Report Industry Investment Rating No relevant content provided. Core View of the Report - The bond market currently has significant differences, and breaking through the current trading range requires the formation of a new consensus, which is expected to gradually take shape in the next month [2][7]. - The economic data in August further weakened, and if the GDP growth rate significantly weakens in Q3 and the pressure continues to increase in Q4, the possibility of the central bank restarting bond purchases or even reducing the reserve - requirement ratio and interest rates cannot be ruled out [2]. - Although the bond market is currently sensitive to negative factors, the probability of the A - share market accelerating its unilateral upward movement in the short term is relatively low, and the impact of redemption fee policies on market sentiment may gradually weaken [2][3]. - The central bank is likely to maintain the stability of cross - quarter funds, and the adjustment of the 14 - day reverse repurchase bidding method is conducive to the decline of cross - quarter funds prices [2][3][47]. - During the period of waiting for market consensus to form, it is recommended to maintain a certain leverage, use 2 - 3 - year medium - and high - grade credit bonds as the bottom position, retain some positions in 10 - year treasury bonds, and further increase positions after the signal is clear, while the operation of ultra - long bonds still needs to observe the trend of the equity market in the short term [3]. Summary According to the Directory 1. Interest rates need the market to reach a new consensus on the central bank's adjustment driven by the weakening fundamentals for further decline - In August, the economic data further weakened. The industrial added - value dropped to a new low of 5.2% for the year, and the 25Q3 GDP growth rate is likely to drop to 5% or lower [2][10]. - On the demand side, the year - on - year growth rate of social retail sales in August dropped to 3.4%. After September, the base increase may further magnify the pressure, and the year - on - year growth rate of fixed - asset investment accelerated its decline, with all three sub - items weakening comprehensively [2][13][15]. - In August, the real - estate - related growth rates also declined across the board. Although the economic entered the peak season in September, the improvement of production activities was not significantly better than the seasonal average, and the export volume may face pressure in Q4 [2][18][19]. - Since Q3, the relationship between the bond market and the fundamentals has weakened. If the GDP growth rate significantly weakens in Q3 and the pressure continues to increase in Q4, the central bank may restart bond purchases or even reduce the reserve - requirement ratio and interest rates, but the market needs time to reach a consensus on this [2][26]. 2. Under the central bank's stable attitude, the bank's liability pressure is limited. The adjustment of the 14 - day reverse repurchase bidding method is conducive to the decline of cross - quarter funds prices - In August, the excess reserve ratio was 1.1%, lower than expected, mainly due to the unexpected significant increase in government deposits, which may be affected by the slowdown of general public budget expenditures and the slow progress of replacement bond use [2][26][29]. - The central bank's tool issuance in recent months has been more inclined to large - scale banks. Small and medium - sized banks have continued to net repay inter - bank certificates of deposit, indicating that their motivation to expand assets through inter - bank business has weakened, and their liability pressure may be relatively lower [2][36]. - Last week, the funds tightened marginally under multiple exogenous disturbances, but on Friday, the funds became looser marginally. The average values of DR001 and DR007 since September are roughly the same as those since Q3, so it cannot be inferred that the central bank's attitude has changed [2][3][40]. - The central bank's adjustment of the 14 - day reverse repurchase operation to fixed - quantity, interest - rate bidding, and multiple - price winning may achieve the effect of interest - rate cuts in essence, showing the intention to support cross - quarter funds and being conducive to the decline of cross - quarter funds prices [47]. 3. Emphasize the leveraged interest - rate - arbitrage strategy in the short term and wait for clearer signals for long - end bonds - The probability of the A - share market accelerating its unilateral upward movement in the short term is relatively low, and the impact of redemption fee policies on market sentiment may gradually weaken [3][49]. - Although the probability of the central bank's bond purchases, reserve - requirement ratio cuts, and interest - rate cuts in the future increases, the timing of market consensus formation is uncertain, and it is difficult to grasp the right - side entry rhythm [3][50]. - The central bank's liquidity easing has the highest certainty. It is recommended to maintain a certain leverage, use 2 - 3 - year medium - and high - grade credit bonds as the bottom position, retain some positions in 10 - year treasury bonds, and further increase positions after the signal is clear, while the operation of ultra - long bonds still needs to observe the trend of the equity market in the short term [3][50][51].