Report Industry Investment Rating - The rating for treasury bonds is "oscillation" [5] Core Viewpoints of the Report - Economic data in May showed a mixed performance, with external demand weakening but government subsidies taking effect. While the economy demonstrated resilience in Q2, facing a growth target of 5% is not difficult, but pressure on the fundamentals will gradually emerge in Q3, making it necessary to introduce incremental policies. The bond market is desensitized to the fundamentals and will maintain an oscillatory pattern in the short term [1][2][3] Summary by Relevant Catalogs 1. External Demand Weakens but Government Subsidies Take Effect, Economic Data Shows Mixed Performance - **Production Side: Industrial Production Weakens, Service Industry Strengthens** - In May, the year-on-year growth rate of industrial added value was 5.8%, lower than expected and the previous value, with external demand weakening and persistently low prices being the main reasons. The growth rate of the service industry production index was 6.2%, an increase of 0.2 percentage points from the previous value, due to policy support and holiday demand [1][13][14] - Looking ahead, the production growth rate is likely to maintain a resilient decline, with structural differentiation continuing. Industrial production will face downward pressure, but the year-on-year reading of industrial added value will not decline significantly. The growth rate of the service industry production may weaken, but will not decline sharply either [19] - **Demand Side: Manufacturing, Real Estate, and Infrastructure Growth Rates All Decline** - From January to May, the cumulative investment growth rate in manufacturing was 8.5%, continuing to decline. External demand weakening, the domestic supply-demand imbalance, and policy factors have affected corporate investment willingness, but policy support has maintained a certain level of resilience [22] - From January to May, the cumulative growth rate of general infrastructure was 10.42%, showing a slight decline. The slow issuance of local special bonds is the main reason. In the short term, infrastructure growth may face downward pressure, but it will rise again with policy support [26][30] - Most real estate data continued to weaken. The willingness of the residential sector to purchase homes with debt remains low, and real estate companies are facing increasing financial pressure. Policy aims to stabilize the real estate market while accelerating industry transformation [31][32][33] - **Demand Side: Retail Sales Growth Rate Exceeds Expectations and Rebounds** - In May, the growth rate of total retail sales of consumer goods was 6.4%, higher than the previous value. Holiday factors and government subsidies have stimulated consumer demand, but the sustainability of consumption improvement needs to be observed. In Q3, incremental policies are expected to boost consumption [36][37][39] 2. The Bond Market is Desensitized to the Fundamentals and Maintains an Oscillatory Pattern in the Short Term - The fundamental environment is still favorable for the bond market, but market participants are well aware of this, so fundamental news is unlikely to drive the bond market to strengthen further. The yield curve is relatively flat, and the upward space for long-term bonds mainly depends on the performance of short-term bonds [40][41] - Short-term bonds are currently overvalued, and their upward movement requires confirmation of a continuous loosening of the money supply. In the short term, the market will be oscillatory, and the bond bull market may show a "stop-and-go" rhythm [42] - Strategies include paying attention to mid - line long positions on dips, noting that the opportunities for futures positive spreads have significantly decreased, and initial opportunities for steepening the yield curve have emerged, requiring close attention to changes in liquidity expectations [43][44][45]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Views - Steel prices returned to weakness after touching the 20 - day moving average on Thursday, with both spot volume and price falling. After basis repair, prices may face pressure again if there is no better bullish story in the industry. For hot - rolled coils and rebar, pay attention to the 20 - day moving average on the disk as the resistance level and the re - entry hedging point range [5]. - The Sino - US talks disturbed market sentiment. Coking coal spot continued to weaken, with many auctions failing and the cost of coking coal decreasing. The futures market of coking coal and coke weakened due to the less - than - expected Sino - US negotiation results. Macro uncertainties are large, and the market has no stable expectation. In the industry, the demand for five major steel products is seasonally weakening, and the coking coal supply may increase in the future [6]. - For steel, focus on short - side trading. Prefer hot - rolled coils with better liquidity for hedging. Buy put options on steel at high prices [8]. - For coking coal and coke, based on the judgment that the medium - to - long - term bottom of coking coal has not been found, continue to take a bearish view on the single - side trading [9]. - For ferrosilicon and silicomanganese, their fundamentals are stable and follow the steel market. The prices of both are expected to be under pressure, and attention should be paid to subsequent steel tenders [9]. - For iron ore, the trend remains unchanged, and a high - short strategy should be maintained. The decline in the output of five major steel products did not lead to inventory accumulation. Iron ore shipments are expected to rise to a high level, and the market should consider the changes in inventory after the peak season and the stability of steel exports [9]. 3. Summary by Related Catalogs Futures Market - **Prices and Changes**: - On June 12, for far - month contracts, RB2601 closed at 2962 yuan/ton, down 20 yuan (- 0.67%); HC2601 at 3079 yuan/ton, down 22 yuan (- 0.71%); I2601 at 671 yuan/ton, up 0.5 yuan (0.07%); J2601 at 1348 yuan/ton, down 20 yuan (- 1.46%); JM2601 at 779 yuan/ton, down 15.5 yuan (- 1.95%). - For near - month contracts, RB2510 closed at 2968 yuan/ton, down 21 yuan (- 0.70%); HC2510 at 3080 yuan/ton, down 27 yuan (- 0.87%); I2509 at 704 yuan/ton, down 1.5 yuan (- 0.21%); J2509 at 1328.5 yuan/ton, down 24 yuan (- 1.77%); JM2509 at 766.5 yuan/ton, down 22 yuan (- 2.79%) [2]. - **Spreads and Ratios**: - On June 12, the spread between RB2510 and RB2601 was 6 yuan/ton, unchanged; between HC2510 and HC2601 was 1 yuan/ton, down 5 yuan. - The coil - to - rebar spread was 112 yuan/ton, down 5 yuan; the rebar - to - iron ore ratio was 4.22, down 0.01; the coal - to - coke ratio was 1.73, unchanged; the rebar disk profit was 184.4 yuan/ton, down 4.3 yuan; the coking disk profit was 309.06 yuan/ton, down 4.89 yuan [2]. Spot Market - Steel: On June 12, Shanghai rebar was 3070 yuan/ton, down 30 yuan; Tianjin rebar was 3220 yuan/ton, unchanged; Guangzhou rebar was 3230 yuan/ton, unchanged; Tangshan billet was 2890 yuan/ton, down 30 yuan. Shanghai hot - rolled coil was 3160 yuan/ton, down 50 yuan; Hangzhou hot - rolled coil was 3240 yuan/ton, unchanged; Guangzhou hot - rolled coil was 3190 yuan/ton, down 20 yuan [2]. - Coking Coal and Coke: Coking coal prices continued to weaken, with many auctions failing. The price index of coking coal was 951.7, down 6.1. Port - traded quasi - first - class coke was quoted at 1180 yuan/ton. For Mongolian coal, prices were under pressure, with downstream buyers having strong price - cutting intentions [6]. Different Product Analysis - **Steel**: After the basis repair, prices may face pressure again. For trading, focus on short - side trading, and prefer hot - rolled coils for hedging. Buy put options on steel at high prices [5][8]. - **Coking Coal and Coke**: The Sino - US talks disturbed market sentiment. Spot coking coal weakened, and the futures market also showed weakness. Continue to take a bearish view on the single - side trading based on the judgment that the medium - to - long - term bottom of coking coal has not been found [6][9]. - **Ferrosilicon and Silicomanganese**: Their fundamentals are stable and follow the steel market. Prices are expected to be under pressure due to factors such as weakening demand, approaching off - season, and decreasing costs [9]. - **Iron Ore**: The trend remains unchanged, and a high - short strategy should be maintained. Iron ore shipments are expected to rise, and pay attention to inventory changes and steel export stability [9].

1. Report Industry Investment Rating - The investment rating for treasury bonds is "Oscillation" [4] 2. Core View of the Report - The pressure of weakening external demand is emerging, and the bond market is expected to strengthen in an oscillatory manner. The negative impact of trade frictions is starting to show, with the official manufacturing PMI in April falling short of expectations. Most economic indicators are expected to weaken in the first half of May, and the bullish logic for the bond market is certain. Although high - frequency indicators related to domestic demand perform well, their impact on the bond market is limited. The marginal easing of trade conflicts mainly affects market expectations and sentiment. Once negative news causes the bond market to fall, it presents a buying opportunity [2][14][15] 3. Summary by Relevant Catalogs 3.1 One - Week Review and Outlook - **This Week's Trend Review**: From April 21 - 27, treasury bond futures oscillated upwards. On Monday, with a relatively balanced capital market and a slight upward revision of broad - money expectations, treasury bond futures rose. On Tuesday, with a calm news environment and balanced capital, the market expected the April PMI to weaken, leading to a significant rise in treasury bond futures. On Wednesday, although the April manufacturing PMI was below expectations, treasury bond futures slightly corrected as the market had already priced in the news. By April 30, the settlement prices of the main continuous contracts of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures were 102.368, 106.100, 109.050, and 120.840 yuan respectively, up 0.058, 0.125, 0.245, and 1.020 yuan from the previous weekend [1][13] - **Next Week's Outlook**: The market is still a mix of bullish and bearish factors, but the bullish force is expected to prevail, and treasury bond futures may attempt to break upwards. Negative factors mainly affect market expectations and sentiment. Once negative news causes the bond market to fall, it is a good opportunity for bulls to increase positions. Most economic indicators are expected to weaken in the first half of May, and the bullish logic for the bond market is clear. If some indicators exceed market expectations, the bond market may fall temporarily, presenting a buying opportunity [14][15] 3.2 Weekly Observation of Interest - Rate Bonds - **Primary Market**: This week, 32 interest - rate bonds were issued, with a total issuance of 1350.92 billion yuan and a net financing of 1346.97 billion yuan, a change of - 5406.91 billion yuan and + 2149.45 billion yuan from last week respectively. 29 local government bonds were issued, with a total issuance of 930.92 billion yuan and a net financing of 926.97 billion yuan, a change of - 980.31 billion yuan and - 698.15 billion yuan from last week respectively. 168 inter - bank certificates of deposit were issued, with a total issuance of 2493.40 billion yuan and a net financing of - 859.70 billion yuan, a change of - 7184.40 billion yuan and - 2631.10 billion yuan from last week respectively [23] - **Secondary Market**: Most treasury bond yields declined. By April 30, the yields of 2 - year, 5 - year, 10 - year, and 30 - year treasury bonds were 1.45%, 1.51%, 1.63%, and 1.83% respectively, down 3.76, 3.99, 3.25, and 9.75 basis points from the previous weekend. The 10Y - 1Y spread compressed by 4.17bp to 16.80bp, the 10Y - 5Y spread widened by 0.74bp to 12.19bp, and the 30Y - 10Y spread compressed by 6.50bp to 19.96bp. The yields of 1 - year, 5 - year, and 10 - year policy - bank bonds were 1.57%, 1.57%, and 1.66% respectively, down 0.44, 3.75, and 3.56bp from the previous weekend [28][29] 3.3 Treasury Bond Futures - **Price, Trading Volume, and Open Interest**: Treasury bond futures oscillated upwards. By April 30, the settlement prices of the main continuous contracts of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures were 102.368, 106.100, 109.050, and 120.840 yuan respectively, up 0.058, 0.125, 0.245, and 1.020 yuan from the previous weekend. The trading volumes of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures this week were 41761, 59303, 65919, and 83215 lots respectively, with changes of + 1358, + 7676, - 377, and - 20221 lots from the previous weekend. The open interests were 146910, 205789, 236575, and 133653 lots respectively, with changes of + 3958, + 2418, + 13819, and + 4959 lots from the previous weekend [38][41] - **Basis and IRR**: A positive - carry strategy for short - term varieties is recommended. The IRR of short - term varieties has been running at a relatively high level. After the capital market gradually loosens at the end of Q1, the cost - effectiveness of the positive - carry strategy becomes more prominent [45] - **Inter - Delivery and Inter - Variety Spreads**: By April 30, the inter - delivery spreads of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures contracts 2506 - 2509 were - 0.264, - 0.300, - 0.145, and - 0.270 yuan respectively, with changes of - 0.010, - 0.010, + 0.020, and 0.000 yuan from the previous weekend. The futures roll - over rhythm is fast, and the open interest of the 06 contract significantly exceeds the seasonal level of previous contracts. The roll - over pressure is high, and the spread of TS2506 - 09 is expected to continue to decline [48] 3.4 Weekly Observation of the Capital Market - The central bank conducted 11503 billion yuan of reverse repurchase operations this week, with 5045 billion yuan of reverse repurchases maturing, resulting in a net injection of 6458 billion yuan. By April 30, R007, DR007, SHIBOR overnight, and SHIBOR 1 - week were 1.84%, 1.80%, 1.76%, and 1.76% respectively, up 18.09, 16.28, 19.30, and 12.40 basis points from the previous weekend. The average daily trading volume of inter - bank pledged repurchase this week was 5.46 trillion yuan, 196.1 billion yuan less than last week, and the overnight proportion was 78.44%, lower than the previous week's level [53][55][57] 3.5 Weekly Overseas Observation - The US dollar index strengthened slightly, and the yield of 10Y US treasury bonds rose slightly. By May 2, the US dollar index rose 0.46% to 100.0424 from the previous weekend. The yield of 10Y US treasury bonds was 4.33%, up 4 basis points from the previous weekend, and the yield spread between Chinese and US 10Y treasury bonds was inverted by 254 basis points. There are signs of easing in trade conflicts, and both the US dollar and the RMB exchange rates strengthened slightly. The better - than - expected US non - farm payrolls data in April led the market to lower its expectations for the Fed's interest - rate cuts, causing the US treasury bond yields to rise slightly [61][62] 3.6 Weekly Observation of High - Frequency Inflation Data - Industrial product prices fell across the board. By April 30, the Nanhua Industrial Product Index, Metal Index, and Energy and Chemical Index were 3478.21, 6106.89, and 1621.01 points respectively, down 61.07, 41.83, and 35.59 points from the previous weekend. Agricultural product prices also fell. By April 30, the prices of pork, 28 key vegetables, and 7 key fruits were 20.59, 4.39, and 7.59 yuan/kg respectively, down 0.19, 0.19, and 0.13 yuan/kg from the previous weekend [65] 3.7 Investment Recommendations - Adopt a bullish approach towards the bond market, focus on the strategy of buying on dips. Consider the positive - carry opportunities of short - term varieties. Wait for the right - hand signal for the curve - steepening strategy. Pay attention to the opportunity of narrowing the spread of TS06 - 09 [2]