1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - The current credit bond market is generally stable but lacks a clear direction, in a transitional phase where negative factors are gradually digested and positive factors are not fully priced. Key policy variables such as the reform of fund redemption fees have not been implemented, restricting the improvement of risk appetite. [2][6] - Looking ahead, the market will mainly feature structural opportunities, and it is difficult to see a trending market. Policy variables, such as whether the central bank restarts bond - buying and the timing of the implementation of the new fund regulations, will directly determine the pricing direction. [2][7][8] - It is recommended that investors adopt a prudent allocation strategy, focusing on the coupon income and defensive value of medium - to high - grade medium - and short - term credit bonds, which have a "safety margin." At the same time, they should closely monitor policy progress and risk events such as tariff issues and flexibly adjust positions to prevent fluctuations. Long - term credit can wait for the right - side opportunity after the over - adjustment when uncertainties are cleared. [2][6][7] 3. Summary by Relevant Catalogs 3.1 Credit Bond Market in the Transitional Phase - From October 9th to October 12th, the credit bond market continued the adjustment trend since September. After continuous adjustment, negative factors in the market have been relatively fully priced, and the risk of a further sharp decline is controllable. The market is not short of positive factors, but the signals have not been fully valued and priced. [7] - Recently, the credit bond market has been affected by multiple factors, including the long - term restructuring pressure on the bond outsourcing investment structure caused by the redemption fee regulations draft issued by the CSRC, the strong performance of equity assets diverting bond allocation demand, and the incomplete clearance of potential redemption pressure, especially the local pressure on the liability side of wealth management and funds. [7] - This week, the yield fluctuations of credit bonds intensified. One - year - or less short - duration credit bonds became relatively stable, with faster yield recovery, while the credit spreads of long - duration assets further increased. [7] 3.2 Policy Variables Determine Market Direction - The core contradiction in the bond market in October still focuses on policy variables, including whether the central bank restarts bond - buying and the timing of the implementation of the new fund fee regulations. These factors will directly determine the pricing direction of credit bonds. [7][8] - If the central bank restarts bond - buying, it will release a signal of loose money, which is conducive to boosting the overall sentiment of the bond market, especially supporting interest - rate bonds and driving the narrowing of credit spreads. It is expected that the probability of the central bank restarting bond - buying in October is relatively high. [8] - If the new fund regulations are implemented, they may impact the scale of bond funds. Bonds preferred by funds, such as policy - financial bonds, secondary - tier two bonds, and ultra - long - term credit bonds, may be the first to be affected. Policy uncertainties will magnify the differentiation in terms and ratings. Medium - and short - term high - grade bonds are relatively resistant to decline and have a "safety margin," while long - duration weak - quality bonds may face greater fluctuations. [8] 3.3 Yield and Spread Overview - **Each term's yield and its change**: The yields of various bonds such as treasury bonds, policy - bank bonds, and local government bonds showed different degrees of changes compared to last week, with different historical quantiles. For example, the 0.5 - year treasury bond yield was 1.39%, down 1.2bp from last week, and its historical quantile was 10.7%. [15] - **Each term's spread and its change**: The credit spreads of various bonds also changed, and the historical quantiles varied. For instance, the 0.5 - year credit spread of public non - perpetual urban investment bonds was 17bp, down 3.9bp from last week, and its historical quantile was 4.0%. [17] 3.4 Credit Bond Yield and Spread by Category (Hermite Algorithm) - **Urban investment bonds by region**: The yields and spreads of urban investment bonds in different regions showed different trends. For example, in Anhui, the 0.5 - year yield of public non - perpetual urban investment bonds was 1.82%, down 5.19bp from last week, and the 0.5 - year credit spread was 29.30bp, down 4.8bp from last week. [21][24] - **Yield and spread by implicit rating**: The yields and spreads of urban investment bonds with different implicit ratings also had distinct changes. For example, in Anhui, the yield of AAA - rated public non - perpetual urban investment bonds was 1.82%, down 0.9bp from last week, and the credit spread was 19.74bp, down 0.58bp from last week. [28][33] - **Yield and spread by administrative level**: The yields and spreads of urban investment bonds at different administrative levels showed different characteristics. For example, in Anhui, the yield of provincial - level public non - perpetual urban investment bonds was 1.81%, down 3.16bp from last week. [38]