1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The bond market is in the process of repair, with most Treasury bond futures closing higher. The bond market oscillates between stable growth and easing expectations, and short - term attention should be paid to the policy signals at the end of the month [1][3]. - The macro - policy in 2026 is to continue implementing a more proactive fiscal policy and a moderately loose monetary policy, with room for further reserve requirement ratio cuts and interest rate cuts. The deficit rate is planned to be around 4%, and a special ultra - long - term Treasury bond of 1.3 trillion yuan will be issued [1]. - The financial data in February shows a pattern of "stable total volume and structural differentiation". The credit growth rate continues to decline, and the household credit demand is weak, which has a neutral - to - positive impact on the bond market [2]. 3. Summary by Directory I. Interest Rate Pricing Tracking Indicators - Price indicators: China's CPI (monthly) has a month - on - month increase of 1.00% and a year - on - year increase of 1.30%; China's PPI (monthly) has a month - on - month increase of 0.40% and a year - on - year decrease of 0.90% [9]. - Monthly economic indicators: The social financing scale is 451.40 trillion yuan, with a month - on - month increase of 2.29 trillion yuan and a growth rate of 0.51%; M2 year - on - year is 9.00% with no change; the manufacturing PMI is 49.00%, with a month - on - month decrease of 0.30% and a decrease rate of 0.61% [10]. - Daily economic indicators: The US dollar index is 99.62, with a month - on - month increase of 0.41 and a growth rate of 0.41%; the US dollar against the offshore RMB is 6.9021, with a month - on - month increase of 0.007 and a growth rate of 0.10%; SHIBOR 7 - day is 1.44, with a month - on - month increase of 0.02 and a growth rate of 1.27%; DR007 is 1.44, with a month - on - month increase of 0.03 and a growth rate of 2.34%; R007 is 1.55, with a month - on - month decrease of 0.01 and a decrease rate of 0.55%; the 3 - month inter - bank certificate of deposit (AAA) is 1.47, with a month - on - month increase of 0.01 and a growth rate of 0.97%; the AA - AAA credit spread (1Y) is 0.09, with a month - on - month increase of 0.00 and a growth rate of 0.97% [10]. II. Overview of Treasury Bonds and Treasury Bond Futures Market - The closing prices of TS, TF, T, and TL on March 25, 2026, are 102.49 yuan, 105.91 yuan, 108.16 yuan, and 111.18 yuan respectively, with the corresponding price changes of 0.02%, 0.00%, 0.00%, and 0.01% [3]. - The average net basis of TS, TF, T, and TL is 0.077 yuan, 0.097 yuan, 0.080 yuan, and 0.182 yuan respectively [3]. III. Overview of the Money Market Funding Situation - From January to February, the fiscal operation started smoothly. The general public budget revenue increased by 0.7% year - on - year, and the expenditure increased by 3.6% year - on - year. The government - funded revenue decreased by 16% year - on - year due to the drag of land sales, while the expenditure increased by 16% year - on - year due to the accelerated issuance of special bonds [2]. - On March 25, 2026, the central bank conducted a 7 - day reverse repurchase operation of 78.5 billion yuan at a fixed interest rate of 1.4% [2]. - The main term repurchase rates of 1D, 7D, 14D, and 1M are 1.319%, 1.435%, 1.511%, and 1.505% respectively, and the repurchase rates have recently declined [2]. IV. Spread Overview - The report provides various spread data, including the inter - period spread trends of Treasury bond futures varieties, and the spread between spot bond maturity and futures cross - varieties [34][35][37]. V. Two - year Treasury Bond Futures - The report presents the implied interest rate of the two - year Treasury bond futures main contract and the Treasury bond maturity yield, as well as the IRR of the TS main contract and the funding rate, and the three - year basis and net basis trends of the TS main contract [44][46]. VI. Five - year Treasury Bond Futures - The report shows the implied interest rate of the five - year Treasury bond futures main contract and the Treasury bond maturity yield, the IRR of the TF main contract and the funding rate, and the three - year basis and net basis trends of the TF main contract [48][61]. VII. Ten - year Treasury Bond Futures - The report includes the implied yield of the ten - year Treasury bond futures main contract and the Treasury bond maturity yield, the IRR of the T main contract and the funding rate, and the three - year basis and net basis trends of the T main contract [56][60]. VIII. Thirty - year Treasury Bond Futures - The report provides the implied yield of the thirty - year Treasury bond futures main contract and the Treasury bond maturity yield, the IRR of the TL main contract and the funding rate, and the three - year basis and two - year net basis trends of the TL main contract [64][67]. Strategies - Unilateral strategy: The repurchase rate has declined, and the Treasury bond futures prices are oscillating [4]. - Arbitrage strategy: Pay attention to the decline of the 2606 basis [4]. - Hedging strategy: There is medium - term adjustment pressure, and short - sellers can use far - month contracts for appropriate hedging [4].

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - In February, the price continued to recover. The CPI reflected the accelerated repair of endogenous momentum, especially the service sub - item after excluding the base effect. The PPI recovered under the input of raw materials and the mapping of computing power. The market is concerned about whether the bond market will trade the "inflation market", but the report maintains the view that the bond market is in the repair logic [6][7] 3. Summary According to Relevant Catalogs CPI Analysis - In February, the CPI and core CPI readings reached the highest monthly values in nearly 3 years. The CPI was 1.3% year - on - year and 1.0% month - on - month, and the core CPI was 1.8% year - on - year and 0.7% month - on - month, both the highest since February 2023 [2] - The strong rise of CPI was due to the Spring Festival month - shifting factor. Even excluding this factor, the CPI month - on - month was still 0.35 pct stronger than last year. The average month - on - month growth rate of CPI from January to February this year was 0.6%, second only to 2024 in the past 5 years and significantly higher than last year's 0.25% [2] - In terms of sub - items, from January to February, the month - on - month growth rates of service CPI and food CPI were 0.45 pct and 0.55 pct higher than last year, higher than those of non - food (+0.25 pct) and consumer goods (+0.2 pct). In February, food and tobacco, transportation and communication, and education and entertainment made large contributions to the year - on - year change of CPI, almost contributing to all the 1.1 pct change in CPI year - on - year [3] PPI Analysis - In February, the PPI continued to recover year - on - year, but the month - on - month repair speed slowed down. The PPI was - 0.9% year - on - year, with the decline narrowing by 0.5 pct compared with last month, and 0.4% month - on - month, with the growth rate the same as last month [4] - The ex - factory prices of means of production and means of subsistence continued to recover year - on - year. In February, they were - 0.7% and - 1.6% year - on - year, up 0.6 pct and 0.1 pct respectively compared with last month; the month - on - month growth rates were 0.5% and 0 respectively, with the former remaining flat and the latter down 0.1 pct compared with last month [4] - Among sub - items, the ex - factory price of the mining industry accelerated its recovery, while that of durable consumer goods slowed down. In February, the year - on - year and month - on - month growth rates of the mining industry's ex - factory price were - 5.3% and 1.2% respectively, up 2.8 pct and 2.9 pct respectively compared with last month; for durable consumer goods, they were - 1.6% and 0.3% respectively, up 0.2 pct year - on - year and flat month - on - month compared with last month, with the repair speed slowing down [4] - In terms of sub - industries, the ex - factory prices of upstream non - ferrous and energy - chemical industries with input - type characteristics and the computer, communication and electronics industries related to computing power had relatively large month - on - month increases, including non - ferrous mining, oil and gas processing, non - ferrous smelting and rolling, chemical product manufacturing, and chemical fiber manufacturing [4] Market Expectation and Current Situation - The market - expected inflation path included the mapping of "anti - involution" in the new energy industry chain, the turnaround of the real estate chain driving the black industry chain, and the non - ferrous market driven by the prosperity of the technology industry. However, recently, the input - type inflation narrative of "war + oil and gas" has taken the lead [7] - Such input - type inflation has been experienced in 2021 and 2022, which brought contraction risks to the downstream. Looking back, it had little impact on the bond market trend for the whole year. The report maintains the view that the bond market is in the repair logic [7]

1. Report Industry Investment Rating - The industry rating is "Overweight", expecting a gain of over 10% relative to the benchmark index in the next 6 - 12 months [28] 2. Core Viewpoints - The bond market has seen a recovery this year, but the ongoing Middle - East situation has shifted asset pricing from "pulse - style" risk - aversion to inflation concerns. "Input - type" or "supply - side" inflation doesn't necessarily lead to bond market adjustments, and inflation usually isn't the core contradiction in the bond market. The report maintains the judgment that the 10 - year bond will repair to 1.75% and the 30 - year bond to 2.15%, and the 30 - year bond may present more opportunities due to its chip structure [4][8][26] 3. Summary by Relevant Catalogs 3.1 War and PPI Inflation - Since the beginning of the year, the bond market has had a recovery, but the Middle - East situation has changed asset pricing. As of March 6, the Nanhua Commodity Index rose 14.1%, with precious metals, industrial products, and agricultural products up 22.6%, 12.8%, and 3.9% respectively. The PPI inflation in March may accelerate further, with the average of the Nanhua Industrial Products Index in March up 6.7% from February, higher than the 4.4% increase in January. The inflation in January was driven by technology optimism and strategic premiums in metals, while the inflation in March is due to the US - Iran war, with oil prices soaring and affecting downstream products [8][9] 3.2 Impact of Inflation on the Bond Market - The current commodity price rebound is an "input - type inflation" risk caused by geopolitical events and energy prices. Inflation affects interest rates through two mechanisms: influencing central bank monetary policy and affecting inflation expectations or risk preferences. Looking at historical data from three similar post - 2020 periods, central bank monetary policy remained stable, and there was no consistent conclusion on market interest rates. "Input - type" or "supply - side" inflation doesn't necessarily lead to bond market adjustments and usually isn't the core contradiction in the bond market [14][21] 3.3 Micro - behavior and Strategy of the Bond Market - In the first week of March, the borrowing of Special 6 reached 10 billion, and the bond market showed a multi - empty game. After the holiday, 25 Special 6 first covered short positions and then increased short positions, with the borrowing concentration rising to a record high of 41.7%. Some short - sellers forced funds to stop losses, but the current fund holding duration is about 2.4 years, and there has been little addition of duration. The bond market has decoupled from high - volatility assets and has become a low - volatility allocation asset. The report maintains the repair targets of 1.75% for the 10 - year bond and 2.15% for the 30 - year bond, and the 30 - year bond may have more opportunities [23][25][26]

Key Points - The article highlights significant events in the cultural, tourism, and real estate sectors in China, indicating a robust recovery in domestic travel and adjustments in housing policies [2] - The Ministry of Culture and Tourism reported a record 596 million domestic trips during the Spring Festival holiday, generating a total expenditure of 803.48 billion yuan, marking an increase of 126.48 billion yuan compared to the previous year [2] - The Shanghai government has announced further optimizations to real estate policies, including adjustments to housing purchase restrictions and improvements to housing fund loan policies [2] - A meeting of the Central Political Bureau discussed the draft of the 15th Five-Year Plan and the government work report, indicating ongoing economic planning and policy formulation [2] - Internationally, tensions escalated with the announcement of U.S. military strikes against Iran, which has implications for geopolitical stability and market reactions [2]

Core Insights - The bond market has unexpectedly shown a recovery trend over the past month, with the 10-year yield dropping below 1.8% and the TL surpassing the key resistance level of 112.8 [3] - Since the beginning of the year, most bond varieties have declined by over 10 basis points from their early January highs, with the 5-year and 7-year government bond yields decreasing by 14 basis points and 13 basis points respectively, and the 7-year and 10-year yields dropping by over 20 basis points [3] - The report indicates that the recovery is supported by several factors, including low volatility in T6 and a favorable configuration for bonds with maturities under 10 years, which tests the short sellers' mentality [3][4] Summary by Sections Market Performance - The bond market has experienced a significant recovery, with the 10-year yield declining from a high of 1.9% to 1.79%, a drop of 11 basis points [5] - Fund subscriptions have been strong, with a notable increase in purchases of 7-10 year government bonds amounting to 560 billion and 3-5 year bonds totaling 352 billion, indicating a robust buying interest before the holiday [5][6] Institutional Behavior - Institutions have shown a strong willingness to hold bonds over the holiday, with a notable increase in bond fund subscriptions [5] - The report highlights that the borrowing cost for T6 has increased to an annualized rate of approximately 1.45%, which may affect the psychological perception of interest rate increases [4] Future Outlook - The report anticipates that the bond market will continue to recover post-holiday, with the 10-year yield expected to stabilize around 1.75% and the 30-year yield at 2.15% [7] - The impact of tariff changes on the bond market sentiment is expected to be limited, as the market has become desensitized to minor adjustments in tariffs [6]

Core Viewpoint - The bond market has shown signs of recovery over the past month, with various fixed-income products achieving positive returns, particularly those with embedded options, while the stock market remains volatile and weak [2][3][9]. Group 1: Fixed Income Product Performance - In the past month, all types of fixed-income products have generated positive returns, with option-embedded bond funds leading at 0.74%, followed by medium to long-term bond funds at 0.37%, short bond funds at 0.20%, high-grade interbank certificates of deposit at 0.15%, and cash management products at 0.10% [3][9]. - The recovery in the bond market is attributed to increased demand for safe-haven assets due to stock and commodity market volatility, as well as a more favorable liquidity environment [9][19]. Group 2: Market Review - The bond market has experienced a recovery, with interest rates declining, supported by factors such as increased investor demand for bonds during the holiday season and a more abundant liquidity environment [9][19]. - The 10-year government bond yield has dropped below the critical level of 1.8%, but further downward movement is expected to be limited in the short term [9][22]. Group 3: Future Outlook - In the short term, the bond market's recovery may be nearing its end, with potential upward pressure on interest rates due to various factors, including stock market performance and inflation expectations [22][28]. - The strategy for investors includes maintaining positions in short to medium-term pure bond products while waiting for better entry points for long-duration bonds as yields rise [34][35]. Group 4: Credit Bond Market - The credit bond market is expected to remain stable, with limited risks of widening credit spreads, and short to medium-duration products are favored [23][34]. - Investors are advised to continue holding medium to short-duration products to capture coupon payments, while being cautious with long-duration credit bonds due to increased volatility [23][34]. Group 5: Regulatory Updates - On January 23, the China Securities Regulatory Commission released guidelines for the performance comparison benchmarks of publicly offered securities investment funds, which aim to simplify compliance requirements and enhance transparency in the fixed-income market [29][30].

Core Viewpoint - The bond market is experiencing structural repair, with the 10-year government bond yield falling below the critical level of 1.8%, attracting market attention [1] Group 1: Market Dynamics - There is a divergence in institutional views regarding the potential for further interest rate declines, with some institutions supporting the bond market due to a loose funding environment and ongoing insurance capital allocation [1] - Conversely, other institutions believe that yields below 1.8% may have already priced in some expectations of rate cuts, indicating that future trends will depend on policy implementation and further validation of the economic fundamentals [1] Group 2: Short-term Outlook - The bond market is likely to remain in a phase of both repair and contention in the short term, influenced by multiple variables [1]

Report Industry Investment Rating - Not provided in the document Core Viewpoints of the Report - The pre - holiday bond market continued to recover mainly because the pressure on the bank's asset - liability gap was lower than expected. Factors included government bond digestion pressure not being too high, most due deposits being renewed, and an increase in the speed of foreign exchange settlement under the expectation of RMB appreciation [6][9]. - Since 2025, the "quantity and price decline" of large - bank certificates of deposit (CDs) has often led to a downward repair of bond market interest rates. After the holiday, it is necessary to focus on whether CDs can continue the pre - holiday trend of "quantity and price decline" [6][9][11]. - The key to whether bond interest rates can continue to break through after reaching critical points depends on whether CD interest rates can "as expected" continue to decline after the holiday [6][11]. Summary by Relevant Catalogs 1. Bond Market Weekly Viewpoint: Pay Attention to Whether CDs Can Continue the "Quantity and Price Decline" after the Holiday - The pre - holiday bond market recovery was due to three factors: government bond high growth not causing much digestion pressure, bank deposit loss not being serious as most due deposits were renewed, and the positive impact of increased foreign exchange settlement on the bond market [6][9]. - The "quantity and price decline" of large - bank CDs since 2025 has been correlated with the downward repair of bond market interest rates, and this time is no exception [6][9]. - After the holiday, it is necessary to observe whether there are more factors to ease the bank's liability pressure and whether the central bank will reduce other ways of base money injection [11]. - Since the end of 2024, CD interest rates have often shown "anti - seasonal" fluctuations, and it is worth noting whether they will continue to decline after the holiday [6][11]. 2. This Week's Focus in the Fixed - Income Market: The Supply Scale of Interest - Bearing Bonds Remains at a High Level in the Same Period 2.1 This Week's Domestic Inflation and Financial Data Will Be Released - China will announce January CPI, PPI and other data, and the US will announce January unemployment rate and other data [15][16]. 2.2 This Week's Interest - Bearing Bond Issuance Is Expected to Be Around 712.1 Billion - The total issuance of interest - bearing bonds this week is expected to reach 712.1 billion. Among them, treasury bonds are expected to issue 210 billion, local bonds 322.1 billion, and policy - financial bonds about 180 billion [17][18]. 3. Review and Outlook of Interest - Bearing Bonds: Bond Market Interest Rates Mostly Decline 3.1 The 14 - day Reverse Repurchase Injection Started - After the month - end, the scale of open - market operation injections decreased. The 7 - day reverse repurchase scale decreased last week, and the 14 - day reverse repurchase injection started in the second half of the week, with a net withdrawal of 756 billion [22][23]. - The increase in cross - month capital interest rates was controllable. The repurchase trading volume increased, and the overnight proportion reached a high level. The overnight price and DR007 both declined [23]. - The issuance volume of CDs increased, and the price continued to decline. The net financing amount of CDs was positive, and the proportion of medium - term CDs decreased [29]. 3.2 The Bond Market Sentiment Remained Optimistic - Last week, there was little new information in the bond market. After the month - end, funds were loose, and the equity and commodity markets mostly declined. The bond market sentiment remained optimistic, and most interest rates declined [39]. - The 10Y treasury bond reached a critical point, and more catalysts may be needed for a downward breakthrough. Most yields of interest - bearing bonds with different maturities declined, with only the 1 - year treasury bond yield rising slightly [39]. 4. High - Frequency Data: Most Commodity Prices Were Hit - On the production side, the trends of operating rates were divergent. The blast furnace and PTA operating rates increased, while the semi - steel tire and asphalt operating rates decreased. The year - on - year decline in the daily average crude steel output in late January widened [45]. - On the demand side, the year - on - year growth rates of passenger car manufacturers' wholesale and retail sales were still negative. The land premium rate in 100 large - and medium - sized cities decreased, and the land transaction area increased. The sales area of commercial housing in 30 large - and medium - sized cities increased significantly compared with the same period of last Spring Festival. The export indices declined [45]. - On the price side, most commodity prices declined. Crude oil, copper, and aluminum prices decreased, and the price of coking coal futures also decreased. The comprehensive building materials price index and cement index decreased slightly, while the glass index increased. The price of downstream consumer products such as vegetables and pork mostly declined [46].

Core Viewpoint - The bond market is experiencing a recovery, with the 10-year government bond yield dropping below 1.8% for the first time since November 2025, indicating a shift in market sentiment towards bonds as a safer investment amid high volatility in other asset classes [1][2]. Group 1: Market Performance - As of February 9, the 10-year government bond yield reached a low of 1.793%, marking a cumulative decline of 10 basis points since January [1][2]. - The yield on the 10-year active bond "25附息国债16" fell to 1.8%, while the 30-year bond yield showed a slight increase, indicating a narrowing of the yield spread between different maturities [2]. - The bond futures market also saw gains, with the 30-year main contract rising by 0.14% to 112.730 yuan [2]. Group 2: Influencing Factors - The recovery in the bond market is attributed to weak fundamentals and a supportive liquidity environment, with expectations of monetary easing gaining traction [3][6]. - The manufacturing PMI dropped to 49.3% in January, reinforcing market expectations for additional policy measures [3]. - Major state-owned banks have been net buyers of 10-year government bonds, with a cumulative net purchase of 993 billion yuan, indicating strong institutional interest [3][4]. Group 3: Future Outlook - Analysts predict that the bond market will remain strong leading up to the Spring Festival, driven by expectations of continued monetary easing and a stable funding environment [5][6]. - Upcoming economic indicators, particularly inflation data, are expected to influence market dynamics, with concerns about supply and valuation pressures in the bond market [8].

Market Overview - From late January to early February, significant global events disrupted asset pricing, leading to fluctuations in gold and silver prices, and a notable decline of 2.48% in the Shanghai Composite Index on February 2[20] - The domestic bond market saw a window for growth, with the yield on 30-year government bonds decreasing by 4 basis points (bp) to 2.22%[20] Bond Market Characteristics - The current bond market is characterized by three main features: a decline in risk appetite, ample liquidity, and favorable supply-demand dynamics[2] - Risk appetite has weakened, with the performance of risk assets declining compared to mid-December to mid-January, leading to a shift of funds back to fixed income[2] - Despite an increase in bond supply in February, demand remains strong, with government bonds seeing good subscription rates and a high coverage ratio of over 12 times for some issuances[2] Inflation Concerns - Inflation remains a key concern, with January's Producer Price Index (PPI) expected to show a month-on-month increase of approximately 0.3%, driven by rising commodity prices[3] - The Consumer Price Index (CPI) is anticipated to rebound significantly in February due to the effects of the Spring Festival, with both year-on-year and month-on-month growth expected to rise[3] Yield Dynamics - The 10-year government bond yield is currently stable at around 1.80%, indicating resistance to a systemic decline in interest rates[20] - The yield spread between 30-year and 10-year government bonds has compressed from 48bp to 44bp, driven by buying interest from funds and smaller banks[4] Risk Factors - Potential risks include unexpected adjustments in monetary policy, liquidity changes, and fiscal policy shifts that could impact market stability[5]