Group 1: Economic Fundamentals - In August, the focus will be on the verification of policy effects, with new policy financial tools expected to boost credit and investment recovery[1] - The "anti-involution" narrative is expected to lead to moderate price recovery, although short-term trends remain uncertain[1] - External factors indicate a potential 90-day extension of the exemption period, with reduced uncertainty in tariff policies, but the downward trend in exports is expected to continue[1] Group 2: Liquidity and Market Dynamics - Historical data shows that August is a month with potential liquidity fluctuations, but risks are limited under current monetary policy targets[2] - The liquidity gap in August is projected to be around 1.8 trillion, with a central tendency likely to remain around 1.5%[2] - The supply of government bonds is expected to accelerate, with net financing projected between 1.5 to 1.6 trillion[3] Group 3: Institutional Behavior - Demand for bonds may weaken due to increased supply and limited institutional buying power, with a supply-demand index for August expected to be at 59%, significantly lower than the second quarter average[3] - The market is likely to experience structural pressure due to the imbalance between supply and demand[3] Group 4: Market Strategy - The bond market is entering the second phase of a "three-step" strategy, with the 10-year government bond expected to fluctuate between 1.65% and 1.75%[3] - Investors are advised to be flexible and consider timely profit-taking in response to key market events and policy announcements[3]

Group 1 - The report indicates that August marks the second phase of the "three-step" strategy for the bond market, with a focus on timely adjustments and profit-taking opportunities [6][5][4] - The fundamental outlook for August suggests a verification period for policy effects, with new policy financial tools expected to boost credit and investment recovery [15][16][17] - The "anti-involution" narrative is expected to influence pricing and production, although short-term trends remain uncertain [21][22][25] Group 2 - Liquidity conditions are expected to remain supportive, with the central bank's actions likely to mitigate potential funding disruptions during the high payment month of August [31][32][38] - Historical data shows that August typically experiences significant government bond issuance, which may lead to increased net financing [40][41] - The supply-demand structure in the bond market is under pressure due to increased supply and limited demand from institutions [2][3][4] Group 3 - The report highlights the importance of monitoring external factors, such as trade negotiations and tariff policies, which may impact market sentiment and bond performance [25][26][27] - The anticipated issuance of new policy financial tools is expected to accelerate investment demand, particularly in infrastructure projects [16][17][19] - The report emphasizes the need for flexible trading strategies, particularly in response to key events and market sentiment shifts [6][5][4]

Report Industry Investment Rating No relevant information provided. Core Viewpoints - In the fifth week of July, futures sentiment cooled down, and spot prices mostly had small month - on - month declines, but prices were still higher than at the end of June. Food prices reversed from a decline to an increase. Container shipping prices continued to fall, and port cargo volume decreased month - on - month but remained high year - on - year. In the industrial sector, the incremental measures from the Politburo meeting in July were slightly weaker than expected, causing futures sentiment to cool and investment product prices to decline. In the investment sector, typhoon and rainfall affected construction activities, leading to a continued decline in cement prices. In the real estate sector, the end - of - month sales rush for new homes was evident, while second - hand home sales continued to decline, in line with seasonality [4][34]. - For the bond market, short - term implementation of anti - involution policies, price transmission, and the impact of production control on industrial growth are worthy of attention. "Broad credit" disturbances may increase compared to July. Externally, the results of China - US economic and trade negotiations were in line with expectations, and the market reaction was muted. Export resilience remains, but its elasticity is decreasing, and the weakening of "rush exports" may gradually materialize. Internally, the strong futures market last week driven by major infrastructure projects and "anti - involution" led to spot price increases. This week, futures sentiment cooled, and spot demand weakened due to weather conditions. Although industrial product prices generally corrected, they were still higher than before July. In the future, price increase elasticity may be limited in the short term, but the recovery trend is hard to disprove, which may support equity sentiment. Urban renewal may accelerate, and the implementation of policy - based financial instruments is expected. August is the policy effect verification stage, increasing the importance of data observation [4][35]. Summary by Directory Inflation - related - Food prices reversed from a decline to an increase. The wholesale price index of 200 agricultural products and the wholesale price index of basket products increased by 0.05% and 0.03% month - on - month respectively. The average wholesale price of pork decreased by 0.84% month - on - month, while vegetable prices rose, and the decline in fruit prices narrowed [4][10]. Import - Export related - Container shipping prices continued to decline. The CCFI index decreased by 2.3% month - on - month, and the SCFI decreased by 2.6% month - on - month. From July 21st to July 27th, port container throughput and cargo throughput decreased by 6.5% and 4.3% month - on - month respectively, but increased by 11.5% and 13.3% year - on - year. The BDI index decreased by 3.1% month - on - month, and the CDFI index increased by 0.2% month - on - month [12]. Industrial related - The price of thermal coal continued to rise. The price of thermal coal (Q5500) at Qinhuangdao Port increased by 1.4% month - on - month with a narrowing increase. The price of rebar reversed from an increase to a decrease, with a 0.26% month - on - month decline in spot price. The apparent demand for rebar decreased by 6.1% month - on - month, and the year - on - year decline widened to 5.7%. Copper prices decreased month - on - month, affected by the Fed's cautious attitude towards interest rate cuts and the strengthening of the US dollar. Glass prices also reversed from an increase to a decrease as futures market sentiment cooled [14][18][19]. Investment related - Cement prices continued to weaken, with a 1.40% month - on - month decline in the national cement price index and a narrowing decline. In the real estate sector, from July 25th to July 31st, the transaction area of new homes in 30 cities increased by 25% month - on - month but decreased by 15.4% year - on - year. The transaction area of second - hand homes in 17 cities decreased by 4.6% month - on - month but increased by 5.1% year - on - year [20][29]. Consumption - From July 1st to July 27th, passenger car retail sales decreased by 19% month - on - month compared to the same period in June but increased by 9% year - on - year. From July 21st to July 27th, retail sales decreased by 30% month - on - month and increased by 5% year - on - year. Brent and WTI crude oil prices increased by 1.8% and 3.3% month - on - month respectively, boosted by factors such as a trade agreement between the US and Europe and supply - side constraints [30].

Group 1 - The People's Bank of China (PBOC) shifted from net withdrawal to net injection of liquidity in late July, increasing short-term liquidity provision [1] - From July 21 to July 24, the PBOC conducted net withdrawals of 55.5 billion, 127.7 billion, 369.6 billion, and 119.5 billion yuan, followed by a net injection of 601.8 billion yuan on July 25 after conducting 789.3 billion yuan reverse repos [1] - The MLF (Medium-term Lending Facility) operations in July included a total injection of 100 billion yuan, marking the fifth consecutive month of increased MLF operations [1] Group 2 - In July, the PBOC conducted a total of 1.4 trillion yuan in reverse repos, achieving a net injection of 200 billion yuan, which effectively met medium-term liquidity needs [2] - The overall net financing scale for government bonds is expected to reach 1.5 to 1.6 trillion yuan monthly from August to September, increasing the demand for stable funding from banks [3] - The PBOC is likely to continue using OMO, MLF, and reverse repos to manage liquidity, with potential for government bond purchases and reserve requirement ratio cuts to inject liquidity [3]

新华财经北京7月28日电（刘润榕）人民银行28日开展4958亿元7天期逆回购操作，操作利率为1.40%， 与此前持平；鉴于当日有1707亿元7天期逆回购到期，公开市场实现净投放3251亿元。 上周（7月21日-25日）央行公开市场全口径合计实现净投放1295亿元。此外，上周有1200亿国库现金定 存到期，周三财政部开展1000亿元1M国库现金定存操作，中标利率1.78%，较前值下行30BP。 资金面可谓经历"过山车"行情。周初税期已过、跨月未至，资金面如期转松，隔夜利率重回1.40%附 近，然而伴随央行税期逆回购投放悉数回笼，资金面逐步收敛，不过绝对水平并不算太高，21-23日隔 夜利率依然分布在OMO利率附近，7天资金价格也基本稳定在1.50%以下。24日资金面"超预期"收敛， 隔夜利率迅速攀升至1.65%以上，7天资金也迅速提价上行近10BP；与此同时，央行公告7月MLF续做 4000亿元，全月净投放1000亿元，7月中长期资金累计净投放3000亿元。25日，资金面压力略有缓和， 隔夜利率回落，R001、DR001分别下行14、13BP，分别收至1.55%、1.52%。不过，7天资金可支持跨 月，7天资金 ...

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - The bond market is under significant pressure due to increased institutional redemptions, with the 10y Treasury bond yield fluctuating. The current redemption is a small - scale wave driven by the stock - bond seesaw effect, and the central bank maintains a relatively mild monetary policy stance. The bond market will enter a "hard mode" from August to October, and investment strategies should shift from alpha - mining to beta - trading [11][3][59] Group 3: Summary by Relevant Catalogs 1. How will the stock - bond seesaw driven by risk preference play out? - **Judgment on the current redemption level**: Bank wealth management has a safety cushion, and the focus is on the redemption pressure of funds. Since the beginning of the year, the safety cushion of wealth management has stabilized the net value, and it has maintained net buying of bonds. The current redemption is concentrated in the fund sector, with obvious preventive redemptions by institutional investors [15][18] - **Review of bond market redemptions driven by the stock - bond seesaw effect**: Since 2022, there have been eight rounds of redemptions, with only the one in November 2022 being a large - scale one involving both funds and bank wealth management. The rest are small - scale ones mainly affecting funds. Redemption periods usually last 1 - 2 weeks, and they often end with a decline in the equity market [21][26] - **Current stage of redemption**: The market is in the negative feedback stage of the redemption wave, with the intensity similar to that in February 2025. Although the redemption pressure shows signs of relief, there is still a risk of recurrence, and the 10y Treasury bond yield may have an additional 4 - 8BP adjustment space [34][35] 2. Has the central bank's attitude changed? - The short - term amplification of capital friction during the bond market's weak adjustment does not necessarily mean a change in the central bank's attitude. The central bank's current liquidity injection is mainly short - term, and in the third quarter, factors such as fiscal policies, equity market diversion, and redemption frictions have increased capital disturbances. However, the central bank's current operations still show a relatively mild monetary policy stance [3][56] 3. From August to October, the bond market trading enters the "hard mode" - Seasonally, from August to October, bond market disturbances increase, and yields tend to rise. This year, due to the central bank's tightening of funds in the first quarter and the forward - shifting of market trading, the 10y Treasury bond yield has adjusted ahead of the seasonal pattern. After August, the bond market still faces uncertainties such as tariff negotiations and policy effect verification [59][61] - In reality, the fundamental data shows a "weak recovery" pattern, and there is no signal of a trend reversal, which provides some support for the bond market's upward movement [63] 4. Bond market strategy: Shift from alpha - mining to beta - trading - Maintain the view of a volatile bond market in the second half of the year. The 10y Treasury bond above 1.75% has allocation value, and the 30y Treasury bond has allocation value when the 30 - 10y spread is around 25bp. Trading desks should avoid large - scale left - hand trading [70][71] - From August to October, the market will be volatile, increasing the demand for liquidity. It is necessary to shift from alpha - mining to beta - trading and reduce positions in illiquid assets that have realized profits during favorable market windows [72][75] - Short - term products such as certificates of deposit have allocation value when the central bank's attitude is stable. Certificates of deposit above 1.65% and credit products after adjustment may be considered for allocation [78] 5. Review of the interest - rate bond market: Institutional redemption sentiment resurfaces, and the bond market is significantly pressured - **Funding situation**: The central bank's OMO has a small - scale net injection, and the funding situation is tight first and then loose [12] - **Primary issuance**: The net financing of Treasury bonds, policy - bank bonds, and inter - bank certificates of deposit has decreased, while that of local government bonds has increased [94] - **Benchmark changes**: The term spreads of both Treasury bonds and China Development Bank bonds have widened [88]

Group 1 - The People's Bank of China (PBOC) conducted a 400 billion yuan Medium-term Lending Facility (MLF) operation to maintain ample liquidity in the banking system, marking the fifth consecutive month of increased net MLF issuance [1] - In July, the PBOC's net MLF injection amounted to 1 trillion yuan, offsetting 300 billion yuan of MLF maturing, while the total net liquidity injection for the month was 300 billion yuan, consistent with June's scale [1] - Analysts suggest that the ongoing net liquidity injection is primarily due to the peak issuance of government bonds and the regulatory push for financial institutions to increase credit supply, indicating a coordinated monetary and fiscal policy approach [1] Group 2 - Looking ahead, experts anticipate that while the probability of interest rate cuts is low in the short term, monetary policy is expected to further support domestic demand and stabilize growth, with MLF likely to continue its upward trend in the second half of the year [2] - A total of 25 trillion yuan in MLF is set to mature in the remainder of the year, with specific maturities of 300 billion yuan in August, 300 billion yuan in September, 700 billion yuan in October, 900 billion yuan in November, and 300 billion yuan in December [2] - On the same day, the PBOC conducted a 7-day reverse repo operation of 789.3 billion yuan at a fixed rate of 1.40%, resulting in a net injection of 601.8 billion yuan after accounting for maturing reverse repos [2]

Core Insights - The People's Bank of China reported a stable growth in total loans, indicating enhanced economic recovery momentum [1][2] - The structure of loans is optimizing, with significant increases in loans to small and micro enterprises, agricultural loans, and loans supporting technological innovation [1][3] Loan Growth Overview - As of the end of Q2 2025, the total balance of RMB loans reached 268.56 trillion yuan, a year-on-year increase of 7.1%, with an addition of 12.92 trillion yuan in the first half of the year [1] - Corporate loans accounted for 89% of the new loans, with an increase of 11.5 trillion yuan, highlighting the strong demand from enterprises [2] Sector-Specific Loan Trends - Green loans reached a balance of 42.39 trillion yuan, growing by 14.4% since the beginning of the year, with an increase of 5.35 trillion yuan in the first half [3] - Loans to technology-based small and medium-sized enterprises (SMEs) increased significantly, with a loan balance of 3.46 trillion yuan, reflecting a year-on-year growth of 22.9% [3] Future Outlook - The loan growth rate is expected to remain stable, with further optimization in structure, particularly in technology and green sectors [4] - The central bank is anticipated to enhance financial support for the real economy, with new loan disbursements expected to maintain a rapid growth trend [4][5]

Group 1 - The latest Loan Prime Rate (LPR) remains unchanged for two consecutive months, with the 1-year LPR at 3.0% and the 5-year LPR at 3.5%, aligning with market expectations [1] - The economic data for Q2 indicates a stable yet slightly strong economic performance, reducing the necessity for a downward adjustment of LPR in the short term [1][2] - Banks lack sufficient motivation to lower LPR quotes due to tax payments in July and liquidity shortages, despite some net injection through reverse repos [1] Group 2 - Future expectations suggest that external shocks like tariffs will ease, while domestic credit recovery remains slow, leading to continued loose liquidity operations by the central bank [2] - In the short term, LPR quotes are expected to remain stable, but there may be room for downward adjustments in the second half of the year due to external uncertainties and efforts to boost domestic demand [2] - The impact of external fluctuations on exports is anticipated to manifest in the second half, potentially leading to further interest rate cuts and a subsequent decrease in both LPR terms [2]

Group 1 - The 2025 Central Urban Work Conference emphasizes a strategic shift in China's urbanization from expansion to quality improvement, focusing on optimizing existing urban spaces and facilities [1] - Traditional real estate developers face transformation pressures as the government reduces its role in urban renewal projects, potentially impacting their performance and valuations [1] - The credit risk of municipal investment bonds may vary based on project quality and returns, with industries like environmental protection and public utilities likely to see improved credit ratings [1] Group 2 - The bond market has entered an adjustment phase, with short-term bonds experiencing greater declines than long-term bonds due to funding and risk appetite pressures [2] - June exports increased by 5.8% year-on-year, reflecting positive impacts from eased US-China trade tensions, while potential uncertainties in tariff policies may affect future export performance [2] - Financial data showed improvements in June, with new social financing reaching 4.20 trillion yuan, indicating a recovery in credit demand among enterprises and households [3] Group 3 - The liquidity in the financial system has tightened recently, with a notable decrease in net lending from banks, influenced by tax deadlines and MLF maturities [4] - Market risk appetite has risen, driven by expectations around stablecoin and supply-side policies, leading to a notable increase in A-share market sentiment [4] - Despite short-term adjustments, the long-term bullish trend in the bond market remains intact, with further room for long-term and ultra-long-term bond yields to decrease [4]