High-Grade Corporate Bond Spread Factor Index, which serves as a performance benchmark for medium and high-grade corporate bonds [7]

Group 1 - Recent fluctuations in the bond market, particularly in long-term bond prices, have attracted significant market attention [1] - The adjustment in the bond market is believed to be relatively sufficient, with several supporting factors still in place [2] - The primary reasons for the current bond market adjustment include the "see-saw" effect between the stock and bond markets, high market congestion in the bond market, and short-term emotional disturbances due to new policies and trade negotiations [1][2] Group 2 - The investment logic in the bond market may be shifting, with a greater focus on the performance of the stock market impacting bond market dynamics [2] - If the stock market continues to reach new highs, the bond market may face ongoing pressure; conversely, if the stock market adjusts, the bond market may experience a rebound [2] - Current conditions suggest that the bond market's adjustment space is limited, and there is potential investment value, especially if further declines occur due to overreaction [2]

Market Performance - Treasury futures closed higher across the board, with the 30-year main contract rising by 0.30%, the 10-year main contract up by 0.17%, the 5-year main contract increasing by 0.08%, and the 2-year main contract gaining 0.02% [1] - The yield on the 30-year government bond "25 Super Long Special Government Bond 02" decreased by 0.4 basis points, while the 10-year government bond "25 Coupon Government Bond 11" saw a yield drop of 1 basis point [1] Funding Conditions - The central bank announced a 182.7 billion yuan 7-day reverse repurchase operation at a fixed rate of 1.40%, with the same amount being the bid and winning amount [2] - On the same day, 288.4 billion yuan in reverse repos matured, resulting in a net withdrawal of 105.7 billion yuan [2] - The overall funding conditions remained stable, with a slight decrease in overnight repurchase rates for deposit-taking institutions [2] Economic Fundamentals - The manufacturing PMI for August slightly increased by 0.1% to 49.4, driven mainly by a 0.3% rise in the production index to 50.8 [3] - The new orders index also saw a minor increase of 0.1% to 49.5, indicating some resilience in external demand [3] - The raw material purchase price index rebounded by 1.8% to 53.3, while the factory price index increased by 0.8% to 49.1, suggesting ongoing price pressures in the manufacturing sector [3] Operational Recommendations - The slight recovery in the PMI for August may not significantly impact the bond market, but a balanced funding environment and renewed interest in long-term bonds could support a stronger bond market [4] - The 10-year government bond yield is expected to fluctuate between 1.75% and 1.8%, with a recommendation for investors to adopt a range-based trading strategy [4] - The anticipated easing of monetary policy, particularly with a potential rate cut by the Federal Reserve, could open up a wider space for domestic monetary easing [4]