Report Investment Rating - No industry investment rating is provided in the report [1] Core Viewpoints - In March, the bond market showed a divergence in short - and long - term trends. Short - term yields mostly declined, while long - term yields mostly rose. On March 27, the yields of 1 - year/3 - year/5 - year/10 - year/30 - year treasury bonds were 1.25%, 1.33%, 1.55%, 1.82%, and 2.35% respectively, down - 7.0BP/ - 5.2BP/+1.0BP/+4.2BP/+7.8BP compared to February 28 [2][80] - From January to February 2026, the total profit of industrial enterprises above designated size reached 1.02 trillion yuan, a year - on - year increase of 15.2%. The conflict between the US and Iran may narrow the decline of PPI, but due to international energy price fluctuations, enterprise profits in March may be under pressure [2][80] - The recent significant appreciation of the RMB is beneficial to the Chinese bond market. Currently, the long - bond positions of trading desks are still relatively small. The year - on - year recovery of PPI is a general market expectation, and the risk of long - term bonds may be low. It is recommended to seize trading opportunities [2][80] Summary by Directory 1. Macro News - From January to February 2026, the total profit of industrial enterprises above designated size was 1.02 trillion yuan, a year - on - year increase of 15.2%. The operating income was 20.84 trillion yuan, a year - on - year increase of 5.3%. The operating cost was 17.68 trillion yuan, a year - on - year increase of 5.0%. The operating income profit margin was 4.92%, a year - on - year increase of 0.43 percentage points [8] - In January - February 2026, both the general public budget revenue and expenditure increased year - on - year. The general public budget revenue was 4.4 trillion yuan, a year - on - year increase of 0.7%. Tax revenue was 3.6 trillion yuan, a year - on - year increase of 0.1%; non - tax revenue was 0.8 trillion yuan, a year - on - year increase of 3.4%. The general public budget expenditure was 4.7 trillion yuan, a year - on - year increase of 3.6% [10] 2. Mid - level High - frequency Data 2.1 Consumption - As of March 22, the daily average retail volume of passenger cars by manufacturers was 5.1 million vehicles, a year - on - year decrease of 7.0%, and the daily average wholesale volume was 6.2 million vehicles, a year - on - year decrease of 3.0% [17] - As of March 27, the total box office revenue of national movies in the past 7 days was 321.205 million yuan, a year - on - year increase of 35.1% [17] - As of March 20, the total retail volume of three major household appliances was 1.003 million units, a year - on - year decrease of 27.2%, and the total retail sales were 2.19 billion yuan, a year - on - year decrease of 28.9% [23] 2.2 Transportation - As of March 28, the average migration scale index in the past 7 days was 472.3, a year - on - year increase of 6.1% [27] - As of March 22, the number of civil aviation flights guaranteed in the current week was 1.23 million, a year - on - year increase of 3.4% [27] - As of March 27, the average daily passenger volume of the subway in first - tier cities in the past 7 days was 40.56 million person - times, a year - on - year increase of 0.6% [27] - As of March 22, the current - week express delivery collection volume was 3.85 billion pieces, a year - on - year increase of 4.4%, the delivery volume was 3.89 billion pieces, a year - on - year increase of 5.5%, the railway freight volume was 80.312 million tons, a year - on - year increase of 1.0%, and the highway truck traffic volume was 54.585 million vehicles, a year - on - year decrease of 0.1% [30] 2.3 Industry - As of March 27, the iron ore inventory in the current week was 176.668 million tons, a year - on - year increase of 17.9%, the rebar inventory was 6.428 million tons, a year - on - year increase of 5.4%, and the float glass enterprise inventory was 73.622 million tons, a year - on - year increase of 9.9% [32] - As of March 13, the daily coal consumption of key power plants in the current week was 4.85 million tons, a year - on - year decrease of 0.2% [35] - As of March 27, the apparent consumption of steel products in the current week was 8.88 million tons, a year - on - year decrease of 3.5%, the apparent consumption of rebar was 2.254 million tons, a year - on - year decrease of 8.1%, and the apparent consumption of wire rods was 0.92 million tons, a year - on - year decrease of 4.3% [35] - As of March 25, the blast furnace operating rate of major steel enterprises in the current week was 75.3%, a year - on - year decrease of 1.3 percentage points. As of March 26, the average asphalt operating rate was 15.0%, a year - on - year decrease of 8.0 percentage points, the soda ash operating rate was 82.0%, a year - on - year increase of 0.6 percentage points, and the PVC operating rate was 76.1%, a year - on - year decrease of 3.0 percentage points [43] 2.4 Real Estate - As of March 27, the total commercial housing transaction area in 30 large - and medium - sized cities in the past 7 days was 2.706 million square meters, a year - on - year decrease of 10.9% [44] 2.5 Prices - As of March 29, the average wholesale price of pork in the current week was 15.6 yuan/kg, a year - on - year decrease of 25.2%, and a decrease of 8.4% compared to four weeks ago [47] - As of March 27, the average wholesale price of vegetables was 4.8 yuan/kg, a year - on - year increase of 0.3%, and a decrease of 9.8% compared to four weeks ago. The average wholesale price of six key fruits was 7.8 yuan/kg, a year - on - year increase of 3.0%, and a decrease of 2.8% compared to four weeks ago [47] - As of March 27, the average price of thermal coal at northern ports was 755 yuan/ton, a year - on - year increase of 11.7%, and an increase of 3.9% compared to four weeks ago. The average spot price of WTI crude oil was 92.7 US dollars/barrel, a year - on - year increase of 34.0%, and an increase of 42.4% compared to four weeks ago [47] - As of March 27, the average spot price of rebar was 3184.4 yuan/ton, a year - on - year decrease of 0.6%, and an increase of 1.6% compared to four weeks ago. The average spot price of iron ore was 810.1 yuan/ton, a year - on - year increase of 1.6%, and an increase of 5.1% compared to four weeks ago. The average spot price of glass was 13.5 yuan/square meter, a year - on - year decrease of 10.8%, and an increase of 1.7% compared to four weeks ago [54] 3. Bond and Foreign Exchange Markets - On March 27, the overnight Shibor was 1.32%, unchanged from March 23 and down 0.30BP from March 16. R001 was 1.39%, down 0.90BP from March 23 and down 1.22BP from March 16; R007 was 1.51%, up 3.06BP from March 23 and down 0.53BP from March 16. DR001 was 1.32%, down 0.24BP from March 23 and down 0.38BP from March 16; DR007 was 1.44%, up 1.39BP from March 23 and down 1.25BP from March 16. IBO001 was 1.37%, up 0.03BP from March 23 and down 0.27BP from March 16; IBO007 was 1.47%, up 0.57BP from March 23 and down 0.97BP from March 16 [56] - The yields of most treasury bonds declined in the past week. On March 27, the yields of 1 - year/5 - year/10 - year/30 - year treasury bonds were 1.25%/1.55%/1.82%/2.35% respectively, down - 0.7BP/ - 1.0BP/ - 1.2BP/ - 3.7BP compared to March 20 and down - 2.7BP/ - 0.8BP/+0.3BP/ - 1.5BP compared to March 13. The yields to maturity of 1 - year/5 - year/10 - year/30 - year China Development Bank bonds were 1.46%/1.69%/1.96%/2.48% respectively, down - 1.3BP/ - 0.7BP/ - 1.1BP/ - 3.7BP compared to March 20 and down - 3.5BP/ - 2.9BP/ - 0.4BP/ - 2.1BP compared to March 13 [61] - On March 27, the yields to maturity of 1 - year/5 - year/10 - year local government bonds were 1.33%/1.69%/2.00% respectively, down - 4.5BP/ - 1.0BP/+1.7BP compared to March 20 and down - 1.5BP/+1.7BP/+1.7BP compared to March 13. The yields to maturity of AAA 1 - month/1 - year, AA+1 - month/1 - year inter - bank certificates of deposit were 1.43%/1.53%/1.45%/1.55% respectively, down - 3.0BP/+1.3BP/ - 3.0BP/+1.3BP compared to March 20 and down - 7.7BP/ - 0.4BP/ - 7.7BP/ - 0.4BP compared to March 13 [68] - As of March 27, 2026, the yields of 10 - year treasury bonds in the US, Japan, the UK, and Germany were 4.44%, 2.38%, 4.97%, and 3.18% respectively, up 16BP/13.5BP/21.4BP/17BP compared to March 13 [73] - On March 27, the central parity and spot exchange rate of the US dollar against the RMB were 6.91/6.91 respectively, up 243/288 pips compared to March 20 and up 134/75 pips compared to March 13 [76] 4. Institutional Behavior - The duration of medium - and long - term pure bond funds has decreased. On March 27, 2026, the median duration of medium - and long - term interest - rate bond funds was about 2.8 years, a decrease of about 0.48 years compared to March 13. The median duration of credit bond funds was about 1.7 years, a decrease of about 0.97 years compared to March 13 [77][78] 5. Investment Recommendations - In 2026, the total supply of the bond market is expected to be stable, and the supply - demand relationship in the bond market is expected to improve. It is predicted that the yield of 10 - year treasury bonds will fluctuate in the range of 1.6% - 1.9%, and the yield of 30 - year treasury bonds will fluctuate in the range of 1.9% - 2.4%. Currently, it is recommended to pay attention to the opportunities of 30 - year old treasury bonds, 10 - year China Development Bank bonds, and long - duration subordinated capital bonds [82] - The Fed's interest rate cut may be postponed to May 2026 or later. China's exports are resilient, and domestic policy rate cuts may be late, possibly in the middle of the year or later. It is expected that bond market investments may be relatively favorable in the second half of the year [82]