Summary of Conference Call Records Industry Overview - The records primarily discuss the bond market, focusing on convertible bonds and government bonds, with insights into the broader financial market dynamics as of March 2026. Key Points and Arguments Market Performance - The China Convertible Bond Index fell by 7.1% in March, reversing all gains for the year, indicating high volatility in the market [1][2] - The Shanghai Composite Index dropped by 3.6% on March 23, 2026, marking a significant decline, with historical comparisons showing similar drops in previous years due to external factors [2] Institutional Fund Flows - There was a notable net redemption of fixed-income products, particularly from wealth management subsidiaries, which significantly impacted high-volatility products [2] - Institutions primarily sold off sectors such as electronics, power equipment, banking, non-ferrous metals, and pharmaceuticals, while showing interest in automotive, basic chemicals, and machinery sectors [2] Future Market Scenarios for Convertible Bonds - Three potential scenarios for the convertible bond market were outlined: 1. **Optimistic Scenario**: A short-term rebound leading to price increases in equity-type and mid-to-low priced convertible bonds [3] 2. **Volatile Scenario**: A period of market fluctuation with limited new capital inflow, delaying overall valuation increases [4] 3. **Pessimistic Scenario**: A shift in market sentiment leading to significant risks, particularly for lower-quality convertible bonds [4] Investment Strategies - Emphasis on identifying convertible bonds with strong debt support and a high likelihood of conversion success, targeting a price of 130 yuan to trigger strong redemption [5] - Recommendations to maintain cautious positions and focus on structural allocations, particularly in mid-to-low priced convertible bonds with favorable conversion prospects [5] Government Bond Market Insights - The yield on 10-year government bonds is expected to fluctuate between 1.78% and 1.85%, while 30-year bonds may reach up to 2.3% [6] - The market is anticipated to experience a directional choice soon, with significant attention on the upcoming special government bond issuance plan [6][10] Monetary Policy Outlook - The likelihood of the central bank actively withdrawing MLF (Medium-term Lending Facility) is low, with a supportive monetary policy stance expected to continue [7] - Key signals to watch for include the wording in MLF announcements and the potential impact of external geopolitical factors on domestic monetary policy [7] Credit Bond Market Dynamics - Funds are the primary players in the credit bond market, with significant net purchases observed, particularly in the 1-3 year maturity range [9] - The trend of funds heavily investing in credit bonds is expected to persist into the second quarter, despite potential risks associated with concentrated positions [10] Key Variables to Monitor - Upcoming special government bond issuance plans and their market impact [8] - Economic data releases in early April to assess ongoing economic trends [10] - Fluctuations in oil prices and their implications for monetary policy [10] Additional Important Content - The records highlight the importance of structural investment strategies in a volatile market environment, emphasizing the need for careful monitoring of both domestic and international economic indicators [5][10]

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints - The report is overall optimistic about the bond market, especially the 30-year Treasury bonds [5][12]. - The callback risk of the bond market from March to April is not high [5][12]. - The 10-year China Development Bank bonds are more promising than the 10-year Treasury bonds [5][13]. - The 30-year Treasury bonds are expected to have an excessive decline in interest rates if product accounts gradually participate in the allocation [5][14]. 3. Summary by Relevant Catalogs Event - Amid geopolitical disturbances recently, the stock market is weak while the bond market is strong. As of March 4, the yield to maturity of the active 10-year Treasury bond has declined to around 1.79% [11]. Comment Low Callback Risk from March to April - The February PMI is lower than market expectations and has declined month-on-month. In the short term, fundamentals have limited suppressing effects on the bond market [5][12]. - Market expectations for loose monetary policy have risen. Investors expect reserve - requirement ratio cuts and interest rate cuts during the Two Sessions. As of March 3, the capital lending volume of large banks has rebounded to 5.63 trillion yuan after the holiday. The short - term interest rate was strong on March 4, with the TS contract main - continuous rising 5% on a single day [5][12]. - Attention should be paid to potential geopolitical fluctuations and the historical stock - bond calendar effect from March to April [5][12]. Preference for 10 - year China Development Bank Bonds over 10 - year Treasury Bonds - The liquidity of 10 - year Treasury bonds is under test. On March 4, the trading volume of the active 10 - year Treasury bond 250022 was only 354 transactions, while that of the 10 - year China Development Bank bond 250220 reached 2484 transactions [5][13]. - The tax spread between 10 - year China Development Bank bonds and 10 - year Treasury bonds has been widening since 2025. If the liability side of public funds eases and the bearish bond market expectation weakens, the tax spread of various maturities is expected to compress [5][13]. Optimism about 30 - year Treasury Bonds - As of the end of February, public funds only held 315 billion yuan of the secondary - market position of the active bond 2500006, while large banks held 633 billion yuan. If product accounts gradually participate in the allocation of ultra - long bonds, the interest rate of this variety will decline excessively [5][14]. - Banks will gradually reduce their willingness to lend bonds around mid - to - late March to optimize first - quarter statement indicators. Currently, the net borrowing volume of securities firms in 30 - year Treasury bonds is at a new high, and the subsequent decline will drive short - covering forces [5][14].

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - On March 3, the capital market at the beginning of the month remained loose, the bond market was generally strong but long - term bonds weakened slightly, convertible bond market indices fell collectively, and most convertible bond issues declined. Yields of U.S. Treasuries across maturities generally rose, and 10 - year government bond yields of major European economies also generally increased [1] 3. Summary by Directory 3.1 Bond Market News 3.1.1 Domestic News - The press conference of the 4th Session of the 14th National Committee of the Chinese People's Political Consultative Conference was held on March 3. The spokesperson Liu Jieyi answered questions on China's economic situation, development prospects, opening - up, and the integration and development of the Greater Bay Area, stating that China's economy has strong resilience and long - term positive fundamentals [3] - The central bank released the operation of the financial market in January 2026 on March 3. In January 2026, net financing of government bonds was 976.39 billion yuan, an increase of 283.13 billion yuan year - on - year; net financing of corporate bonds was 503.26 billion yuan, an increase of 57.9 billion yuan year - on - year. At the end of January 2026, the bond market custody balance was 197.7 trillion yuan. In the money market, the average daily turnover of inter - bank lending was 493.75 billion yuan, a year - on - year increase of 84.4%; the average daily turnover of bond repurchase in the inter - bank market was 8.5 trillion yuan, a year - on - year increase of 47.7%. At the end of January 2026, the outstanding balance of inter - bank lending was 0.8 trillion yuan, and the outstanding balance of bond repurchase in the inter - bank market was 12.0 trillion yuan [4] 3.1.2 International News - Minneapolis Fed President Kashkari, a voting member of the FOMC, said that if inflation cools, one or two interest rate cuts later this year might be appropriate, but the Middle East war could lead to a longer - term pause in action. He considered the current 3.5% - 3.75% interest rate range to be close to the "neutral level" [5] - New York Fed President Williams said that if inflation continues to decline after the impact of tariffs fades, the Fed will have reason to further cut interest rates. He expected that tariffs would put additional pressure on consumer prices in the first half of this year, and the inflation rate would drop to 2.5% by the end of 2026 and to 2% in 2027. He also expected the unemployment rate to decline slightly in the next two years and the economic growth rate to be about 2.5% this year [6] 3.1.3 Commodities - On March 3, WTI April crude oil futures rose 4.67% to $74.56 per barrel, with a cumulative increase of 14.34% since February 26; Brent May crude oil futures rose 4.71% to $81.40 per barrel; COMEX gold futures fell 3.98% to $5099.40 per ounce; NYMEX natural gas futures rose 1.98% to $3.039 per ounce [7] 3.2 Capital Market 3.2.1 Open Market Operations - On March 3, the central bank conducted 3.43 billion yuan of 7 - day reverse repurchase operations at a fixed - rate and quantity - tender method, with an operating rate of 1.40%. There were 52.6 billion yuan of reverse repurchases due on the same day, resulting in a net withdrawal of 49.17 billion yuan [9] 3.2.2 Capital Interest Rates - On March 3, despite the central bank's net withdrawal in the open market, the capital market at the beginning of the month remained loose, and major repurchase interest rates declined significantly. DR001 dropped 4.52bp to 1.3266%, and DR007 dropped 1.24bp to 1.452% [10] 3.3 Bond Market Dynamics 3.3.1 Interest - Bearing Bonds - **Yield Trends of Spot Bonds**: On March 3, affected by the stock market decline and loose capital market, the bond market was generally strong, but long - term bonds weakened slightly due to the lower - than - expected bond - buying scale of the central bank in February. As of 20:00, the yield of the 10 - year Treasury bond active issue 250016 rose 0.45bp to 1.7935%, and the yield of the 10 - year CDB bond active issue 250220 rose 0.35bp to 1.9630% [13] - **Bond Tendering Situation**: Various bonds such as 26 Guokai 02, 25 Guokai 18 (Increment 28), etc., were tendered, with different issuance scales, winning yields, full - field multiples, and marginal multiples [15] 3.3.2 Credit Bonds - **Abnormal Secondary - Market Transactions**: On March 3, the trading prices of 4 industrial bonds deviated by more than 10%. "H1 Vanke 06" rose more than 11%, "H1 Vanke 04" rose more than 14%, "H0 Baolong 04" rose more than 66%, and "H1 Bidi 03" rose more than 100% [16] - **Credit Bond Events**: Companies such as Vanke, Agile Group, and Zhongnan Construction announced loan renewals, postponement of liquidation hearings, and meetings to discuss bond extensions [19] 3.3.3 Convertible Bonds - **Equity and Convertible Bond Indices**: On March 3, the A - share market fell with heavy trading volume, and the three major stock indices declined. The convertible bond market also followed the equity market down significantly. The CSI Convertible Bond Index, Shanghai Stock Exchange Convertible Bond Index, and Shenzhen Stock Exchange Convertible Bond Index fell 1.81%, 1.71%, and 1.98% respectively. Most convertible bond issues declined [20] - **Convertible Bond Tracking**: On March 3, Wentai Convertible Bond and Hongtu Convertible Bond announced that the board of directors proposed to lower the conversion price; Kehua Convertible Bond announced that it was about to trigger the condition for lowering the conversion price. Anji Convertible Bond and Hengyi Convertible Bond announced early redemptions; Baichuan Convertible Bond 2 and Liyang Convertible Bond announced that they were about to meet the early redemption conditions [24] 3.3.4 Overseas Bond Markets - **U.S. Bond Market**: On March 3, yields of U.S. Treasuries across maturities generally rose. The 2 - year U.S. Treasury yield rose 4bp to 3.51%, and the 10 - year U.S. Treasury yield rose 1bp to 4.06%. The yield spread between the 2 - year and 10 - year U.S. Treasuries narrowed 3bp to 55bp; the yield spread between the 5 - year and 30 - year U.S. Treasuries narrowed 1bp to 107bp. The break - even inflation rate of the 10 - year U.S. Treasury Inflation - Protected Securities (TIPS) remained unchanged at 2.29% [23][25][26] - **European Bond Market**: On March 3, 10 - year government bond yields of major European economies generally rose. Germany's 10 - year government bond yield rose 7bp to 2.78%, and those of France, Italy, Spain, and the UK rose 8bp, 11bp, 6bp, and 8bp respectively [27] - **Daily Price Changes of Chinese - Issued U.S. Dollar Bonds**: As of the close on March 3, some Chinese - issued U.S. dollar bonds had price increases or decreases, with different daily and monthly changes [29]

1. Report Industry Investment Rating - Not mentioned in the provided content. 2. Core Views - Since February, the market has worried about the weakening of bank buying, but objectively, bank assets and liabilities are still abundant, especially the allocation of small and medium - sized banks is far from full. Large banks' net selling is mainly concentrated in local bonds, while their net buying of long - term treasury bonds remains higher than the seasonal level, and they continue to stabilize the bond market during interest rate adjustments. Small and medium - sized banks have more deposits and greater asset - shortage pressure, and are under regulatory attention, so their trading of ultra - long - term interest - rate bonds fluctuates greatly. They also buy policy - financial bonds within 1y and CDs for liquidity management and to ease duration pressure. Insurance mainly follows a configuration strategy. In February, the funds of allocation - oriented investors began to overflow, and trading - oriented investors took over to dominate the bond - market trend. The liability side of funds has recovered, mainly due to more wealth - management product subscriptions; securities firms actively conduct right - side trading; other institutions always over - buy 7 - 10y policy - financial bonds and ultra - long - term local bonds [2]. - Looking forward to March, the "abundant funds" situation of banks will not change, but the cross - year allocation of insurance may end. The key is when the funds of allocation - oriented investors will accelerate to overflow to trading - oriented investors. Considering the incremental funds from wealth - management products, the report believes that the trend - based bond - market rally will occur in the second quarter, and interest rates may remain volatile with a slight downward trend in March. It is recommended that investors "find high points and focus on allocation" [3]. 3. Summary by Relevant Catalogs 3.1 Bank Configuration Intensity Declines Marginally - **Reasons for the decline in bank configuration intensity**: Since February, bill interest rates have risen, indicating a marginal recovery in loan demand. However, bank assets and liabilities may still be in an abundant state. The reasons for the decline in bank bond - buying intensity are as follows: the phased impetus for banks to transfer entrusted investments back to self - operated configurations has ended; the net financing of local bonds has increased significantly, increasing the primary - market underwriting pressure on banks and weakening secondary - market buying; in a low - interest - rate environment, banks' trading desks have increased, and they have taken profits during the interest - rate decline [12][17]. - **Large banks**: Large banks over - buy 1 - 3y treasury bonds, 7 - 10y treasury bonds, and 7 - 10y old treasury - bond issues, and over - sell local bonds over 10y and 3 - 5y Tier 2 capital bonds. Although the net - buying intensity of large banks for long - term and ultra - long - term bonds has declined, it is mainly concentrated in local bonds. Their net buying of long - term and ultra - long - term treasury bonds remains higher than the seasonal level. When interest rates rebounded in the last week of February, large banks' selling decreased, indicating their intention to stabilize the bond market. They significantly over - sell 3 - 5y Tier 2 capital bonds due to profit - taking and the high capital occupation of these bonds [21]. - **Small and medium - sized banks**: The buying of small and medium - sized banks has also weakened. They over - seasonally buy short - term policy - financial bonds, over - sell medium - and long - term treasury bonds and policy - financial bonds overall (with a marginal recovery at the end of the month), and the net buying of ultra - long - term interest - rate bonds fluctuates greatly. They over - seasonally buy policy - financial bonds within 1y and sell 5 - 10y treasury bonds, 7 - 10y policy - financial bonds, and 7 - 10y old issues. Small and medium - sized banks have more deposits but are restricted by duration indicators, so they obtain coupons through short - term policy - financial bonds. They also need to buy CDs for duration management [26]. 3.2 Insurance Configuration Demand Shows Obvious Structural Characteristics - **Preference for ultra - long - term local bonds**: Since the beginning of the year, ultra - long - term treasury bonds have outperformed ultra - long - term local bonds. Considering comprehensive allocation value and trading profit - taking, insurance has replaced ultra - long - term treasury bonds with ultra - long - term local bonds. It is expected that in March, insurance may continue to over - allocate 30y local bonds, and there may be a chance for the net buying of ultra - long - term treasury bonds to recover [39]. - **Over - seasonal selling of Tier 2 capital bonds and maintaining the configuration of non - financial credit bonds**: Insurance over - seasonally sells Tier 2 capital bonds, especially in the 1 - 3y and 5 - 7y tenors. At the same time, its buying of non - financial credit bonds remains at a high level. In mid - February, insurance took concentrated profits on Tier 2 capital bonds. While reducing Tier 2 capital bonds, insurance maintains a good buying intensity for non - financial credit bonds [42]. - **Over - seasonal selling of CDs related to money - like special accounts**: At the beginning of this year, insurance significantly over - seasonally increased its holdings of CDs, but since the end of January, it has turned to over - seasonally selling. The trading of CDs by insurance mainly reflects the behavior of wealth - management entrusted investments in money - like special accounts. It is expected that the trading of CDs by insurance will still fluctuate greatly, but there is an upward trend in March according to the seasonal pattern [48]. 3.3 Securities Firms Conduct Right - Side Trading - Securities firms over - seasonally buy 7 - 10y old treasury - bond issues, 5 - 7y treasury bonds, and 1 - 5y credit bonds, and have a certain degree of replenishment of ultra - long - term treasury bonds, but they sell again at the end of the month. They also over - seasonally sell 5 - 7y policy - financial bonds. Their buying of ultra - long - term bonds rebounds periodically, and they actively seek trading opportunities. In February, their buying shifted from medium - term policy - financial bonds to medium - term treasury bonds [52]. 3.4 Funds' Bullish Momentum Significantly Recovers - Funds over - seasonally buy 10y - plus old treasury - bond issues, 5 - 10y policy - financial bonds, 1 - 5y credit bonds (including 3 - 5y Tier 2 capital bonds), and the buying of 5 - 7y Tier 2 capital bonds also increases periodically. The fluctuations on the liability side of funds at the beginning of the year have ended, and they have regained bullish momentum. Their duration preference has recovered, with good buying intensity for ultra - long - term treasury bonds, and they also buy medium - and long - term policy - financial bonds. They buy Tier 2 capital bonds from short - term to long - term. In late January, funds actively extended their durations to seek returns. However, the bond - market fluctuations at the end of February interrupted the incremental buying of 5 - 7y Tier 2 capital bonds [59]. 3.5 Other Institutions Over - Buy 7 - 10y Policy - Financial Bonds and Ultra - Long - Term Local Bonds - Other institutions, mostly entrusted investment vehicles, over - seasonally buy 7 - 10y policy - financial bonds and local bonds over 10y. Their overall buying of interest - rate bonds is in line with the seasonal pattern. They choose to appropriately extend their durations to seek returns in an environment of a trend - based bond - market recovery [65].

Core Insights - The current market is characterized by a consensus range constraint and a technical pattern indicating a consolidation phase, with the central bank suggesting an interest rate range of approximately 1.75% to 1.9%, indicating that trading is unlikely to exceed this range in the short term [9] - There is speculation whether the bond market is preemptively reacting to the upcoming Two Sessions, as the period before the sessions often sees a vacuum in policy and economic data, leading to potential market reversals post-sessions [10] - The market's defensive positioning may reveal opportunities, as this year's local economic targets are set in ranges, suggesting that stimulus policies may not be overly aggressive [10] Market Strategy - The current strategy suggests taking advantage of adjustments in the bond market by focusing on liquid credit varieties to capture coupon income, particularly high-rated perpetual bonds with maturities of 3 to 5 years [11] - The past week saw a notable adjustment in perpetual bonds, with limited overall interest rate changes, while local government bonds remained relatively stable [11] - The trading logic indicates a rise in defensive sentiment before the Two Sessions and the introduction of new housing policies, with a slight overall market pullback but limited in extent [12] Future Outlook - The outlook remains cautiously optimistic, with potential for interest rate cuts and viewing market adjustments as opportunities, suggesting a slight bullish stance in the short to medium term [11] - Recommended strategies include focusing on 2-year local government bonds and high-grade perpetual bonds, as well as monitoring real estate bonds for recovery opportunities [11]

Core Viewpoint - The bond market continues to show strength, with government bond futures rising across the board and interbank bond yields generally declining, indicating a positive sentiment ahead of the Chinese New Year [1][2]. Market Performance - Government bond futures closed higher, with the 30-year main contract up 0.14% at 112.73, the 10-year contract up 0.06% at 108.49, the 5-year contract up 0.08% at 106.025, and the 2-year contract up 0.04% at 102.484 [2]. - The yield on the 10-year government bond "25附息国债16" decreased by 0.7 basis points to 1.795%, while the yield on the 10-year policy bank bond "25国开20" fell by 2.25 basis points to 1.94% [2]. Overseas Market Trends - In North America, U.S. Treasury yields rose across the board, with the 2-year yield increasing by 5.54 basis points to 3.498% and the 10-year yield rising by 2.99 basis points to 4.206% [3]. - In Asia, Japanese government bond yields also saw significant increases, with the 5-year and 10-year yields rising by 4.9 basis points and 5.4 basis points, respectively [3]. Primary Market Activity - Agricultural Development Bank's financial bonds had successful bids with yields of 1.4406% for 1.0356-year, 1.5793% for 3-year, and 1.9286% for 10-year bonds, with bid-to-cover ratios of 3.08, 2.89, and 4.42 respectively [4]. - The 10-year "26陕西债04" bond had a yield of 1.92% with a bid-to-cover ratio of 34.64, indicating strong demand [4]. Funding Conditions - The central bank conducted a 7-day reverse repo operation of 1130 billion yuan at a rate of 1.40%, resulting in a net injection of 380 billion yuan for the day [5]. - Short-term Shibor rates mostly increased, with the overnight rate down 0.7 basis points to 1.27% and the 7-day rate up 7.0 basis points to 1.505% [5]. Institutional Insights - Citic Securities noted that the bond market is warming up due to reduced profitability in equities and commodities, alongside expectations of total easing, suggesting a potential recovery in the bond market [7]. - Huatai Fixed Income highlighted that while the bond market may perform steadily before the holiday, the post-holiday trend will depend on fundamental factors and policy signals [7]. - Xingzheng Fixed Income emphasized that under stable funding conditions, leveraging strategies and short-duration credit bond strategies remain effective [7].

Market Overview - The bond market showed signs of warming up with a general decline in interbank bond yields, particularly for government bonds with maturities of 5 years and above, where the 10-year government bond yield approached 1.81% [1] - The net injection in the open market was 14 billion yuan, leading to a decline in short-term funding rates across the board [1] Bond Futures - Government bond futures closed higher across the board, with the 30-year main contract rising by 0.07% to 112.09, the 10-year main contract up by 0.05% to 108.21, and the 5-year main contract increasing by 0.06% to 105.87 [2] - The China Convertible Bond Index rose by 0.50% to 531.58 points, with notable increases in several convertible bonds, including N Lianrui and Jinjiji bonds, which rose by 30.00% and 13.82% respectively [2] International Bond Market - In North America, U.S. Treasury yields showed mixed results, with the 2-year yield rising by 0.64 basis points to 3.596% and the 10-year yield increasing by 2.79 basis points to 4.243% [3] - In the Eurozone, yields on 10-year government bonds also increased, with French bonds rising by 0.1 basis points to 3.435% and German bonds up by 0.8 basis points to 2.873% [3] Primary Market - The Export-Import Bank's 2-year and 3-year financial bonds had winning yields of 1.5501% and 1.6044%, respectively, with bid-to-cover ratios of 5.34 and 4.54 [4] - The Xinjiang Uygur Autonomous Region's local bonds showed strong demand, with bid-to-cover ratios exceeding 15 times for both the 20-year and 30-year bonds [4] Funding Conditions - The central bank conducted a 7-day reverse repurchase operation with a total amount of 377.5 billion yuan at a rate of 1.40%, resulting in a net injection of 14 billion yuan for the day [5] - Short-term Shibor rates declined across the board, with the overnight rate down by 0.5 basis points to 1.366% [5] Institutional Insights - CITIC Securities noted that long-term government bonds are primarily priced by funds, which have significant holdings and trading volumes, while rural commercial banks have weaker pricing power [6] - Huaxi Fixed Income pointed out that the current interest rate decline is driven by a supply-demand mismatch, with banks increasing their allocations in the secondary market [7] - Zhejiang Commercial Bank indicated that while this week is a data vacuum period, supply pressure from government bonds will gradually emerge, and the market is sensitive to negative news [7]

Core Viewpoint - The bond market showed slight weakness with all government bond futures closing down, while the interbank bond yield exhibited mixed trends, indicating a cautious outlook ahead of the Spring Festival and the Two Sessions [1][2]. Market Performance - Government bond futures closed lower across the board, with the 30-year main contract down 0.07% at 112.17, the 10-year main contract down 0.05% at 108.15, the 5-year main contract down 0.04% at 105.835, and the 2-year main contract down 0.02% at 102.408 [2]. - The interbank bond yield showed slight divergence, with the 30-year government bond yield down 0.45 basis points (bps) to 2.2565%, while the 10-year government bond yield increased by 0.05 bps to 1.834% [2]. Overseas Market Trends - In North America, U.S. Treasury yields collectively fell, with the 10-year yield down 5.16 bps to 4.241% [3]. - In Asia, Japanese government bond yields continued to decline, with the 10-year yield down 2.3 bps to 2.266% [3]. - In the Eurozone, yields on 10-year bonds increased, with French bonds up 1.7 bps to 3.541% [3]. Primary Market - The Export-Import Bank's financial bonds had a bid yield of 1.4226% for the 1.2521-year and 1.7028% for the 5.5041-year, with bid-to-cover ratios of 2.63 and 6.74 respectively [4]. - The China Development Bank's financial bonds had a bid yield of 1.6683% for the 3-year and 1.8772% for the 7-year, with bid-to-cover ratios of 2.85 and 3.83 respectively [4]. Liquidity Conditions - The central bank conducted a 7-day reverse repurchase operation with a total amount of 2102 billion yuan at an interest rate of 1.40%, resulting in a net injection of 309 billion yuan for the day [5]. - The Shibor rates showed mixed performance, with the overnight rate rising by 9.1 bps to 1.413% [5]. Institutional Insights - Huatai Securities suggests maintaining a configuration of medium to short-term credit bonds, with a focus on leveraging opportunities in the ultra-long end and government bonds [6]. - CITIC Securities notes that the central bank's balance sheet has expanded steadily, indicating a potential for government bond trading to influence yields [7]. - Guosheng Fixed Income emphasizes that current inflation is not indicative of a broad price increase, suggesting that monetary policy may remain stable or undergo minor adjustments [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - Short - term bond market may face downward pressure. Small - position active participation in band trading after adjustments, emphasizing reverse operations. Consider the market's concerns about factors such as the supply pressure of ultra - long - term government bonds in Q1, the impulse of credit issuance at the beginning of the year, and the continuous rise of equity and commodity prices. Long - term bonds may continue to be under pressure. The strategy is mainly based on short - duration carry strategies, and small - position participation in band trading after adjustments [3][15]. - Next week, the capital market will face phased pressure, but the pressure during the tax period is expected to be controllable. It is necessary to pay attention to the central bank's capital injection during the tax period [2]. 3. Summary According to the Directory 3.1 Review and Outlook of the Bond Market - This week, under the combined effects of equity market adjustment, policy game, and capital market fluctuations, the bond market oscillated and recovered with increased volatility. The yields of 10Y and 30Y government bonds changed by - 4bp and + 0.1bp respectively. The capital price first rose and then fell due to the reserve payment day and the delayed release of outright repos [10][11]. - Next week, the capital market will face phased pressure. The net withdrawal of the open - market will increase to 1.1015 trillion yuan, and the government bond issuance scale will increase to 706.6 billion yuan. However, due to the relatively late Spring Festival this year and the structural interest rate cut, the capital pressure is expected to be controllable [2][14]. 3.2 Bond Market Review 3.2.1 Funding: Central Bank Net Injection, Funding Rates First Up Then Down - This week, the central bank's open - market net injection was 81.28 billion yuan. From January 12th to January 16th, the central bank injected 951.5 billion yuan and had 138.7 billion yuan of reverse repos mature. The capital price first rose and then fell. R001 and DR001 rose by 3bp and 5bp respectively compared with January 9th [19][20]. 3.2.2 Secondary Trend: Oscillating Downward, Increased Volatility - This week, yields oscillated downward with increased volatility. Except for 3M and 30Y, the yields of other key - term government bonds declined. Except for 5Y - 3Y and 50Y - 30Y, the term spreads of other key - term government bonds widened. As of January 16th, the yields of 10Y and 30Y government bonds changed by - 4bp and + 0.1bp respectively compared with January 9th [27]. 3.2.3 Bond Market Sentiment: Widening of 30Y - 10Y Government Bond Spread, Recovery of Bond Fund Duration - From January 12th to January 16th, the weekly turnover rate of 30Y government bonds dropped to 37%. As of January 16th, the 50Y - 30Y government bond spread narrowed by 1.9bp compared with January 9th, and the 30Y - 10Y government bond spread widened by 3.7bp. The inter - bank leverage ratio slightly decreased to 108.1%, and the exchange leverage ratio decreased to 123.2%. The median duration of medium - and long - term pure - bond funds recovered, and the divergence decreased [33]. 3.2.4 Bond Supply: Increase in Government Bond Issuance Scale Next Week - This week, the net financing of interest - rate bonds decreased and turned negative, with a net financing of - 174.4 billion yuan. The net financing of government bonds and local government bonds decreased, while that of policy - bank bonds increased. Next week, the planned issuance of government bonds is 475 billion yuan, and the planned issuance of local government bonds is 231.6 billion yuan [49][52][53]. 3.3 Economic Data: Improvement in Real Estate Transactions, Weak Performance in Automobile Consumption - In December, imports and exports ended at a high level. The growth rate of social financing slightly declined, and household credit remained weak. Since January, real estate transactions have improved, and automobile consumption has been weak. High - frequency data shows that new - home transactions have turned positive month - on - month, and the year - on - year decline has narrowed. Thirteen - city second - hand housing transactions have increased month - on - month, and the year - on - year decline has narrowed. Automobile consumption has turned negative both month - on - month and year - on - year [58][59]. 3.4 Overseas Bond Market: Cooling of Core Inflation in the US in December - In December, the core inflation in the US cooled down. The Fed's interest - rate cut expectation was further dampened. Overseas bond markets showed that US bonds declined, and emerging markets mostly declined. This week, the 2Y US bond yield rose 5bp to 3.59%, and the 10Y US bond yield rose 6bp to 4.24%. The 10Y - 2Y US bond spread widened from 64bp on January 9th to 65bp [68][69]. 3.5 Major Asset Classes: Strength in Shanghai Gold and Crude Oil, Adjustment in Shanghai Copper - The CSI 300 index slightly adjusted this week. As of January 16th, 2026, it closed at 4731.9 points, down 0.57% from January 9th. This week, Shanghai gold, the Nanhua Pig Index, and the Nanhua Crude Oil Index rose, while Shanghai copper weakened. The performance of major asset classes was: Shanghai gold > Pig > CSI 1000 > Crude oil > Rebar > US dollar > Chinese bonds > Chinese - funded US dollar bonds > Convertible bonds > CSI 300 > Shanghai copper [75]. 3.6 Next Week's Bond Market Calendar - The calendar includes information on liquidity injection and maturity, government bond supply, fundamental data, and important domestic and international events from January 19th to January 25th, 2026 [80].

Core Viewpoint - The bond market is showing a strong consolidation trend, with government bond futures mostly rising and interbank bond yields slightly declining, indicating a potential high point in the yield curve [1][2][6] Market Performance - Government bond futures closed mostly higher, with the 30-year main contract up 0.30% at 111.2, the 10-year main contract up 0.06% at 107.845, and the 5-year main contract up 0.05% at 105.625 [2] - The interbank bond yields mostly decreased slightly, with the 30-year government bond yield down 0.3 basis points to 2.3%, and the 10-year yield down 0.2 basis points to 1.968% [2] Overseas Bond Market - In North America, U.S. Treasury yields mostly rose, with the 2-year yield up 4.60 basis points to 3.532% and the 10-year yield up 0.4 basis points to 4.167% [3] - In Asia, Japanese bond yields continued to rise, with the 5-year and 10-year yields increasing by 2.5 basis points and 2 basis points, respectively [3] - In the Eurozone, yields on 10-year bonds from France, Germany, Italy, and Spain all decreased slightly [3] Primary Market - Agricultural Development Bank's financial bonds had bidding yields of 1.4982% for 1.0356-year, 1.6494% for 3-year, and 2.0047% for 10-year, with bid-to-cover ratios of 3.06, 3.82, and 3.65 respectively [4] Liquidity Conditions - The central bank conducted a 7-day reverse repurchase operation of 861 billion yuan at a fixed rate of 1.40%, resulting in a net injection of 361 billion yuan for the day [5] - Shibor rates for short-term products mostly increased, with the overnight rate rising by 4.4 basis points to 1.316% [5] Institutional Views - Huatai Securities noted that the market is experiencing a "New Year rally" due to increased capital inflow and high sentiment, but cautioned that rapid local market movements may require regulatory observation [6] - Zhongyou Securities emphasized that the steep yield curve presents a certain opportunity, suggesting that long-term yields lack the basis for significant upward trends [7]