Macro Outlook - The overall direction remains favorable, but the market should be viewed from the perspective of a high-volatility oscillating market throughout the year [4] Mid-Market Outlook - Supply-demand contradictions persist, with potential for short-term mismatches leading to phase-specific market opportunities. Credit bond supply remains weak, with city investment bonds entering a stock era and industrial bonds continuing to increase supply [4][11] - Demand for credit bonds is supported by a fluctuating market and expanding institutional liabilities, although valuation volatility may increase [4] Micro Outlook - Overall credit risk is manageable, but attention should be paid to localized risks [4] Market Outlook - In the second half of the year, the value of credit bond coupons is expected to be certain amid high volatility. The supply-demand contradiction remains, and while credit risk is generally controllable, valuation volatility may increase due to accelerated net value adjustments in wealth management products [4] Credit Strategy - A strategy focusing on mid-to-short-term bonds is preferred, with a recommendation to maintain duration but exercise restraint, especially after August. Opportunities may arise in 3-5 year high-grade credit bonds [4] City Investment Bonds - The process of debt resolution is entering a verification phase, with a focus on risk control. The expected acceleration in the clearance of hidden debts may lead to increased pressure on city investment platforms [6] - Investment strategies should focus on 3-year AA(2) rated bonds, considering regions with strong fiscal support and high land acquisition announcements [6] Industrial Bonds - The fundamentals of industrial bond issuers are under pressure, and caution is advised in selecting lower-rated bonds. Structural opportunities may exist in high-grade bonds and specific sectors [6] Bank Perpetual Bonds - The difficulty of trading in bank perpetual bonds is increasing, making it crucial to grasp market rhythms. The supply of these bonds is expected to remain weak, and trading strategies should focus on 4-5 year high-grade perpetual bonds [6] Market Review - From January to May 2025, the issuance of traditional credit bonds was 55,164 billion, with net financing of 7,623 billion, reflecting a year-on-year decline of 3.5% and 23.1% respectively [11] - The net financing of city investment bonds and industrial bonds both showed a year-on-year decline, indicating a trend of slight net outflow for city investment bonds and net inflow for industrial bonds [11] Secondary Market Review - Since the beginning of 2025, the credit bond yield has shown a downward trend, with the credit spread shifting from a "weak oscillation" to a "strong oscillation" [19][23] - The overall credit risk premium has narrowed, with lower-rated bonds performing better in terms of yield [30]