1. Report Industry Investment Rating There is no information provided about the industry investment rating in the given content. 2. Core Viewpoints of the Report - In the context of supply exceeding demand, certificates of deposit (CDs) may fluctuate at a low level in the range of approximately 1.5% - 1.55% in the short term, and attention should be paid to the marginal changes in funds at the end of the quarter [2][46]. - The current liquidity environment is relatively stable, but considering the repurchase operations of reverse repurchase, the room for further loosening of funds is limited. Without the expectation of interest rate cuts, the 1yMLF and the funds price (DR007) impose a lower - bound constraint on CDs, and there may be a small - scale net repurchase situation similar to the reverse repurchase operation in this month's MLF operation. However, in an environment with strong short - term allocation demand, the market remains in a state of supply falling short of demand, which may support the low - level operation of CD interest rates [2][46]. 3. Summary According to the Directory Supply: Net financing further contracts, and the term structure continues to narrow - From March 16th to 22nd, the issuance scale of CDs was 759.79 billion yuan, and the net financing amount was - 403.07 billion yuan (last week it was - 162.32 billion yuan). In terms of the supply structure, the issuance proportion of state - owned banks increased from 14% to 16%, and that of joint - stock banks decreased from 41% to 31%. In terms of terms, the weighted term of CD issuance continued to shorten to 7.98 months (the previous value was 8.28 months) [2][5]. - From March 23rd to 29th, the maturity scale of CDs decreased to 698.2 billion yuan, a weekly decrease of 464.66 billion yuan. The maturities are mainly concentrated in state - owned banks and city commercial banks. From a term perspective, the maturity amounts of 1Y and 6M CDs are relatively high, reaching 249.99 billion yuan and 169.41 billion yuan respectively [2][5]. Demand: Large - scale banks are the main secondary - market allocators, and the primary - market subscription rate declined slightly - In terms of secondary - market allocation institutions, the weekly net purchases of small and medium - sized banks decreased from 63.976 billion yuan to 12.115 billion yuan; those of large - scale banks decreased slightly from 55.302 billion yuan to 54.007 billion yuan; the weekly net sales of money market funds decreased from 84.924 billion yuan to 47.498 billion yuan; the weekly net purchases of wealth management products decreased from 12 billion yuan to 2.7 billion yuan; the weekly net purchases of other types increased by 14.096 billion yuan to 36.337 billion yuan compared with last week (22.241 billion yuan) [2][17]. - In terms of primary - market issuance, the overall market subscription rate (15DMA) decreased slightly to 92%. Among different institutions, the subscription rates of rural commercial banks and city commercial banks remained unchanged from last week at 93% and 87% respectively, while those of joint - stock banks and state - owned banks increased from 93% to 94% [2][17]. Valuation: The primary and secondary pricing of CDs continues to fluctuate at a low level - In terms of primary - market pricing, the weighted issuance rate of 1y joint - stock bank CDs decreased slightly to 1.53%. Specifically, the 3M CDs of joint - stock banks decreased by 3bp compared with last week, and the 9M CDs decreased by 2bp, around 1.51%. The 1y variety's pricing continued to fluctuate at a low level, dropping to 1.53%. In terms of term spreads, the 1Y - 3M term spread of joint - stock banks was 4.58bp, at the 13% historical quantile. In terms of credit spreads, the spread between 1Y city commercial banks and joint - stock banks was 6.42BP, with the spread quantile around 3%; the spread between rural commercial banks and joint - stock banks was 5.55BP, with the spread quantile around 6% [2][20]. - In terms of secondary - market yields, the yields of AAA - rated CDs decreased and remained in a low - level fluctuation. Specifically, the 1M and 6M varieties decreased by 4bp compared with last week, the 3M and 9M varieties decreased by 3bp and 2bp respectively, and the 1Y variety decreased by 2bp, around 1.52%. In terms of term spreads, the 1Y - 3M term spread of AAA - rated CDs was 5bp, at the 18% historical quantile level [2][27]. Comparison: The spreads between CDs and treasury bonds and policy - bank bonds basically remained unchanged - Specifically, the spread between the 1yAAA - rated CD yield and the DR007:15DMA funds widened from 6.70BP to 7.35BP; the spread with the R007:15DMA funds widened from 0.91BP to 1.42BP; the spread between CDs and treasury bonds increased slightly from 25.57BP to 25.82BP, with the quantile remaining at 28%; the spread between CDs and policy - bank bonds increased slightly from 4.33BP to 4.41BP, with the quantile remaining around 5%. In addition, the spread between AAA medium - and short - term notes and CDs narrowed from 1.72BP to 1.68BP, and the quantile decreased to around 9% [2][33].

Group 1: Market Overview - The funding environment remains tight, with long-term credit bonds outperforming short-term ones due to factors such as tight liquidity and better-than-expected social financing data. The yield curve for credit bonds has flattened, with credit spreads generally narrowing [1][2] - Credit spreads for medium to long-term low-rated bonds and ultra-long-term municipal investment bonds have compressed significantly, with 3-year and above AA+ rated and below medium-term credit spreads narrowing by 4-8 basis points, while 1-year credit spreads narrowed by 2-4 basis points [1][2] Group 2: Specific Bond Types - Municipal bonds saw a general passive narrowing of credit spreads, particularly for medium to long-term low-rated and ultra-long-term municipal bonds, with 3-year and 5-year AA-rated municipal bonds' spreads narrowing by approximately 7 basis points [1][2] - Financial bonds, excluding short-term ones, also experienced a passive narrowing of credit spreads, with 3-year medium to low-rated financial bonds seeing a significant spread compression of about 4 basis points [1][2] Group 3: Investment Strategies - Following recent adjustments in the bond market, the cost-effectiveness of short-term credit bonds has improved, with institutions such as funds and other products increasing their allocation to credit bonds [2] - In a tight funding environment, it is advisable to consider left-side allocations in high-quality municipal bonds from central and eastern regions with a duration of 2-3 years, while also monitoring short-term recovery opportunities [2]