Group 1 - The report indicates that the liquidity environment remains stable, with short-term rates continuing to decline, benefiting from a stable liquidity environment [5][8] - For April, the report highlights that the initial liquidity is expected to ease, with a focus on the government bond issuance plan, particularly the long-term supply schedule [5][8] - The report notes that the total issuance of local government bonds is expected to reach 31,988 billion yuan by April 5, 2026, with 16,618 billion yuan in long-term bonds, accounting for 52% of the total [12][39] Group 2 - The report anticipates that the local government bond issuance plan for the second quarter will be significant, with a total planned issuance of 21,100 billion yuan [13][40] - It is mentioned that the issuance of replacement bonds is progressing slower than in the same period of 2025, which may lead to a higher actual issuance scale in the second quarter [13][40] - The report identifies potential investment opportunities in the long-term local government bonds, particularly focusing on the yield spread between 30-year and 20-year bonds [41][42] Group 3 - The report tracks the interbank certificate of deposit (CD) market, noting that the issuance increased to 7,705 billion yuan from March 23 to March 27, 2026, with a net financing of 723 billion yuan [53][54] - The report highlights that the overall issuance success rate for CDs remains high at 93%, with the highest success rate for 9-month CDs at 97% [53][54] - The report indicates that the secondary market for CDs has maintained low yields, with rates for various maturities showing slight declines [74]

Report Industry Investment Rating No information provided in the content. Core Viewpoints - In Q1 2026, government bond issuance continued the front - loading trend, with total issuance expanding year - on - year but net financing declining due to increased repayment. In Q2, fiscal policy will remain proactive, and government bond supply will be strong with an optimized rhythm. The net financing scale of government bonds in Q2 is expected to be around 4 trillion yuan, and attention should be paid to the impact of special treasury bond issuance on the market and the long - term bond reception capacity [2][3][34]. Summary by Directory 1. Q1 Review: Total Government Bond Volume Increased Year - on - Year, and Net Financing Declined Relatively 1.1 Scale and Rhythm: Longer Maturity of Treasury Bond Issuance, Slower Year - on - Year Growth of Local Refinancing Bonds - In Q1 2026, government bond issuance continued the front - loading feature. The total issuance increased by 5490.72 billion yuan year - on - year, but net financing decreased by 5637.03 billion yuan due to higher repayment. Treasury bond issuance was front - loaded, with a net financing progress of 21.55% of the annual expected scale, similar to the same period in 2025. Local bond issuance was also front - loaded, with a net financing progress of 40.32%, the fastest in the past five years. New special local bonds had a faster issuance progress, and local ordinary refinancing bonds were issued faster while special refinancing bonds were slower [9][10][12]. 1.2 Term Structure and Issuance Sentiment: Expansion of Medium - and Long - Term Treasury Bonds, Increase in 10Y and 30Y Local Bonds - Treasury bond issuance expansion was concentrated in the 7 - 10Y medium - and long - term, with the overall duration lengthened. The issuance sentiment was stable, and the market's reception capacity was maintained. Local bond term structure was more concentrated in 10Y and 30Y, and although the weighted duration decreased, the supply pressure at key long - term points increased. The long - term concentrated issuance of local bonds affected market participation, but the pricing stability was strong [18][20][22]. 2. Q2 Outlook: Fiscal Policy Remains Front - Loaded, and Supply in Q2 is Strong 2.1 Supply Side: Front - Loaded Treasury Bond Issuance, Smooth Local Bond Issuance - In Q2, fiscal policy will remain proactive, and government bond supply will be strong with an optimized rhythm. Treasury bond issuance is expected to increase, with a total issuance of about 45088.60 billion yuan and a net financing of 20983.30 billion yuan, reaching about 50% of the annual net financing progress by the end of Q2. Local bond issuance will be smooth, with a peak in May. The total issuance is expected to be about 29370.10 billion yuan, and the net financing is about 19021.61 billion yuan [25][27][30]. 2.2 Sentiment Side: Pay Attention to the Potential Impact of Special Treasury Bond Issuance on the Market - The special treasury bond issuance arrangement is not fully clear. Historically, the announcement of the issuance plan has easily led to short - term gaming, and the supply shock is mainly concentrated in the T + 1 to T + 5 window, with a stronger impact on the 30Y interest rate than the 10Y [35][37]. 2.3 Demand Side: Pay Attention to the Reception Capacity of Allocation - Oriented Investors for Ultra - Long - Term Treasury Bonds - In Q1 2026, insurance funds' willingness to allocate long - term treasury bonds was significantly weaker than in the same period last year, while the demand for long - term and ultra - long - term local bonds was more stable. In Q2, more attention should be paid to the market's reception capacity for ultra - long - term treasury bonds [38][40][41].

Summary of Key Points from Conference Call Records Industry Overview - The records primarily discuss the bond market and its dynamics for March 2026, with a focus on government bonds and the impact of macroeconomic factors on the market. Core Insights and Arguments 1. **Market Conditions and Policy Expectations** - The funding environment has been stable and relatively loose since the beginning of the year, but short-term interest rates and credit spreads are at low levels, requiring signals such as reserve requirement ratio cuts or interest rate reductions for further declines [1][2][3] - The market is experiencing increased volatility due to diverging expectations regarding policy changes, suggesting a strategy of seeking high points for investment [2][3] 2. **Government Bond Financing** - Government bond net financing in March is expected to approach 1.4 trillion, with a potential extension of maturities due to special refinancing bonds and special government bond issuances [1][5][12] - The supply-demand dynamics in the bond market are assessed to be manageable, with asset growth lagging behind liabilities, indicating limited pressure on the bond market [14] 3. **Real Estate and Economic Indicators** - Real estate data for January and February was weak, but March is expected to show improvement in economic activity, with new home sales remaining weak but second-hand home sales showing seasonal strength [1][7][8] - Export indicators are performing well, supporting a relatively optimistic outlook for key macroeconomic sectors [8] 4. **Interest Rate Trends** - Historically, March typically sees a decline in interest rates, with the average drop for 10-year government bonds around 4-10 basis points [5] - Current key variables influencing March include policy direction, macroeconomic fundamentals, government bond supply, and external factors affecting risk appetite [5][6] 5. **Market Sentiment and Investment Strategy** - The sentiment in the bond market remains bullish for the second quarter of 2026, with opportunities expected to arise, thus maintaining a bullish mindset is recommended [2][3] - The strategy for long-duration bonds, such as 30-year government bonds, should remain positive, capitalizing on market fluctuations [4] 6. **Banking Sector Dynamics** - The banking sector is under relatively low pressure on the liability side, with a continued negative net financing of certificates of deposit [3][16] - In February, banks shifted from significant purchases of long-term bonds to reductions, influenced by trading factors and increased primary supply [17] 7. **Investment Behavior of Institutions** - Different institutional behaviors have been observed, with brokerages showing active positions in 5-7 year government bonds, while funds have been cautious regarding long-duration bonds due to market volatility [18][19] 8. **Geopolitical and External Factors** - Key external factors include U.S.-China relations, currency fluctuations, and geopolitical tensions, particularly the U.S.-Iran conflict, which could impact the bond market through various channels [20][21] Other Important but Potentially Overlooked Content - The potential for a "survivorship bias" in recovery data post-holiday, indicating that the sample quality may skew results positively [9][10] - The bond market's response to the upcoming Two Sessions and the expected fiscal policies, which are anticipated to be in line with market expectations without significant surprises [6] - The importance of monitoring the transition of bank liabilities from deposits to wealth management products, which could accelerate fund flows to non-bank entities [19] This summary encapsulates the key points from the conference call records, providing a comprehensive overview of the bond market's current state and future outlook.

1. Report Industry Investment Rating The document does not mention the industry investment rating. 2. Core Viewpoints of the Report - In January, the wealth - management scale continued to decline, with a monthly decrease of 1.142 billion yuan, contrary to market expectations of a rebound. Looking ahead, before the Spring Festival in February, the scale may show a moderate growth trend [1][9]. - The inter - bank leverage ratio continued to decline, while the exchange leverage ratio increased, and non - bank institutions increased leverage [2][35]. - Interest - rate and credit - type medium - and long - term bond funds compressed their durations, while medium - short - term and short - term bond funds slightly increased their durations [3][44]. - The supply scale of government bonds increased significantly in early February, with a planned issuance of 906.7 billion yuan in the first week of February [50]. 3. Summary According to Relevant Catalogs 3.1 1 - Month Wealth - Management Scale Decline 3.1.1 Weekly Scale - From January 19 - 23, the wealth - management scale continued to rise, with a week - on - week increase of 7.41 billion yuan to 33.35 trillion yuan, higher than the historical same - period level. From January 26 - 30, due to the drive of funds returning to the balance sheet, the scale decreased by 178.8 billion yuan to 33.18 trillion yuan, and the decline was more than seasonal [8]. 3.1.2 Wealth - Management Risks - Product net values continued to rise, and the proportion of negative yields remained low. The proportion of all products with negative yields in the interval remained low at 0.96%. The wealth - management break - even level slightly increased, with the break - even rate of all products rising by 0.03 pct to 0.2%. The proportion of products with unmet performance targets continued to decline, with the non - performance rate of all wealth - management products dropping by 0.3 pct to 23.9% [15][24]. 3.2 Leverage Ratio: Inter - bank Continued to Decline - From January 26 - 30, affected by cross - month demand, capital prices seasonally increased. The average weekly trading volume of inter - bank pledged repurchase decreased, and the average overnight proportion also decreased. The inter - bank leverage ratio continued to decline, the exchange leverage ratio increased, and non - bank institutions increased leverage [32][35]. 3.3 Interest - Rate and Credit - Type Medium - and Long - Term Bond Funds Compressed Durations - From January 26 - 30, due to insufficient incremental information at the end of the month, institutions were still cautious in their operations. The average weekly durations of interest - rate and credit - type medium - and long - term bond funds decreased. The durations of medium - short - term and short - term bond funds slightly increased [42][44]. 3.4 Government Bond Supply Scale Increased Significantly in Early February - In the first week of February (February 2 - 6), the planned issuance of government bonds was 906.7 billion yuan, a significant increase from the previous week. The estimated net payment scale of government bonds was about 460.4 billion yuan, still higher than the weekly median payment level since 2025. In terms of different types of bonds, the net payment scale of treasury bonds decreased, while that of local bonds increased [50][53].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - For stocks, with the entry of incremental funds at the beginning of the year, the financing scale has increased significantly, and the market trading volume has rapidly expanded. In the long - term, the policy support for the capital market remains unchanged. Strategically, the idea of buying on dips is recommended [4]. - For bonds, the improvement of economic expectations may put pressure on the bond market, but the sustainability of economic recovery momentum needs to be observed. The central bank's attitude of caring for funds remains, and the bond market is expected to be volatile and weak [8]. - For precious metals, if the silver price stabilizes, it will continue a new upward trend, and the driving force for the gold price remains strong. It is recommended to pay attention to the support of gold and silver prices around the BCOM and tariff adjustment nodes and buy on dips after short - term negative factors end [10]. - For non - ferrous metals, most metal prices are expected to be volatile. For example, copper prices are expected to fluctuate and consolidate in the short term; aluminum prices are expected to remain high; zinc and lead prices are expected to fluctuate widely following the sentiment of the non - ferrous sector [13][15][18]. - For black building materials, steel prices are expected to continue to fluctuate at the bottom; iron ore prices are expected to fluctuate at a relatively high level; glass and soda ash markets are generally weak; coking coal and coke prices are expected to fluctuate in a range [32][34][37]. - For energy and chemicals, different products have different trends. For example, rubber is recommended to be treated neutrally; the valuation of heavy - quality oil products is raised; methanol has the feasibility of buying on dips; urea is recommended to take profits on rallies [55][57][59]. - For agricultural products, the short - term trend of hog prices is expected to be stable or slightly rising, and different trading strategies are recommended for different contract periods; egg prices are expected to be stable or rising, and different strategies are also recommended for different contract periods [79][80][81]. 3. Summary by Relevant Catalogs 3.1 Macro - financial 3.1.1 Stock Index - **Market Information**: China Chamber of Commerce for Import and Export of Machinery and Electronic Products promoted a "soft landing" of the EU's anti - subsidy case on electric vehicles; Lihong No.1 completed its first sub - orbital flight test; Brain - Machine Haihe Laboratory completed the first "space brain - machine interface experiment"; prices of multiple non - ferrous and precious metal futures reached new highs [2]. - **Basis Ratio of Stock Index Futures**: Different ratios are provided for IF, IC, IM, and IH contracts in different periods [3]. - **Strategy Viewpoint**: With incremental funds entering at the beginning of the year, the financing scale has increased significantly, and the market trading volume has rapidly expanded. In the long - term, the policy support for the capital market remains unchanged. Strategically, the idea of buying on dips is recommended [4]. 3.1.2 Treasury Bonds - **Market Information**: On Monday, the closing prices of TL, T, TF, and TS main contracts changed by 0.30%, 0.07%, 0.05%, and 0.00% respectively. The Canadian Prime Minister will visit China, and the National Development and Reform Commission and other departments issued relevant policies on government investment funds [5]. - **Liquidity**: The central bank conducted 861 billion yuan of 7 - day reverse repurchase operations on Monday, with a net investment of 361 billion yuan [6][7]. - **Strategy Viewpoint**: The improvement of economic expectations may put pressure on the bond market, but the sustainability of economic recovery momentum needs to be observed. The central bank's attitude of caring for funds remains, and the bond market is expected to be volatile and weak [8]. 3.1.3 Precious Metals - **Market Information**: Shanghai gold rose 1.31%, and Shanghai silver rose 7.23%. The US federal prosecutor launched a criminal investigation into Fed Chairman Powell, which impacted the Fed's independence [9]. - **Strategy Viewpoint**: If the silver price stabilizes, it will continue a new upward trend, and the driving force for the gold price remains strong. It is recommended to pay attention to the support of gold and silver prices around the BCOM and tariff adjustment nodes and buy on dips after short - term negative factors end [10]. 3.2 Non - ferrous Metals 3.2.1 Copper - **Market Information**: Silver prices were strong, and the domestic equity market strengthened, driving copper prices to rise. LME copper inventory decreased, and domestic electrolytic copper social inventory increased [12]. - **Strategy Viewpoint**: The Fed's interest - rate cut expectation has weakened, and short - term sentiment may cool down. The copper mine supply is in a tight pattern, and copper prices are expected to fluctuate and consolidate in the short term [13]. 3.2.2 Aluminum - **Market Information**: The general atmosphere of bulk commodities was strong, and aluminum prices fluctuated and rose. LME aluminum inventory decreased, and domestic aluminum ingot and aluminum rod social inventories increased [14]. - **Strategy Viewpoint**: The high - level fluctuations of precious metals and non - ferrous metals have increased, and short - term sentiment may cool down. Aluminum prices are expected to remain high [15]. 3.2.3 Zinc - **Market Information**: The Shanghai zinc index rose, and LME zinc also increased. Zinc ingot social inventory decreased slightly [16][17]. - **Strategy Viewpoint**: The zinc price has a large room for catch - up compared with copper and aluminum. It is expected to fluctuate widely following the sentiment of the non - ferrous sector [18]. 3.2.4 Lead - **Market Information**: The Shanghai lead index rose, and LME lead also increased. Lead ingot social inventory increased [19]. - **Strategy Viewpoint**: The lead price is approaching the upper edge of the long - term oscillation range, and it is expected to fluctuate widely following the sentiment of the non - ferrous sector [19]. 3.2.5 Nickel - **Market Information**: Nickel prices rebounded, and the prices of nickel ore and nickel iron also changed accordingly [20]. - **Strategy Viewpoint**: The oversupply pressure of nickel is still large, and it is expected to fluctuate widely in the short term. It is recommended to wait and see in the short term [20][21]. 3.2.6 Tin - **Market Information**: Tin prices rose significantly. The supply in Myanmar is gradually recovering, and the demand is mainly for rigid needs [22]. - **Strategy Viewpoint**: The tin market demand is weak, and the supply is expected to improve. It is recommended to wait and see. The price is expected to fluctuate following the market risk preference [22]. 3.2.7 Carbonate Lithium - **Market Information**: The spot index of carbonate lithium rose, and the futures price also increased [23]. - **Strategy Viewpoint**: The "rush to export" effect has increased the demand expectation, but the rapid rise may increase the callback risk. It is recommended to wait and see or try with a light position [23]. 3.2.8 Alumina - **Market Information**: The alumina index rose, and the inventory continued to accumulate [24]. - **Strategy Viewpoint**: The mine price is expected to decline, and the alumina market continues to face over - capacity. It is recommended to wait and see and consider shorting on rallies [25]. 3.2.9 Stainless Steel - **Market Information**: The stainless steel main contract price was stable, and the social inventory decreased [26]. - **Strategy Viewpoint**: The optimistic expectation of Indonesia's RKAB supports the price. The price is expected to remain high and volatile in the short term [27]. 3.2.10 Casting Aluminum Alloy - **Market Information**: The price of casting aluminum alloy rose, and the inventory increased slightly [28]. - **Strategy Viewpoint**: The cost is strong, and the supply is disturbed. The price is expected to remain high in the short term [29]. 3.3 Black Building Materials 3.3.1 Steel - **Market Information**: The prices of rebar and hot - rolled coil increased, and the inventory of rebar increased slightly while that of hot - rolled coil decreased slightly [31]. - **Strategy Viewpoint**: The steel price is expected to continue to fluctuate at the bottom. It is necessary to pay attention to the de - stocking of hot - rolled coil and relevant policies [32]. 3.3.2 Iron Ore - **Market Information**: The iron ore main contract price rose, and the port inventory continued to accumulate [33]. - **Strategy Viewpoint**: The overseas iron ore shipment is in the off - season, and the iron ore price is expected to fluctuate at a relatively high level. It is necessary to pay attention to the steel mill's replenishment and iron - making rhythm [34]. 3.3.3 Glass and Soda Ash - **Market Information**: The glass main contract price decreased slightly, and the inventory decreased. The soda ash main contract price increased, and the inventory increased [35][37]. - **Strategy Viewpoint**: The glass price is expected to fluctuate, and it is recommended to wait and see. The soda ash market is generally weak [36][37]. 3.3.4 Coking Coal and Coke - **Market Information**: The prices of coking coal and coke rose. The spot prices of coking coal and coke also changed [38]. - **Strategy Viewpoint**: The commodity market sentiment is positive, but the fundamental support for the price is limited. The price is expected to fluctuate in a range [40][41]. 3.3.5 Manganese Silicon and Ferrosilicon - **Market Information**: The prices of manganese silicon and ferrosilicon rose. The spot prices also changed [42]. - **Strategy Viewpoint**: The future market trend is mainly affected by the overall market sentiment and cost factors. It is recommended to pay attention to manganese ore and "dual - carbon" policies [45]. 3.3.6 Industrial Silicon and Polysilicon - **Market Information**: The price of industrial silicon rose slightly, and the price of polysilicon decreased. The inventory of industrial silicon may increase, and the supply of polysilicon may be adjusted [46][48]. - **Strategy Viewpoint**: Industrial silicon is expected to face inventory pressure, and polysilicon is expected to be weak and volatile. It is necessary to pay attention to relevant policies and production plans [47][49]. 3.4 Energy and Chemicals 3.4.1 Rubber - **Market Information**: The rubber price fluctuated and rebounded. The tire start - up rate had marginal fluctuations, and the inventory increased [51][53]. - **Strategy Viewpoint**: The overall commodity atmosphere is positive, but the rubber seasonality is weak. A neutral strategy is recommended, and short - selling can be considered if the price falls below a certain level [55]. 3.4.2 Crude Oil - **Market Information**: The main contract price of INE crude oil rose, and the inventories of refined oil products changed [56]. - **Strategy Viewpoint**: The Latin American geopolitical situation does not have enough positive impact on the overall oil price, but the valuation of heavy - quality oil products is raised [57]. 3.4.3 Methanol - **Market Information**: The regional spot prices of methanol changed, and the main contract price decreased [58]. - **Strategy Viewpoint**: The current valuation of methanol is low, and it has the feasibility of buying on dips [59]. 3.4.4 Urea - **Market Information**: The regional spot prices of urea changed slightly, and the main contract price increased [60]. - **Strategy Viewpoint**: The import window has opened, and it is recommended to take profits on rallies [62]. 3.4.5 Pure Benzene and Styrene - **Market Information**: The prices of pure benzene and styrene rose. The inventory of pure benzene increased, and the inventory of styrene decreased [63]. - **Strategy Viewpoint**: The non - integrated profit of styrene can be long - bought before the first quarter [64]. 3.4.6 PVC - **Market Information**: The PVC main contract price rose, and the inventory increased [65]. - **Strategy Viewpoint**: The domestic PVC market has a pattern of strong supply and weak demand. It is recommended to short on rallies [66]. 3.4.7 Ethylene Glycol - **Market Information**: The ethylene glycol main contract price rose, and the inventory increased [67]. - **Strategy Viewpoint**: The ethylene glycol market needs to increase production cuts to improve the supply - demand pattern. It is necessary to beware of rebound risks [68]. 3.4.8 PTA - **Market Information**: The PTA main contract price rose, and the inventory decreased [69]. - **Strategy Viewpoint**: The PTA is expected to enter the Spring Festival inventory - accumulation stage. It is recommended to pay attention to long - buying opportunities on dips [70]. 3.4.9 p - Xylene - **Market Information**: The p - xylene main contract price rose, and the inventory decreased [71][72]. - **Strategy Viewpoint**: The p - xylene load is high, and it is recommended to pay attention to long - buying opportunities following the crude oil price [73]. 3.4.10 Polyethylene (PE) - **Market Information**: The PE main contract price rose, and the inventory increased [74]. - **Strategy Viewpoint**: The PE price may be supported, and it is recommended to long - buy the LL5 - 9 spread on dips [75]. 3.4.11 Polypropylene (PP) - **Market Information**: The PP main contract price rose, and the inventory situation was complex [76]. - **Strategy Viewpoint**: The PP price may bottom out in the first quarter of next year [77]. 3.5 Agricultural Products 3.5.1 Hogs - **Market Information**: The domestic hog price was mixed, and the price may stabilize or rise slightly [79]. - **Strategy Viewpoint**: The short - term hog price may support the futures price, but in the medium - term, supply pressure exists. Different trading strategies are recommended for different contract periods [80]. 3.5.2 Eggs - **Market Information**: The national egg price mostly rose, and the price is expected to be stable or rise [81]. - **Strategy Viewpoint**: The short - term egg price may support the futures price, but in the medium - term, supply pressure exists. Different trading strategies are recommended for different contract periods [82]. 3.5.3 Soybean and Rapeseed Meal - **Market Information**: The protein meal futures price fluctuated. The import cost of soybeans may have a bottom, but the fundamental situation is weak [83][84]. - **Strategy Viewpoint**: It is recommended to wait and see in the short term due to the combination of long - and short - term factors [84]. 3.5.4 Oils and Fats - **Market Information**: The oil futures price fluctuated. The palm oil inventory in Malaysia increased, and the domestic three - major oil inventories were at a relatively high level [85][86]. - **Strategy Viewpoint**: The current fundamental situation is weak, but the long - term expectation is optimistic. The oil price may be close to the bottom [86]. 3.5.5 Sugar - **Market Information**: The Zhengzhou sugar futures price fluctuated. The spot price of sugar decreased slightly [87]. - **Strategy Viewpoint**: The international sugar price may rebound after February, and it is recommended to wait and see in the short term [89]. 3.5.6 Cotton - **Market Information**: The Zhengzhou cotton futures price decreased. The cotton supply and demand situation changed [90]. - **Strategy Viewpoint**: The cotton price may fluctuate after rising. It is recommended to wait for a callback to buy [91].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - Based on various fiscal announcements, the report calculates the supply of government bonds and ultra - long bonds in Q1 2026 and interprets the key points of market - concerned supply [8]. - It analyzes the characteristics of government bond issuance in Q1 2026, including the situation of treasury bonds, local bonds, and makes supply forecasts [1][3][9]. 3. Summary According to the Directory 3.1 Treasury Bonds: In Q1, the number of issuances changes little, the single - issue scale rises and then falls, and there is room for acceleration in the future 3.1.1 Q1 Treasury Bond Plan: The number of issuances changes little, and 30y bonds use new codes - The number of treasury bond issuances in Q1 2026 is similar to that in the same period of 2025, with the number of coupon - bearing treasury bonds and savings bonds of each term remaining the same as in Q1 2025, and an additional 3M discount treasury bond issued in March 2026. The 50 - year treasury bond is postponed from February to March [9]. - 30y treasury bonds will use new codes. After the announcement, 250002 performed weakly, and 2500006 may continue to be the active bond in the short term. There is a risk of failure in the coupon - bond replacement of 30y ordinary treasury bonds [10]. 3.1.2 Single - issue Scale of Key - term Treasury Bonds: It rises first and then falls, and there may still be room for acceleration in the future - In January 2026, the single - issue scale of 2 - year and 10 - year coupon - bearing treasury bonds increased significantly compared with the same period in 2025, which may be due to high maturity pressure, the need to form physical workloads earlier, and to make way for the issuance of special treasury bonds [15][16]. - The single - issue scale of 1 - year treasury bonds later decreased to 135 billion. If the issuance speed of 135 billion continues, the monthly average may be around 150 billion, which is in line with the neutral issuance speed under a 4% deficit rate. To catch up with the net financing progress in 2025 in Q1, the quarterly average single - issue scale of key - term treasury bonds needs to reach 170 billion, indicating room for acceleration [18][19]. - Treasury bonds can use the remaining quota for issuance expansion before the Two Sessions. The remaining quota at the beginning of 2026 is expected to be around 580 billion, providing room for expansion [23]. 3.1.3 The quota of ultra - long special treasury bonds is pre - allocated but issued later - No special treasury bonds are scheduled for issuance in Q1. Ultra - long special treasury bonds show the characteristic of "quota pre - allocation but issuance postponement". The "Two - New" quota in 2026 is pre - allocated in a reduced scale but earlier, while the "Two - Important" quota is pre - allocated in a larger scale but later [25][29][30]. 3.2 Local Bonds: In Q1, the issuance scale is similar to that in the same period of 2025, the rhythm is earlier, and the terms vary across regions 3.2.1 Q1 Local Bond Plan: The issuance scale is basically the same as that in Q1 2025, and the supply is more concentrated in January - The planned issuance scale of the regions that have released plans is close to that in the same period of 2025. Affected by the Spring Festival shift, the issuance in January 2026 increased significantly compared with the same period in 2025 [31][32]. 3.2.2 Terms: Different regions show differentiation, and term shortening is not yet a general phenomenon - Regions with significantly shortened terms include Guangxi and Zhejiang, which do not arrange the issuance of 30y varieties and increase 10 - 20y varieties [32]. - Regions with little change in terms include Beijing and Shandong. Beijing's new special bonds still cover the full range of 1 - 30y terms, and Shandong's weighted average term is similar to that in Q1 2025 [33]. - Regions with significantly extended terms include Qingdao, which added 30y varieties that were not issued in 2025 [33]. 3.3 Q1 Supply Forecast: It is expected that the net financing of government bonds will be 3.6 trillion, and the issuance of ultra - long bonds will be 1.3 - 1.65 trillion 3.3.1 Government Bond Supply Forecast: The Q1 net financing is 3.6 trillion, including 2.15 trillion local bonds and 1.46 trillion treasury bonds - Local bonds: The net financing in Q1 may be around 2.15 trillion, with January and March being the supply peaks. The net financing in January, February, and March is expected to be 830 billion, 490 billion, and 840 billion respectively [38]. - Treasury bonds: The net financing in Q1 may be around 1.46 trillion. The single - issue scale of key - term treasury bonds is assumed to be 135 billion for the remaining 3 issues in January, rising to 175 billion in February, and around 190 billion in March due to high maturity pressure [39]. 3.3.2 Ultra - long Bond Supply Forecast: The issuance in Q1 is 1.4 - 1.77 trillion, including 11.6 billion treasury bonds and 1.3 - 1.65 trillion local bonds - Ultra - long treasury bonds: The issuance in Q1 may be around 11.6 billion, with 32 billion, 32 billion, and 52 billion issued in January, February, and March respectively [42]. - Ultra - long local bonds: The issuance in Q1 may be 1.3 - 1.65 trillion, with different issuance scales calculated according to different reference term structures [43].

Core Viewpoint - The report from CITIC Securities indicates a moderate growth in government debt supply expected by 2026, with specific focus on net financing of general bonds and the timing of issuance peaks [1] Group 1: Government Debt Supply - It is anticipated that the total supply of government debt will experience mild growth by 2026 [1] - The net financing situation for general bonds in 2026 is predicted based on the average net financing progress of national bonds from 2023 to 2025 [1] Group 2: Issuance Timing - The report suggests that net supply pressure may be concentrated in Q2 of 2026 [1] - New general bond issuance is expected to maintain a relatively slow pace, while a peak in new special bond issuance may occur towards the end of Q2 [1] Group 3: Refinancing and Local Debt - The proportion of refinancing bonds and maturing local debt is expected to increase in 2025, a trend that is likely to continue into 2026 [1]

Group 1 - The report highlights that the liquidity remains ample as of late December 2025, with bank lending exceeding 60 trillion yuan, and key rates such as DR001 and R001 showing narrow fluctuations [10][24][39] - The People's Bank of China emphasizes a monetary policy focused on expanding domestic demand and optimizing supply, indicating a potential alignment with fiscal debt issuance in 2026 [11][24] - The report notes a significant increase in the issuance of long-term local government bonds, particularly 30-year bonds, which have improved liquidity and attracted institutional investors [18][20][39] Group 2 - The analysis of government debt issuance reveals that national bonds follow a strict issuance plan, while local bonds have more flexible issuance schedules, leading to discrepancies between planned and actual issuance [20][39] - The report outlines that local government bonds are primarily aimed at debt replacement, with average costs decreasing by over 2 percentage points in many regions, thus alleviating repayment pressures [21][39] - The planned issuance of local government bonds for Q1 2026 totals 1.61 trillion yuan, with a focus on potentially reducing the supply of 30-year bonds in favor of shorter maturities [22][39] Group 3 - The report indicates that the net financing from local government bonds was negative in recent weeks, highlighting the need for careful monitoring of future issuance strategies [42][39] - The analysis of the interbank market shows that the demand for short-term bonds remains strong, with significant net purchases observed in the secondary market [48][39] - The report suggests that the pricing of long-term bonds may not be attractive currently, with better value found in shorter maturities, reflecting market dynamics [49][39]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the bond market outlook for early 2026, focusing on government bonds and credit bonds, with specific attention to the impact of monetary policy and market dynamics on these instruments [1][3][9]. Core Insights and Arguments - **Monetary Policy and Market Sentiment**: The expectation for monetary policy easing is limited, with concerns about increased government bond supply, particularly from Shandong province, which is set to issue nearly 100 billion in a single day [1][2]. - **Interest Rate Projections**: The forecast for the 10-year government bond yield is between 1.75% and 1.85%, while the 30-year yield is expected to be around 2.3% [1][3][9]. - **Social Financing Growth**: A slight increase in social financing growth is anticipated, projected to rise by 0.1%, but overall, significant upward movement is not expected [1][4]. - **Inflation Expectations**: The impact of rising prices of small and precious metals on the Producer Price Index (PPI) is expected to be limited due to their low weight in the PPI calculation. The CPI is projected to reach 1.5% year-on-year in February 2026, influenced by seasonal factors and technical issues [1][5]. - **Market Stability**: The central bank is expected to maintain market stability through liquidity easing and purchasing operations, with large banks and insurance companies actively participating in the market [1][7][8]. Investment Strategy - **Focus on Space Selection**: The current investment strategy should prioritize space selection over timing, given the stability of interest rate ceilings [1][8]. - **Credit Bond Recommendations**: The most secure investments are expected to be in three-year perpetual bonds, followed by AA- to AA+ rated city investment bonds, and then five-year perpetual bonds and two-year general credit bonds [1][10]. - **Convertible Bonds**: There is a notable demand for convertible bonds at the beginning of the year, although the current low holding levels of insurance and pension funds may affect this trend [1][11]. Additional Insights - **Market Dynamics**: The bond market is expected to experience fluctuations, but significant declines are not anticipated. The market consensus suggests that the peak for the 10-year government bond yield will be around 2.0% [1][9]. - **Sector Performance**: In the convertible bond market, sectors such as AI and robotics are performing well, while previous strong sectors like non-ferrous metals are adjusting [1][14]. - **New Issuances**: There has been an increase in the issuance of new bonds, particularly in the technology sector, with promising opportunities expected in January 2026 [1][15]. Conclusion - The bond market outlook for early 2026 suggests a stable yet cautious environment, with specific strategies recommended for navigating the anticipated fluctuations and opportunities in various sectors. The focus remains on maintaining a balanced approach to investment, considering both the macroeconomic indicators and sector-specific trends.

Domestic Insights - High-frequency data indicates that effective demand has been insufficient since Q4 2025, continuously squeezing corporate profit margins, leading to a significant reduction in the marginal effect of "price for volume" [2][12] - In November, the profit growth rate of industrial enterprises remained in negative territory, with a decline of 7.6 percentage points compared to the previous month [2][14] - The appreciation of the RMB may be nearing its peak, driven by concentrated settlement demand near year-end, but the central bank may begin to intentionally control the extent of appreciation [2][12] - A break of the 7 mark in the central parity requires an increase in corporate hedging rates and the proportion of cross-border RMB settlements, with expectations for a favorable timing in mid to late 2026 [2][12] Overseas Insights - Following the Bank of Japan's monetary policy meeting, Governor Ueda stated that they are steadily approaching the 2% inflation target and will continue to raise interest rates, maintaining a gradual tightening pace [2][13] - The U.S. Q3 GDP growth rate exceeded expectations at 4.3%, with over half of this growth attributed to personal consumption expenditures, while government investment has rebounded [2][13] - The high mortgage rates have a delayed transmission effect on the real estate market but are expected to significantly impact current consumption [2][13] Asset Market Insights - The A-share equity market continues its allocation trend, but short-term volatility may increase, especially with external disturbances expected after the New Year [3][12] - The USD/JPY exchange rate remains above 155, and any intervention by the Bank of Japan or a cooling of Fed rate cut expectations could cause temporary disturbances to domestic equity assets [3][12] Monetary Liquidity Tracking - The central bank's flexible operations have resulted in a tight balance in the funding environment, with a net injection of 652 billion yuan from various operations [4][12] - The average weekly rate for DR001 decreased by 0.950 basis points to 1.2633%, while DR007 increased by 0.330 basis points to 1.4464% [5][16] Government Bonds - The supply pressure of government bonds has significantly decreased, with a maturity repayment scale of 2,948.57 billion yuan, and the planned issuance for the upcoming week is 26 billion yuan, a substantial drop from the previous week [6][17] Interbank Certificates of Deposit - The weighted issuance rate for interbank certificates of deposit was 1.6394%, down 1.46 basis points from the previous week, while the secondary market saw slight increases in rates for various maturities [7][18] Major Asset Performance - Domestic long-term and short-term government bond yields showed a divergence, with short-term yields declining significantly [8][34] - Gold prices surged, while oil prices experienced fluctuations [11][34]