Core Viewpoint - The recent trends in credit bond yields indicate a downward trajectory, influenced by low net supply, expected growth in wealth management scale, and the resumption of loose monetary policy [1][2][3] Supply and Demand Dynamics - As of May 15, the overall yield of credit bonds in the interbank market has decreased, with the 3-year AAA yield dropping to 1.83% and the 5-year yield around 1.99% [2] - During the week of May 5 to May 9, yields for 1 to 3-year credit bonds fell by 5 to 7 basis points, while the 5-year yield decreased by 1 to 4 basis points [2] - The net issuance of non-financial credit bonds was only 48 billion yuan, with 194 bonds issued totaling 170.7 billion yuan, and 7 bonds worth approximately 2.5 billion yuan canceled [2][3] Demand Side Analysis - The net buying data for non-financial credit bonds shows significant demand, with wealth management net purchases at 9.8 billion yuan and fund net purchases rising to 57.7 billion yuan [3] - Other asset management institutions also contributed with net purchases of 5 billion yuan, indicating a positive supply-demand relationship [3] Preference for City Investment Bonds - City investment bonds remain a favored choice among investment institutions, with a net issuance decrease of 9.2 billion yuan during the week of May 5 to May 9 [4] - The issuance of city investment bonds has seen a significant increase in subscription rates, with over 57% of bonds being subscribed at three times the issuance amount [4] Market Outlook - The market is expected to focus on the basic economic fundamentals as monetary policies stabilize, with a potential for credit spreads to compress further [6] - Short-term credit bonds are highlighted as particularly attractive, especially after recent monetary policy adjustments [6][7] - Recommendations include focusing on short to medium-term city investment bonds with lower default risks and higher yield potential [7]