1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report This week, the bond market lacked a clear trading direction, and institutional behaviors remained stable overall. Large banks continued to focus on net - buying short - term bonds within 3 years, but the intensity declined. Funds showed a strong preference for credit bonds. Rural commercial banks took advantage of the bond market adjustment to make small - scale purchases. Looking ahead, the year - end "rush to allocate" seasonal market may not occur due to various constraints on banks and insurance companies [11]. 3. Summary by Directory 3.1 Overall Sentiment: Slight Increase in Bond Market Vitality Index - As of November 7, the bond market vitality index rose 4 pcts to 22% compared to October 31, and the 5D - MA increased 3 pcts to 25% [1][12]. - Upward indicators included the trading volume of the active 10Y China Development Bank bond / balance of 9 - 10Y China Development Bank bonds (rolling two - year percentile rose from 42% to 69%) and the 30Y Treasury bond turnover rate (rolling two - year percentile rose from 20% to 35%) [1][13]. - Downward indicators included the implied tax rate of the 10 - year China Development Bank bond (reverse) (rolling two - year percentile remained at 7%), the excess level of the inter - bank bond market leverage ratio compared to the average of the past 4 years (rolling two - year percentile rose from 61% to 18%), and the median duration of medium - and long - term pure bond funds (rolling two - year percentile dropped from 84.0% to 82.1%) [1][14][16]. 3.2 Institutional Behavior: Continued Volatility in the Bond Market, Overall Stability in Institutional Behaviors 3.2.1 Buying and Selling Intensity and Bond Selection: Large Banks Continuously Buy Short - Term Bonds, Funds Focus on Credit Bonds - This week, the order of net buying intensity in the cash bond market was: other products > insurance > wealth management > large banks > money market funds > others > funds > rural financial institutions > foreign - funded banks. The order of net selling intensity was: city commercial banks > joint - stock commercial banks > securities firms. For ultra - long bonds (bonds with a maturity of over 15 years), the order of net buying intensity was: insurance > funds > other products > rural commercial banks > others > foreign - funded banks, and the order of net selling intensity was: large banks > joint - stock commercial banks > securities firms > city commercial banks > wealth management [22]. - The main bond types of various institutions were: large banks focused on 5 - 7Y interest - rate bonds; rural commercial banks focused on interest - rate bonds over 10Y; insurance focused on 1 - 3Y credit bonds and 7 - 10Y other bonds; funds focused on 3 - 5Y credit bonds; wealth management and other products had no obvious main bond types [26]. 3.2.2 Trading Portfolio: General Reduction in Duration of Various Types of Bond Funds - As of November 7, the mean and median durations of the full - sample medium - and long - term pure bond funds decreased by 0.08 years and 0.09 years respectively compared to October 31, reaching 4.09 years and 3.75 years, and were at the 82.4% and 82.2% rolling two - year percentiles respectively. Among them, the median durations of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds were - 0.13 years, + 0.01 years, and - 0.09 years respectively, reaching 5.04 years, 4.39 years, and 3.28 years. The median durations of high - performing interest - rate bond funds and credit bond funds decreased by 0.72 years and - 0.01 years respectively, reaching 1.90 years and 0.91 years [38][42]. 3.2.3 Allocation Portfolio: Large Banks Concentrate on Buying Interest - Rate Bonds within 3 Years - **Increased Primary Subscription Demand for Treasury Bonds and Policy - Financial Bonds, and Increased Demand for Ultra - Long Bonds**: This week, the weighted average full - market multiples of treasury bonds and policy - financial bonds continued to rise from 2.93 to 3.13 times and from 3.21 to 3.25 times respectively. Among them, the weighted average full - market multiples of treasury bonds and policy - financial bonds with a maturity of 10Y and above increased from 2.45 times to 5.08 times and from 3.02 times to 3.52 times respectively [56]. - **Large Banks**: As of November 7, the cumulative net purchase of 1 - 3Y treasury bonds this year reached 9173 billion yuan, exceeding the 8746 billion yuan at the end of November last year. Although large banks faced pressure from interest - rate risk indicator assessments, the constraints were expected to ease in the short term [62]. - **Rural Commercial Banks**: After increasing net selling of cash bonds in October, rural commercial banks made small - scale purchases this week. As of November 7, the cumulative net purchase of 7 - 10Y and over 10Y cash bonds this year was 9616 billion yuan and 805 billion yuan respectively [72][74]. - **Insurance**: As of November 7, the ratio of the cumulative net purchase of cash bonds this year to the cumulative premium income reached 52.96%, significantly higher than 44.51% at the end of November last year. The ratio of the cumulative net purchase of cash bonds to the cumulative issuance of government bonds over 10Y was 31.59%, significantly higher than 26.32% at the end of November last year [79]. - **Wealth Management**: Since June, the cumulative net purchase of cash bonds by wealth management has continued to rise, significantly higher than the levels of the past three years. As of November 7, the cumulative net purchase of bonds over 10Y this year was 1712 billion yuan [87]. 3.3 Asset Management Product Tracking: Better Performance of Credit Bond Funds in the Past Week - Since October, the scale growth of stock funds and bond funds has been limited, with bond funds growing more slowly than stock funds. This week, 40.64 billion yuan of new bond funds were established, a significant decline from the previous week but at a relatively high level compared to October as a whole [91]. - In terms of bond fund performance, the net values of most interest - rate bond funds declined in the past week, while credit bond funds showed stronger resilience. The median annualized returns of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds in the past week were - 5.91%, - 4.57%, and 0.47% respectively, and most credit bond funds had positive returns in the past three months [91].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the current chaotic bond market, trading desks are actively exploring structural trading opportunities, especially showing high enthusiasm for the previously oversold Tier 2 and perpetual bonds. Although the allocation desks have not yet formed a systematic承接 strength, the pressure restricting the allocation power is easing, and the承接 strength may improve marginally [10]. - Fund sentiment has stabilized, with a return to net buying of various bond types. However, overall, the enthusiasm for interest - rate bonds is not high, mainly focusing on steadily increasing the allocation of credit bonds and Tier 2 and perpetual bonds [10]. - Attention should be paid to the承接 strength of large - scale banks and insurance companies. The constraints on large - scale banks' bond allocation may ease, and the bond market has adjusted to a level with allocation value, which is more attractive to insurance companies [10][11]. 3. Summary by Relevant Catalogs 3.1 Overall Emotion - As of October 17, the bond market vitality index increased by 21 pcts to 21% compared to October 10, and the 5D - MA increased by 19 pcts to 25%. The warming indicators include the implied tax rate of the 10 - year China Development Bank bond (inverse), the trading volume of the active 10Y CDB bond / the balance of 9 - 10Y CDB bonds, the leverage ratio of the inter - bank bond market, and the turnover rate of the 30Y Treasury bond. The cooling indicator is the median duration of medium - and long - term pure bond funds [1][12][13]. 3.2 Institutional Behavior 3.2.1 Buying and Selling Strength and Bond Type Selection - In the current bond market, the order of net buying strength is other product types > insurance > funds > rural finance > money market funds > securities firms > wealth management > city commercial banks, and the order of net selling strength is large - scale banks > joint - stock banks > foreign banks. For ultra - long bonds (bonds with a maturity of over 15 years), the order of net buying strength is insurance > funds > securities firms > others > wealth management > foreign banks, and the order of net selling strength is large - scale banks > other product types > city commercial banks > joint - stock banks > rural commercial banks [23]. - On different trading days from October 13 to October 17, the buying and selling behaviors of various institutions showed different characteristics. For example, on October 13, funds significantly increased their net buying of long - term and ultra - long - term interest - rate bonds; on October 14, funds slightly net sold interest - rate bonds of all maturities but maintained net buying of Tier 2 and perpetual bonds and credit bonds within 3 years [23][24]. - Currently, the main bond types of various institutions are as follows: large - scale banks and rural commercial banks have no obvious main bond types; insurance mainly focuses on interest - rate bonds with a maturity of less than 1 year; funds mainly focus on 1 - 3 - year credit bonds; wealth management mainly focuses on 1 - 3 - year credit bonds; other product types mainly focus on credit bonds with a maturity of less than 1 year [2][26]. 3.2.2 Trading Desk - As of October 17, the mean and median durations of the full - sample medium - and long - term pure bond funds decreased by 0.18 years and 0.23 years respectively compared to October 10, reaching 4.09 years and 3.82 years. Among them, the median durations of pure interest - rate bond funds, interest - rate bond funds, and credit bond funds decreased by 0.40 years, 0.35 years, and 0.21 years respectively. The median durations of high - performing interest - rate bond funds decreased by 0.20 years, while that of high - performing credit bond funds increased by 0.06 years [38][41]. 3.2.3 Allocation Desk - **Decrease in primary subscription demand for Treasury bonds and policy - financial bonds**: The primary subscription demand for Treasury bonds and policy - financial bonds decreased, and the demand for ultra - long bonds also declined. The weighted average full - market multiples of Treasury bonds and policy - financial bonds decreased or remained flat, and the weighted average full - market multiples of 10Y and above Treasury bonds and policy - financial bonds declined [55]. - **Large - scale banks**: The constraints on large - scale banks' bond allocation may ease. Although the cumulative net buying scale of short - term Treasury bonds by large - scale banks since June has increased, it is still far lower than the same period in 2024. The net buying scale of 1 - 3Y Treasury bonds has been declining since August [61]. - **Rural commercial banks**: The cumulative net buying scale of rural commercial banks this year is significantly weaker than in previous years, mainly due to the weak net buying strength of short - term bonds within 1 year. However, the net buying strength of 7 - 10Y and over 10Y bonds is significantly higher than in previous years [73]. - **Insurance companies**: The net buying strength of insurance companies for bonds this year is significantly higher than in previous years, especially for ultra - long bonds over 10 years. As of October 17, the ratio of the cumulative net buying of bonds to the cumulative premium income and the ratio of the cumulative net buying of bonds to the cumulative issuance scale of over 10Y government bonds are both higher than the end of October last year. The strong performance of 30Y local government bonds and railway bonds this week may reflect the improvement of insurance companies' bond - allocation strength [80]. - **Wealth management**: Since June, the cumulative net buying scale of wealth management products in the secondary market has continued to rise, significantly higher than the past three years. As of October 17, the cumulative net buying of over 10Y bonds by wealth management products this year reached 16.3 billion yuan [85]. 3.3 Asset Management Product Tracking - Since October, the scales of bond funds and equity funds have both decreased month - on - month, with equity funds experiencing a larger decline. There were no newly established bond - type funds this week. In terms of bond fund performance, the net values of most credit and interest - rate bond funds continued to rise in the past week, with pure interest - rate bond funds having a larger increase. Most interest - rate and credit bond funds recorded negative returns in the past three months [5][89][90].