Report Investment Rating The provided content does not mention the industry investment rating. Core Viewpoints - The core issue in the bond market lies in demand rather than supply. In early 2026, the bond market continued to adjust. Although there was a high - volume supply of government bonds and a lengthening trend in local bond issuance terms, the rapid post - New Year loosening of the capital market and the "bear - steep" adjustment of the curve indicated that supply was not the core contradiction. Also, the insurance sector's adjustment of its local bond allocation term structure offset the impact of the change in local bond issuance terms [6][13]. - The root cause is the active contraction of bond investment by institutions. Since 2025, banks have been actively reducing bond investment, similar to the situation in 2016 - 2017, but the current reason is the low interest rate, which makes the return unable to cover the cost. Fund and fixed - income asset management products have been continuously redeemed, leading to large - scale bond sales [6][23]. - To solve the demand - side problem, three aspects can be considered: reigniting the market's expectation of a significant interest rate decline, the central bank taking further steps in directly purchasing long - term bonds, and increasing the necessity of strongly stimulating the economy to promote banks' rapid re - expansion of their balance sheets and spill - over into bond investment [6]. - In the short term, the overall demand problem in the bond market is difficult to solve. It is advisable to focus on structural demand changes, especially in wealth management products. Wealth management products may gradually shift to slightly longer - duration products for returns. Attention can be paid to the riding value of 2 - 3Y urban investment bonds, 1 - 2Y industrial bonds, and appropriate credit picking of high - quality urban and rural commercial banks for sub - perpetual bonds within 3Y, and trading opportunities for 3 - 4Y sub - perpetual bonds [6][27]. Summary by Directory 1. Bond Market Weekly Viewpoint - Some believe the bond market adjustment in 2026 is due to supply expansion, with the first - week government bond net issuance reaching a new high and a lengthening trend in local bond issuance terms [6][10]. - However, the core problem is on the demand side. The post - New Year capital loosening and "bear - steep" curve adjustment show that supply is not the core contradiction. Also, the insurance sector's adjustment of its local bond allocation term structure has kept the spread between local and national bonds stable [13][15]. - Institutions are actively reducing bond investment. Since 2025, banks' bond investment contraction is similar to that in 2016 - 2017, but currently due to low interest rates. Fund and fixed - income asset management products are being redeemed, leading to bond sales [23]. - To solve the demand - side problem, consider reigniting interest rate decline expectations, central bank action on long - bond purchases, and economic stimulus [23]. - In the short term, focus on wealth management products. They may shift to longer - duration products for returns, and attention can be paid to specific bond types [27]. 2. This Week's Focus in the Fixed - Income Market - **Release of December Financial Data**: This week, China will release December financial data, and the US will release December CPI and other data [30]. - **Interest - Rate Bond Issuance**: The expected issuance volume of interest - rate bonds this week is around 427.2 billion yuan, including 207 billion yuan of national bonds, 70.2 billion yuan of local bonds, and about 150 billion yuan of policy - bank financial bonds, which is at a medium level compared to the same period in previous years [30][31]. 3. Review and Outlook of Interest - Rate Bonds - **Reverse Repurchase Net Withdrawal**: Last week, the central bank's open - market operations had a net withdrawal of 165.5 billion yuan. After the New Year, the reverse repurchase maturity volume was high, and the capital market had a seasonal volume increase and price increase, with the increase in price being controllable [34][35]. - **Interest - Rate Adjustment at the Beginning of the Year**: The new fund fee regulations before New Year's Day were beneficial to bond - fund liabilities, but the market quickly took profits after the interest - rate decline. Concerns about government bond supply and the strong start of the equity market suppressed bond - market sentiment. Finally, the yields of most interest - rate bonds increased, with only the 1 - year national bond yield falling by 4.9bp, and the 3 - year national bond yield rising the most, by about 7.8bp [49]. 4. High - Frequency Data - **Production Side**: There was a divergence in operating rates. The blast - furnace and PTA operating rates increased, while the semi - steel tire and asphalt operating rates decreased. In late December, the daily average crude - steel output had a wider year - on - year decline of 14.8% [52]. - **Demand Side**: The year - on - year growth of passenger - car wholesale and retail sales improved rapidly. In the week of December 31, the year - on - year growth of passenger - car wholesale and retail sales were 45% and 17% respectively. The year - on - year decline in the commercial - housing transaction area narrowed. In the week of January 4, the land premium rate of 100 large - and medium - sized cities decreased, and the land transaction area had a seasonal decline and a large year - on - year decline. The commercial - housing sales area of 30 large - and medium - sized cities decreased to 2.75 million square meters, with a narrowed year - on - year decline of 9%. The SCFI and CCFI composite indices changed by - 0.5% and 4.2% respectively [52]. - **Price Side**: Crude - oil prices recovered, copper and aluminum prices increased, coal prices diverged, the mid - stream building - material composite price index increased slightly, and downstream vegetable and fruit prices decreased while pork prices increased. The rebar inventory decreased to a low level of 283 tons, and the futures price increased by 0.6% [53].

Core Viewpoint - The rapid increase in gold prices is driven by heightened global market risk aversion, influenced by geopolitical events, particularly U.S. military actions in Venezuela, which have created new uncertainties in energy supply and market risk tolerance [1][3]. Price Structure and Market Confidence - Gold prices have shown resilience after a previous high-level pullback, indicating strong medium to long-term confidence in gold as an asset [1][3]. - A significant price increase in gold is expected by 2025, with potential for normal profit-taking phases, but the overall outlook remains positive due to supportive liquidity and risk aversion factors [1][3]. Geopolitical and Economic Factors - U.S. military actions in Venezuela have impacted market risk tolerance and created uncertainties in energy supply, which may lead investors to increase gold holdings as a hedge against potential volatility [1][3]. - The linkage between energy markets and macro inflation expectations suggests that increased uncertainty will drive funds towards gold [1][3]. Long-term Support for Gold - The fundamental support for gold remains intact, driven by expectations of declining interest rates, increasing official reserves, and insufficient global economic growth momentum, all of which are favorable for gold prices in the medium to long term [1][3]. - Even with short-term volatility, as long as core supportive factors are not disproven, gold is expected to maintain a strong operational pattern [1][3]. Broader Commodity Market Sentiment - The simultaneous rise in other metals such as silver, platinum, and copper reflects a warming sentiment in the overall commodity market, driven by both risk aversion and a reassessment of future demand and liquidity conditions [2][4]. - Gold remains a key emotional barometer for market sentiment, with its price movements serving as an important reference for assessing overall market risk appetite [2][4].

Core Viewpoint - The recent rebound in tin prices is driven by macroeconomic expectations, supply chain risks, and changing industry narratives, indicating a significant shift in market trading logic [1][3]. Group 1: Macroeconomic Factors - The immediate catalyst for the rebound is the weak U.S. employment data, which has raised expectations for an upcoming interest rate cut by the Federal Reserve, leading to a weaker dollar and providing upward valuation support for dollar-denominated commodities [1][2]. - The easing liquidity expectations are becoming a key variable influencing commodity market sentiment [1]. Group 2: Supply Dynamics - The core contradiction in the fundamentals remains the rigid supply tension, exacerbated by low inventory levels, which amplifies price volatility [2]. - Global tin inventories are at historically low levels, making the supply chain highly sensitive to any disruptions [2]. Group 3: Demand Shifts - The demand narrative is undergoing structural changes, with emerging technologies like artificial intelligence and advanced computing driving new long-term growth for tin, despite seasonal pressures in traditional consumer electronics [2]. - Tin is essential for high-end soldering materials, serving as a foundation for AI servers and high-performance chip packaging, thus gaining robust support from future demand [2]. Group 4: Market Dynamics - The market focus has shifted from weak expectations to strong realities, with recent price rebounds reflecting a renewed investor attention on supply shortages [2]. - Any negative news from the supply side could be quickly priced in, especially in the context of extremely tight global inventories [2]. Group 5: Price Outlook - Short-term expectations indicate that tin prices will maintain a strong oscillating pattern, supported by persistent supply constraints and low global inventories [3]. - The anticipated price fluctuation range is between 320,000 to 335,000 yuan/ton, with the ability to break through the 330,000 yuan/ton resistance depending on new supply signals and the strength of emerging demand [3].

Core Viewpoint - The long-term large-denomination certificates of deposit (CDs) are rapidly disappearing from the market due to various factors, including narrowing bank interest margins and changing regulatory environments [1][2]. Group 1: Industry Trends - The availability of 3-year and 5-year large-denomination CDs has significantly decreased, with many banks only offering CDs with a maximum term of 2 years [1]. - The net interest margin for commercial banks in China has dropped to 1.43%, a historical low, prompting banks to reduce high-cost liabilities like large-denomination CDs [1][2]. - The expectation of declining interest rates is increasing, leading banks to withdraw long-term large-denomination CDs to avoid locking in high-interest liabilities [2]. Group 2: Regulatory Influence - Regulatory bodies are guiding banks to lower deposit costs through market-oriented mechanisms, aiming to maintain reasonable profit and net interest margin levels [2]. - Banks are encouraged to balance scale and efficiency, with many identifying the reduction of long-term deposits as a key strategy for adjusting their liability structure [2]. Group 3: Customer Adaptation - Customers are advised to shift from a single savings model to a diversified asset allocation approach to adapt to the changing market [3]. - It is essential for customers to recognize the scarcity of high-yield assets and avoid blindly pursuing high returns, which could lead to investment risks [3]. - Building an investment portfolio should consider individual circumstances, including investment experience, return expectations, risk tolerance, and liquidity needs [3].