Core Viewpoint - The central bank has resumed 14-day reverse repos to release year-end liquidity, maintaining stability in the money market, while short-term interest rates strengthen under expectations of loose monetary policy [1] Market Overview - The bond market saw fluctuations with the yield curve steepening, as the 10-year government bond yield decreased by nearly 1 basis point (BP) and the 30-year yield fell by over 2 BP during the week [1] - The yields for various maturities changed as follows: 1-year (-3.32 BP), 2-year (-1.99 BP), 3-year (-2.2 BP), 5-year (-2.58 BP), 7-year (-1.52 BP), 10-year (-0.88 BP), and 30-year (-2.35 BP) [2][3] Bond Market Dynamics - The bond market experienced a recovery mid-week after initial declines, with the 10-year government bond yield dropping to 1.836% [2] - The 30-year bond contract saw a slight increase of 0.02% over the week, while the 10-year and 5-year contracts rose by 0.14% each [5] Issuance in Primary Market - A total of 35 bonds were issued last week, amounting to 376.13 billion yuan, including 4 government bonds worth 296.04 billion yuan [7] - For the upcoming week, 8 bonds are planned for issuance, totaling 150.04 billion yuan, with 2 government bonds worth 148 billion yuan [7] International Bond Market - U.S. Treasury yields fell overall, with the 10-year yield down by 3 BP to 4.16% and the 2-year yield down by 4 BP to 3.48% [8] - In Japan, the central bank raised interest rates to 0.75%, leading to a sell-off in government bonds, with the 10-year yield reaching its highest level since 1999 at 2.023% [8] Economic Indicators - In November, the U.S. consumer price index (CPI) rose by 2.7%, lower than expected, which has increased bets on potential interest rate cuts by the Federal Reserve [10] - The U.S. unemployment rate rose to 4.6%, the highest since October 2021, indicating a weakening labor market [11] Institutional Perspectives - Analysts suggest that the bond market is currently in a consolidation phase, with expectations of continued monetary easing and potential trading opportunities emerging in the first quarter of the following year [15] - The market is characterized by high volatility, driven by differing behaviors of institutional investors and trading desks, with ongoing concerns about supply pressures and regulatory changes [16]

1. Report Industry Investment Rating No information provided in the document. 2. Core Viewpoints of the Report - Last week, precious metal prices continued to be strong, with London spot gold approaching the historical high of $4,380 in October, and London spot silver reaching a new historical high of $67. The short - term K - line shows no turning signal. After Tuesday, the Fed's interest rate cut expectation rebounded slightly due to补发 of non - farm and CPI employment data, indicating downward pressure on the US economy and easing inflation [2]. - Since the end of November, silver has outperformed gold, and the gold - silver ratio has dropped significantly due to factors such as low supply elasticity and low inventory of silver, large deliveries of COMEX 2512 contracts, rigid industrial demand, continuous inflow of ETF investment demand (but a weekly outflow of 36.7 tons from the iShares Silver ETF last week), growth expectations of silver demand from green new energy and digital AI economy, and concerns about import tariffs caused by the uncertainty of the US 232 mineral survey results [3]. - Near - term trading logic (before January 2026): Be cautious about chasing high silver prices as price correction risks are accumulating. Factors include high implied volatility of SHFE silver options, potential technical support for the gold - silver ratio, alleviation of concentrated delivery pressure, possible release of the US 232 mineral survey results, and potential phased selling of silver by some indices and products [3]. - Long - term trading logic (after January 2026): Pay attention to the change of the US dollar index, the Fed's interest rate cut rhythm and RMP operation in the first half of 2026, central bank gold purchases under the de - dollarization trend, and the growth prospects of investment demand. Also, focus on key resource demand and tariff policies under anti - globalization and trade protection [4]. - Trend judgment: The short - term trend remains oscillating and strong. Gold should pay attention to the previous high resistance, and silver should be aware of the profit - taking pressure. The support and resistance levels for London spot gold are $4,100 - $4,250 - $4,400, and for London spot silver are $60 - $65 - $70. The unilateral strategy is to hold existing long positions cautiously. For gold, if it breaks through the historical high on the daily line, consider chasing the long position; for silver, be cautious about chasing high in the short term [4][5]. 3. Summary by Relevant Catalogs 3.1 Core Contradictions and Strategy Recommendations 3.1.1 Core Contradictions - Precious metal price trends: London spot gold and silver showed strong performance last week, with no short - term turning signal in the K - line [2]. - Factors influencing price: The Fed's interest rate cut expectation rebounded slightly after Tuesday due to economic data, and the competition for the Fed Chairman candidate continued to ferment, with all three candidates being dovish supporters of loose money [2]. - Silver performance: Since the end of November, silver has far outperformed gold, and the gold - silver ratio has dropped significantly due to multiple factors [3]. - Trading logic: Near - term trading logic focuses on the appointment of the new Fed Chairman and economic data's impact on monetary policy expectations. Long - term trading logic involves factors such as the US dollar index, the Fed's interest rate cut rhythm, and investment demand [3][4]. 3.1.2 Trading - type Strategy Recommendations - Trend judgment: Short - term oscillation is still strong, with different key points for gold and silver [4]. - Support and resistance levels: Given for London spot gold and silver [5]. - Strategy: Unilateral strategy suggests cautious holding of existing long positions, with different approaches for gold and silver [5]. 3.1.3 Interest Rate Cut Expectation Changes - Tables show the changes in interest rate cut expectations in the US from December 2025 to April 2027, including target rates, effective rates, implied overnight rates, and expected interest rate cuts or increases at different meetings [8][11]. 3.2 Market Information 3.2.1 This Week's Event Concerns - Monday: Fed Governor Milan will speak at 22:30, and FOMC permanent voter and New York Fed President Williams will speak on the economic outlook at 23:30. - Wednesday: FOMC permanent voter and New York Fed President Williams will give an opening speech at the 2025 Foreign Exchange Market Structure Conference hosted by the New York Fed at 22:05. - Thursday: The Bank of England will announce the interest rate decision and meeting minutes at 20:00, and the European Central Bank will announce the interest rate decision at 21:25. - Friday: Bank of Japan Governor Ueda Kazuo will hold a monetary policy press conference at 14:30, and the Bank of Japan will also announce the interest rate decision [15][16]. 3.2.2 Last Week and This Week's Data Concerns - Last week, the US and China released a series of economic indicators, including non - farm employment, inflation, and consumption data. This week, the US and China are expected to release economic indicators such as construction permits, GDP, and industrial profits [17]. 3.3 Futures and Price Data 3.3.1 International Precious Metal Market - Shows the latest prices, weekly changes, and weekly change rates of international precious metals such as London gold and silver spot, COMEX gold and silver, and related ETF holdings and CFTC positions [20]. 3.3.2 Domestic Precious Metal Market - Presents the latest prices, weekly changes, and weekly change rates of domestic precious metals such as SHFE gold and silver futures and related inventories [21]. 3.3.3 US Financial Asset Performance - Displays the latest prices, weekly changes, and weekly change rates of US financial assets such as the US dollar index, US Treasury yields, and major stock indices [21]. 3.3.4 Domestic Financial Market - Shows the latest prices, weekly changes, and weekly change rates of domestic financial assets such as the US dollar - RMB exchange rate, domestic stock indices, and domestic Treasury yields [22]. 3.3.5 Futures Positions - Includes information on CFTC positions related to gold and silver, and the relationship between domestic futures indices and positions [24][25][27]. 3.4 Macroeconomic Information 3.4.1 FOMC Post - meeting Statements - Compares the FOMC post - meeting statements on December 11, 2025, and October 30, 2025, including fundamental assessment, risk assessment, policy goals, policy decisions, and voting results [30]. 3.4.2 Economic Forecast Tables - Presents the economic forecast tables of the December FOMC, including real GDP growth, unemployment rate, inflation rate, and federal funds rate from 2025 to 2028 and in the long - term [31]. 3.4.3 US CPI and Related Data - Displays the US CPI data by category, including food, energy, and core CPI, and shows the year - on - year and month - on - month changes [37]. 3.5 Sensitive Demand and Valuation 3.5.1 Sensitive Demand - ETF Investment Demand - Includes information on the relationship between gold and silver long - term fund holdings and prices, as well as the holdings of Chinese TOP3 gold ETFs and Huaan Gold ETF [47][48]. 3.5.2 Valuation Anchoring - Related Assets - Covers the COMEX gold - silver ratio, the relationship between gold and the US dollar index, US Treasury real interest rates, and other related assets and indicators [49][51][52]. 3.5.3 Global Major Exchange Inventories - Shows the inventories of gold and silver in LBMA, COMEX, and SHFE, as well as the total inventories of gold and silver in multiple exchanges [68][70][71].

Group 1 - The report highlights an increase in market attention towards monetary policy, with a slight recovery in market sentiment as funding rates continue to decline [2][8] - The report discusses two main questions: whether the recent drop in funding prices below a key level indicates a potential for further monetary easing, and how the market is currently pricing in expectations for loose monetary policy [2][8] - Historical data suggests that when the DR001 rate breaks below its long-term range, it often signals a change in monetary policy, as seen in late 2021 when a similar drop preceded a rate cut [3][9] Group 2 - The report notes that while the market has begun to price in expectations for loose monetary policy, the adjustments have been cautious and moderate, primarily following the decline in funding prices [5][23] - Recent trends show that the yield spreads between various government bonds and funding rates have reached annual highs, particularly for the one-year bonds, although they remain in the lower quartile over a longer time frame [5][16] - The report indicates that the average yield decline for one-year and ten-year government bonds is approximately 72 basis points, while the average decline across all maturities is about 76 basis points, compared to a two-year cumulative reduction of 62 basis points in OMO rates, LPR, and loan rates [18][26] Group 3 - The report emphasizes that the recent drop in funding prices reflects the central bank's supportive stance towards liquidity at year-end, with historical precedents suggesting that such a break could trigger a rate cut in the following quarter [25][28] - It is noted that while the market's response to these changes has been moderate, there remains a certain safety margin between interest rates and funding prices, which could influence short-term rates if a policy adjustment occurs [25][28] - The report concludes that structural supply and demand concerns for long-term bonds persist, indicating that the current easing in short-term rates may not directly lead to a decline in long-term rates, with the potential for yield spreads to widen further [28][32]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The bond market fluctuates between stable growth and easing expectations. The market turned to trade the "broad fiscal - supply surge" logic after the central bank's media mentioned the issuance expectations of larger - scale special bonds and ultra - long - term special treasury bonds. Global trade uncertainties increase the uncertainty of foreign capital inflows. In the short term, attention should be paid to the policy signals at the end of the month [3] Summary by Directory 1. Interest Rate Pricing Tracking Indicators - China's CPI (monthly) has a month - on - month change of - 0.10% and a year - on - year change of 0.70%; China's PPI (monthly) has a month - on - month change of 0.10% and a year - on - year change of - 2.20% [9] - Social financing scale is 440.07 trillion yuan, with a month - on - month increase of 2.35 trillion yuan and a growth rate of 0.54%. M2 year - on - year is 8.00%, with a decrease of 0.20% and a decline rate of 2.44%. Manufacturing PMI is 49.20%, with an increase of 0.20% and a growth rate of 0.41% [10] - The US dollar index is 98.44, with a month - on - month increase of 0.04 and a growth rate of 0.04%. The US dollar against the offshore RMB is 7.0361, with a decrease of 0.003 and a decline rate of 0.04%. SHIBOR 7 - day is 1.43, with no change and a decline rate of 0.14%. DR007 is 1.44, with no change and a decline rate of 0.21%. R007 is 1.51, with no change and a decline rate of 0.31%. The yield of inter - bank certificates of deposit (AAA) 3M is 1.61, with a decrease of 0.02 and a decline rate of 1.00%. The AA - AAA credit spread (1Y) is 0.09, with no change and a decline rate of 1.00% [10] 2. Overview of Treasury Bonds and Treasury Bond Futures Market - On December 18, 2025, the closing prices of TS, TF, T, and TL are 102.44 yuan, 105.85 yuan, 108.01 yuan, and 112.25 yuan respectively, with daily price changes of 0.01%, 0.02%, 0.00%, and 0.23% respectively. The average net basis of TS, TF, T, and TL are - 0.028 yuan, - 0.059 yuan, 0.000 yuan, and - 0.469 yuan respectively [3] 3. Overview of the Money Market Funding Situation - From January to October 2025, the general public budget revenue increased by 0.8% year - on - year, and the general public budget expenditure increased by only 2% year - on - year. In November, the overall financial data was weak, and the growth rate of social financing remained at 8.5%. The central bank conducted 883 billion yuan of 7 - day reverse repurchase operations at a fixed interest rate of 1.4% and 100 billion yuan of 14 - day reverse repurchase operations on December 18, 2025. The main term repurchase rates 1D, 7D, 14D, and 1M are 1.273%, 1.426%, 1.582%, and 1.550% respectively, and the repurchase rates have recently declined [2] 4. Spread Overview - The report mentions various spread indicators such as the cross - period spread trend of treasury bond futures varieties and the term spread of cash bonds and cross - variety spread of futures, but specific numerical analysis is not provided [31] 5. Two - Year Treasury Bond Futures - The report shows relevant charts of the implied interest rate of the two - year treasury bond futures main contract and the treasury bond maturity yield, but specific numerical analysis is not provided [38] 6. Five - Year Treasury Bond Futures - The report shows relevant charts of the implied interest rate of the five - year treasury bond futures main contract and the treasury bond maturity yield, but specific numerical analysis is not provided [52] 7. Ten - Year Treasury Bond Futures - The report shows relevant charts of the implied yield of the ten - year treasury bond futures main contract and the treasury bond maturity yield, but specific numerical analysis is not provided [59] 8. Thirty - Year Treasury Bond Futures - The report shows relevant charts of the implied yield of the thirty - year treasury bond futures main contract and the treasury bond maturity yield, but specific numerical analysis is not provided [66] Strategies - Unilateral: The repurchase rate declines, and the price of treasury bond futures fluctuates [4] - Arbitrage: Pay attention to the decline of the 2603 basis [4] - Hedging: There is an adjustment pressure in the medium term, and short - sellers can use far - month contracts for appropriate hedging [4]

Core Viewpoint - The central bank is expected to increase the volume of Medium-term Lending Facility (MLF) and conduct a certain scale of government bond transactions in December to inject medium- and long-term liquidity into the market [1][7]. Group 1: Market Liquidity Management - The central bank resumed the 14-day reverse repurchase agreement after three months, conducting operations of 883 billion yuan for 7-day and 1,000 billion yuan for 14-day reverse repos on December 18, maintaining the interest rate at 1.40% [1]. - The market's focus on potential tightening of liquidity has increased, with the overnight repo rate (DR001) stabilizing around 1.27% after briefly dropping below 1.3% [1][5]. - Analysts believe that the central bank's continuous liquidity injections are aimed at countering potential tightening risks, resulting in a relatively loose liquidity environment [1][3]. Group 2: Year-End Liquidity Dynamics - As the year-end approaches, the central bank's actions are influenced by increased liquidity disturbances due to factors like bank assessments, fiscal revenue, and resident withdrawals [2][3]. - The central bank's operations are designed to smooth out liquidity fluctuations and maintain a stable market environment, with the 14-day reverse repo directly addressing the funding needs over the New Year holiday [2][4]. - The central bank is expected to continue using both 7-day and 14-day reverse repos to effectively control short-term liquidity fluctuations [4]. Group 3: Interest Rate Trends - The overnight funding rate has shown a downward trend, with DR001 averaging below 1.3% recently, indicating a shift from the previous stable low rate environment [5]. - The weighted average rates for DR007 have remained above the policy interest rate, reflecting ongoing liquidity management efforts [5]. - The SHIBOR rates for overnight and 7-day terms have decreased, while the 14-day SHIBOR has increased, indicating mixed signals in the short-term funding market [5]. Group 4: Future Outlook - Analysts predict that the central bank will continue to utilize various liquidity tools to enhance the precision and effectiveness of liquidity management as the year-end approaches [6][7]. - The central bank's focus will remain on creating a stable financial environment for the real economy, ensuring that liquidity tools effectively smooth short-term fluctuations and guide reasonable interest rates [7].

Report Industry Investment Rating No information provided. Core Viewpoints The bond market is oscillating between stable growth and easing expectations. The market is influenced by factors such as macro - policies, inflation, fiscal and financial conditions, and global trade uncertainties. In the short term, attention should be paid to the policy signals at the end of the month [1][2][3]. Summary by Directory 1. Interest Rate Pricing Tracking Indicators - China's CPI (monthly) has a month - on - month change of - 0.10% and a year - on - year change of 0.70%; China's PPI (monthly) has a month - on - month change of 0.10% and a year - on - year change of - 2.20% [9]. - Social financing scale is 440.07 trillion yuan, with a month - on - month increase of 2.35 trillion yuan and a growth rate of 0.54%; M2 year - on - year is 8.00%, down 0.20% with a decline rate of 2.44%; Manufacturing PMI is 49.20%, up 0.20% with a growth rate of 0.41% [10]. - The US dollar index is 98.40, up 0.19 with a growth rate of 0.19%; The US dollar against the offshore RMB is 7.0390, up 0.001 with a growth rate of 0.02%; SHIBOR 7 - day is 1.43, unchanged with a decline rate of 0.07%; DR007 is 1.44, down 0.01 with a decline rate of 0.45%; R007 is 1.51, unchanged with a decline rate of 0.31%; The 3 - month inter - bank certificate of deposit (AAA) is 1.63, unchanged with a growth rate of 0.00%; The AA - AAA credit spread (1Y) is 0.09, unchanged with a growth rate of 0.00% [10]. 2. Overview of Treasury Bonds and Treasury Bond Futures Market - On December 17, 2025, the closing prices of TS, TF, T, and TL are 102.43 yuan, 105.84 yuan, 108.01 yuan, and 112.14 yuan respectively. The price changes are 0.01%, 0.06%, 0.10%, and 0.63% respectively [3]. - The average net basis of TS, TF, T, and TL are 0.084 yuan, - 0.076 yuan, - 0.053 yuan, and - 0.228 yuan respectively [3]. 3. Overview of the Money Market Funding Situation - From January to October 2025, the general public budget revenue increased by 0.8% year - on - year, and the general public budget expenditure increased by only 2% year - on - year [2]. - In November, the overall financial data was weak. The credit was still supported by bills and short - term loans. The medium - and long - term financing needs of residents and enterprises continued to decline, and the loans increased significantly less year - on - year. The social financing growth rate remained at 8.5%, mainly hedged by corporate bonds and off - balance - sheet financing [2]. - On December 17, 2025, the central bank conducted a 46.8 - billion - yuan 7 - day reverse repurchase operation at a fixed interest rate of 1.4% [2]. - The main term repurchase rates of 1D, 7D, 14D, and 1M are 1.275%, 1.428%, 1.471%, and 1.541% respectively, and the repurchase rates have recently declined [2]. 4. Spread Overview No specific data summary provided in the text, only mentions various spread trend charts such as the inter - period spread trend of treasury bond futures and the spread between spot bond term spreads and futures cross - variety spreads. 5. Two - Year Treasury Bond Futures - Charts show the implied interest rate of the two - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TS main contract and the funding rate, and the three - year basis and net basis trends of the TS main contract [37][38][45]. 6. Five - Year Treasury Bond Futures - Charts show the implied interest rate of the five - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TF main contract and the funding rate, and the three - year basis and net basis trends of the TF main contract [49][53]. 7. Ten - Year Treasury Bond Futures - Charts show the implied yield of the ten - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the T main contract and the funding rate, and the three - year basis and net basis trends of the T main contract [56][58]. 8. Thirty - Year Treasury Bond Futures - Charts show the implied yield of the thirty - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TL main contract and the funding rate, and the three - year basis and net basis trends of the TL main contract [63][69]. Strategies - Unilateral: The repurchase rate has declined, and the treasury bond futures prices are oscillating [4]. - Arbitrage: Pay attention to the decline of the 2603 basis [4]. - Hedging: There is medium - term adjustment pressure, and short - side investors can use far - month contracts for appropriate hedging [4].

Core Viewpoint - Gold stocks experienced an afternoon rally, driven by the recent Federal Reserve interest rate decision and expectations of continued monetary easing, which is expected to support gold prices in the long term [1] Group 1: Gold Stock Performance - Chifeng Jilong Gold Mining (06693) rose by 3.83%, trading at HKD 31.46 [1] - Shandong Gold Mining (01787) increased by 3.48%, trading at HKD 3.49 [1] - Lingbao Gold Company (03330) saw a rise of 2.9%, trading at HKD 18.08 [1] - Zijin Mining Group (02899) gained 2.73%, trading at HKD 33.94 [1] Group 2: Federal Reserve Interest Rate Decision - The Federal Reserve's December meeting resulted in a 25 basis point rate cut, but there was significant internal disagreement regarding future rate cuts, with three dissenting votes [1] - Fed Governor Milan advocated for a 50 basis point cut, while two regional Fed presidents opposed any rate cut [1] Group 3: Market Outlook and Predictions - Morgan Stanley's latest report predicts that rate cuts will continue, leading to a weakening of the US dollar [1] - The report forecasts that gold prices could reach USD 4,800 per ounce by Q4 2026 due to macroeconomic support [1] - Huaan Fund anticipates that the Fed will remain in a long-term easing cycle, which could further benefit gold if a dovish chair is selected [1] - The combination of loose monetary and fiscal policies, along with ongoing global central bank purchases of gold to diversify foreign exchange reserves, supports the long-term investment value of gold [1]

宏观面：（1）宏观政策：10月27日，央行时隔近十个月宣布重启公开市场国债买卖操作，向市场释放了明确的稳 预期信号;10月30日，中美经贸团队达成三方面成果共识，一是中方将与美方妥善解决TikTok相关问题;二是美方将 暂停实施其对华海事、物流和造船业301调查措施一年，同时将暂停实施其9月29日公布的出口管制50%穿透性规则 一年;三是美方取消10%"芬太尼关税"，对中国商品24%对等关税将继续暂停一年。国务院关税税则委员会宣布在一 年内继续暂停实施24%的对美加征关税税率，保留10%的对美加征关税税率；12月8日政治局会议明确实施更加积 极的财政政策和适度宽松的货币政策，释放宽货币信号。（2）通胀:11月CPI同比上升0.7%。 资金面：（3）财政：2025 年 1–10 月财政运行呈现"收入温和修复、支出节奏回落、基金收缩与专项债放缓并存" 的特征。一般公共预算收入同比增长 0.8%，税收连续八个月改善，增值税、个税和企业所得税均保持修复态势， 但非税收入拖累整体增速，收入完成进度略低于往年均值；一般公共预算支出同比仅增 2%，连续三个月放缓，主 要受上半年财政前置发力后劲不足以及基建类支出走弱影响，社 ...

Economic Performance - November industrial added value increased by 4.8% year-on-year, slightly below the expected 5% and the previous month's 4.9%[1] - The industrial export delivery value showed a year-on-year decline of 0.1%, a significant improvement from the previous month's -2.1%[1] - The service sector production index grew by 4.2% year-on-year, a slowdown of 0.4 percentage points from the previous month[2] Retail and Consumption - Retail sales in November increased by 1.3% year-on-year, down from 2.9% in the previous month[3] - The contribution of national subsidies to retail sales declined by approximately 0.7 percentage points compared to the previous month[3] - Restaurant revenue growth slowed to 3.2% year-on-year, down 0.6 percentage points from the previous month, but still above the third quarter average of 1.4%[3] Investment Trends - Fixed asset investment decreased by 2.6% year-on-year from January to November, a decline of 0.9 percentage points compared to the previous month[4] - Manufacturing investment maintained positive growth, while real estate investment fell to -15.9% year-on-year[4] - In November, fixed asset investment showed a year-on-year decline of 12.0%, stabilizing close to the previous month's -12.2%[4] Real Estate Market - November real estate sales area and sales value decreased by 25.1% and 17.3% year-on-year, respectively, with sales area showing a month-on-month increase of 9.3%[5] - New home prices in 70 major cities fell by 0.4% month-on-month, with first-tier cities leading the decline at -1.1%[5] Supply and Demand Dynamics - The weighted year-on-year growth of industrial and service production indicators was 4.4%, while the demand side showed a decline of 3.8%[6] - The gap between production and demand growth rates is the largest since March 2020, indicating increasing supply-demand imbalances[7]

Policy Insights - The political bureau meeting emphasized "increasing counter-cyclical and cross-cyclical adjustment efforts," balancing growth stabilization and risk prevention for the medium to long term[2] - The central economic work conference provided detailed explanations of the political bureau's statements, confirming or refuting various market expectations[2] Interest Rate Dynamics - Long-term interest rates experienced significant volatility, with the 10-year government bond yield rising to 1.84% and the 30-year bond yield slightly decreasing to 2.25% during the week of December 8-12[11] - Market concerns regarding monetary policy for 2026 include whether there will be increased monetary easing and the extent of fiscal stimulus[3][4] Fiscal Policy Projections - The target fiscal deficit rate for 2026 is expected to remain around 4.0%, with new special bond issuance potentially increasing to approximately 5 trillion yuan and long-term special government bonds expanding to about 1.8 trillion yuan[4][24] - The projected increase in narrow deficit scale, special government bonds, and local special bond quotas for 2026 compared to 2025 is approximately 2.8 billion, 5 billion, and 6 billion yuan respectively, with a total increase in the range of 1.3 to 1.4 trillion yuan[4][24] Market Outlook - The combination of loose monetary policy and stable fiscal policy is expected to support the bond market in 2026[4][24] - The 10-year government bond yield is currently at 1.84%, close to the effective upper limit of 1.90%, indicating limited potential for adjustment in the bond market[6][30] Investment Strategies - For long-term investors, the focus should be on medium to long-term returns, as current yields may meet next year's return targets, suggesting gradual entry into the market[6][30] - For short-term traders, maintaining discipline and waiting for clearer signals before adjusting positions is recommended, with potential for small-scale contrarian operations during market adjustments[6][30] Risk Factors - Potential unexpected adjustments in monetary policy, liquidity changes, and fiscal policy shifts pose risks to market stability[7]