Report Industry Investment Rating No relevant content provided. Core Views of the Report - The game space for the bond market from the economic fundamentals is shrinking. The economy performed well in Q1, and it is likely to be decent in Q2. It is highly probable that the annual growth rate will reach around 5%. Considering the bond market's front - running effect, not adding positions now may lead to missing an important long - buying window this year. For public funds with relative ranking assessments, it will be extremely difficult to outperform peer products in the second half of the year [4][10]. - Whether the central bank will restart bond purchases is a significant game point in the current bond market. Currently, market sentiment has reached a high level, with the bond market's leverage ratio and bond fund duration both rising. If the central bank announces bond purchases at the end of the month, the short - end yields may decline further, driving down the long - end yields. However, the monetary authority may be aware of the bond market's front - running tendency, and considering that the June 18th Lujiazui Forum did not mention restarting bond purchases and the central bank's Q2 monetary policy meeting maintained the statement of "monitoring changes in long - term bond yields", caution should be exercised regarding the central bank's potential restart of bond purchases [4][10]. - Investors face a prisoner's dilemma when gambling on the central bank's bond - buying. If the central bank restarts bond purchases, investors who miss the opportunity may find it difficult to have another chance to boost returns this year. For those who add positions, the ranking competition depends on the depth of strategy implementation (leverage, duration). If the central bank does not announce bond purchases, heavy - position investors may incur losses, and the ranking competition among those who added positions depends on the speed of stop - loss [4][10]. Summary by Directory 1. This Week's Institutional Behavior Review - **Overall Situation**: At the cross - quarter time point, the bond market was volatile, with short - end bonds performing better. The 10 - year treasury bond yield remained flat, while the 1 - year and 3 - year yields decreased slightly by 1 - 2bp. Investors face a prisoner's dilemma due to factors such as cross - quarter, public funds' pursuit of rankings and scale, the uncertainty of central bank bond - buying, and the yet - to - be - released June PMI data. Large banks have been buying short - term bonds for nearly a month, non - bank institutions have high chasing sentiment, and other product - type net purchases have increased significantly [2][9]. - **Yield Curve**: Treasury bond yields declined at the short - end and rose at the long - end. The 1Y yield decreased by 1bp, 3Y by 1bp, while 5Y, 7Y, 10Y, 15Y, and 30Y yields rose by about 1bp, 3bp, 1bp, 1bp, and 1bp respectively. For China Development Bank bonds, short - end yields declined, and medium - to - long - end yields rose. The 1Y yield decreased by 1bp, 3Y yield changed less than 1bp, 5Y decreased by 1bp, 7Y rose by about 1bp, 10Y remained flat, 15Y rose by 2bp, and 30Y rose by 1bp [12]. - **Term Spread**: Treasury bond and China Development Bank bond spreads showed different trends. For treasury bonds, the short - end spreads widened, and the long - end spreads showed different trends. For China Development Bank bonds, the spreads also showed different trends [13][16]. 2. Bond Market Leverage and Funding Situation - **Leverage Ratio**: From June 23rd to June 27th, 2025, the leverage ratio fluctuated and decreased. As of June 27th, it was approximately 107.80%, down 0.05 percentage points from last Friday and up 0.04 percentage points from Monday [19]. - **Average Daily Turnover of Pledged Repurchase**: From June 23rd to 27th, the average daily turnover of pledged repurchase was about 7.7 trillion yuan, down 0.55 trillion yuan from last week. The average daily overnight turnover accounted for 83% [22][26]. - **Funding Situation**: From June 23rd to June 27th, bank - related fund outflows continued to increase. The net fund outflow of large banks and policy banks on June 27th was 4.93 trillion yuan; joint - stock banks, city commercial banks, and rural commercial banks had an average daily net inflow of 0.01 trillion yuan, with a net outflow of 0.25 trillion yuan on June 27th. The main fund - borrowing party was funds, and the money - market fund outflows first increased and then decreased [27]. 3. Duration of Medium - and Long - Term Bond Funds - **Median Duration**: This week (June 23rd - June 27th), the median duration of medium - and long - term bond funds was 2.87 years (de - leveraged) and 3.17 years (leveraged). On June 27th, the median duration (de - leveraged) was 2.87 years, up 0.05 years from last Friday; the median duration (leveraged) was 3.17 years, up 0.11 years from last Friday [43]. - **Duration by Bond Fund Type**: The median duration (leveraged) of interest - rate bond funds rose to 3.82 years, up 0.13 years from last Friday; the median duration (leveraged) of credit - bond funds rose to 2.95 years, up 0.08 years from last Friday. The median duration (de - leveraged) of interest - rate bond funds was 3.44 years, up 0.04 years from last Friday; the median duration (de - leveraged) of credit - bond funds was 2.74 years, up 0.05 years from last Friday [47][48]. 4. Comparison of Category Strategies - **Sino - US Yield Spread**: The overall Sino - US treasury bond yield spread widened. The 1Y spread widened by 9bp, 2Y by 16bp, 3Y by 13bp, 5Y by about 14bp, 7Y by 16bp, 10Y by 10bp, and 30Y by 5bp [50]. - **Implied Tax Rate**: As of June 27th, the spread between China Development Bank bonds and treasury bonds for 1Y and 3Y changed less than 1bp, 5Y narrowed by about 2bp, 7Y narrowed by 1bp, 10Y changed less than 1bp, 15Y widened by 1bp, and 30Y changed less than 1bp [53]. 5. Changes in Bond Lending Balances On June 27th, the lending concentration of active 10 - year treasury bonds, second - active 10 - year China Development Bank bonds, and active 30 - year treasury bonds showed an upward trend, as did the second - active 10 - year treasury bonds and active 10 - year China Development Bank bonds. By institution, all institutions showed a decline [54].