Core Viewpoint - The bond secondary market experienced a continuous increase in trading atmosphere in December 2025, with total transaction amounts showing year-on-year and month-on-month growth, particularly in credit bonds [1][3]. Group 1: Market Performance - In December, the total transaction amount in the bond secondary market reached 376,780.29 billion, reflecting a year-on-year increase of 7.75% and a month-on-month increase of 10.60% [1]. - The transaction amount for interest rate bonds was 219,753.95 billion, with year-on-year and month-on-month growth of 7.15% and 2.49%, respectively [3]. - Credit bonds saw a significant increase in transaction amounts, totaling 88,964.95 billion, with year-on-year growth of 17.90% and month-on-month growth of 21.31%, becoming the main driver of market growth [3]. Group 2: Credit Spread Analysis - The overall credit spread in December continued its fluctuating trend, ending the month at 42.32 basis points, with a cumulative narrowing of 24.01 basis points for the year, indicating an improved credit environment compared to the beginning of the year [3][4]. - Most industry credit spreads widened in December, with real estate, power equipment, basic chemicals, pharmaceutical biology, and social services having high spreads, while communication, electronics, public utilities, transportation, and non-ferrous metals had lower spreads [4]. Group 3: Future Outlook - The credit spread is expected to continue a narrow fluctuation and slight narrowing trend, supported by stable economic growth and a moderately loose liquidity environment, while facing pressures from government bond supply and overseas policy fluctuations [5]. - Factors supporting the narrowing of credit spreads include ongoing economic stability, continued easing of liquidity policies, and improvements in credit quality for local government financing platforms [5].

Report Industry Investment Rating - The report does not provide a specific investment rating for the industry [1] Core Viewpoints - The latest macro - economic data shows that stabilizing growth remains the main theme of the fourth - quarter macro - economy. The stock and bond markets were both weak on Thursday. After the sharp short - term decline in Treasury bond futures, a rebound may be brewing. Traders are advised to conduct band operations [1][2] Summary by Relevant Catalogs Market Review - On Thursday, the main contracts of Treasury bond futures opened lower across the board. The 30 - year Treasury bond futures main contract TL2603 fell 1.04%, the 10 - year T2603 fell 0.35%, the 5 - year TF2603 fell 0.24%, and the 2 - year TS2603 fell 0.05% [1] Important Information 1. **Open Market**: On Thursday, the central bank conducted 180.8 billion yuan of 7 - day reverse repurchase operations, with 356.4 billion yuan of reverse repurchase maturing, resulting in a net withdrawal of 175.6 billion yuan [1] 2. **Funding Market**: On Thursday, the overnight interest rate in the inter - bank funding market remained low. The weighted average of DR001 was 1.30% throughout the day, the same as the previous trading day; the weighted average of DR007 was 1.44% throughout the day, also the same as the previous trading day [1] 3. **Cash Bond Market**: On Thursday, the closing yields of inter - bank Treasury bonds mostly increased compared with the previous trading day. The yield to maturity of 2 - year Treasury bonds decreased by 0.83 basis points to 1.41%, the 5 - year increased by 2.64 basis points to 1.65%, the 10 - year increased by 1.99 basis points to 1.87%, and the 30 - year increased by 4.10 basis points to 2.28% [1] 4. **Central Bank Operation**: On December 5th, the central bank will conduct 1 trillion yuan of outright reverse repurchase operations with a term of 3 months (91 days) through a fixed - quantity, interest - rate tender, and multiple - price winning bid method. The 1 - trillion - yuan outright reverse repurchase operation matures on the same day, with an equal - amount roll - over [1] 5. **US Unemployment Data**: On Thursday, it was announced that the number of initial jobless claims in the US last week was 191,000, lower than the estimated 220,000 and the previous value of 216,000. The number of continuing jobless claims two weeks ago fell back to 1.939 million but remained close to the highest level since 2021, reflecting a co - existence of a slowdown in new job cuts and difficulties for the long - term unemployed to find new jobs [1] Market Logic - In October, due to factors such as a higher base in the same period of the previous year and a relatively rapid increase in financial expenses, the profits of industrial enterprises above a designated size decreased by 5.5% year - on - year. The manufacturing PMI in November was 49.2%, remaining below the boom - bust line for the eighth consecutive month. The service business activity index in November was 49.5%, falling below the boom - bust line for the first time this year. The new orders in the service industry reached a new low this year [1][2] Stock Market Performance - On Thursday, the Wind All - A Index opened roughly flat, slightly declined in the morning session and then rebounded, and fluctuated narrowly in the afternoon. It closed with a doji star, up 0.01% from the previous trading day, but the number of falling stocks was more than twice that of rising stocks. The trading volume was 1.56 trillion yuan, slightly lower than 1.68 trillion yuan in the previous trading day [2] Trading Strategy - Traders are advised to conduct band operations [2]

Report Summary 1. Report Industry Investment Rating - The investment rating for the macro and financial (treasury bond) sector is "oscillation" for TL, T, TF, and TS [1]. 2. Core View of the Report - The latest macro - economic data shows that stabilizing growth remains the main line of the fourth - quarter macro - economy. Treasury futures are expected to oscillate in the short term [2]. 3. Summary by Related Catalogs **Market Review** - On Friday, the main contracts of treasury futures mostly opened higher, declined in the morning session, and fluctuated horizontally in the afternoon. By the close, the 30 - year main contract TL2512 fell 0.31%, the 10 - year T2512 fell 0.04%, the 5 - year TF2512 fell 0.06%, and the 2 - year TS2512 remained flat [1]. **Important Information** - **Open Market**: On Friday, the central bank conducted 375 billion yuan of 7 - day reverse repurchase operations, with 212.8 billion yuan of reverse repurchases maturing, resulting in a net injection of 162.2 billion yuan [1]. - **Funds Market**: On Friday, the overnight interest rate in the inter - bank funds market dropped to a recent low. The weighted average of DR001 was 1.32% (previous trading day: 1.37%), and the weighted average of DR007 was 1.44% (previous trading day: 1.49%) [1]. - **Cash Bond Market**: On Friday, the closing yields of inter - bank treasury bonds mostly edged up slightly compared to the previous trading day. The 2 - year yield rose 0.12 BP to 1.43%, the 5 - year rose 0.55 BP to 1.59%, the 10 - year rose 0.31 BP to 1.82%, and the 30 - year rose 0.45 BP to 2.16% [1]. - **Commerce Data**: From January to October, the national foreign investment absorption was 621.93 billion yuan, a year - on - year decrease of 10.3% [1]. - **Fed Expectations**: According to CME's "FedWatch", the probability of the Fed cutting interest rates by 25 basis points in December is 71%, and the probability of keeping rates unchanged is 29%. By January next year, the probability of a cumulative 25 - basis - point cut is 58%, the probability of keeping rates unchanged is 20%, and the probability of a cumulative 50 - basis - point cut is 22% [1]. - **Fed Official Statement**: On November 21st evening, Fed's "third - in - command" Williams sent a dovish signal, saying that as the labor market cools, the Fed still has room to further cut interest rates in the near term to adjust the policy stance closer to a neutral level, which led to increased bets on a December rate cut [1]. - **US PMI Data**: The preliminary US S&P Global Manufacturing PMI in November was 51.9 (expected 52, previous 52.5), the Services PMI was 55 (expected 54.6, previous 54.8), and the Composite PMI was 54.8, rising for the second consecutive month, indicating that the US business activity expansion rate reached the fastest in four months, with service growth accelerating and manufacturing growth slowing [1]. - **Eurozone PMI Data**: The preliminary Eurozone Composite PMI in November was 52.4, slightly lower than October's 52.5, remaining above the boom - bust line of 50. The Services PMI was 53.1, better than the previous and expected values, achieving the best monthly performance in a year and a half, while the Manufacturing PMI was 49.7, falling below the boom - bust line. Analysts believe that although manufacturing is dragging down growth, the high weight of services in the overall economy means that the Eurozone's growth in the fourth quarter should be faster than in the third quarter [2]. **Market Logic** - The unemployment rates of 16 - 24 and 25 - 29 age groups (excluding students) in October were 17.3% and 7.2% respectively, higher than the same period last year, indicating that efforts to stabilize growth and employment are still needed. South Korea's exports in the first 20 days of November increased 8.2% year - on - year, and its imports from China increased 5.6%, suggesting good export prospects for China in November. The wholesale prices of agricultural products fluctuated narrowly in mid - November, and the Nanhua Industrial Products Index declined slightly, with the overall domestic inflation remaining moderate. The year - on - year decline in the transaction area of commercial housing in 30 large - and medium - sized cities widened in mid - November, and housing prices continued to decline. The latest macro - economic data shows that stabilizing growth is the main line of the fourth - quarter macro - economy. On Friday, the Wind All - A Index opened lower and closed with a medium - sized negative line, down 3.17% from the previous trading day, with a trading volume of 1.98 trillion yuan, up from 1.72 trillion yuan in the previous trading day. Treasury futures mostly closed down on Friday, with only the 2 - year contract remaining flat, not showing strength despite the sharp decline in the stock market [2]. **Trading Strategy** - Traders are advised to conduct band trading [2]