Core Insights - The credit bond market has shown unexpectedly optimistic performance, with significant gains surpassing those of interest rate bonds, particularly from May 19 to May 23, 2025 [9][24] - The strategy of focusing on weak-quality city investment bonds with a duration of 2-4 years has been widely adopted by institutions, with an extension to around 5 years observed in recent trading [10][24] - The absolute yield and credit spread protection for credit bonds are currently insufficient, indicating a cautious approach is warranted despite the market's enthusiasm [4][24] Credit Strategy Insights - The yield of AAA and AA+ medium-term notes decreased significantly, with 1Y, 2Y, 3Y, 4Y, and 5Y yields down by 1.5BP, 0.4BP, 2.4BP, 2.8BP, and 5.2BP respectively during the observed period [9][11] - The performance of weak-quality city investment bonds in the 2-5 year range has been particularly strong, with declines in yields exceeding those of comparable medium-term notes [10][24] - The market for super long-term credit bonds has shown signs of improvement, with a notable increase in buying interest, especially for real estate bonds and weak-quality city investment bonds [21][24] Market Dynamics - The average transaction duration for credit bonds has lengthened, reflecting a shift towards a more optimistic market sentiment [18][24] - The proportion of transactions below valuation for super long-term credit bonds has improved, with a significant focus on real estate bonds, which have seen yield declines of over 20BP [21][24] - The current market conditions suggest that there is still room for exploration in city investment bonds with yields above 2.2%, which constitute about 10% of the public city investment bonds [24]