Report Industry Investment Rating No relevant content provided. Core Viewpoints - In 2025, Chinese USD corporate bonds delivered high - single - digit returns (6.87%), showing overall resilience but slightly underperforming the broader Asia ex - Japan USD corporate bond universe (7.47%) due to the Vanke onshore debt maturity extension talks at year - end [4][5][6]. - Chinese IG bonds performed marginally stronger than HY bonds. The decline in sub - 10 - year US Treasury yields supported Chinese IG bonds, and their spread tightening outpaced that of HY bonds [4][15][24]. - The issuance volume in the Chinese USD bond primary market rebounded in 2025, but the net issuance was still deeply negative due to large - scale maturities, redemptions, and buybacks [4][39][40]. Summaries by Related Catalogs Performance Analysis - Chinese corporate bonds had a total return of 6.87% in 2025, lower than the 7.47% of the Asia ex - Japan corporate bond index and 7.75% of the iBoxx Global USD Corporate Bond Index [5][6]. - The iBoxx USD China IG Index posted a 6.87% total return, outperforming Chinese HY bonds but trailing the 7.51% return of the Asia ex - Japan IG index. Chinese HY bonds had a 6.70% return, significantly below the 9.38% of the Asia ex - Japan USD HY index [7][10][14]. Market Analysis - In 2025, the decline in sub - 10 - year US Treasury yields supported Chinese IG bonds. The Fed cut rates in September, October, and December and restarted balance - sheet expansion in December [15][19]. - By year - end, 2 - year, 5 - year, and 10 - year Treasury yields declined by 77bps, 66bps, and 40bps respectively, while the 30 - year yield edged up 6bps, steepening the yield curve [16][19]. - In 2026, the actual number of Fed rate cuts may exceed expectations due to a potentially more dovish voting committee [17][19]. Spread Analysis - Chinese IG bond spreads tightened by 24bps to 47bps in 2025, driven by negative net issuance and strong investor demand. Chinese HY bond spreads tightened by 16bps [24][25][28]. High - Yield Financing Environment - Some HY industrial and property developers returned to the primary market in 2025 with over - subscriptions, but Vanke's onshore bond extension affected other HY property developers' offshore refinancing [30][33]. - The government focused on stabilizing the property market. Developers' operations continued to diverge, and the sector was in a bottoming - out phase. Quality SOE and central SOE property bonds are preferred [31][33]. - Chinese developers' default resolution and restructuring deepened, and creditors shifted focus to more sophisticated claims protection [32][33]. Sector Performance - In IG, tech, property, and AMC bonds had returns over 8% as spreads narrowed. Central SOE perpetual and bank senior bonds had lower returns. In non - defaulting HY, HY industrial bonds had 15.9% returns, and HY property bonds had 8.8% returns despite the Vanke incident. Bank AT1 bonds underperformed with 5.5% returns [37][41]. - In the broader Asia ex - Japan credit market, bank, basic materials, and consumer services sectors had total returns above 8% [38][41]. Issuance Review - In 2025, the Chinese USD bond primary market issuance volume rebounded to US$101.7bn (+23% YoY). Excluding restructuring issuances, new issuance rose 6% YoY to US$81.1bn. Net issuance was deeply negative due to US$155.5bn of maturities, redemptions, and buybacks [4][39][42]. - Chinese issuers' activity in the Asia ex - Japan USD bond market increased slightly, accounting for 47% of total issuance volume compared to 43% in 2024. Non - Chinese Asia ex - Japan issuers' issuance volume grew 7.6% to US$116.4bn [40][42]. - Monthly issuance peaks were in February, May, September, and November, supported by financial and sovereign issuers. IG non - financial corporates' issuance was sensitive to USD interest rates. Rated HY bond volume increased, with non - property issuers dominant. Unrated bonds mainly came from LGFVs, small - scale leasing companies, and property restructuring [44][46]. - In 2025, issuance was mainly under 4 years (76.3%), but demand for longer - term funding emerged. The industrial sector became the largest issuer group (41%), overtaking the financial sector (32.7%). Property sector issuance was 22.4%, mainly for debt restructuring. LGFV issuance decreased to 29.8%. SOEs dominated new issuance (72%), and non - SOE issuers' proportion rose to 28% [45][47].

Core Viewpoint - The narrowing of interest rate differentials may be a potential trigger for the decline in the USD/JPY exchange rate, with expectations of faster rate hikes by the Bank of Japan and quicker rate cuts by the Federal Reserve in the next 12 months [1] Group 1 - Eurizon SLJ Capital highlights the significant scale of yen carry trades, indicating a notable risk of sudden unwinding of these trades [1] - The conservative target price for the USD/JPY currency pair over the next 2-3 years is set at 125 by Eurizon [1]

Core Viewpoint - The global foreign exchange market in 2025 has been significantly influenced by tariff expectations and fluctuations in the US dollar exchange rate, with a notable decline in the dollar index during the second quarter due to unexpected tariff announcements and deteriorating employment data [2][3][4]. Group 1: 2025 Overview - In the first quarter of 2025, the dollar index fell from its high as Trump's tariff policies progressed slower than expected, reversing the "Trump trade" that had boosted the dollar [2][4]. - The second quarter saw a significant drop in the dollar index, primarily due to the announcement of "reciprocal tariffs" that exceeded market expectations and rising trade tensions between the US and China, leading to concerns about the stability of the US economy and dollar assets [2][4]. - By the third quarter, the dollar's performance stabilized as the US reached tariff agreements with major trading partners, alleviating market concerns about economic stability, and the dollar entered a consolidation phase [2][4]. Group 2: 2026 Outlook - For 2026, narrowing interest rate differentials and changes in risk appetite are expected to be the main themes in currency trading, with the Fed's potential for rate cuts being greater than that of other non-US central banks [3][10]. - The US labor market is anticipated to slow down, prompting the Fed to consider more accommodative monetary policies, especially with a potential change in leadership at the Fed [3][11]. - The dollar's decline is expected to be limited due to the absence of crowded long positions and the relative economic strength of the US compared to Europe and Japan [3][13]. Group 3: Renminbi (RMB) Dynamics - The core variables influencing the RMB exchange rate in 2026 will be the dollar's performance and changes in US-China trade relations, with a stable exchange rate policy likely impacting the RMB's trajectory [4][16]. - The RMB appreciated approximately 2.5% in the first three quarters of 2025, initially facing depreciation pressure due to tariffs but later benefiting from the dollar's decline and improved trade negotiations [14][15]. - The expectation is that the RMB will continue to appreciate moderately in 2026, supported by the weakening dollar and converging interest rates between China and the US [16][17].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - As the issuance of the second batch of Sci - tech Bond ETFs progresses, Sci - tech Bonds have certain investment value at the current stage. The inflow of incremental funds is expected to compress the spreads of Sci - tech Bond ETF component bonds, and investors can look for opportunities in the potential spread compression of component bonds [3][27]. 3. Summary by Directory 3.1 Second Batch of Sci - tech Bond ETFs Issued, Incremental Funds to Enter the Market - On September 12, 2025, 14 Sci - tech Bond ETFs of the second batch were issued. Among them, 10 track the CSI AAA Sci - tech Corporate Bond Index, 3 track the SSE AAA Sci - tech Corporate Bond Index, and 1 tracks the SZSE AAA Sci - tech Corporate Bond Index. They were declared on August 20, approved on September 8, and officially issued on September 12 [1][7]. - Referring to the first batch, the second - batch Sci - tech Bond ETFs are expected to be listed from late September to early October. The first batch took about a month from application to listing, and the second - batch issuance is from September 12 - 18 [8]. - It is estimated that the second - batch Sci - tech Bond ETFs will raise 37 - 42 billion yuan, bringing incremental funds to the Sci - tech Bond market. The first batch of 10 ETFs had a cap of 3 billion yuan each and raised 28.99 billion yuan in total, reaching 96.6% of the cap [1][12]. 3.2 Characteristics of Underlying Assets and Market Effects of the First Batch of Sci - tech Bond ETFs - As of September 11, the first - batch Sci - tech Bond ETFs held 633 Sci - tech Bonds, with remaining maturities mostly 2 - 3 years and 4 - 5 years, implied ratings mostly AAA and AA +, and industries mostly in the industrial sector [2][14]. - The passive allocation effect of the first - batch Sci - tech Bond ETFs significantly affected the valuation of component bonds. The excess spreads of component bonds (calculated as the spread of Sci - tech Bond ETF component bonds minus the spread of medium - and short - term notes of the same maturity and rating) narrowed significantly during the issuance and construction periods. The process can be divided into three stages: from issuance to listing, the excess spread compressed by 5.1BP to - 7.9BP; after listing, it continued to decline by nearly 5BP to - 12.7BP; although there was a slight correction in credit bonds, the expected new issuance of Sci - tech Bond ETFs drove the excess spread to repair to - 12.6BP [2][21]. 3.3 Seize Opportunities in Spread Compression with Incremental Funds - The second - batch Sci - tech Bond ETFs are expected to bring 37 - 42 billion yuan of incremental funds. Similar to the first batch, the excess spreads of their component bonds are expected to compress again during the concentrated construction and allocation period after September 12 [3][27]. - The yields of existing ETF component bonds are generally 4 - 20BP lower than non - component bonds in the index, showing an obvious premium. Attention should be paid to the degree of gambling [3][28]. - There are still over 363 index component bonds not fully covered by the first - batch ETFs. Investors can select high - quality individual bonds that meet the requirements of new ETF construction to capture spread compression opportunities [4][28].

Core Viewpoint - US Treasury futures prices fell to intraday lows, with 2-year to 5-year Treasury yields rising by more than 10 basis points on the day [1] Summary by Relevant Categories Market Performance - Yields generally increased by 6 to 10 basis points, indicating a trend of rising interest rates [1] - The yield curve flattened, with the 2s10s and 5s30s spreads narrowing by 3 basis points and 4 basis points respectively [1]