Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Viewpoints of the Report - In March 2026, the manufacturing PMI returned to the expansion range, with the production and demand sides both improving. The non - manufacturing and comprehensive PMIs also returned to the expansion range [2][3] - The improvement in demand on the market's demand side was stronger than that on the supply side, but the differentiation between domestic and foreign demand may continue. Domestic demand in the market may remain insufficient in the short term, and policy support is needed to boost demand [4] - There are positive signals in prices, but the gap between purchase prices and ex - factory prices has widened, which may compress corporate profit margins [5] - The PMIs of the construction and service industries have both increased, and the service industry PMI has returned to the expansion range. The construction industry remains confident in its future development [5] - The target range for the 10 - year treasury bond is expected to be 2 - 3%, with a central value of 2.5% [5] Group 3: Summary by Relevant Catalogs 3.1 PMI Data in March - The manufacturing PMI in March was 50.4%, a 1.4 - percentage - point increase from the previous value, higher than the market expectation. The non - manufacturing PMI was 50.1%, a 0.6 - percentage - point increase, and the comprehensive PMI was 50.5%, a 1.0 - percentage - point increase [2][3] - After the Spring Festival, as enterprises resumed work and production, the production index increased by 1.8 percentage points, the new order index increased by 3.0 percentage points, and the new export order index increased by 4.1 percentage points. The production and operation activity expectation index was 53.4%, a 0.2 - percentage - point increase [4] 3.2 Price Situation - The purchase price of major raw materials increased by 9.1 percentage points to 63.9%, and the ex - factory price increased by 4.8 percentage points to 55.4%. The ex - factory price index has remained in the expansion range for three consecutive months [5] 3.3 Industry Situation - The construction industry PMI was 49.3%, a 1.1 - percentage - point increase from the previous value, and the service industry PMI was 50.2%, a 0.5 - percentage - point increase. The business activity expectation index of the construction industry was 50.5%, a 0.4 - percentage - point decrease but still in the expansion range [5] 3.4 Bond Market Viewpoint - The target range for the 10 - year treasury bond is expected to be 2 - 3%, with a central value of 2.5%. The economic recovery is accelerating, and factors such as inflation, monetary policy, and real estate need to be considered [5]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - The economic data at the beginning of 2026 showed an unexpected rebound, with industrial production, consumption, and exports all exceeding expectations, and the investment growth rate turning from negative to positive [1][4][5] - In the process of new and old kinetic energy conversion, there are structural highlights in the equipment manufacturing, new - quality productivity, and high - tech industries, but the real estate industry is still bottom - seeking [5] - The target range of the 10 - year treasury bond is expected to be 2 - 3%, with a central value of about 2.5% [6] 3. Summary According to Relevant Catalogs 3.1 1 - 2 Month Economic Data Focus - **Industrial Production**: In January - February 2026, the cumulative year - on - year growth of the added value of large - scale industries was 6.3%, exceeding the median and average forecasts of 9 institutions. The month - on - month growth was 0.83%, an increase of 0.44 pct compared with the previous value. The reasons were the later Spring Festival in 2026 and the high growth of exports [4] - **Consumption and Exports**: The total retail sales of consumer goods from January to February increased by 2.8% year - on - year, exceeding the median and average forecasts of 8 institutions. The cumulative export from January to February increased by 21.8% year - on - year, far exceeding the median and average forecasts of 6 institutions. However, domestic demand was still weaker than external demand [4] - **Investment**: The cumulative year - on - year growth of fixed - asset investment from January to February was 1.8%, turning from negative to positive. Infrastructure investment grew rapidly, with a year - on - year growth of 11.4%, while real estate development investment decreased by 11.1% year - on - year, still dragging down investment [5] 3.2 New and Old Kinetic Energy Conversion - **Equipment Manufacturing**: In January - February, the added value of large - scale equipment manufacturing increased by 9.3% year - on - year, accounting for 33.5% of all large - scale industries, and all 8 sub - industries achieved growth [5] - **New - Quality Productivity Industry**: In January - February, the added value of large - scale high - tech manufacturing increased by 13.1% year - on - year, contributing 31.5% to the growth of all large - scale industries [5] - **High - Tech Industry Investment**: In January - February, high - tech industry investment increased by 5.1% year - on - year, 3.3 pct higher than the growth rate of all investments [5] 3.3 Bond Market Viewpoint - **Fundamentals**: The falsification of the under - expected economic recovery, combined with the possible loose credit and fiscal policies at the beginning of 2026, accelerates the cycle recovery [6] - **Broad Money**: If there are broad monetary policies such as reserve requirement ratio cuts, interest rate cuts, or bond purchases, the bond yield may decline briefly and then rise, similar to 2025 [6] - **Inflation**: It is expected that inflation will rebound, and attention should be paid to whether the month - on - month PPI can remain positive [6] - **Funding Rate**: If the month - on - month inflation continues to rise, there is a possibility of tightened funds, and the short - term bond yield will also start to rise [6] - **Real Estate**: Real estate is not the main means of stabilizing growth this time. Similar to the situation in the United States after 2008, real estate is a lagging indicator and may bottom out after the recovery of various economic indicators and the rise of the stock market [6] - **Bonds**: The target range of the 10 - year treasury bond is expected to be 2 - 3%, with a central value of about 2.5% [6]

Group 1: Report Overview - Report Name: Treasury Bond Derivatives Weekly Report [1] - Date: March 13, 2026 [1] - Author: Xu Liang (Z0002220) [1] - Reviewer: Tang Yun (Z0002422) [1] Group 2: Market Factors Bullish Factors - Better-than-expected import/export and social financing data boost the economic fundamentals [2] - Increased market expectations for loose monetary policy lead to a slight increase in Treasury bond futures prices [2] Bearish Factors - Intensified market concerns about the economic outlook [2] - Rising expectations of imported inflation and concerns about a shift in monetary policy cause yields to rise [2] Group 3: Trading Advice - Suggest paying attention to policy signals at the end of the month and maintaining a wait-and-see attitude [2] Group 4: Data Analysis Treasury Bond Yields - Include 2Y, 5Y, 7Y, 10Y, and 30Y Treasury bond yields from 2024 to 2025 [3] Funding Rates - Include deposit institution pledged repo weighted average rates (1-day and 7-day) and 7-day reverse repo rate from 2023 to 2025 [3] Treasury Bond Term Spreads - 7Y - 2Y and 30Y - 7Y term spreads from 2024 to 2025 [4] Treasury Bond Futures Positions - Positions of 2Y, 5Y, 10Y, and 30Y Treasury bond futures from 2015 to 2025 [6] Treasury Bond Futures Trading Volume - Trading volume of 2Y, 5Y, 10Y, and 30Y Treasury bond futures from 2024 to 2025 [7] Treasury Bond Futures Basis - Basis of 2Y, 5Y, 10Y, and 30Y Treasury bond futures (when-quarter contracts) [8][9][10][12] Treasury Bond Futures Inter - delivery Spreads - Inter - delivery spreads (when - quarter minus next - quarter) of 2Y, 5Y, 10Y, and 30Y Treasury bond futures [15][16] Treasury Bond Futures Cross - variety Spreads - Cross - variety spreads of TS*4 - T and T*3 - TL from 2023 to 2025 [17][18]

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the given content. 2. Core Viewpoints of the Report - The export growth in January - February 2026 exceeded expectations. The cumulative export from January to February increased by 21.8% year - on - year, and the export in February alone increased by 39.6% year - on - year, far exceeding the market's forecast [3]. - The reasons for the export growth exceeding expectations are the later Spring Festival in 2026 and the improvement of external demand. The development of the AI - related industrial chain, export diversification, and positive port high - frequency data also contributed to the growth. Although the Spring Festival holiday in March may put pressure on imports and exports, the long - term positive trend remains unchanged [4][5]. - The root cause of China's continuous export exceeding expectations lies in the high cost - performance of Chinese goods, which is the result of domestic "involution" and technological progress. Even after "anti - involution", China's price advantage may last for a long time, so the report is optimistic about China's exports [6]. - In the bond market, on March 10, the long - term yield first rose and then fell. The report predicts that the target range of the 10 - year Treasury bond is 2 - 3%, with a central value of 2.5% [7][8]. 3. Summary by Relevant Catalogs 3.1 2026 January - February Import and Export Data - **Import and Export Growth**: In February 2026, imports increased by 13.8% year - on - year (25.7% in January), and exports increased by 39.6% year - on - year (10.0% in January). The trade surplus increased by 190.9% year - on - year. The cumulative export from January to February increased by 21.8% year - on - year, and imports increased by 19.8% year - on - year [3]. - **Exceeding Expectations**: The export in February far exceeded the market's forecast. The median and average of the 4 - institution forecast for February's export year - on - year growth were +4.0% and +3.8% respectively, while the actual growth was 39.6%. The median and average of the 6 - institution forecast for the cumulative export year - on - year growth from January to February were +7.5% and +7.3% respectively, and the actual growth was 21.8% [3]. 3.2 Reasons for the Export Growth Exceeding Expectations in January - February 2026 - **Spring Festival Factor**: The Spring Festival in 2026 was in late February, later than in 2025. The holiday disturbance was postponed, which was one of the reasons for the export growth exceeding expectations [4]. - **External Demand Improvement**: The external demand improved, and the export momentum was strong, with the export amount at a historical high [4]. - **Product Structure**: The development of the AI - related industrial chain promoted the high - growth of exports of electromechanical products and high - tech products. From January to February, the cumulative export of electromechanical products increased by 27.1% year - on - year, and the export of integrated circuits increased by 72.6% year - on - year, while high - tech products increased by 26.9% year - on - year [5]. - **Export Destination**: Except for the United States, exports to other major countries increased significantly. From January to February, exports to ASEAN increased by 29.4% year - on - year, and exports to Africa increased by 49.9% year - on - year [5]. - **Port High - Frequency Data**: The monthly average weekly container throughput of key ports in January and February increased by 13.5% and 10.9% year - on - year respectively, and the weekly throughput in the first 7 weeks was higher than that in the same period of 2025 [5]. 3.3 Root Cause of China's Continuous Export Exceeding Expectations The root cause is the high cost - performance of Chinese goods, which is the result of domestic "involution" and technological progress. Even after "anti - involution", China's price advantage may last for a long time due to the faster price increase in other countries [6]. 3.4 Bond Market Situation - **Market Performance on March 10**: The long - term yield first rose and then fell. The yield of the 10 - year Treasury bond's second - active bond reached 1.8190% in the early trading, and then the bond market recovered in the afternoon [7]. - **Bond Market Outlook**: It is predicted that the target range of the 10 - year Treasury bond is 2 - 3%, with a central value of 2.5%. The factors considered include economic fundamentals, monetary policy, inflation, capital interest rates, and the real estate market [8].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The bond market is oscillating between the expectations of stable growth and monetary easing. The stock market's performance, the unchanged LPR, the continued expectation of the Fed's interest - rate cut, and the increased trade uncertainty due to the Iran conflict have added uncertainty to foreign capital inflows. Short - term attention should be paid to the policy signals at the end of the month [3]. 3. Summary According to the Directory 3.1 Interest Rate Pricing Tracking Indicators - **Price Index**: China's CPI increased by 0.2% month - on - month and year - on - year, while PPI increased by 0.4% month - on - month and decreased by 1.4% year - on - year [9]. - **Monthly Economic Indicators**: Social financing scale reached 449.11 trillion yuan, with a month - on - month increase of 6.99 trillion yuan or 1.58%. M2 year - on - year growth was 9.00%, up 0.50% or 5.88% month - on - month. The manufacturing PMI was 49.00%, down 0.30% or 0.61% month - on - month [10]. - **Daily Economic Indicators**: The US dollar index was 98.80, down 0.26 or 0.26% day - on - day. The offshore US dollar - to - RMB exchange rate was 6.8930, down 0.029 or 0.42% day - on - day. SHIBOR 7 - day was 1.41, with no change in value and a decrease of 0.21% day - on - day. DR007 was 1.42, with no change in value and an increase of 0.13% day - on - day. R007 was 1.56, down 0.12 or 6.95% day - on - day. The 3 - month inter - bank certificate of deposit (AAA) was 1.51, down 0.02 or 1.47% day - on - day. The AA - AAA credit spread (1Y) was 0.09, with no change in value and a decrease of 1.47% day - on - day [11]. 3.2 Overview of the Treasury Bond and Treasury Bond Futures Market - **Closing Price and Fluctuation**: On March 5, 2026, the closing prices of TS, TF, T, and TL were 102.50 yuan, 106.12 yuan, 108.55 yuan, and 112.77 yuan respectively, with fluctuations of - 0.02%, - 0.03%, - 0.03%, and - 0.05% respectively [3]. - **Net Basis Spread**: The average net basis spreads of TS, TF, T, and TL were 0.011 yuan, 0.041 yuan, - 0.004 yuan, and 0.182 yuan respectively [3]. 3.3 Overview of the Money Market Fundamentals - **Monetary Policy**: The Politburo meeting on December 8 signaled a more proactive fiscal policy and a moderately loose monetary policy. The Central Economic Work Conference proposed to continue such policies in 2026, with the potential for further reserve requirement ratio cuts and interest rate cuts. On January 19, 2026, a basket of interest rates such as re - loans and rediscounts was lowered by 0.25 percentage points [1]. - **Inflation**: In January, CPI increased by 0.2% year - on - year [1]. - **Fiscal Situation**: In 2025, fiscal revenue and expenditure did not meet expectations. Revenue was dragged down by weak tax revenue and a high non - tax base, with the annual general public budget revenue decreasing by 1.7% year - on - year. Expenditure was front - loaded, with the year - end intensity weakening and the annual completion rate being low. In 2026, fiscal policy is expected to remain proactive, with increased spending and a continued front - loaded rhythm [2]. - **Financial Data**: In January, new social financing reached 7.22 trillion yuan, an increase of 166.2 billion yuan year - on - year. Government bond net financing rebounded, indicating front - loaded fiscal efforts. M1 year - on - year growth rebounded to 4.9%, M2 growth rebounded to 9%, and the M2 - M1 gap narrowed to 4.1%. The growth rate of RMB loans fell to 6%, while the deposit growth rate rebounded to 10.1%, with an expanding gap between deposit and loan growth rates, indicating relatively abundant funds in the banking system but stable credit demand and some idle funds [2]. - **Central Bank Operations**: On March 5, 2026, the central bank conducted 23 billion yuan of 7 - day reverse repurchase operations at a fixed interest rate of 1.4% [2]. - **Money Market Interest Rates**: The main term repurchase rates 1D, 7D, 14D, and 1M were 1.267%, 1.412%, 1.461%, and 1.547% respectively, and the repurchase rates have recently declined [2]. 3.4 Spread Overview The report provides various spread data, including the inter - period spread trends of treasury bond futures, and the spread relationships between spot bond term spreads and futures cross - variety spreads, such as (4*TS - T), (2*TS - TF), (2*TF - T), (3*T - TL), and (2*TS - 3*TF + T) [34][36][38]. 3.5 Two - Year Treasury Bond Futures The report presents data on the implied interest rate and maturity yield of the two - year treasury bond futures main contract, as well as the IRR of the TS main contract and the relationship with the funding rate, and the three - year basis spread and net basis spread trends of the TS main contract [43][45]. 3.6 Five - Year Treasury Bond Futures It includes data on the implied interest rate and maturity yield of the five - year treasury bond futures main contract, the IRR of the TF main contract and the relationship with the funding rate, and the three - year basis spread and net basis spread trends of the TF main contract [47][54]. 3.7 Ten - Year Treasury Bond Futures The report shows data on the implied yield and maturity yield of the ten - year treasury bond futures main contract, the IRR of the T main contract and the relationship with the funding rate, and the three - year basis spread and net basis spread trends of the T main contract [55][57]. 3.8 Thirty - Year Treasury Bond Futures It provides data on the implied yield and maturity yield of the thirty - year treasury bond futures main contract, the IRR of the TL main contract and the relationship with the funding rate, and the three - year basis spread and net basis spread trends of the TL main contract [60][63]. 3.9 Strategies - **Single - Side Strategy**: With the decline of repurchase rates, treasury bond futures prices are oscillating [4]. - **Arbitrage Strategy**: Pay attention to the decline of the 2606 basis spread [4]. - **Hedging Strategy**: There is medium - term adjustment pressure, and short - side investors can use far - month contracts for appropriate hedging [4].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The economic data for December shows that the production side has improved driven by exports, while on the demand side, the marginal effect of policies has weakened, leading to a slowdown in durable - goods consumption. There are still drags from the real - estate market and insufficient consumer confidence, and domestic demand still awaits the stabilization of residents' income and policy support. The export data in December was stronger than expected, with a decline in exports to the US and resilient growth in non - US regions. The central bank has carried out a structural interest rate cut of 0.25 percentage points and indicated that there is room for further reserve requirement ratio cuts and interest rate cuts this year. Overseas, the US liquidity has improved, and the market has postponed the expected timing of the Fed's interest rate cut to mid - year [10]. - In the context of weak domestic demand recovery, there is still room for reserve requirement ratio cuts and interest rate cuts, but the timing of overall easing may be postponed after the structural interest rate cut. The central bank maintains an attitude of protecting funds, and the capital market is expected to be stable. Recently, the bond market has strong allocation power, but the impact of the stock market's spring rally, government bond supply, and inflation expectations still needs to be noted. It is expected that the market will continue to fluctuate, and the rhythm mainly depends on the seesaw effect between stocks and bonds [11]. - The improvement of the fundamentals still needs to be observed. The current downward adjustment space of the bond market is limited. In the future, the capital market is expected to remain loose. With the increasing uncertainty of tariff disturbances and external demand, there is still pressure on the economy to achieve stable growth. The direction of loose monetary policy and the adjustment trend of capital - intensive industries are difficult to change. In the long - term, the bond market should mainly adopt the idea of buying on dips [12]. 3. Summary by Directory 3.1. Weekly Assessment and Strategy Recommendation - **Economic and Policy Situation**: In December, the production side improved due to exports. The marginal effect of policies on the demand side weakened, leading to a slowdown in durable - goods consumption. The real - estate market was a drag, and consumer confidence was insufficient. Exports in December were stronger than expected, with a decline in exports to the US and resilient growth in non - US regions. The central bank carried out a 0.25 - percentage - point structural interest rate cut and indicated room for further cuts. Overseas, the US liquidity improved, and the market postponed the expected timing of the Fed's interest rate cut to mid - year. China's GDP in 2025 was 1,401,879 billion yuan, with a year - on - year increase of 5% at constant prices. In December, the industrial added value above designated size increased by 5.2% year - on - year, and social consumer goods retail sales increased by 0.9% year - on - year. In 2026, the first batch of 93.6 billion yuan of ultra - long - term special treasury bonds for equipment renewal was allocated, driving total investment of over 460 billion yuan. The personal consumption loan fiscal subsidy policy was extended to the end of 2026. Japan's House of Representatives was dissolved, and the Bank of Japan maintained the benchmark interest rate at 0.75% [10]. - **Liquidity**: This week, the central bank conducted 1,181 billion yuan of reverse repurchase operations, with 951.5 billion yuan of reverse repurchases maturing, resulting in a net injection of 229.5 billion yuan. The DR007 interest rate closed at 1.49% [11]. - **Interest Rates**: The latest 10 - year treasury bond yield was 1.83%, a week - on - week decrease of 1.12 BP; the 30 - year treasury bond yield was 2.29%, a week - on - week decrease of 1.50 BP; the latest 10 - year US treasury bond yield was 4.24%, with no week - on - week change [11]. - **Trading Strategy**: The recommended strategy is to buy on dips, with a profit - to - loss ratio of 3:1 and a recommended cycle of 6 months. The core driving logic is loose monetary policy and the difficulty of credit improvement [13]. 3.2. Futures and Spot Markets - The report presents the closing prices, annualized discounts, settlement prices, and net basis of T, TL, TF, and TS contracts, as well as the closing prices and trading volumes of TS, TF, T, and TL contracts [16][20][26][29][31][34]. 3.3. Major Economic Data - **Domestic Economy** - GDP: In the third quarter of 2025, the actual GDP growth rate was 4.8%, exceeding market expectations, and the economy maintained resilience in the first three quarters [37]. - PMI: In December, the manufacturing PMI was 50.1%, up 0.9 percentage points from the previous value; the service industry PMI was 49.7%, up 0.2 percentage points from the previous value. In the manufacturing PMI sub - items, both supply and demand improved moderately, with the production index rising 1.7 percentage points to 51.7% and new orders rising 1.6 percentage points to 50.8% [38][44]. - Price Index: In December, CPI increased by 0.8% year - on - year, core CPI increased by 1.2% year - on - year, and PPI decreased by 1.9% year - on - year. On a month - on - month basis, CPI, core CPI, and PPI all increased by 0.2% [47]. - Exports: In December 2025, exports (in US dollars) increased by 6.5% year - on - year, and imports increased by 5.7% year - on - year. Exports to the US decreased by 30.0% year - on - year, while exports to ASEAN maintained a relatively high growth rate [50]. - Industrial Added Value and Social Consumer Goods Retail Sales: In December, the industrial added value increased by 5.2% year - on - year, and social consumer goods retail sales increased by 0.9% year - on - year, with a slowdown due to high bases and diminishing marginal utility of durable goods [53]. - Fixed - Asset Investment and Real - Estate Market: From January to December, the cumulative year - on - year growth rate of fixed - asset investment was - 3.8%, and the real - estate investment growth rate was - 17.2%. In December, the price of second - hand housing in 70 large and medium - sized cities decreased by 0.7% month - on - month and 6.1% year - on - year. The cumulative value of new housing starts in December was 587.7 million square meters, a year - on - year decrease of 20.4%, and the cumulative value of new housing construction was 6.5989 billion square meters, a year - on - year decrease of 10.0%. The cumulative year - on - year data of the completion end in December decreased by 18.16%, and the new housing sales data in 30 large - and medium - sized cities weakened recently [56][60][63]. - **Foreign Economy** - US Economy: In the third quarter, the US GDP at current prices was 3,109.5 billion US dollars, with a real year - on - year growth rate of 2.33% and a quarter - on - quarter growth rate of 4.30%. In December, the US CPI increased by 2.7% year - on - year, and the core CPI increased by 2.6% year - on - year. In October, the US durable goods orders were 307.3 billion US dollars, with a year - on - year increase of 4.81%. In December 2025, the seasonally - adjusted non - farm payrolls increased by 50,000, and the unemployment rate was 4.4%. In December, the US ISM manufacturing PMI was 47.9, and the non - manufacturing PMI was 54.4 [66][69][72]. - EU Economy: In the third quarter, the EU GDP increased by 1.4% year - on - year and 0.3% quarter - on - quarter. In December, the euro - area CPI increased by 2% year - on - year and 0.2% month - on - month. The manufacturing PMI was 48.8, and the service industry PMI was 52.4 [72][75]. 3.4. Liquidity - In December, the M1 growth rate was 3.8%, and the M2 growth rate was 8.5%. The social financing increment was 2.21 trillion yuan, with a year - on - year decrease of 645.7 billion yuan. The new RMB loans were 970 trillion yuan, with a year - on - year decrease of 80 billion yuan. In the social financing sub - items, the year - on - year growth rate of government bonds slowed down, and the financing of the real - economy sector was stable. The social financing growth rate of the household and enterprise sectors was 6.1%. In December, the MLF balance was 6.25 trillion yuan, with a net injection of 100 billion yuan. This week, the central bank conducted 1,181 billion yuan of reverse repurchase operations, with 951.5 billion yuan of reverse repurchases maturing, resulting in a net injection of 229.5 billion yuan, and the DR007 interest rate closed at 1.49% [80][83][86]. 3.5. Interest Rates and Exchange Rates - **Interest Rates**: The report shows the changes in various interest rates, including repurchase rates (R001, R007, DR001, DR007), treasury bond yields (2 - year, 5 - year, 10 - year, 30 - year), and the 10 - year US treasury bond yield, including daily, weekly, and monthly changes [89]. - **Exchange Rates**: The report presents the trends of the USDCNH spot exchange rate and the US dollar index [100].

Group 1: Report Industry Investment Rating - Not provided Group 2: Core Viewpoints of the Report - The positive statements in the central bank meeting boosted market sentiment. After the start of the year, the production of coal, coke and steel enterprises has recovered. The pre - holiday replenishment of raw materials by downstream enterprises supports the price - holding confidence of upstream enterprises. The short - term futures price fluctuates sharply, and cautious operation is recommended [2][3] Group 3: Summary by Related Content Market Performance - Last week, the ferrous metal sector generally rose, with coking coal rising more than 7%. The central bank emphasized promoting high - quality economic development and reasonable price recovery, strengthening the expectation of loose monetary policy and stimulating the sentiment of the ferrous metal sector with relatively low valuation to warm up [3] Supply Side - After the start of the year, coal mines have gradually resumed production. Last week, the output of coking raw coal and clean coal rebounded to 1899000 tons and 734000 tons respectively. The raw coal inventory at the mine end increased, while the clean coal inventory decreased. The daily customs clearance volume of Mongolian coal at the Ganqimaodu Port last week was 164600 tons, 37400 tons higher than the same period last year, and the port inventory remained at a relatively high level [3] Demand Side - In the past two weeks, the profit rate of steel mills has slightly expanded. The daily average hot metal output of blast furnaces stopped falling and rebounded. In the week of January 9th, it was 2.295 million tons, an increase of 20700 tons compared with the previous week and 51300 tons compared with the same period last year. It is expected to show a steady and small increase in the short - term, and the raw material replenishment rhythm of steel mills is expected to accelerate later [3]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The December PMI data shows that both supply and demand ends have rebounded. With external demand and policy support, demand has warmed up. However, the sustainability of economic recovery momentum remains to be observed, and domestic demand still awaits the stabilization of residents' income and policy support. The bond market may face certain pressure due to the improved market expectations for the economy, but in the long - term, it is still advisable to adopt a strategy of buying on dips. The bond market is expected to be volatile and weak in the short - term, mainly affected by the spring rally in the stock market, government bond supply, and interest rate cut expectations in the first quarter [10][13][14]. Summary by Directory 1. Weekly Assessment and Strategy Recommendation - **Economic and Policy Situation**: In December, the PMI data indicated that both the supply and demand sides of the manufacturing industry had recovered, and it returned to the expansion range. The export data in November was stronger than expected, with a decline in exports to the US and resilient growth in non - US regions. The central government emphasized the continuation of a moderately loose monetary policy, and there were still expectations of reserve requirement ratio cuts and interest rate cuts. In the US, the liquidity situation improved, and the market postponed the expectation of the Fed's interest rate cut to mid - year [10]. - **Key Economic Data**: In December 2025, China's CPI rose 0.8% year - on - year, and PPI fell 1.9% year - on - year. In the US, the non - farm payrolls increased by 50,000 in December, with an unemployment rate of 4.4%. The US president announced a plan to purchase $200 billion in mortgage - backed securities. On January 8, the central bank conducted a 90 - day RMB 1.1 trillion outright reverse repurchase operation for equal - amount rollover. As of the end of December 2025, China's foreign exchange reserves reached $3.3579 trillion, an increase of $11.5 billion from the end of November. The Ministry of Commerce prohibited the export of dual - use items to Japanese military users and for military purposes. The National Development and Reform Commission planned to allocate over RMB 100 billion in funds for Yangtze River protection projects [10][11][12]. - **Liquidity**: The central bank conducted RMB 138.7 billion in reverse repurchase operations this week, with RMB 1.7937 trillion in reverse repurchases maturing, resulting in a net withdrawal of RMB 1.655 trillion. The DR007 rate closed at 1.47% [13]. - **Interest Rates**: The latest 10 - year Chinese government bond yield was 1.88%, up 3.03 BP week - on - week; the 30 - year yield was 2.31%, up 3.50 BP week - on - week. The 10 - year US Treasury yield was 4.18%, down 1.00 BP week - on - week [13]. - **Trading Strategy**: It is recommended to buy on dips for a 6 - month period, with a profit - to - loss ratio of 3:1, driven by the combination of loose monetary policy and the difficulty of credit improvement [15]. 2. Futures and Spot Markets - **Contract Performance**: The report presents the closing prices, annualized discounts, settlement prices, and net basis of T, TL, TF, and TS contracts, as well as the closing prices and trading volumes of TS and TF, T and TL contracts [18][23][24][27]. 3. Major Economic Data - **Domestic Economy** - **GDP and PMI**: In the third quarter of 2025, China's GDP actually grew by 4.8% year - on - year. In December, the manufacturing PMI was 50.1%, up 0.9 percentage points from the previous value, and the service industry PMI was 49.7%, up 0.2 percentage points [40]. - **PMI Sub - items**: In December, the manufacturing PMI sub - items showed a moderate improvement in both supply and demand. The production index increased by 1.7 percentage points to 51.7%, and new orders increased by 1.6 points to 50.8 [46]. - **Price Index**: In December, CPI increased by 0.8% year - on - year, core CPI increased by 1.2% year - on - year, and PPI decreased by 1.9% year - on - year. From a month - on - month perspective, CPI, core CPI, and PPI all increased by 0.2% [49]. - **Export Data**: In November 2025, China's exports were stronger than expected, with a year - on - year increase of 5.9%. Exports to the US decreased by 28.5% year - on - year, while exports to ASEAN maintained a relatively high growth rate of 8.17% [52]. - **Industrial and Consumption Data**: In November, the year - on - year growth rate of industrial added value was 4.8%, and the year - on - year growth rate of total retail sales of consumer goods was 1.3%, down 1.6 percentage points from the previous value [55]. - **Investment and Real Estate Data**: From January to November, the cumulative year - on - year growth rate of fixed - asset investment was - 2.6%, and the real estate investment growth rate was - 15.9%. In November, the month - on - month decline in second - hand housing prices in 70 large and medium - sized cities was 0.7%, and the year - on - year decline was 5.7%. The cumulative year - on - year decline in the completion end data in November was 18.06%, and the new home sales data in 30 large - scale cities had weakened recently [58][64]. - **Foreign Economy** - **US Economy**: In the third quarter, the US GDP grew by 2.33% year - on - year and 4.30% quarter - on - quarter. In November, the US CPI increased by 2.7% year - on - year, and the core CPI increased by 2.6% year - on - year. In December, the seasonally adjusted non - farm payrolls increased by 50,000, and the unemployment rate was 4.4%. The ISM manufacturing PMI in December was 47.9, and the non - manufacturing PMI was 54.4 [67][70][73]. - **European Economy**: In the third quarter, the EU GDP grew by 1.5% year - on - year and 0.3% quarter - on - quarter. In December, the eurozone CPI increased by 2% year - on - year, the manufacturing PMI was 48.8, and the service industry PMI was 52.4 [73][76]. 4. Liquidity - **Money Supply and Social Financing**: In November, the M1 growth rate was 4.9%, and the M2 growth rate was 8.0%. The social financing increment was 2.5 trillion yuan, with an increase of 160 billion yuan year - on - year. The growth rate of government bonds in the social financing sub - items slowed down, and the financing of the real - economy sector was weak. The social financing growth rate of the household and enterprise sectors was 6.0%, and the government bond growth rate was 18.80% [81][84]. - **Central Bank Operations**: In December, the MLF balance was 6.25 trillion yuan, with a net injection of 100 billion yuan. This week, the central bank conducted 138.7 billion yuan in reverse repurchase operations, with 1.7937 trillion yuan in reverse repurchases maturing, resulting in a net withdrawal of 1.655 trillion yuan, and the DR007 rate closed at 1.47% [87]. 5. Interest Rates and Exchange Rates - **Interest Rates**: The report provides the latest rates, daily, weekly, and monthly changes of various types of interest rates, including repurchase rates, Chinese government bond yields, and US Treasury yields [90]. - **Exchange Rates**: The report presents the exchange rate between the US dollar and the RMB and the US dollar index [100].

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The significant rebound of PMI in December 2025 may be related to the policy intensification in October, and the policy has shown obvious effects [4][5]. - The replenishment of inventory may start, which is expected to drive economic recovery [6]. - The overall rhythm of the change in manufacturing PMI is similar to that in 2016 and 2019, indicating that the economic cycle may have started [7]. - The core of the policy is to disprove the view of "less - than - expected economic recovery", and after repeated disproving, the market will become optimistic [8]. - Regarding the bond market, the target range of the 10 - year Treasury bond is 2 - 3%, with a central value of about 2.5% [9]. 3. Summary by Related Catalog 3.1 Event Review - In December 2025, the manufacturing PMI was 50.1% (previous value: 49.2%), up 0.9 pct month - on - month; the non - manufacturing PMI was 50.2% (49.5%), up 0.7 pct month - on - month; the composite PMI was 50.7% (49.7%), up 1.0 pct month - on - month. The manufacturing PMI rebounded significantly beyond seasonality and expectations, reaching a new high since April [4]. 3.2 Reasons for PMI Rebound - **Policy Intensification**: In October, the policy intensified with 50 billion yuan of policy - based financial instruments and 50 billion yuan of local debt balance limits. After the policy efforts, the PMI improved slightly in November and significantly in December [5]. - **Inventory Replenishment**: After continuous destocking from October to November, the raw material inventory was at a historical low in December, and inventory replenishment started, which may drive economic recovery [6]. - **Similar Historical Patterns**: The sudden rebound of PMI above 50% in December 2025 is similar to the situations in 2016 and 2019, indicating that the economic cycle may have started [7]. 3.3 Policy Logic - The policy aims to disprove the view of "less - than - expected economic recovery". In history, there were periods of economic decline, but the economy recovered after policy support, and the view was disproved. After repeated disproving, the market will form optimistic expectations [8]. 3.4 Bond Market View - **Fundamentals**: The view of "less - than - expected economic recovery" is disproved, and the wide - credit and wide - fiscal policies at the beginning of 2026 may accelerate the economic cycle recovery [9]. - **Monetary Policy**: If there is a wide - monetary policy, it may be a reduction opportunity, similar to the situation in 2025 [9]. - **Inflation**: Pay attention to whether the month - on - month increase of PPI can remain positive [9]. - **Funds Rate**: If inflation rises month - on - month continuously, there is a possibility of tightening funds, and the yield of short - term bonds will rise [9]. - **Real Estate**: Real estate is not used as a means of stabilizing growth this time and may bottom out after the recovery of various economic indicators and the rise of the stock market [9]. - **Bonds**: The target range of the 10 - year Treasury bond is 2 - 3%, with a central value of about 2.5% [9].

Market Performance - Government bond futures closed higher across the board, with the 30-year main contract rising by 0.63% to 112.140 yuan, the 10-year main contract up by 0.10% to 108.005 yuan, the 5-year main contract increasing by 0.06% to 105.840 yuan, and the 2-year main contract gaining 0.01% to 102.434 yuan [1] - The yields on major interbank bonds generally declined, with the 30-year government bond "25 Super Long Special Government Bond 06" yield down by 3.8 basis points to 2.2410%, the 50-year government bond "25 Super Long Special Government Bond 03" yield down by 4.65 basis points to 2.3810%, and the 10-year policy bank bond "25 Policy Bank 15" yield down by 2.89 basis points to 1.9031% [1] Funding Conditions - The central bank announced a 468 billion yuan 7-day reverse repurchase operation on December 17, with a fixed rate of 1.40%, and the full bid amount was accepted [2] - On the same day, 189.8 billion yuan in reverse repos matured, resulting in a net withdrawal of 143 billion yuan [2] - The interbank market maintained a loose funding environment, with the overnight repo weighted average rate (DR001) at around 1.26%, and the anonymous click (X-repo) system overnight quote at approximately 1.25% [2] - The one-year national interbank certificate of deposit rate fluctuated narrowly around 1.66%-1.67% due to recent liquidity easing [2] Operational Suggestions - The previous day's treasury futures rose across the board, particularly in long-term bonds, likely due to a recovery from previous declines and driven by unverified positive news [3] - The market is expected to experience small gains today, but the short-term upward trend lacks solid logic, with low probability for the implementation of a loose monetary policy by year-end [3] - The 10-year bond yield is expected to remain stable, with the upper limit of interest rate not deviating significantly from 1.85%, and support levels for T2603 to be monitored around 107.6-107.8 [3] - The strategy suggests a cautious approach with a focus on short-term trading opportunities, while observing the central bank's MLF injections and month-end bond trading conditions [3]