Report Industry Investment Rating The document does not provide the industry investment rating. Core Viewpoints - Interest rate bonds: Treasury bond yields declined, and the term spread narrowed. From July 25, 2025, to August 1, 2025, the central bank conducted a total of 2.8525 trillion yuan in reverse repurchase operations, with 2.0438 trillion yuan in reverse repurchases maturing, resulting in a net injection of 808.7 billion yuan. Inter - bank funding prices generally decreased. The 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds decreased by 1.01BP, 3.26BP, 3.62BP, 2.02BP, and 2.65BP respectively, and the 10Y - 1Y term spread narrowed to 33.25BP [1]. - Credit bonds: The majority of credit bond yields declined. From July 28, 2025, to August 3, 2025, 610 new credit bonds were issued, with a total issuance scale of 668.086 billion yuan, a decrease of 540.715 billion yuan from the previous period. The net financing amount was 16.326 billion yuan. The issuance of asset - backed securities accounted for the largest proportion in terms of bond types. In terms of bond ratings, the issuance scale of AAA - rated bonds was 17.63 billion yuan, accounting for 62.66%. In terms of maturity, credit bond issuance was mainly concentrated in the 5 - 10 - year range. In terms of industry, the financial industry had the largest number of bond issuances. From July 25, 2025, to August 1, 2025, the majority of urban investment bond yields declined, with the 1 - year AA - rated bond having the largest decline of 6.94BP [2]. - Observation of major asset classes: From July 25, 2025, to August 1, 2025, the three major US stock indexes declined. The Dow Jones Industrial Average fell 2.92% weekly, the S&P 500 index fell 2.36% weekly, and the Nasdaq Composite fell 2.17% weekly. European and Asian - Pacific stock indexes also declined. US Treasury yields decreased, the US dollar index rose 1.04% weekly, and most non - US currencies weakened. Crude oil and gold prices rose during the week [2]. Summary by Directory 1. Interest rate bonds: Treasury bond yields declined, and the term spread narrowed 1.1. Liquidity observation: Liquidity was net - injected, and funding prices generally decreased - From July 25, 2025, to August 1, 2025, the central bank conducted a total of 2.8525 trillion yuan in reverse repurchase operations, with 2.0438 trillion yuan in reverse repurchases maturing, resulting in a net injection of 808.7 billion yuan. Inter - bank and exchange - market funding prices generally decreased [14]. 1.2. Primary market issuance: Net financing increased, and local government bond issuance decreased - From July 28, 2025, to August 3, 2025, the primary market for interest rate bonds issued 672.435 billion yuan, with a total repayment of 119.178 billion yuan for matured bonds, and a net financing amount of 553.257 billion yuan. The issuance of local government bonds decreased compared to the previous period [24]. 1.3. Secondary market trading: Treasury bond yields declined, and the term spread narrowed - From July 25, 2025, to August 1, 2025, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds decreased by 1.01BP, 3.26BP, 3.62BP, 2.02BP, and 2.65BP respectively, and the 10Y - 1Y term spread narrowed from 34.89BP to 33.25BP. The yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year policy - bank bonds decreased by 2.52BP, 3.50BP, 3.20BP, 3.47BP, and 4.64BP respectively, and the 10Y - 1Y term spread narrowed from 28.57BP to 26.45BP [30][31]. 2. Credit bonds: The majority of credit bond yields declined 2.1. Primary market issuance: Issuance volume decreased compared to the previous period - From July 28, 2025, to August 3, 2025, 610 new credit bonds were issued, with a total issuance scale of 668.086 billion yuan, a decrease of 540.715 billion yuan from the previous period. The net financing amount was 16.326 billion yuan. Asset - backed securities had the largest number of issuances, and medium - term notes had the highest issuance amount. In terms of bond ratings, AAA - rated bonds accounted for 62.66% of the total issuance. In terms of maturity, credit bond issuance was mainly concentrated in the 5 - 10 - year range. The financial industry had the largest number of bond issuances [42]. 2.2. Secondary market trading: The majority of credit bond yields declined - From July 25, 2025, to August 1, 2025, the majority of urban investment bond yields declined, with the 1 - year AA - rated bond having the largest decline of 6.94BP. The yields of medium - and short - term notes also decreased, with the 3 - year AA - rated note having the largest decline of 6.98BP [52]. 2.3. Review of weekly credit default events - From July 28, 2025, to August 3, 2025, there were no defaults on corporate credit bonds [54]. 3. Observation of major asset classes 3.1. European and American stock indexes declined - From July 25, 2025, to August 1, 2025, the three major US stock indexes and European and Asian - Pacific stock indexes all declined [55]. 3.2. US Treasury yields declined - From July 25, 2025, to August 1, 2025, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year US Treasury bonds decreased by 22.00BP, 19.00BP, 18.00BP, 18.00BP, and 17.00BP respectively, and the 10Y - 1Y term spread changed by 5.00BP to 36.00BP [57]. 3.3. The US dollar index strengthened, and most non - US currencies weakened - From July 25, 2025, to August 1, 2025, the US dollar index rose 1.04% weekly, and most non - US currencies weakened [59]. 3.4. Crude oil and gold prices rose during the week - From July 25, 2025, to August 1, 2025, the price of COMEX gold futures rose 0.93% weekly, and the price of London spot gold rose 0.10% weekly. The price of Brent crude oil rose 1.80% weekly, and the price of WTI crude oil rose 3.33% weekly [61][63]. 4. Investment suggestions - The recent VAT policy adjustment on the interest income of bonds such as treasury bonds may have multiple impacts on bond funds. It may compress direct returns, increase short - term market volatility, and lead to adjustments in bond - fund investment strategies. It is suggested to pay attention to the relevant allocation opportunities after the adjustment of new and old interest rate bonds, and this tax policy is conducive to guiding the optimization of the market structure and guiding funds to flow into the credit - bond market [3][65].