Group 1: Report's Industry Investment Rating - There is no information provided about the industry investment rating in the report. Group 2: Report's Core View - In December 2025, the bond supply scale was at a relatively low level, with the bond custody balance's year - on - year growth rate dropping by 1.8 percentage points compared to November, and the monthly new custody scale being 819.2 billion yuan, a low level in 2025. The supply of credit bonds increased while that of inter - bank certificates of deposit decreased. In terms of institutions, asset management accounts had insufficient bond - allocation power, while insurance institutions increased their holdings. Looking ahead, the government bond issuance in Q1 may be fast, and banks are expected to be the main force in absorbing government bond supply. Insurance institutions' bond - allocation scale may be supported by high yields and supply, while the non - bank bond - allocation power of asset management accounts may be weak [3]. Group 3: Summary by Relevant Catalogs 1. Bond Supply in December 2025 - The bond custody balance's year - on - year growth rate in December 2025 was 11.6%, 1.8 percentage points lower than in November. The new custody scale was 819.2 billion yuan, a low level in 2025 [3][4]. 2. Bond Supply by Type - Treasury bonds, local government bonds, and inter - bank certificates of deposit had less - than - seasonal increases of 42.4 billion yuan, 175.9 billion yuan, and 1.3 trillion yuan respectively. Credit bonds and ABS had more - than - seasonal increases of 596.8 billion yuan and 165.5 billion yuan respectively. In December 2025, the new supply of treasury bonds was 358.2 billion yuan, and that of local bonds was 431 billion yuan, both at relatively low levels. The net supply of inter - bank certificates of deposit was - 622.4 billion yuan, at a low level in 2025, while the net supply of corporate credit bonds was 377.1 billion yuan, rising against the season [3][8][11]. 3. Bond - Allocation by Institutions in December 2025 - **Banks**: After adjustment for repurchase, the actual bond - buying scale was 385.6 billion yuan, in line with the season. They mainly increased their holdings of policy - financial bonds and treasury bonds. The adjusted government - bond - buying scale was 432.5 billion yuan, accounting for 55% of the new government - bond custody scale, indicating a seasonal weakening of bond - allocation power [23]. - **Insurance institutions**: They increased their holdings by 304.7 billion yuan, 204.6 billion yuan more than the season, mainly increasing their holdings of credit bonds and local government bonds, possibly due to low bond - allocation in November and year - end bond - grabbing [26]. - **Asset management accounts**: They increased their holdings by 221.3 billion yuan, 358.5 billion yuan less than the season, mainly reducing their holdings of inter - bank certificates of deposit and increasing their holdings of credit bonds, possibly due to the stock - bond seesaw effect and low issuance of debt - biased funds [29]. - **Foreign investors**: They reduced their holdings by 115.5 billion yuan, 147.3 billion yuan less than the season, mainly reducing their holdings of inter - bank certificates of deposit, possibly due to the unsustainability of risk - free carry - trade and insufficient new supply of inter - bank certificates of deposit [35]. - **Securities firms**: They reduced their holdings by 504 million yuan, 178.5 billion yuan less than the season, mainly reducing their holdings of credit bonds, possibly for year - end profit - taking [35]. 4. Outlook - **Bond supply**: With the front - loaded fiscal policy, the government bond issuance in Q1 may be fast, and the supply of local government bonds is expected to be higher than last year [38]. - **Banks**: They are expected to be the main force in absorbing government bond supply. With stable deposit growth and slowing loan growth, banks still have large bond - allocation space, but attention should be paid to the structural restrictions on bond - allocation caused by deposit transfer and activation [41]. - **Insurance institutions**: High yields and supply may support their bond - allocation scale. In January, they continued to have strong bond - allocation power, possibly affected by the premium "good start" effect. The wide spread between ultra - long - term local government bonds and insurance's predetermined interest rate is still attractive [44]. - **Asset management accounts**: Under the pressure of stock - market diversion, the non - bank bond - allocation power is expected to be weak. The bond - allocation power of wealth management products and debt funds has not increased significantly, possibly due to funds flowing into bank deposits, the equity market, and insufficient issuance of inter - bank certificates of deposit [46].

1. Report Industry Investment Rating No relevant content provided in the report. 2. Core Viewpoints of the Report - In November 2025, the new bond issuance scale decreased year - on - year, mainly dragged down by inter - bank certificates of deposit. The new custody volume of interest - rate bonds decreased slightly, while that of corporate credit bonds increased, mainly supported by industrial bonds [3][4]. - In November 2025, banks significantly increased their bond allocations, while the demand from other investors was weak. After considering the central bank's outright reverse repurchase, commercial banks' bond investments increased year - on - year, and the proportion of banks' increased government bond holdings to the net supply of government bonds was at a relatively high level [3][17]. - In December 2025, the government bond supply decreased year - on - year, and it is expected to increase significantly year - on - year in January 2026. The bond supply after the New Year will rise, and the market's carrying capacity will face a test [3][40]. 3. Summary by Relevant Catalogs 3.1 Bond New Custody Volume in November 2025 - The bond custody balance in November 2025 was 193.57 trillion yuan, with a year - on - year growth rate of 13.37%, a decrease of 0.67 percentage points from the previous month. The new custody scale in November was 143.97 billion yuan, a year - on - year decrease of 82.21 billion yuan [5]. - The new custody volume of inter - bank certificates of deposit and local government bonds decreased by 68.67 billion yuan and 15.19 billion yuan year - on - year respectively. The decline in the supply of inter - bank certificates of deposit was the main reason for the overall decline in bond supply [8]. - The new custody volume of interest - rate bonds decreased slightly year - on - year. Among them, the new custody volumes of treasury bonds and local government bonds were lower than the previous year, while that of policy - financial bonds was higher [11]. - The new custody volume of corporate credit bonds increased by 3.74 billion yuan year - on - year, entirely supported by industrial bonds. The net financing of urban investment bonds and industrial bonds changed by - 7.87 billion and 16.61 billion yuan year - on - year respectively [16]. 3.2 Bond Allocation by Different Institutions in November 2025 - Banks significantly increased their bond allocations, while other investors' demand was weak. After considering the central bank's outright reverse repurchase, commercial banks increased their bond holdings by 91.7 billion yuan year - on - year, while asset management accounts (i.e., non - legal entity products) increased their bond holdings less by 118.62 billion yuan year - on - year, and insurance companies basically remained the same [19]. - Banks' strong bond - allocation efforts may be a passive choice due to the weak demand from non - banks. Banks mainly increased their allocation to various interest - rate bonds. The ratio of banks' increased government bond holdings to the net supply of government bonds in November was 90.9%, higher than the previous month and the average of the past 12 months [22][25]. - Insurance companies' bond - allocation efforts weakened marginally, mainly reducing their allocation to local government bonds and corporate credit bonds. After excluding supply disturbances, the bond - allocation efforts of insurance companies also weakened [29]. - The bond - allocation efforts of asset management accounts weakened, which may be affected by the liability side of wealth management products and the supply of inter - bank certificates of deposit. The new scale of wealth management products and the supply of inter - bank certificates of deposit both decreased significantly year - on - year, leading to less bond - buying by asset management accounts [30]. - Foreign investors and securities brokers mainly reduced their bond holdings. Foreign investors sold 1.36 billion yuan more bonds year - on - year, mainly inter - bank certificates of deposit. Securities brokers sold 27.38 billion yuan more bonds year - on - year, mainly treasury bonds [39]. 3.3 Outlook for Bond Supply and Institutional Behavior - In December 2025, the government bond supply decreased by nearly 1 trillion yuan year - on - year. In January 2026, the government bond supply may increase significantly year - on - year, with the issuance of new special bonds and special refinancing bonds likely to rise [44]. - In December 2025, banks may have a relatively large bond - allocation volume. After the New Year, the supply - demand contradiction of bonds will further test banks. The supply - demand contradiction of long - term bonds remains significant, and attention should be paid to banks' actions [46]. - The value of bond allocation for insurance companies is prominent, and their demand may be supported. The spread between the yield of 30 - year local government bonds and the insurance预定利率 is more than 50BP, and insurance companies are expected to increase their bond - buying as the government bond supply recovers in January 2026 [50]. - The bond - allocation volume of asset management accounts in December 2025 may decrease year - on - year, and there is great uncertainty after the New Year. The decrease in December may be due to bond market adjustments and the significant decrease in the supply of inter - bank certificates of deposit. The pace of deposits moving to wealth management products is uncertain, and asset management accounts may also reduce their positions [54].

1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The bond market is expected to recover after the holiday. The mild implementation of the new public - fund fee regulations and the alleviation of banks' institutional indicator pressure may increase the allocation power and drive the bond market to pick up [5][8][14]. - In January, the bond market may remain volatile under supply shocks. The increased supply of government bonds and the potential credit surge at the beginning of the year may crowd out the allocation power and increase capital demand, leading to greater capital fluctuations [5][14]. - After late January, the recovery of the bond market may be smoother. The impact of supply is rhythmic rather than trend - setting, and the overall financing demand is not strong [5][14]. - It is still believed that the 10 - year Treasury bond is expected to reach a new low in the first half of the year [5][14] 3. Summary by Relevant Contents Pre - holiday Bond Market Performance - In the last week before the holiday, the bond market weakened again, with interest - rate bonds falling and credit bonds strengthening. The yields of 10 - year and 30 - year Treasury bonds rose by 1.0bps and 4.4bps to 1.85% and 2.27% respectively, and short - end interest rates also increased. The yields of 3 - year and 5 - year AAA - second - tier capital bonds declined slightly, and the yield of 1 - year AAA certificates of deposit dropped 1.0bps to 1.63% [1][8] Factors Contributing to Post - holiday Bond Market Recovery - The new public - fund fee regulations implemented on the last day before the holiday are significantly milder than the draft for comments. It gives partial exemptions on bond - fund redemption fees, eases concerns about the new redemption rules, relieves the redemption pressure on bond funds, and helps the bond market recover [1][8][9] - In the new year, the pressure on banks' indicators eases. According to the final revised document of the Basel framework SPR31, the parallel upward shift in the bank book interest - rate shock scenario is adjusted from 250bps to 225bps, and banks will also get new indicator spaces at the beginning of the year, with the indicator pressure seasonally decreasing. This will enhance the overall allocation power and assist the bond - market recovery [2][9] Factors Causing Pressure on the January Bond Market - Supply - side factors: The issuance of government bonds will start in the new year. The 26 regions that have announced their issuance plans plan to issue 2.1 trillion yuan in the first quarter, lower than the 2.5 - trillion - yuan plan in 2025, but the issuance rhythm is more front - loaded, with 8095 billion yuan planned for January, compared with 3713 billion yuan in January 2025. Also, a 30 - year Treasury bond will be newly issued on January 14th, and a 10 - year Treasury bond will be re - issued on January 9th [2][10] - Credit factors: Credit may surge at the beginning of the year. The proportion of first - quarter credit in the whole - year credit increased from 36.2% in 2020 to 59.8% in 2025, and that of January increased from 17.0% in 2020 to 31.4% in 2025. It may rise to 35% or higher in 2026. The concentrated credit release at the beginning of the year may squeeze bank funds and reduce the allocation power to the bond market. It may also increase capital demand and cause greater short - term capital fluctuations if the central bank fails to inject enough funds [3][11] Rhythmic Nature of Supply Impact - The possible surge in January's credit and social financing is not due to an increase in financing demand. The credit - demand index in the third quarter of 2025 was 52.8%, remaining at a low level for two consecutive quarters, and current credit demand is not strong [4][13] - In 2026, fiscal expansion will be moderate, and the year - on - year increase in government bonds will be significantly lower than in 2025. The concentrated issuance in January means less issuance space later, so the impact is rhythmic rather than trend - setting, and the impact on the bond market will gradually subside after the peak in late January [4][13][14]

Summary of Key Points from Conference Call Industry Overview - The focus of current fiscal policy has shifted towards debt resolution rather than traditional demand stimulation, leading to direct impacts on bond supply and yield pricing. A slight change in bond issuance volume has limited effects on overall yield [1][4] - The anticipated government bond issuance for 2026 is expected to exceed 26 trillion, with a significant portion being long-term bonds. The capacity of banks to absorb this supply and the potential market impact remain to be observed [1][4] Core Insights and Arguments - **Fiscal Policy Impact**: The current fiscal policy aims primarily at debt resolution, which directly influences yield pricing. Even with a deficit rate above or below 4%, the resulting bond issuance variations of 1,000 to 3,000 billion will not drastically alter overall yields [4] - **Monetary Policy Role**: Recent interest rate cuts are primarily aimed at boosting market confidence rather than immediate market benefits. A potential rate cut is expected in Q1 2026, but it should not be interpreted as a signal for significant yield declines [5] - **Market Behavior of Large Banks**: The actions of large banks in the latter half of December are crucial. Continued selling of old bonds, especially long-term ones, indicates a need for better interest rate risk control. Conversely, buying behavior would suggest manageable risk levels [6][9] - **Market Volatility and Trading Strategy**: There is a defined volatility range in the market, and exceeding this range may indicate overvaluation, presenting a good exit point. Investors should adjust strategies based on market sentiment and stabilization forces [8][16] Additional Important Insights - **December Fiscal Spending**: The last two weeks of December are typically characterized by concentrated fiscal spending, with the tightest funding conditions usually occurring around mid-December. Increased fiscal spending towards the end of the month may alleviate some pressure [10][11] - **Interest Rate Spread**: The current spread between 10-year and 30-year government bonds is 40 basis points, with a low probability of significant deviation in the short term. The acceptable fluctuation range for the 10-year bond is 1.8%-1.85%, corresponding to 2.18%-2.27% for the 30-year bond [3][13] - **Central Bank Actions**: Recent central bank interventions have not significantly altered market rates, with the six-month marginal rate expected to remain stable. The current deposit certificate yield is projected to hold at around 1.65% [14] This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and expectations within the bond market and fiscal policy landscape.

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The fiscal policy in 2026 is expected to maintain an active tone to support stable growth, with a projected fiscal policy combination of a 4% deficit - rate (5.88 trillion yuan deficit), 2 trillion yuan in special treasury bonds, 4.7 trillion yuan in special local bonds, and 2 trillion yuan in replacement bonds, corresponding to 14.6 trillion yuan in net government bond financing [1][11][13]. - The government - sector leverage ratio is expected to rise to 74.6% in 2026, with a slightly slower upward slope compared to 2025 [1][15]. - The net financing of interest - rate bonds in 2026 is expected to be 17.1 trillion yuan, an increase of 0.8 trillion yuan compared to 2025, and the supply rhythm is in line with the front - loaded fiscal policy [2][16]. - After the "last dip" in the bond market, it is advisable to layout for the year - end pre - emptive market. The bond market strategy should flexibly switch between α and β strategies [4]. 3. Summary According to the Table of Contents 3.1 2026 Bond Supply Outlook - Fiscal Policy: The fiscal policy in 2026 is expected to remain active, but with limited room for further increasing the deficit rate. "Quasi - fiscal" tools may still have room for action [1][11]. - Government Bond Net Financing: The net government bond financing in 2026 is expected to be 14.6 trillion yuan, including 7.1 trillion yuan in treasury bonds, 7.5 trillion yuan in local bonds. The government - sector leverage ratio is expected to rise to 74.6%, with a slower growth rate, and the central and local government leverage ratios are expected to rise to 32.1% and 42.5% respectively [1][15][16]. - Interest - Rate Bond Net Financing: The net financing of interest - rate bonds in 2026 is expected to be 17.1 trillion yuan, including 7.1 trillion yuan in treasury bonds, 7.5 trillion yuan in local bonds, and 2.5 trillion yuan in policy - bank bonds. The supply rhythm is front - loaded, and the supply in the fourth quarter may be relatively small [2][16][19]. - Impact of Unused Quotas: If unused quotas are considered, there is still room for an increase in government bond supply in 2026, which may be decided based on economic conditions [3][20]. 3.2 Bond Market Strategy: Layout for the Year - End Pre - emptive Market after the "Last Dip" - Current Situation of 10 - year Treasury Bonds: The 10 - year treasury bonds are currently fluctuating narrowly around 1.8%, which is in the middle of the central bank's attention range. Due to limited expectations of interest - rate cuts this year and the unimplemented fund fee - rate regulations, the bond market lacks a trading theme, and 1.8% has become a short - term neutral psychological point formed by institutional games [4][28]. - Seasonal Pattern: Historically, there has often been a "last dip" in mid - to late November. After the negative factors are exhausted, the bond's allocation value becomes prominent, and institutions such as rural commercial banks usually start building positions, driving down yields [4]. - Strategy Switch: The α - mining strategy for medium - term bonds is nearing its end, and it is advisable to gradually switch back to the β strategy. There may be opportunities for both α and β in ultra - long - term bonds in December [34]. - Interest - Rate Bond Selection: Currently, bonds with α - space can be selected from multiple dimensions such as riding, variety spreads, and term spreads. A dumbbell strategy can be adopted to participate in short - term and ultra - long - term bonds [5][35]. 3.3 Interest - Rate Bond Market Review: The Bond Market Lacks a Trading Theme, and Yields Remain Narrowly Fluctuating - Overall Market: In the third week of November, the 10 - year treasury bond yields fluctuated weakly around 1.8%. The 1 - year treasury bond yield decreased by 0.5BP to 1.4%, the 10 - year treasury bond yield increased by 0.75BP to 1.8125%, and the 30 - year treasury bond yield increased by 1.05BP to 2.1585% [9]. - (1) Funding Situation: The central bank made large - scale net injections through open - market operations (OMO), and the funding situation was balanced but tight [10][52]. - (2) Primary Issuance: The net financing of policy - bank bonds increased, while the net financing of treasury bonds, local bonds, and inter - bank certificates of deposit decreased [52]. - (3) Benchmark Changes: The term spread of treasury bonds widened, while the term spread of China Development Bank bonds narrowed. The short - term treasury bonds performed better than the long - term ones, and the long - term China Development Bank bonds performed better than the short - term ones [50].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - In September 2025, the new bond custody scale was 1.1 trillion yuan, the lowest level of the year, with the year - on - year growth rate of bond custody balance at 14.2%, down 0.75 percentage points from August. Government bonds and credit bonds were the main supply forces, while inter - bank certificates of deposit were weak. Banks and insurance institutions increased their bond holdings, while non - legal person products decreased theirs. It is expected that from November to December, the net financing scale of national debt and special bonds will be 1.0 trillion yuan and 930 billion yuan respectively, with a relatively stable supply. Banks are expected to maintain a neutral to slightly strong bond - allocation level, insurance institutions are expected to maintain a strong bond - allocation level, and the buying power of asset management accounts is expected to increase [3][4]. 3. Summary According to Relevant Catalogs 3.1 Bond Custody Scale in September 2025 - The year - on - year growth rate of bond custody balance was 14.2%, down 0.75 percentage points from August. The new custody scale in September was 1.1 trillion yuan, the lowest of the year, and about 0.9 trillion yuan less than the same period last year [3][4]. 3.2 Bond Supply by Type - Government bonds, credit bonds were the main supply forces, while inter - bank certificates of deposit were weak. National debt, local government bonds, and corporate credit bonds increased by 13.72 billion yuan, 3.08 billion yuan, and 30.23 billion yuan more than the seasonal level respectively. Policy - financial bonds and inter - bank certificates of deposit had net financing significantly lower than the seasonal level. Policy - financial bonds increased 13.43 billion yuan less than the seasonal level, possibly due to the concentrated financing of 500 billion yuan in new policy - financial instruments in August. Inter - bank certificates of deposit increased 74.79 billion yuan less than the seasonal level, continuing the weak trend [3][7]. - The new supply of national debt in September was 761.2 billion yuan, and that of local bonds was 455.1 billion yuan, both decreasing month - on - month. The total of the two was 1.2 trillion yuan, a year - on - year decrease of 351.9 billion yuan [11]. - In September, the net supply of inter - bank certificates of deposit was - 40.75 billion yuan, and that of financial bonds was 1.71 billion yuan, both further declining from August. The net supply of corporate credit bonds was 26.93 billion yuan, an increase of 11.58 billion yuan month - on - month, mainly supported by central enterprise credit bonds [17]. 3.3 Bond - Buying Behavior by Institution - Banks and insurance institutions increased their bond holdings, while non - legal person products and foreign investors decreased theirs. In September, banks increased their bond holdings by 981.2 billion yuan (considering repurchase), and the proportion of the increase in bank bond - holding scale to the new government bond custody scale was 68%, at a historically low level. Insurance institutions increased their bond holdings by 252.8 billion yuan, 124.2 billion yuan more than the seasonal level, mainly increasing their holdings of local government bonds and credit bonds. Asset management accounts decreased their bond holdings by 236.6 billion yuan, 331.3 billion yuan less than the seasonal level, mainly reducing their holdings of credit bonds, inter - bank certificates of deposit, and financial bonds. Foreign investors decreased their bond holdings by 44.9 billion yuan, 15.2 billion yuan less than the seasonal level, mainly reducing their holdings of inter - bank certificates of deposit. Securities firms increased their bond holdings by 22.7 billion yuan, 35.8 billion yuan less than the seasonal level, mainly increasing their holdings of local government bonds [3][20][34]. 3.4 Outlook for Bond Supply and Institutional Behavior - Bond supply: It is expected that from November to December, the net financing scale of national debt and special bonds will be 1.0 trillion yuan and 930 billion yuan, with a relatively stable supply [3][40]. - Banks: Considering the restart of the central bank's bond - buying and the still - low loan growth rate, it is expected that banks will maintain a neutral to slightly strong bond - allocation level [3][42]. - Insurance institutions: With sufficient premiums and the return of yields to an attractive level for allocation, it is expected that insurance institutions will maintain a strong bond - allocation level [3][44]. - Asset management accounts: With the return of the liability side and the warming of the bond market, the buying power is expected to increase. However, the liability side of funds may still be affected by the potential negative impact of the new public fund fee regulations, and the fund redemption situation needs to be observed [3][47].

1. Report Industry Investment Rating - There is no information about the industry investment rating in the provided content. 2. Core Viewpoints of the Report - The current bond market is in a headwind period, with the "slow bull in stocks and non - continuous sharp decline in bonds" state likely to continue due to liquidity and capital factors. The 10 - year Treasury yield may face two - stage pressure levels: 1.80% and 1.90%. However, the resistance at 1.80% and the difficulty of breaking through 1.90% are relatively high [2][22]. - If three out of four conditions are met in the second half of this year, the probability of the domestic central bank's comprehensive interest rate cut is very high. Currently, three conditions are gradually being met, and if the Federal Reserve cuts interest rates in September, the probability of the People's Bank of China synchronously lowering the OMO rate in the fourth quarter may increase. Then, the bond market will shift from a headwind period to a tailwind period [3][23][24]. 3. Summary by Relevant Catalogs 3.1 Interest - rate Bond Data Review for Last Week - **Funds Rate**: In the week of August 18th, the funds rate first rose and then fell. DR001, R001, DR007, and FR007 all showed fluctuations in the same period [8]. - **Open - market Operations**: The central bank's reverse - repurchase volume reached 2.08 trillion yuan, with a total maturity of 711.8 billion yuan, resulting in a net capital injection of 1.37 trillion yuan, which is a relatively large net injection this month [8]. - **Sino - US Market Interest Rate Comparison**: The inversion range of the Sino - US bond yield spread has shown differentiation. The inversion range of the 6 - month interest rate spread has slightly increased, while the inversion range of the 2 - year and 10 - year bond yield spreads has slightly decreased [13]. - **Term Spread**: The term spread of Chinese bonds remained unchanged, while that of US bonds slightly widened. The 10 - 2 - year term spread of Chinese bonds was 35BP, and that of US bonds was 58BP [15]. - **Interest - rate Term Structure**: The yield curve of Chinese bonds changed little, while that of US bonds shifted downward. The yield of Chinese bonds from 3 - month to 1 - year decreased by 2BP, and that from 5 - to 10 - year decreased by 1BP; the overall yield of US bonds decreased by more than 5BP [16]. 3.2 High - frequency Real - estate Data Tracking - **First - tier Cities**: In the week of August 22nd, the commercial housing transactions in first - tier cities were in a low - level oscillation state. The daily average transaction area was 57,500 square meters, and the daily average transaction volume was 532 units. The market fluctuated significantly, with the highest point on August 20th and the lowest on August 24th [25]. - **Ten Major Cities**: The commercial housing transaction data of ten major cities rebounded compared with last week, with an average daily transaction area of about 103,700 square meters, an increase of about 20,000 square meters per day compared with last week [25]. - **30 Large and Medium - sized Cities**: The commercial housing transactions in 30 large and medium - sized cities remained at a historical low. The daily average transaction area was about 220,000 square meters, and the daily average transaction volume was about 2,566 units. The transaction area and volume reached the weekly peak on August 22nd [25].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - From July 28 to August 1, treasury bond yields first rose and then fell due to multiple factors, with the yield curve showing a flattening trend. The resumption of VAT on bonds has a limited negative impact on the bond market, and credit bonds may see value re - evaluation opportunities. The tax advantage of public funds over bank self - operations is further enhanced, which may drive the outsourcing demand of bank self - operations. Next week, fund rates are expected to remain stable, while the supply pressure of treasury bonds will increase. The current bond market strategy suggests maintaining a defensive stance and seizing structural opportunities [2][3][7]. 3. Summary According to the Directory 3.1 Bond Market Weekly Review - From July 28 to August 1, treasury bond yields first rose and then fell. The fund - side was first loose and then tight, remaining generally loose. Important policy events were successively implemented, and the manufacturing PMI in July fell below the boom - bust line. Overall, yields of treasury bonds across various maturities generally declined. For example, the yields of 1 - year, 10 - year, and 30 - year treasury bonds decreased by 1.01BP, 2.65BP, and 2.35BP respectively, and the yield curve showed a flattening trend [2][12]. 3.2 Bond Market Data Tracking 3.2.1 Fund - side - From July 28 to August 1, the central bank's open - market operations had a net injection of 69.00 billion yuan. The central bank conducted 16,632.00 billion yuan of open - market reverse repurchases, with 16,563.00 billion yuan maturing. The fund - side was stable across the month, and the fund rate center declined. The differences in fund costs between non - bank institutions and banks increased, and the term spread of FR007S5Y - FR007S1Y converged [23][24]. 3.2.2 Supply - side - From July 28 to August 1, the total issuance of interest - rate bonds decreased, while the net financing increased. The issuance of government bonds decreased, and the issuance scale of inter - bank certificates of deposit also decreased. The net financing of treasury bonds increased, while that of local government bonds decreased [41][44]. 3.3 Next Week's Outlook and Strategy 3.3.1 Impact of Resuming VAT on the Bond Market - Starting from August 8, 2025, VAT will be resumed on the interest income of newly issued treasury bonds, local government bonds, and financial bonds. This has a limited negative impact on the bond market, and credit bonds may see value re - evaluation opportunities. The tax advantage of public funds over bank self - operations is further enhanced. The market impact after the implementation of the new policy needs to closely track the primary - market issuance [3][52]. 3.3.2 Next Week's Outlook - After crossing the month, fund rates are expected to remain stable. Next week, the planned issuance of treasury bonds is 4130.00 billion yuan, significantly higher than this week, and the supply pressure will increase [59][60]. 3.3.3 Bond Market Strategy - For interest - rate bonds, 10 - year treasury bonds above 1.70% have allocation value, with 1.80% regarded as the upper - limit pressure. For credit bonds, seize the value re - evaluation opportunities brought by the resumption of VAT on interest - rate bonds. In the convertible bond market, focus on equity - balanced varieties. This week, pay attention to the primary - market issuance results of local government bonds on August 8, the central bank's liquidity injection through various tools in July, and inflation data [7][61]. 3.4 Global Major Assets - As of August 1, 2025, yields of US treasury bonds generally declined, and the term spread widened. The US dollar index rose, and the central parity rate of the US dollar against the RMB increased slightly. Gold and crude oil prices rose, while silver prices fell [63][68].

Group 1: Report Overview - The report is titled "2025 April Institutional Behavior Thinking: Improving Liquidity Environment, Slow Supply of New Special Bonds" and is written by the Fixed Income Team of Ping An Securities Research Institute [1] Group 2: Investment Rating - No industry investment rating is provided in the report Group 3: Core Views - In April 2025, the bond custody balance increased at a year - on - year rate of 15.5%, 0.6 percentage points higher than in March. The monthly new custody scale was 1.7 trillion yuan, remaining at a high level in the same historical period [3][4] - It is expected that the bond supply in May will increase compared to April. The new special bond issuance is slower than in previous years, and there is still supply pressure [39][40] - Banks are expected to maintain their bond - increasing strength, but their ability to absorb supply depends on the central bank's liquidity injection. Insurance is expected to adjust its bond - allocation rhythm according to local government bond supply. The capital increment of asset management accounts is expected to recover [3][43][51] Group 4: Bond Custody Scale - In April 2025, the bond custody balance had a year - on - year growth rate of 15.5%, up 0.6 percentage points from March. The new custody scale was 1.7 trillion yuan, which, although showing a marginal decline month - on - month, was at a high level in the same historical period [3][4] Group 5: Bond Supply by Type - Government bonds and inter - bank certificates of deposit (CDs) increased more than the seasonal average, while treasury bonds increased less. In April, local government bonds and inter - bank CDs increased by 5218 billion yuan and 1668 billion yuan more than the seasonal average respectively, and treasury bonds increased by 825 billion yuan less [8] - The total supply of government bonds (treasury bonds + local bonds) in April was close to 1 trillion yuan, showing a seasonal decline compared to March. However, both treasury bonds and local bonds were higher than the previous year [11] - The net supply of inter - bank CDs in April was 377.9 billion yuan, a significant decline from March, indicating an improvement in banks' asset - liability situation. The supply of corporate credit bonds was 224.2 billion yuan, returning to a high level in previous years [14] Group 6: Bond Allocation by Institutions - Banks and asset management accounts were the main institutions increasing bond holdings. Commercial banks increased their holdings by 797.5 billion yuan. After adjusting for the central bank's reverse repurchase scale in April, the actual purchase amount was in line with the seasonal pattern. Insurance increased holdings by 167.3 billion yuan, 70.9 billion yuan more than the seasonal average, mainly adding local government bonds. Asset management accounts increased holdings by 1.1 trillion yuan, 408.9 billion yuan more than the seasonal average, mainly increasing inter - bank CDs. Foreign investors increased holdings by 88.1 billion yuan, 120.8 billion yuan more than the seasonal average, mainly adding treasury bonds. Securities firms increased holdings by 183.5 billion yuan, 394.7 billion yuan more than the seasonal average, mainly adding treasury bonds [3][18] - Within asset management accounts, wealth management products concentrated on increasing inter - bank CDs from March to April, while funds showed a growing preference for credit bonds [29] Group 7: Outlook - It is expected that the bond supply in May will increase compared to April. The issuance of new special bonds is slower than in previous years, and there is still supply pressure [39][40] - Banks are expected to maintain their bond - increasing strength, but their ability to absorb supply depends on the central bank's liquidity injection. Insurance is expected to adjust its bond - allocation rhythm according to local government bond supply. The capital increment of asset management accounts is expected to recover. If the liquidity injection remains loose, the scale of wealth management products is expected to continue to grow steadily, and funds may still have room to increase bond holdings through leverage [3][43][51]