Core Viewpoint - The real risk faced by investors is the expectation gap between their predictions and market movements, which is highlighted by the phrase "risk is the difference between your expectations and market trends" [1] Monetary Policy and Market Conditions - The central bank conducted a 4,958 billion yuan reverse repurchase operation, with a net injection of 3,251 billion yuan after 1,707 billion yuan matured [2] - The funding environment is balanced and slightly loose, with funding rates continuing to decline; DR001 is around 1.46% and DR007 is around 1.58% [3] - The central bank's continued large net injections have led to a slight increase in the stock market, while commodities have seen significant declines and bond market rates have fluctuated downwards [4] Market Performance - The interbank funding rates have shown a downward trend, with R001 at 1.49% (down 6 basis points) and R007 at 1.63% (down 7 basis points), indicating a total transaction volume of 68,928.38 billion yuan [5] - The commodity market experienced a sharp decline, with various products hitting their daily limit down, while the bond market showed positive sentiment with the 10-year government bond yield fluctuating around 1.715% [5] Social Policy Impact - The introduction of a child-rearing subsidy policy, providing 3,600 yuan per child per year, marks a significant breakthrough in social policy aimed at improving birth rates [6]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - This week, the yield of the 10-year active Treasury bond rose from 1.664% last Friday to 1.664% + 6.85bp = 1.7325%. The "anti-involution" policy and the start of the Yarlung Zangbo River hydropower project extended the stock-bond seesaw last week to the commodity-bond seesaw this week. By referring to the supply-side reform from 2015 - 2017, it is predicted that the PPI year-on-year will steadily recover but is unlikely to turn positive this year, and the recovery of the year-on-year growth rate of social financing stock requires time and central bank support. It is expected that the interest rate will mainly show a downward trend this year [1][18]. - Last week, overseas markets generally continued the previous week's trend, with US Treasuries falling and US stocks remaining flat. The short - end of US Treasuries rose less than the long - end. Considering the impact of Trump's tariff policy on prices and the support of stablecoins for the short - end of US Treasuries, and based on the new data, the report analyzes the US economic data in July 2025, including PMI, housing sales, unemployment benefits, and EIA crude oil inventory. The "Shadow Fed Chairman" and Trump are pressuring the Fed to cut interest rates. The probability of a 25bp interest rate cut in July remains at 4.1%, while the probability of a rate cut in September has increased to 61.9% [3][7]. 3. Summary According to the Table of Contents 3.1 One - Week Views 3.1.1 Impact of "Anti - Involution" Policy on Commodity - Bond Seesaw - This week (July 21 - 25, 2025), the yield of the 10 - year active Treasury bond rose 6.85bp from 1.664% last Friday to 1.7325%. The start of the Yarlung Zangbo River hydropower project and the "anti - involution" policy affected the bond market. The yield increased on most days, with a slight decline on Friday [1]. - By looking back at the supply - side reform from 2015 - 2017, there was a one - year lag between the rise in commodity prices and bond yields. It is predicted that the PPI year - on - year will recover but not turn positive this year, and the recovery of the social financing stock growth rate needs time and central bank support. It is expected that the interest rate will mainly decline this year [18]. 3.1.2 Outlook for US Treasury Yields After Data Release - Last week, overseas markets continued the previous week's trend, with US Treasuries falling and US stocks remaining flat. The short - end of US Treasuries rose less than the long - end. The report analyzes the July 2025 US economic data: the service PMI decreased, the manufacturing PMI increased; the EIA crude oil inventory decreased by 316.9 million barrels; the annualized month - on - month decline in existing home sales in June was 2.7%; the number of initial jobless claims decreased, and the number of continued jobless claims increased. The "Shadow Fed Chairman" and Trump are pressuring the Fed to cut interest rates. As of July 25, the probability of a 25bp interest rate cut in July remained at 4.1%, and the probability of a rate cut in September increased to 61.9% [3][7]. 3.2 Domestic and Overseas Data Summaries 3.2.1 Liquidity Tracking - In terms of open - market operations, from July 21 - 25, 2025, the net investment was 1295 billion yuan. The money market interest rates generally increased compared to last week [40]. - The yields of various bonds and the term spreads of bonds also changed. For example, the yields of 1 - year and 3 - year Treasury bonds increased, and the term spreads of some bonds also changed [48]. 3.2.2 Domestic and Overseas Macroeconomic Data Tracking - Steel prices significantly increased. For example, the price of HRB400 20mm rebar nationwide rose from 3321 yuan/ton on July 18 to 3472 yuan/ton on July 25, an increase of 151 yuan/ton [55]. - The official prices of LME non - ferrous metal futures all increased. For example, the price of LME 3 - month zinc rose from 2782 dollars/ton on July 18 to 2845 dollars/ton on July 25, an increase of 2.26% [57]. - The total commercial housing transaction area increased across the board [56]. 3.3 One - Week Review of Local Government Bonds 3.3.1 Primary Market Issuance Overview - This week, 61 local government bonds were issued in the primary market, with a total issuance amount of 3757.55 billion yuan, a repayment amount of 828.46 billion yuan, and a net financing amount of 2929.09 billion yuan. The top three provinces in terms of issuance amount were Zhejiang, Chongqing, and Guangdong [68]. - One province issued special refinancing bonds to replace hidden debts, with Henan issuing 118.6481 billion yuan. From January 1 to July 25, 2025, the total issuance of such bonds nationwide was 18364.35 billion yuan [71]. - The total early redemption scale of urban investment bonds this week was 19.58 billion yuan, with Chongqing, Gansu, and Yunnan leading in redemption amount [75]. 3.3.2 Secondary Market Overview - The stock of local government bonds this week was 52.3 trillion yuan, the trading volume was 3861.04 billion yuan, and the turnover rate was 0.74%. The top three provinces in terms of trading activity were Guangdong, Shandong, and Sichuan. The top three active trading maturities were 30Y, 20Y, and 10Y [80]. - The yields of local government bonds generally declined this week [84]. 3.3.3 This Month's Local Government Bond Issuance Plan The report shows the local government bond issuance plan for the end of July, with multiple provinces having planned issuances [85]. 3.4 One - Week Review of the Credit Bond Market 3.4.1 Primary Market Issuance Overview - This week, 370 credit bonds were issued in the primary market, with a total issuance amount of 3508.44 billion yuan, a total repayment amount of 2959.29 billion yuan, and a net financing amount of 549.15 billion yuan, an increase of 96.95 billion yuan compared to last week [87]. - Specifically, the net financing amount of urban investment bonds was - 308.31 billion yuan, and that of industrial bonds was 857.46 billion yuan [88]. 3.4.2 Issuance Interest Rates The issuance interest rates of various bonds changed. For example, the issuance interest rate of short - term financing bonds decreased by 3.55bp, while that of medium - term notes increased by 9.57bp [99]. 3.4.3 Secondary Market Transaction Overview - The trading volume of credit bonds in the secondary market was 5722.35 billion yuan. Among them, the trading volume of medium - term notes was the largest, reaching 3252.69 billion yuan [101]. 3.4.4 Yield to Maturity - The yields of various bonds generally increased. For example, the yield of 1 - year short - term financing bonds increased by 9.61bp, and the yield of 3 - year medium - term notes increased by 10.40bp [104]. 3.4.5 Credit Spreads - The credit spreads of short - term financing bonds and medium - term notes generally widened, while those of urban investment bonds showed a differentiated trend [109][116]. 3.4.6 Rating Spreads - The rating spreads of short - term financing bonds, medium - term notes, and corporate bonds generally widened, while those of urban investment bonds showed a differentiated trend [120][125]. 3.4.7 Trading Activity - The report lists the top five most actively traded bonds in each bond type. The industrial industry had the largest weekly trading volume of credit bonds, reaching 3262.06 billion yuan [133]. 3.4.8 Changes in Subject Ratings There were no bonds with upgraded or downgraded ratings or outlooks this week [134].