1. Report Industry Investment Ratings - No industry investment ratings are provided in the report. 2. Core Views of the Report - After the Fed cut interest rates by 25bp as expected, the market quickly digested the expectation and turned to shock. With the approaching holiday, the activity of the capital market decreased, and short - term style switching and partial withdrawal would occur [2]. - Without incremental negative news, the 1.8 - 1.83% range may be the high - level range for the 10 - year Treasury bond yield, but in the absence of strong positive factors, the short - term decline in interest rates is also limited [2]. - As the end of the quarter approaches, the liquidity of derivative contracts for gold tightens, and the risk of volatility is relatively large. The silver price is driven by both financial and industrial attributes, with high upward elasticity [2]. - The shipping index on the EC (European line) is rising on the disk, and the steel exports support the black valuation, with steel prices continuing to fluctuate [2]. - The geopolitical risk premium drives the oil price up, but the expected recovery of supply in the Kurdish region limits the rebound height, with short - term shock as the main trend [2]. - The supply of urea remains loose in the short term, and the demand side lacks strong drivers, so the market is weak [2]. - For agricultural products, the supply prospects of overseas sugar are broad, and new cotton is gradually coming onto the market, increasing supply pressure [2]. 3. Summaries According to Related Catalogs Financial Stock Index - TMT continues to lead the market, and most stock indices close higher. It is recommended to sell put options on the MO2511 contract with an execution price near 6600 when the index pulls back to collect premiums [2]. Treasury Bond - The MLF is renewed with an increased amount, and the overall trend of Treasury bond futures is volatile. It is recommended to operate within the range for the unilateral strategy and pay attention to quick entry and exit. For the basis spread strategy, the basis of the TL contract fluctuates at a high level, and one can appropriately participate in the basis narrowing strategy [2]. Precious Metals - For gold, maintain the idea of buying on dips or buying out - of - the - money call options. For silver, keep a low - buying strategy as its price fluctuates above $43 [2]. Black Steel - Steel exports support the black valuation, and steel prices continue to fluctuate. Try short - buying on pullbacks and narrow the spread between the January contract of hot - rolled coil and rebar [2]. Iron Ore - The decline in shipments, the increase in molten iron, and the replenishment demand support the high - level shock of iron ore prices. The 2601 contract of iron ore is regarded as volatile, with a reference range of 780 - 850 [2]. Coal - The coal prices in coal - producing areas are stable with a slight upward trend. It is recommended to short the coking coal 2601 contract at high prices, with a reference range of 1150 - 1250, and short the coke 2601 contract at high prices, with a reference range of 1650 - 1800 [2]. Energy and Chemical Crude Oil - The geopolitical risk premium drives the oil price up, but the expected recovery of supply in the Kurdish region limits the rebound height. It is recommended to adopt a unilateral band - trading strategy, with the WTI operating range at [60, 66], Brent at [64, 69], and SC at [471, 502] [2]. Other Chemicals - For various chemicals such as urea, PX, PTA, etc., different trading strategies are proposed according to their supply - demand situations, such as short - selling urea on rallies, and paying attention to the pressure levels for PX and PTA long positions [2]. Agricultural Products - For different agricultural products like soybeans, pigs, corn, etc., different trends and trading suggestions are given. For example, for sugar, conduct short - selling on rebounds; for cotton, short in the short term [2]. Special Commodities - For glass, due to news - driven factors, the glass futures market has risen sharply, and it is recommended to watch cautiously. For rubber, the impact of the typhoon is limited, and the rubber price has fallen slightly, so it is recommended to watch [2]. New Energy - For polysilicon, the market sentiment is repaired, and the futures market rebounds, so it is recommended to watch temporarily. For lithium carbonate, driven by the sector sentiment, the futures market strengthens slightly, and the main contract is expected to operate in the range of 70,000 - 75,000 yuan [2].

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - After the Fed cut interest rates by 25bp as expected, the market quickly digested the expectation and turned to a volatile state. With the approaching holiday, the activity of the capital market decreased, and there will be a style switch and partial withdrawal in the short - term [3]. - There is no strong incremental negative news, and the 10 - year Treasury yield may reach a high in the range of 1.8 - 1.83%. Without strong positive news, the short - term downward space of the interest rate is limited, and there may be resistance around 1.75% [3]. - Gold maintains a high - level shock, and its volatility may rise again. However, with the approaching end of the month, the expiration of derivative contracts brings greater volatility risks [3]. - Steel exports support the valuation of the black industry, and steel prices will continue to fluctuate. The decline in iron ore shipments, the recovery of hot metal production, and restocking demand support the strong operation of iron ore prices [3]. - The supply of crude oil shows marginal increase concerns, and the future trend needs to pay attention to the evolution of geopolitical issues [3]. - The high supply pressure of urea continues, and the progress of urea factory orders before the National Day needs to be concerned [3]. 3. Summary According to Relevant Catalogs Financial Sector - **Stock Index**: As the long holiday approaches, the capital market becomes less active. There will be a style switch in the short - term, with blue - chip indexes remaining firm. It is recommended to sell put options on MO2511 with an exercise price near 6600 when the index pulls back to collect premiums [3]. - **Treasury Bonds**: The open - market operation turns to net withdrawal, weakening the bond market sentiment. The Treasury bond futures generally decline. It is recommended to operate within the range for the unilateral strategy, and try to go long with a light position when the market sentiment stabilizes at the low level, but pay attention to taking profits in time. For the basis - trading strategy, the basis of the TL contract fluctuates at a high level, and investors can participate in the basis narrowing strategy [3]. - **Precious Metals**: Gold maintains a high - level shock, and its volatility may rise again. It is recommended to buy on dips or buy out - of - the - money call options. Silver has high upward elasticity driven by emergencies, but the sentiment fades quickly. It is recommended to sell out - of - the - money put options when the price fluctuates above $41 [3]. - **Container Shipping Index (European Line)**: The EC market is highly volatile, and it is recommended to wait and see [3]. Black Sector - **Steel**: Steel exports support the valuation of the black industry, and steel prices continue to fluctuate. It is recommended to try short - term long positions on pullbacks and narrow the spread between hot - rolled and rebar futures contracts for January [3]. - **Iron Ore**: With the decline in shipments, the recovery of hot metal production, and restocking demand, iron ore prices are supported to run strongly. It is recommended to go long on the iron ore 2601 contract at low levels, with a reference range of 780 - 850, and go long on iron ore and short on hot - rolled coils [3]. - **Coking Coal**: The coal price in the production area is stable with a slight upward trend. Supported by the downstream restocking demand, the futures market has an upward expectation. It is recommended to go long on the coking coal 2601 contract at low levels, with a reference range of 1150 - 1300, and go long on coking coal and short on coke [3]. - **Coke**: After the second round of price cuts for coke is implemented, some coke enterprises start to raise prices, and the futures market has a rebound expectation in advance. It is recommended to go long on the coke 2601 contract at low levels, with a reference range of 1650 - 1800, and go long on coking coal and short on coke [3]. Non - ferrous Sector - **Copper**: The market fluctuates and consolidates, and spot transactions are good below 80,000 yuan. The main contract is expected to trade between 79,000 - 81,000 yuan [3]. - **Aluminum Oxide**: The price breaks below 2900 yuan, and the downward space is limited due to cost support. The main contract is expected to trade between 2850 - 3150 yuan [3]. - **Aluminum**: The price drops, and trading volume picks up slightly. Attention should be paid to the inflection point of inventory. The main contract is expected to trade between 20,600 - 21,000 yuan [3]. - **Aluminum Alloy**: The pre - holiday restocking demand provides short - term support for the spot price. The main contract is expected to trade between 20,200 - 20,600 yuan [3]. - **Zinc**: The social inventory decreases during the peak season. Attention should be paid to the sustainability of inventory reduction. The main contract is expected to trade between 21,500 - 22,500 yuan [3]. - **Tin**: The import of tin ore remains at a low level in August, and the fundamentals provide support. The operating range is expected to be between 265,000 - 285,000 yuan [3]. - **Nickel**: The market maintains a weak shock, and the fundamentals change little. The main contract is expected to trade between 119,000 - 124,000 yuan [3]. - **Stainless Steel**: The market maintains a narrow - range shock. Attention should be paid to the pre - holiday restocking situation of downstream enterprises. The main contract is expected to trade between 12,800 - 13,200 yuan [3]. Energy and Chemical Sector - **Crude Oil**: Concerns about the marginal increase in supply have eased. The future trend needs to pay attention to geopolitical issues. It is recommended to operate in a band for the unilateral strategy, with the WTI operating range at [60, 66], Brent at [64, 69], and SC at [471, 502]. Wait for opportunities to widen the spread on the option side [3]. - **Urea**: The high - supply pressure continues. Attention should be paid to the order - taking progress of urea factories before the National Day. It is recommended to wait and see for the unilateral strategy, with a short - term support level at 1610 - 1630 yuan/ton. On the option side, after the implied volatility rises, it is recommended to narrow the spread at high levels [3]. - **PX**: The supply - demand expectation is positive, but the cost side is strong. PX may be supported in the short - term. It is recommended to go long on the PX11 contract in the short - term or wait for a rebound to go short [3]. - **PTA**: The supply - demand expectation improves, but it is still weak in the medium - term, with limited driving force. It is recommended to go long on TA in the short - term or wait for a rebound to go short. Treat the TA1 - 5 spread as a rolling reverse spread [3]. - **Short - fiber**: There is no obvious driving force in the short - term, and it follows the raw material price fluctuations. The trading strategy is the same as that of PTA. The processing margin on the disk fluctuates between 800 - 1100 yuan, with limited upward and downward driving forces [3]. - **Bottle Chip**: The demand for bottle chips improves periodically, but the supply - demand pattern remains loose, and the upward space of the processing margin is limited. The trading strategy is the same as that of PTA. The processing margin on the main contract is expected to fluctuate between 350 - 500 yuan/ton [3]. - **Ethanol**: The expectation of new device commissioning and the weak terminal market put pressure on MEG. It is recommended to sell call options on EG2601 - C - 4400 at high levels and use the EG1 - 5 reverse spread strategy [3]. - **Caustic Soda**: As the long holiday approaches, middle - stream enterprises adopt a wait - and - see attitude, and the market drops significantly. Hold short positions [3]. - **PVC**: The enthusiasm for spot procurement is average, and the market weakens. It is recommended to wait and see [3]. - **Benzene**: The supply - demand expectation weakens, and the price driving force is limited. BZ2603 will follow the fluctuations of styrene and oil prices in the short - term [3]. - **Styrene**: The oil price is expected to be weak, putting pressure on the absolute price of styrene. It is recommended to go short on the absolute price rebound of EB10 and widen the spread between EB11 and BZ11 at a low level [3]. - **Synthetic Rubber**: The cost and supply - demand driving forces of BR are limited, and it may follow the fluctuations of natural rubber and commodities. Pay attention to the support around 11,400 yuan for BR2511 [3]. - **LLDPE**: The basis strengthens, and the trading volume is fair. The upward and downward space is limited. Wait and see near the previous low [3]. - **PP**: The number of maintenance increases, and the trading volume improves. In the short - term, the high - maintenance situation continues, supply decreases, demand increases, and inventory decreases. Wait and see in the short - term [3]. - **Methanol**: The inventory at the port continues to accumulate, and the price is weak. The downward space is currently limited. Wait and see [3]. Agricultural Sector - **Meal**: Argentina cancels the export tax, putting pressure on the two - meal market again. It will have a short - term weak adjustment [3]. - **Live Pig**: The slaughter pressure is large, and the spot market is difficult to improve before the National Day. Exit the reverse spread strategy and wait and see [3]. - **Corn**: Under the bearish expectation, the market fluctuates weakly [3]. - **Oil**: Argentina cancels the grain export tax, causing the market to plunge. Pay attention to the support at 9000 yuan for the main contract of P in the short - term [3]. - **Sugar**: The overseas supply outlook is broad. Exit short positions and take profits [3]. - **Cotton**: New cotton is gradually coming onto the market, increasing the supply pressure. Go short in the short - term [3]. - **Egg**: The domestic sales in some local markets still support the demand to a certain extent, but the long - term trend is bearish. Control the position of short positions [3]. - **Apple**: Early Fuji apples are traded at negotiated prices, and the sales volume is fair. The main contract is expected to trade around 8300 yuan [3]. - **Jujube**: The spot price fluctuates slightly, and the futures market fluctuates. It is bearish in the medium - and long - term [3]. - **Soda Ash**: The supply - demand surplus situation is difficult to reverse, and the market of soda ash weakens. Hold short positions [3]. Special Commodities Sector - **Glass**: The production and sales weaken, and the market drops. Wait and see [3]. - **Rubber**: Affected by typhoon weather, the rubber price fluctuates strongly in the short - term. Wait and see [3]. - **Industrial Silicon**: Market sentiment weakens, and the price of industrial silicon drops. The main price fluctuation range is expected to be between 8000 - 9500 yuan/ton [3]. New Energy Sector - **Polysilicon**: Suppressed by fundamental sentiment, the price of polysilicon drops significantly. Wait and see for the time being [3]. - **Lithium Carbonate**: The driving force weakens, and the market fluctuates mainly. The fundamental situation is in a tight balance during the peak season. The main contract is expected to trade between 70,000 - 75,000 yuan [3].

Summary of the Conference Call for China Life Insurance Company Overview - The conference call pertains to **China Life Insurance** and discusses its financial performance and strategic outlook for 2025. Key Points and Arguments Financial Performance - The VFA model has shown some accounting losses due to short-term interest rate fluctuations, which do not reflect long-term performance. It is essential to focus on the full-cycle investment performance and operational capabilities when evaluating results [2][3] - In the first half of 2025, underwriting financial losses increased by **7% year-on-year**, primarily due to the growth in reserve size [2][3] - The discount rate curve used by the company ranges from **1 year to 40 years**, with a terminal level of **4.5%** applied from **20 years onward**. This results in better CSM indicators for longer-duration businesses under the new standards [2][3][4] - The company's income tax expenses significantly decreased in the first half of 2025, mainly due to increased investment income from tax-exempt investment types (government bonds) and the potential release of deferred tax assets in the future [2][8] Business Strategy and Market Position - The company maintains a strategy of simultaneous growth in scale and value for its bancassurance channel, achieving significant improvements in total premiums, new premiums, and first-year premiums in the first half of 2025 [3][8] - The average guaranteed interest rate for existing liabilities is approximately **2.9%**, while the new business average is about **2.2%**, showing a downward trend compared to the end of 2024 [3][10] New Business Margins - The new business contract service margin (CSM) was significantly impacted by market interest rate changes, with a notable decrease in the new business liability duration [6][11] - The CSM for new contracts declined by approximately **90 basis points**, which is a more significant drop than the decrease in guaranteed interest rates, leading to a reduction in CSM [11] Investment Strategy - The company is optimistic about the equity market, expecting stable growth in the Chinese economy. The strategy includes long-term investment, value investment principles, and flexible allocation in fixed income [12][13] - The overall bond allocation ratio remained stable compared to the end of the previous year, indicating a divergence in market participants' strategies based on their circumstances [14] Regulatory Compliance - The company is committed to the regulatory requirement of investing **30% of new premiums** into the A-share market. In the first half of 2025, the public market equity scale increased by **150 billion** yuan [17] Risk Management and Future Outlook - The company plans to maintain a certain level of long-term bond allocation to match liabilities, with an effective duration of approximately **10 years** for liabilities and **8.5 years** for assets [15] - The difference between the adjusted net asset value and the net asset value in financial statements is attributed to the use of a longer-term discount rate for the adjusted value and the exclusion of non-tradable intangible assets [16] Additional Important Insights - The company is enhancing its agent channel's value rate through product transformation and improved expense management, which has led to significant improvements in profitability [9] - The company is prepared to adapt its strategies in response to market conditions, particularly if the stock market continues to rise [17]

1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report - The pricing power of funds in the bond market has further increased, and there are still short - term long - trading opportunities. The high correlation between funds and interest rate trends has been further strengthened this year, and low interest rate fluctuations imply the enhancement of funds' pricing power in the bond market. Some "unexplained" interest rate increases may be due to the lack of bond - receiving institutions. The impact of fund institutional behavior on interest rate fluctuations may further expand, and short - term redemption pressure is controllable [2][11][15] 3. Summary According to the Directory 3.1 This Week's Institutional Behavior Review - **Correlation between funds and interest rates**: The high correlation between funds and interest rate trends is not new. Since 2024, the behavior of funds and interest rate trends have shown high correlation, and this year, the low - level fluctuation of interest rates has implied the further improvement of funds' pricing power in the bond market, which may be related to bank wealth management outsourcing [2][11][12] - **"Unexplained" interest rate increases**: This phenomenon may be related to the lack of bond - receiving institutions. Insurance institutions have reduced their allocation of national bonds since 2024, and rural commercial banks' intention to buy more as the interest rate adjusts is gradually decreasing [15] 3.2 Yield Curve - **Treasury bonds**: Short - term yields increased, while medium - and long - term yields decreased. The 1Y yield increased by 3bp, the 3Y yield increased by 1bp, the 5Y yield decreased by 2bp, the 7Y yield decreased by 1bp, the 10Y yield decreased by 1bp, the 15Y yield increased by 3bp, and the 30Y yield decreased by 3bp [17] - **China Development Bank bonds**: Yields decreased overall. The 1Y yield increased by 1bp, the 3Y yield decreased by 1bp, the 5Y yield decreased by about 2bp, the 7Y yield decreased by 2bp, the 10Y yield decreased by about 1bp, the 15Y yield decreased by 2bp, and the 30Y yield decreased by 1bp [17] 3.3 Term Spread - **Treasury bonds**: The interest spread increased, and the short - term spread narrowed while the long - term spread was differentiated. The 1Y - DR001 interest spread remained flat overall, and the 1Y - DR007 interest spread increased by 10bp [20] - **China Development Bank bonds**: The interest spread increased, and the short - term spread narrowed while the long - term spread was differentiated. The 1Y - DR001 interest spread increased by 2bp, and the 1Y - DR007 interest spread increased by about 8bp [22] 3.4 Bond Market Leverage and Funding Situation - **Leverage ratio**: It decreased to 107.14%. From September 1st to September 5th, 2025, the leverage ratio fluctuated and increased within the week. As of September 5th, it was about 107.14%, up 0.30pct from last Friday and 0.07pct from Monday [25] - **Average daily trading volume of pledged repurchase**: From September 1st to September 5th, the average daily trading volume of pledged repurchase was about 7.3 trillion yuan, a decrease of 0.24 trillion yuan compared with last week. The average daily trading volume of overnight pledged repurchase was 7.6 trillion yuan, a decrease of 0.43 trillion yuan month - on - month. The average overnight trading volume accounted for 88.35%, an increase of 2.89pct month - on - month [28][33] - **Funding situation**: Bank - based fund outflows first increased and then decreased. The main fund inflow party was funds, and the outflows of money market funds first decreased and then increased. DR007 and R007 fluctuated and decreased [34] 3.5 Duration of Medium - and Long - Term Bond Funds - **Median duration**: The median duration of medium - and long - term bond funds decreased. As of September 5th, the median duration (de - leveraged) was 2.77 years, a decrease of 0.04 years from last Friday; the median duration (including leverage) was 2.95 years, a decrease of 0.16 years from last Friday [45] - **Duration of different types of bond funds**: The median duration (including leverage) of interest - rate bond funds decreased to 3.75 years, a decrease of 0.16 years from last Friday; the median duration (including leverage) of credit bond funds decreased to 2.72 years, a decrease of 0.12 years from last Friday [51] 3.6 Category Strategy Comparison - **Sino - US interest rate spread**: It widened overall. The 1Y spread widened by 23bp, the 2Y spread widened by about 12bp, the 3Y spread widened by 13bp, the 5Y spread widened by 8bp, the 7Y spread widened by 11bp, the 10Y spread widened by 11bp, and the 30Y spread widened by 7bp [55] - **Implied tax rate**: The short - term spread narrowed, and the long - term spread was differentiated. As of September 5th, the 1Y spread between China Development Bank bonds and treasury bonds narrowed by about 1bp, the 3Y spread narrowed by 2bp, the 5Y spread changed by less than 1bp, the 7Y spread narrowed by 1bp, the 10Y spread widened by 1bp, the 15Y spread narrowed by 5bp, and the 30Y spread widened by 2bp [56] 3.7 Bond Lending Balance Changes - On September 5th, the lending concentration of active 10Y treasury bonds, active 10Y China Development Bank bonds, and active 30Y treasury bonds increased; the lending concentration of the second - active 10Y China Development Bank bonds decreased, and the lending concentration of the second - active 10Y treasury bonds remained unchanged. In terms of institutions, the lending of large - scale banks and other institutions decreased, while that of small - and medium - sized banks and securities firms increased [57]

Group 1 - The article emphasizes that different stock markets do not move in unison, and understanding multiple markets can provide investors with more opportunities [2] - Global investment can significantly reduce volatility risk, and the article suggests a free course on investing in global stock markets through index funds [2][3] - The course includes notes and mind maps to help participants quickly grasp the concepts of global index investing [3] Group 2 - The article discusses the impact of interest rate changes on asset prices, likening interest rates to gravity for assets [5] - A decrease in interest rates is beneficial for asset prices, particularly for bonds, and indirectly supports the stock market by increasing liquidity and lowering capital costs [6] - Non-dollar assets benefit more during a dollar interest rate cut cycle, as the dollar tends to depreciate against other currencies, which was evident during the last bull market in Hong Kong stocks from 2020 to 2021 [7] - Following the first interest rate cut by the Federal Reserve in September 2024, A-shares and Hong Kong stocks experienced significant gains, marking the fastest rise in a decade [7][8] - While interest rate fluctuations can create short-term trading opportunities, their long-term impact on investment returns is less significant compared to the longer cycles of bull and bear markets [8]

Core Viewpoint - The article discusses the current state of long-term pure bond funds, highlighting their underperformance in 2025 due to low interest rates and the shift towards "fixed income plus" products that combine bonds with equities for better returns [10][12][35]. Summary by Sections Types of Bond Funds - Common types of bond funds include short-term pure bond funds, long-term pure bond funds, and "fixed income plus" funds [1][4][6]. - Short-term pure bond funds have minimal volatility, typically with a drawdown of less than 1% [1]. - Long-term pure bond funds, such as 7-10 year government bonds, exhibit greater volatility, potentially comparable to low-volatility stock funds [2][3]. - "Fixed income plus" funds combine bonds with a small portion of equities or convertible bonds, aiming for higher returns [4][5]. Performance Trends - In 2021, long-term pure bond funds had interest yields of over 3%-4%, but entered a declining interest rate cycle thereafter [7][8]. - A bull market for long-term pure bond funds lasted from 2021 to 2024, but by 2025, these funds faced significant declines due to low yields [9][10][12]. - As of late 2024, the yield on 10-year government bonds was around 1.6%-1.7%, making long-term pure bonds less attractive [12]. Factors Influencing Bond Fund Performance - Interest rate fluctuations are a primary factor affecting bond fund performance, with declining rates typically leading to rising bond prices [15][16]. - The long-term trajectory of interest rates is influenced by economic growth rates and inflation [20][21]. - In 2025, the performance of long-term pure bond funds was negatively impacted by rising interest rates and a strong stock market [13][20]. Shift to "Fixed Income Plus" Products - Due to low yields on traditional bond funds, investors are increasingly turning to "fixed income plus" products, which offer a mix of stable bond returns and higher-risk equities [35][36]. - "Fixed income plus" funds typically consist of a defensive bond component and a more aggressive equity component, aiming to enhance overall returns [36][37]. - The performance of "fixed income plus" products has been strong, with indices for these funds reaching new highs in 2025, contrasting with the decline in pure bond fund indices [38][39]. Characteristics of "Fixed Income Plus" Products - These products leverage the negative correlation between stocks and bonds, allowing for reduced volatility and improved long-term returns [39][40]. - The risk profile of "fixed income plus" products is significantly influenced by the proportion of equities they hold [43][44]. - They benefit from declining deposit rates, as traditional savings accounts offer lower returns, prompting investors to seek better alternatives [46][48]. Investment Considerations - Investors should assess the equity proportion in "fixed income plus" products based on their risk tolerance [51]. - The bond component should focus on mid to short-term bonds, which currently offer more stability [51]. - Selecting funds with automatic rebalancing strategies can help mitigate risks associated with market volatility [51][60]. Examples of "Fixed Income Plus" Products - The 365-day and monthly salary investment combinations are highlighted as effective "fixed income plus" options, with varying equity and bond ratios [52][55]. - These products have shown resilience and recovery in performance, with the 365-day combination achieving historical highs since its inception [55][58].

Group 1 - The core viewpoint of the articles indicates a downward trend in the yields of major term government bonds, with the 10-year government bond yield returning to 1.69% and a generally loose funding environment as the overnight rate is below 1.3% [1][5] - The closing prices of government bond futures mostly increased, with the 30-year main contract rising by 0.03% to 119.380 yuan, the 10-year main contract up by 0.05% to 108.615 yuan, and the 5-year main contract also up by 0.05% to 105.830 yuan [1][3] - The interbank major interest rate bond yields decreased across the board, with the 10-year government bond active coupon yield down by 0.7 basis points to 1.69% and the 30-year government bond yield down by 0.45 basis points to 1.914% [1][2] Group 2 - The auction results for government bonds showed a weighted interest rate of 1.585% for a 3-year bond and 1.715% for a 7-year bond, with full bid-to-cover ratios of 3.27 and 5.36 respectively [3] - The trading market for non-financial credit bonds saw significant movements, with the top five gainers including bonds from companies like 德达 and 文蓝, while the top five losers included bonds from 万科 and 梁山 [4] - The central bank conducted a reverse repurchase operation of 160.7 billion yuan at a rate of 1.40%, with a net withdrawal of 122.5 billion yuan for the day [5][6]

Group 1: Report Information - Report Title: "Fixed Income Weekly: How Has the Bond Market Broken Through Sideways Trading Historically? - Interest Rate Weekly (Week 3 of July)" [1] - Report Date: July 22, 2025 [2] - Analysts: Yan Ziqi, Hong Ziyan [2] Group 2: Industry Investment Rating - No information provided Group 3: Core Viewpoints - The current bond market has been in a long - lasting sideways trading with low interest rates and extremely low volatility. From April to July this year, the 10 - year Treasury bond yield oscillated between 1.60% - 1.70%, with a range of only 10bp, and the volatility on July 8 reached the lowest in the past 5 years [2]. - Historically, out of 12 rounds of bond market sideways trading from 2019 to now, 7 times the subsequent interest rates broke through downward and 5 times upward, with the sideways trading usually lasting about 1 month. A transition to a bull market typically requires a combination of increased economic downward pressure, monetary policy easing, and asset shortage, while a transition to a bear market needs factors like better - than - expected economic recovery, tightened monetary policy, rising inflation expectations, and regulatory impacts [3]. - The current trading theme in the bond market is unclear. On one hand, the strong GDP performance in the first half of the year makes investors expect no significant incremental policies in the short term, and recent consumption policies have made the bond market underperform. On the other hand, the current capital situation is in a balanced state, and the government bond supply pressure from July to August is not large and can be hedged by the central bank [4][7]. - A method to judge the end of a sideways market turning bearish is to observe the significant cooling of investors' aggressiveness in non - interest - rate bond strategies. When investors' expectation of further interest rate decline weakens, their buying of non - interest - rate bonds decreases, especially in the case of Tier 2 and perpetual bonds [7]. - Historically, the bond market breaking through sideways trading usually requires unexpected macro and policy factors. Currently, considering the long - term sideways trading, low interest rates, and small fluctuations in the bond market, and the enhanced learning effect in the market this year, investors can focus on the aggressiveness of non - interest - rate bond strategies to measure the bond market's risk - preference expectations [10]. Group 4: Summary by Related Catalog Historical Bond Market Sideways Trading and Breakthrough - The report sorted out 12 rounds of bond market sideways trading from 2019 to now, analyzing the sideways trading periods, 10 - year Treasury bond fluctuation ranges, reasons for sideways trading, post - breakthrough performances, and triggering factors [3][4]. Current Bond Market Situation - The trading theme is unclear, with factors from economic performance, policies, capital situation, and supply side affecting the market [4][7]. Micro - perspective Analysis - By observing the trading behavior of non - interest - rate bonds, especially the buying intensity of Tier 2 and perpetual bonds by brokers and funds, a method to judge the end of a sideways market turning bearish is provided [7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The investment in secondary and perpetual bonds (referred to as "two - eternal bonds") in the current bond market has reached the fourth stage. Since 2024, two - eternal bonds have become amplifiers of interest rate fluctuations. The report focuses on analyzing the institutional behavior patterns of two - eternal bonds and attempts to discover effective signals [2][15]. - Different types of institutions have different allocation patterns for two - eternal bonds. For example, banks act as stabilizers in the bond market, while securities firms have high - frequency trading, funds are the main buyers, and other institutions have their own preferences [5][6]. - It is difficult to use the institutional behavior of two - eternal bonds to predict interest rate trends, but it can help investors understand the market's expectation of whether interest rates can continue to decline. The report constructs investment sentiment measurement indicators for the trading desks of two - eternal bonds to assist investors in observation [7][8]. 3. Summary According to the Table of Contents 3.1 Why Focus on the Institutional Behavior of Two - eternal Bonds? - The investment in two - eternal bonds has gone through four stages. Since 2024, they have become amplifiers of interest rate fluctuations. The report aims to analyze their institutional behavior patterns and find effective signals [2][15]. - The report discusses three types of bonds (secondary capital bonds, perpetual bonds, and ordinary financial bonds) and six types of investors (banks, securities firms, funds, wealth management, insurance, and others). Different investors' term preferences are mainly concentrated in 1Y, 3Y, and 5Y, and the trading volume of two - eternal bonds over 5Y declines significantly [3][15]. 3.2 Institutional Behavior Patterns of Two - eternal Bonds 3.2.1 Banks Still Act as Stabilizers in the Bond Market - Since the second half of 2024, commercial banks have increased the trading volume of 1Y/3Y secondary capital bonds and continuously net - sold 5Y secondary capital bonds. For perpetual bonds, the trading volume of 1Y/3Y is small, and 5Y is significantly net - sold. For ordinary financial bonds, the trading volume in the 3Y term is the largest, and they are mostly net - sold, except for increasing allocation during bond market corrections [5][16]. 3.2.2 Securities Firms Have High - Frequency Band - trading of Two - eternal Bonds - Securities firms show obvious trading - desk characteristics in the trading of two - eternal bonds, frequently switching between buying and selling with a relatively large scale. They have a high preference for 1Y/3Y/5Y two - eternal bonds and ordinary financial bonds [5][21]. 3.2.3 Funds Are the Main Buyers of Two - eternal Bonds - Funds tend to make trend - based allocations to two - eternal bonds. They continuously buy during bull markets and sell significantly during bear markets, driving market trends. In recent years, with the overall decline in the interest rates of two - eternal bonds, funds have shown a trend of increasing allocation [5][30]. 3.2.4 The Institutional Behavior Characteristics of Wealth Management in Two - eternal Bonds Are Diverse - In most periods, the trading characteristics of wealth management in two - eternal bonds are not obvious, showing an overall allocation trend. At some points, they take profits during bull markets, buy during bear markets, and continue to buy during volatile markets [5][37]. 3.2.5 Insurance Also Acts as a Stabilizer in the Bond Market - Insurance institutions generally net - sell two - eternal bonds but increase allocation during market corrections, acting as stabilizers [5][46]. 3.2.6 Other Types of Institutions Prefer to Continuously Allocate 5Y Two - eternal Bonds - Other types of institutions have a greater preference for continuously allocating 5Y two - eternal bonds [6][52]. 3.3 How to Use the Institutional Behavior Patterns of Two - eternal Bonds? - It is relatively difficult to use the institutional behavior of two - eternal bonds to predict interest rate trends due to factors such as the synchronicity of institutional behavior indicators, less trading data, and data delays [7][61]. - However, the institutional behavior of two - eternal bonds can help investors understand the market's expectation of whether interest rates can continue to decline. When investors expect interest rates to continue to decline, the trading desks of two - eternal bonds will continue to buy, compressing the spread. When the expectation weakens, the buying power will decrease [7][61]. - The report constructs investment sentiment measurement indicators for the trading desks of two - eternal bonds, which are the smoothed overall purchases of funds and securities firms in 5Y secondary capital bonds and 5Y perpetual bonds. When these indicators decline significantly and approach zero, it indicates that the trading desks are less optimistic about buying two - eternal bonds for capital gains. This year, there were two such time points in January 15th and late April, corresponding to subsequent bond market corrections or fluctuations [8][62].

Group 1 - The overnight SHIBOR rate is reported at 1.5350%, increasing by 12.00 basis points [1] - The 7-day SHIBOR rate is reported at 1.5460%, increasing by 3.10 basis points [1] - The 3-month SHIBOR rate is reported at 1.5590%, decreasing by 0.20 basis points [2] Group 2 - The latest SHIBOR rates for various tenors are as follows: - O/N: 1.5350% (up 12.00 BP) - 1W: 1.5460% (up 3.10 BP) - 2W: 1.5790% (up 4.40 BP) - 1M: 1.5410% (up 0.30 BP) - 3M: 1.5590% (down 0.20 BP) - 6M: 1.5910% (up 0.30 BP) - 9M: 1.6130% (up 0.10 BP) - 1Y: 1.6230% (no change) [3]