1. Report Industry Investment Rating The report does not mention the industry investment rating. 2. Core Viewpoints - The resumption of VAT on the interest income of new - issued treasury bonds, local government bonds, and financial bonds after August 8, 2025, may lead to a "long old bonds, short new bonds" strategy in the market. The mid - term trend of treasury bond futures remains oscillating and bearish, and the basis difference will fluctuate bidirectionally to a reasonable range. The inter - period spread may widen further, and the curve may steepen in the medium term. Credit bonds may be favored in the short - term, and the stratification of credit spreads will be more reasonable in the medium term, benefiting the real economy. The tax adjustment on interest - rate bonds indirectly benefits equity assets, but short - term discount expectations of underlying bond assets of some companies need attention [6]. - There is a large supply - demand gap for soybeans in China before the Spring Festival in 2026. Whether China purchases US soybeans or not, the cost of imported soybeans is difficult to decrease significantly, which will push up the prices of soybean products. It is recommended to buy soybean oil and soybean meal at low prices [10]. 3. Summary by Related Catalogs 3.1 Treasury, Local, and Financial Bond Interest VAT Resumption - **Market Reaction**: After the policy was announced, the interest rate of 25 Attached - interest Treasury Bond 11 showed a "first up then down" trend, indicating that the market first understood the negative impact of the "tax increase" and then realized the value of "old bonds" [6]. - **Bond Market Strategy**: A "long old bonds, short new bonds" strategy may emerge. The CTD of active contracts and corresponding old bonds may have a short - term rally, but the medium - term trend is hard to change. The basis difference will gradually fluctuate bidirectionally from the low - level operation of the past two years to a reasonable range [6]. - **Inter - period Spread**: The inter - period spread between the 09 and 12 contracts may widen further as the pricing will incorporate the tax difference between new and old bonds [7]. - **Curve Shape**: The curve may steepen in the medium term [7]. - **Bond Type Comparison**: Credit bonds may be favored in the short - term, and the stratification of credit spreads will be more reasonable in the medium term, attracting capital inflows to support the real economy. The tax adjustment on interest - rate bonds indirectly benefits equity assets, but short - term discount expectations of underlying bond assets of some companies such as banks and insurance need attention [7][9]. 3.2 Soybean and Its Products - **Supply - demand Situation**: There is a large supply - demand gap for soybeans in China before the Spring Festival in 2026. Whether China purchases US soybeans or not, the cost of imported soybeans is difficult to decrease significantly [10]. - **Price Forecast**: The low - price range of soybean meal is about 3050 yuan/ton, and the high - price range is about 3450 yuan/ton. The low - price range of soybean oil is about 8150 yuan/ton, and the high - price range is about 8650 yuan/ton. It is recommended to buy soybean oil and soybean meal at low prices [10]. 3.3 Other Commodities - **Precious Metals**: Gold shows a weakening trend due to weak non - farm payroll data, and silver has fallen from a high level. The trend intensities of both are - 1 [13][16][21]. - **Base Metals**: Copper's spot premium is firm, limiting price declines, with a trend intensity of 0; zinc is oscillating downward, with a trend intensity of - 1; lead's inventory reduction limits price drops, with a trend intensity of 0; tin is oscillating within a range, with a trend intensity of - 1; aluminum's center of gravity is moving down, alumina is accumulating inventory, and cast aluminum alloy follows electrolytic aluminum, all with a trend intensity of - 1 [13][23][26][29][31][36]. - **Energy and Chemicals**: Products such as crude oil, fuel oil, and asphalt have different trends. For example, fuel oil continues to decline, and asphalt is oscillating at a high level, with corresponding trend intensities [13][39][65]. - **Agricultural Products**: Different agricultural products have different trends. For example, palm oil is waiting to be bought at low levels, and corn is oscillating [13][15].

1. Report Industry Investment Rating There is no information provided regarding the industry investment rating in the report. 2. Core Viewpoints of the Report - The bond market showed a situation of "all negative factors priced in" this week. After the high - level oscillation in the first half of the week, influenced by factors such as the extension of Sino - US tariff exemptions, lack of unexpected policies in the Politburo meeting in July, significant corrections in the equity market and commodity prices, and poor July manufacturing PMI data, the 10 - year Treasury bond yield returned to around 1.7%. The news of resuming the collection of VAT on the interest income of some bonds on Friday afternoon pushed the 10 - year Treasury bond yield below 1.7% [2][6]. - The tax system for bond investment in China varies according to different bond types, investors, and income sources. The new tax policy exempts the old bonds of Treasury bonds, local government bonds, and financial bonds from VAT on interest income, while new bonds require banks and other institutional investors to pay 6.34% VAT and asset management products to pay 3.26% VAT [2][6]. - After the tax rate adjustment, institutions may prefer to hold old bonds. The new bond issuance may need to provide sufficient interest compensation. The actual yield of old bonds may be between 1.65% - 1.7%, and the new - old bond spread may be between 5 - 10BP [2][13]. - The central bank may support the policy adjustment to increase the nominal level of domestic bond interest rates and reduce the investment and trading willingness of financial institutions. The finance department may aim to expand the tax source. The policy may increase the annual VAT revenue by up to 140 billion, and the annual fiscal interest payment may increase by about 50 billion [2][3]. - In the short term, the bond market may maintain a volatile pattern. After the new tax policy, there may be a short - term trading opportunity for old bonds, but the market may still face disturbances, and the volatile pattern is difficult to break [2][23]. 3. Summary According to Related Catalogs 3.1 China's Bond Investment Tax System Varies by Bond Type, Investor, and Income Source - **VAT**: Interest income from Treasury bonds, local government bonds, financial bonds, and inter - bank certificates of deposit is exempt from VAT. For other bond types, the actual VAT rate for general legal entities is 6.34%, and for asset management products, it is 3.26%. Capital gains from most bonds are subject to VAT, but public funds are exempt. The actual VAT rate takes into account price - exclusive factors and additional taxes [2][6][7]. - **Income Tax**: Financial institutions' interest income from investing in Treasury bonds and local government bonds is exempt from income tax. Interest income from railway bonds is taxed at a reduced rate of 12.5%. Other bond interest income and capital gains are taxed at 25%. Contractual asset management products are not income tax payers, and the tax is borne by product holders. Personal investment in asset management products is currently tax - free, while enterprises and financial institutions are taxable. Public fund dividends are exempt from income tax [2][8]. - **Impact on Yield Difference**: Tax system differences are an important reason for the yield differences among different bond types in China. For example, the implied tax rate between Treasury bonds and policy - financial bonds has an upper limit of 25% [9]. 3.2 Under the New Tax Policy, the Market's Rush for Old Bonds is Mainly Due to Different Tax Rates Among Institutions - **New Tax Policy**: Starting from August 8, 2025, new - issued Treasury bonds, local government bonds, and financial bonds' interest income will be subject to VAT, while old bonds' interest income remains tax - free [11]. - **Pricing of New and Old Bonds**: Assuming the fair - value yield of 10 - year Treasury bonds is 1.7%, new bonds need to provide sufficient interest compensation. For asset management products, the new bond issuance rate only needs to reach 1.755% to be equivalent to old bonds, while for self - operated accounts, it needs to reach 1.808%. The actual new - old bond spread may be between 5 - 10BP [12][13]. - **Actual Situation**: Banks can invest in asset management products to avoid tax impacts, which may narrow the new - old bond spread. For short - duration bonds, the new bond yield may rise more. The demand for non - tax - adjusted bonds such as inter - bank certificates of deposit and credit bonds may increase, but the positive impact is limited [14]. 3.3 The New Tax Policy Can Increase the Nominal Interest Rate of New Bonds, but Commercial Banks May Bear Higher Tax Costs - **Policy Motivation**: The central bank may support the policy to increase the nominal level of domestic bond interest rates, and the finance department aims to expand the tax source [17]. - **Fiscal Revenue and Expenditure**: In the first year of the policy implementation, the additional VAT revenue may be less than 36 billion. Eventually, the annual fiscal VAT revenue increase may be within 140 billion, and the annual fiscal interest payment may increase by about 50 billion. The difference reflects the tax cost borne by banks and other financial institutions [3][19][21]. - **Future Policy Expectation**: There may be further adjustments to the tax system of asset management products, especially the tax - exemption policy for public fund dividends [22]. 3.4 After Repricing the Existing Bonds, the Bond Market May Still Show a Volatile Pattern - **Short - Term Market Trend**: The bond market may maintain a volatile pattern in the short term due to the lack of incremental policies in the Politburo meeting in July, limited inflation - driving ability of production - restriction policies, and the expected maintenance of a loose monetary policy [23]. - **Impact of New Tax Policy**: After the new tax policy, there may be a short - term trading opportunity for old bonds as their yields may decline by 0 - 5BP. However, the market may still face disturbances such as rising bank financing costs and potential tax policy adjustments for public funds, and the volatile pattern is difficult to break [24]. - **Long - Term Outlook**: A further decline in interest rates may require weaker fundamental data to force a policy shift. There is a possibility that the economic growth rate may decline in the second half of the year, and if combined with central bank bond - buying or interest rate cuts, interest rates may reach new lows, which may occur in the second half of the third quarter [24].