Report Information - Report Title: "Treasury Bond Futures Weekly Report - Futures Bonds in Volatile Adjustment, Awaiting Policy Breakthrough" [3][4] - Report Date: July 4, 2025 [2] - Researcher: Liao Hongbin [5] Report Industry Investment Rating - Not provided in the report Core Viewpoint - The domestic economy is in a weak recovery, and the external risks are gradually easing. However, the sustainability of economic growth requires the coordinated efforts of fiscal and loose monetary policies. The bond market is expected to remain in a narrow - range shock under the game of multiple factors, and it is recommended to wait for policy signals for band - trading opportunities [94][95] Summary by Directory 1. Market Review - **Weekly Data of Futures Contracts**: The 30 - year and 10 - year main contracts rose by 0.26% and 0.05% respectively, while the 5 - year and 2 - year main contracts fell by 0.01% and 0.03% respectively. The trading volume of TS, TF, and T main contracts increased, while that of the TL main contract decreased. The open interest of TS, TF, and T main contracts decreased, while that of the TL main contract increased [14][17][23][31] - **Yield of Treasury Bonds**: The yields of treasury bond spot bonds strengthened collectively. The yields of 1 - 7Y maturity decreased by about 0.80 - 1bp, and the yields of 10Y and 30Y decreased by about 0.6bp and 0.4bp to 1.64% and 1.85% respectively [10] 2. News Review and Analysis - **Domestic Policies**: The Central Financial and Economic Commission emphasized promoting the construction of a unified national market and the high - quality development of the marine economy. The CSRC focused on optimizing capital market mechanisms and protecting investors. The Ministry of Finance and other departments issued a tax - credit policy for overseas investors' direct investment [9][34] - **Domestic Economic Data**: In June, China's manufacturing PMI, non - manufacturing business activity index, and comprehensive PMI output index all rebounded. In May, economic data was mixed, with industrial growth slightly declining, retail sales exceeding expectations, fixed - asset investment shrinking, and the unemployment rate improving. Export growth weakened, and financial data slightly exceeded expectations [9] - **Overseas News**: The US cancelled the requirement for three chip - design software suppliers to apply for a license for their business in China. The US added 147,000 non - farm jobs in June, and the unemployment rate dropped to 4.1%. The US House of Representatives passed Trump's "Big and Beautiful" tax and spending bill [35] 3. Chart Analysis - **Spread Changes** - **Yield Spread**: The yield spread between 10 - year and 5 - year treasury bonds widened slightly, while that between 10 - year and 1 - year bonds narrowed slightly [43] - **Main Contract Spread**: The spreads between 2 - year and 5 - year, and 5 - year and 10 - year main contracts widened [47] - **Near - Far Month Spread**: The 10 - year contract's inter - period spread widened slightly, the 30 - year contract's spread fluctuated narrowly, the 2 - year contract's spread narrowed slightly, and the 5 - year contract's spread fluctuated [53][57] - **Treasury Bond Futures Main Position Changes**: The net short positions of the top 20 holders of the T treasury bond futures main contract decreased slightly [62] - **Interest Rate Changes** - **Shibor and Treasury Yields**: Shibor rates for overnight, 1 - week, 2 - week, and 1 - month terms all declined. The yields of treasury bond spot bonds strengthened, with 1 - 7Y yields decreasing and 10Y and 30Y yields also declining [67] - **China - US Treasury Yield Spread**: The yield spreads between Chinese and US 10 - year and 30 - year treasury bonds widened slightly [71] - **Open Market Operations**: The central bank conducted 65.22 billion yuan of reverse repurchases and had 202.75 billion yuan of reverse repurchases mature, resulting in a net withdrawal of 137.53 billion yuan. The weighted average DR007 rate dropped to around 1.42% [10][73] - **Bond Issuance and Maturity**: This week, bonds worth 75.5736 billion yuan were issued, with a total repayment of 45.3068 billion yuan, and a net financing of 30.2667 billion yuan [76] - **Market Sentiment** - **Exchange Rate**: The central parity rate of the RMB against the US dollar was 7.1535, up 92 basis points this week. The spread between offshore and onshore RMB strengthened [80] - **US Treasury Yield and VIX Index**: The yield of the 10 - year US Treasury bond rose slightly, and the VIX index dropped slightly [86] - **A - Share Risk Premium**: The yield of the 10 - year treasury bond dropped slightly, and the A - share risk premium declined [91] 4. Market Outlook and Strategy - **Domestic Fundamentals**: The domestic economy is in a recovery trend, but the momentum of domestic demand recovery needs to be consolidated. External risks have eased, but the sustainability of economic growth requires the coordination of fiscal and monetary policies [94] - **Overseas Situation**: The US economy is gradually recovering, and the strong employment market weakens the expectation of the Fed's interest - rate cut, increasing the uncertainty of future interest - rate cut rhythms [94] - **Market Outlook**: The bond market is expected to remain in a narrow - range shock. It is recommended to wait for policy signals for band - trading opportunities [95]

Group 1 - The core viewpoint of the news is that Chongqing is actively promoting the construction of a unified national market by breaking down local protectionism and market segmentation through three strategic measures [1][2][3] Group 2 - The first strategy involves promoting the integration of domestic and foreign trade, which facilitates the efficient connection of domestic and international markets, with 52 leading enterprises capable of operating in both markets and 870 industrial enterprises achieving integrated operations [1] - The second strategy focuses on smoothing trade circulation and breaking down regional market barriers, with Chongqing establishing cooperation mechanisms with surrounding provinces and cities, leading to a projected 40% of its vegetable and fruit production being supplied to external markets in 2024 [2] - The third strategy emphasizes enhancing consumer interaction and promoting deep market integration, with Chongqing leveraging its unique cultural characteristics to develop as an international consumption destination and hosting over 100 promotional activities to boost regional consumption [3]

Core Viewpoint - The meeting emphasized the need to deepen the construction of a unified national market and promote high-quality development of the marine economy, highlighting the importance of coordinated efforts and policy support to achieve these goals [1][2][3]. Group 1: Unified National Market Construction - The basic requirements for advancing the unified national market include "five unifications and one openness," which are unified market infrastructure, unified government behavior standards, unified market supervision and law enforcement, unified resource markets, and continuous expansion of both domestic and foreign openness [1][2]. - Focus areas include addressing low-price disorderly competition among enterprises, guiding companies to improve product quality, and promoting the orderly exit of backward production capacity [2]. - The meeting called for the integration of domestic and foreign trade, facilitating the path from export to domestic sales, and nurturing a group of high-quality enterprises in both domestic and foreign trade [2]. Group 2: High-Quality Development of Marine Economy - The meeting stressed the importance of top-level design and increased policy support to encourage social capital participation in marine economic development [3]. - Key initiatives include enhancing independent innovation capabilities in marine technology, fostering leading marine technology enterprises, and promoting the development of modern offshore fishing and marine biomedicine [3]. - The meeting also highlighted the need for marine ecological environment protection and the exploration of marine carbon sink accounting [3].

Report Industry Investment Rating - The investment rating for the treasury bond in the macro and financial sector is "oscillation" [1] Core View - The macro environment and monetary policy have no significant changes, and the treasury bond futures may oscillate in the short term [2] Summary by Relevant Contents Market Performance - On Thursday, the opening of most main contracts of treasury bond futures rose slightly, with an overall trend of bottom - hunting and recovery, closing with long lower shadows. As of the close, the 30 - year treasury bond futures main contract TL2509 fell 0.02%, the 10 - year T2509 remained flat, the 5 - year TF2509 rose 0.01%, and the 2 - year TS2509 rose 0.01% [1] Important Information - Open market: On Thursday, the central bank conducted 5.72 billion yuan of 7 - day reverse repurchase operations, with 50.93 billion yuan of reverse repurchases maturing on the same day, resulting in a net withdrawal of 45.21 billion yuan [1] - Money market: On Thursday, the short - term interest rates in the inter - bank money market declined slightly compared with the previous trading day. The weighted average of DR001 for the whole day was 1.32% (1.36% on the previous trading day), and the weighted average of DR007 for the whole day was 1.47% (1.51% on the previous trading day) [1] - Cash bond market: On Thursday, the closing yields of inter - bank treasury bonds fluctuated narrowly compared with the previous trading day. The yield to maturity of 2 - year treasury bonds rose 0.25 BP to 1.36%, the 5 - year yield fell 0.42 BP to 1.49%, the 10 - year yield rose 0.11 BP to 1.64%, and the 30 - year yield rose 0.35 BP to 1.85% [1] - The Caixin China General Services Business Activity Index (Services PMI) in June was 50.6, down 0.5 percentage points from May. The expansion speed of China's service industry slowed down in June due to factors such as the fading effect of the May Day and Dragon Boat Festival holidays [1] - The US unemployment rate in June was reported at 4.1% (market forecast: 4.3%, previous value: 4.2%). The number of non - farm payrolls in the US increased by 147,000 in June (forecast: an increase of 110,000, previous value: an increase of 139,000). The stronger - than - expected non - farm payroll report prompted traders to withdraw their bets on a Fed rate cut this month [1] Market Logic - The Central Financial and Economic Commission's Sixth Meeting on July 1st pointed out that the construction of a unified national market should be advanced in depth, and the low - price and disorderly competition of enterprises should be regulated in accordance with laws and regulations to promote the orderly withdrawal of backward production capacity. The policy is conducive to stabilizing prices and restoring corporate profits, but the effect may take a long time to appear [1] - The regular meeting of the Monetary Policy Committee in the second quarter of 2025 suggested increasing the intensity of monetary policy regulation, guiding financial institutions to increase the intensity of currency and credit investment, flexibly grasping the intensity and rhythm of policy implementation, and intensifying the implementation of incremental policies. It also called for observing and evaluating the bond market from a macro - prudential perspective and paying attention to changes in long - term yields [1] - The China Manufacturing Purchasing Managers' Index (PMI) in June was 49.7%, remaining below the boom - bust line for the third consecutive month (previous value: 49.5%). After the cross - half - year period, the capital interest rate has been declining continuously, which is beneficial to bond bulls [2] Trading Strategy - Trading - type investors should conduct band operations [2]

Group 1 - The steel sector experienced a strong rally on July 4, with notable stock performances including Lingang Co. hitting the daily limit, Liugang Co. achieving four consecutive limit-ups, and Angang Steel rising over 6% [1] - Liugang Co. has not identified any media reports or market rumors that could impact its stock price, and its fundamentals remain unchanged, with major shareholders holding 83.01% of the company [1] - The Central Financial Committee emphasized the need to promote the orderly exit of outdated production capacity and improve product quality, which may positively influence the steel sector's profitability [2] Group 2 - There are reports of increased environmental restrictions and production cuts in Tangshan, with approximately half of the steel mills indicating they have received notifications regarding these measures [1] - The steel sector's profitability is expected to recover to historical average levels, and the price-to-book ratio (PB) of steel stocks may also improve as a result [2]

Group 1 - The meeting emphasized the importance of adhering to the Party's leadership and enhancing the functions of various coordination institutions to form a strong working synergy [2] - The focus is on actively serving and integrating into the national unified market construction, improving resource allocation, and promoting high-quality development of the marine economy through innovative technological breakthroughs [2] - The meeting highlighted the need to deepen reforms and innovations to ensure the steady and sustainable practice of Chinese-style modernization in Xi'an [2] Group 2 - The meeting called for a focus on key tasks such as flood prevention, summer supply of electricity and water, and improving the efficiency of the petition work to ensure public safety and social stability [3] - It was stressed to implement "sunshine enrollment" requirements to ensure that the enrollment process for compulsory education is standardized, fair, and orderly [3] - The meeting also discussed the importance of supporting youth organizations and guiding young people to contribute to the high-quality development of Xi'an [2][3]

Group 1 - The meeting emphasized the importance of implementing the spirit of General Secretary Xi Jinping's important speech and the resolutions from the 12th Plenary Session of the Municipal Party Committee, focusing on self-revolution and enhancing party discipline [1][2] - Key areas of focus include economic stability, growth, and the integration into the national unified market, along with the development of new productive forces [2] - The government aims to achieve high-quality development by adhering to the "Fourteen Five" plan and preparing for the "Fifteen Five" development phase, while ensuring safety and addressing potential risks [2]

Core Viewpoint - The People's Bank of China and six other departments issued guidelines to enhance financial support for consumption, emphasizing the optimization of payment services to stimulate consumer activity and improve financial service accessibility [2][25]. Group 1: Payment Service Optimization - The guidelines highlight the need for seamless integration of various payment methods, including cash, bank cards, mobile payments, and digital RMB, to enhance consumer experience [3][4][14]. - Financial institutions are encouraged to focus on key consumption scenarios such as food, housing, travel, shopping, entertainment, and healthcare to improve payment convenience [3][25]. - Experts suggest that different demographics have varying payment preferences, necessitating a diverse range of payment options to cater to all consumer needs [3][4][15]. Group 2: Support for Special Groups - The guidelines call for the enhancement of payment services tailored for elderly individuals and foreign visitors, addressing their unique needs in payment scenarios [7][8][15]. - There is a push for the establishment of "pocket money" exchange services in commercial areas and communities to retain traditional payment methods while promoting mobile payment adaptations for the elderly [7][15]. - The need for improved credit card services for foreign visitors is emphasized, including expanding acceptance of international payment methods and enhancing user experience in key consumption areas [8][15]. Group 3: Digital RMB Development - The promotion of digital RMB requires careful planning and clear objectives, with a focus on integrating it into various payment scenarios [10][11][25]. - Users exhibit a cautious attitude towards digital RMB, preferring established payment methods like WeChat and Alipay unless incentives are provided [10][11]. - Experts advocate for a balanced approach to digital RMB development, ensuring ease of use while maintaining privacy and regulatory oversight [11][10].

Group 1 - The central economic meeting on July 1 emphasized the importance of advancing the construction of a unified national market, proposing "five unifications and one openness" as key requirements [1][10] - The construction of a unified national market is entering a critical phase, addressing deep-seated contradictions in the current market system, particularly in the context of global economic adjustments [1][10] - Accelerating the construction of a unified national market is crucial for ensuring smooth domestic circulation and enhancing international competitiveness [1][10] Group 2 - There is an urgent need to unify market access, fair competition, and credit supervision systems to achieve a nationwide integrated market foundation [2][11] - The establishment of a national negative list for market access and a unified market access efficiency evaluation index is essential for promoting the principle of "non-prohibited entry" [2][11] - A unified credit supervision standard system should be constructed to facilitate cross-regional and cross-departmental sharing of credit information, implementing joint penalties for dishonest enterprises [2][11] Group 3 - The meeting highlighted the need to promote the orderly exit of backward production capacity, particularly in industries like photovoltaics, where local subsidies have led to low-level duplication [3][12] - Market-oriented and legal methods should be utilized to facilitate the exit of inefficient production capacity, encouraging industry associations to strengthen self-discipline and prevent vicious competition [3][12] - Encouraging mergers and acquisitions in the photovoltaic sector can help achieve past capacity expansion goals while promoting technological innovation and quality improvement [3][12] Group 4 - Regional market integration is seen as a breakthrough for the construction of a unified national market, with pilot mechanisms being established to promote the free flow and efficient allocation of resources across regions [4][5] - The focus should be on achieving policy uniformity, rule consistency, and collaborative execution within regions to facilitate cross-regional cooperation [4][5] - Successful pilot projects in regions with mature industrial collaboration should be explored and evaluated for potential nationwide implementation [4][5]

Core Viewpoint - The article emphasizes the need to promote the orderly exit of outdated production capacity to combat low-price disorderly competition and internal competition, thereby enhancing market vitality and optimizing resource allocation [2][4]. Group 1: Market Dynamics - The current low-price disorderly competition and internal competition reflect a significant lack of effective demand in the economy, exacerbated by external trade protectionism [2][3]. - Outdated production capacity poses a high-risk preference in the market, leading to adverse selection and moral hazard, which can disrupt market stability [2][5]. - The orderly exit of outdated production capacity is essential for achieving marginal balance in supply and demand, allowing competition to shift towards improving product quality and consumer surplus [2][6]. Group 2: Mechanisms for Exit - To facilitate the orderly exit of outdated production capacity, it is crucial to eliminate systemic barriers that hinder the operation of the Bankruptcy Law and improve the market exit mechanism [3][4]. - Strengthening market self-discipline and autonomy is necessary, including enhancing the checks and balances between principals and agents, and ensuring creditors can constrain the actions of company controllers [4][5]. - Regulatory bodies should conduct industry risk pressure tests and require companies to disclose their risk assessments regularly to manage potential risks effectively [4][5]. Group 3: Risk Management - Effective risk management involves quantifying and pricing the risks associated with outdated production capacity, which can aid in bankruptcy restructuring and liquidation processes [5][6]. - Misunderstanding of risks is a significant barrier to the exit of outdated production capacity; thus, the market's ability to identify, price, and allocate risks must be fully utilized [5][6]. - Creating a favorable business environment that encourages market participants to engage in risk-taking is vital for eliminating internal competition and low-price disorderly competition [6][7].