Report Summary 1. Report Industry Investment Rating The document does not mention the report industry investment rating. 2. Core Views of the Report - **Credit Bond Outlook**: The recent performance of the credit bond market is better than that of the interest - rate bond market, with narrowing term spreads of various grades and most credit spreads of urban investment bonds and industrial bonds. Although there are potential negatives, the central bank's current supportive attitude makes it difficult to cause significant negative impacts. However, due to the poor liquidity of credit bonds, short - term liquidity disturbances, especially institutional behavior at the end of the quarter, need attention. Short - end coupon strategies are preferred, and long - term ordinary credit bonds should be treated with caution [5][8]. - **Convertible Bond Outlook**: The style of the convertible bond market has changed recently, with high - price, double - low, and high - rating convertible bonds performing well, while medium - and low - rating and low - price convertible bonds are relatively weak. Since May 12th, the market sentiment has weakened. But in 2025, there are three major unchanged logics in the convertible bond market, and it is recommended to reserve positions and wait for right - side adding opportunities [5][10]. 3. Summary by Directory 3.1 Credit Bond and Convertible Bond Views - **Credit Bonds**: The credit bond market outperforms the interest - rate bond market, with narrowing term and credit spreads. Potential negatives include cross - quarter repatriation of wealth management products, peak CD maturities, and tariff policy fluctuations. Due to poor liquidity, short - term liquidity disturbances and institutional behavior at the end of the quarter need attention. Short - end coupon strategies are preferred, and long - term ordinary credit bonds should be carefully considered [5][8]. - **Convertible Bonds**: The market style has changed, with high - price, double - low, and high - rating convertible bonds performing well. Since May 12th, market sentiment has weakened. Three major logics in 2025 remain unchanged, and it is advisable to reserve positions for right - side adding [5][10]. 3.2 Credit Bond Review - **Negative Information Monitoring**: There were no bond defaults, overdue payments, or downgrades of corporate or bond ratings during June 9 - 15, 2025, except for several companies announcing major negative events such as lawsuits, regulatory penalties, and debt repayment difficulties [14][15]. - **Primary Issuance**: The primary issuance volume of credit bonds reached 314.1 billion yuan from June 9 - 15, 2025, with a net financing of 99.6 billion yuan. The total repayment amount was 214.5 billion yuan, a 45% increase from the previous period. Four bonds with a total scale of 3 billion yuan were cancelled or postponed. The issuance costs of medium - and high - grade bonds increased by about 10bp [15][16][18]. - **Secondary Trading**: Credit bond valuations were flat at the short - end and declined at the long - end. The risk - free rate curve only slightly increased at the long - end. Short - term spreads of various grades widened slightly, mid - term spreads remained flat, and long - term spreads narrowed by 3bp. The turnover rate increased to 2.04%. High - discount bonds were mainly from real - estate companies such as Country Garden, Sunshine City, and Vanke [20][29]. 3.3 Convertible Bond Review - **Market Overall Performance**: From June 9 - 13, 2025, the Shanghai Composite Index, Shenzhen Component Index, CSI 300, and other major indices mostly declined, except for the ChiNext Index, which rose 0.22%. The leading convertible bonds generally performed weaker than their underlying stocks. The top - rising convertible bonds were Jinling, Jinji, and Haibo Convertible Bonds [33]. - **Convertible Bonds Slightly Declined, Defensive Varieties Performed Well**: Last week, the CSI Convertible Bond Index declined 0.02%, the parity center increased 0.1% to 96.0 yuan, and the conversion premium rate center increased 0.5% to 26.5%. The average daily trading volume significantly increased to 69.298 billion yuan. Large - cap, high - rating, and double - low convertible bonds performed well [38].

Report Industry Investment Rating No relevant content provided. Core View of the Report - The report is optimistic about the subsequent bond market. It believes that incremental funds for the bond market may come from the expansion of fixed-income asset management products and the increase in insurance allocation willingness. When market concerns fade, bond market interest rates may follow the decline of funding rates [5][15]. Summary According to Related Catalogs 1. Interest Rate View: Where Do the Incremental Funds in the Bond Market Come From? - Since June, the funding situation has been looser than expected, with both funding rates and bond yields declining, but the decline in bond yields is smaller. The market is mainly worried about two issues: no more incremental funds in the bond market in the second half of the year and the unsustainability of the loose funding situation [5][8]. - The report is optimistic about the first issue, believing that there will still be incremental funds in the bond market in the second half of the year, mainly from two sources. First, fixed-income asset management products will continue to expand due to factors such as the lack of low-risk, high-return financial assets, stable market risk preferences, and the cyclical nature of fixed-income asset management products. Second, the insurance allocation demand will increase. The impact of the insurance product interest rate cut on premiums may be limited, and factors such as the deposit maturity rhythm and the search for capital gains in a low-interest rate environment may increase insurance bond allocation [5][8][11]. 2. Fixed Income Market Outlook: Release of Domestic Economic Data 2.1 This Week's Attention Points and Important Data Releases - This week, China will release economic data for May and the Loan Prime Rate (LPR) for June, while the US will announce its interest rate decision for June [16][17]. 2.2 This Week's Estimated Supply of Interest Rate Bonds - This week, it is expected to issue 841.8 billion yuan of interest rate bonds, which is at a high level compared to the same period. Among them, 430 billion yuan of treasury bonds, 261.8 billion yuan of local government bonds, and about 150 billion yuan of policy bank bonds are expected to be issued [17]. 3. Review and Outlook of Interest Rate Bonds: Yields Fluctuate Downward 3.1 Central Bank's Injection and Funding Situation - The central bank has net-repurchased reverse repurchases and continued to inject funds through outright repurchases. The net injection of open market operations this week was a net withdrawal of 7.27 billion yuan. The central bank plans to conduct an outright repurchase injection of 40 billion yuan for six months on June 16 [23]. - Funding rates have shown slight fluctuations. The trading volume of interbank pledged repurchase has continued to rise, and the medium- and long-term secondary yields of certificates of deposit (CDs) have declined rapidly [24][26]. 3.2 The Funding Situation is Favorable for the Bond Market - Last week, the bond market fluctuated slightly around the China-US trade talks. The progress was slightly lower than expected, which was favorable for the bond market. Coupled with the loose funding situation and the central bank's support, most bond yields declined. On June 13, the yields of 1-year, 3-year, 5-year, 7-year, and 10-year treasury bonds decreased by 1bp, 1bp, 0.1bp, 0.6bp, and 1.1bp respectively compared to the previous week [39]. 4. High-Frequency Data: Improvement in Automobile Retail Data - On the production side, the operating rates are divergent. The blast furnace operating rate decreased slightly, while the semi-steel tire operating rate increased significantly. The operating rates of petroleum asphalt and PTA also increased slightly. The year-on-year growth rate of average daily crude steel production in late May further declined [44]. - On the demand side, the year-on-year growth rates of passenger car wholesale and retail sales by manufacturers have increased. The year-on-year growth rate of commercial housing transaction area has fluctuated significantly. The export indices have shown mixed changes [44]. - On the price side, crude oil prices have increased, while copper and aluminum prices, as well as coal prices, have shown divergent trends. The prices of some midstream and downstream products have also changed to varying degrees [45].

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - Previously, the research team suggested paying attention to the opportunities in the bond market in June due to market expectations outpacing reality. Last week, the market's concerns about the capital side faded, leading to a decline in bond market interest rates. The team recommends continuing to focus on the possibility of changes in the curve shape [7]. - Since 2024, the term spreads of treasury bonds and credit bonds have diverged. The core reason lies in the differentiation of institutional behaviors, including banks' unstable liquidity expectations and the preferences of wealth management products [7]. - The shape of the interest rate curve and credit curve in 2024 and 2025 is related to central bank operations and the scale of wealth management products. Looking forward, the central bank's operations may improve banks' expectations of future liquidity, leading to an increase in the purchase of medium - and short - term treasury bonds. Therefore, the report suggests paying attention to the bull - steepening trade of the interest rate bond curve [8]. 3. Summary According to the Directory 3.1 Fixed Income Market Observation and Thinking: Consider Bull - Steepening Trade - The research team previously proposed two reports, hinting at bond market opportunities in June. Last week, the easing of capital - side concerns pushed down bond market interest rates, and the team suggests focusing on curve shape changes [7]. - Since 2024, the term spreads of treasury bonds and credit bonds have diverged. Banks' liquidity expectations and the preferences of wealth management products are the main reasons [7]. - The shape of the interest rate and credit curves in 2024 and 2025 is related to central bank operations and wealth management product scale. The central bank's operations may improve banks' expectations, and the report recommends the bull - steepening trade of the interest rate bond curve [8]. 3.2 Fixed Income Market Outlook: Multiple Domestic Data Releases 3.2.1 This Week's Attention Points and Important Data Releases - This week, China will release May CPI, export, and financial data, while the US will release May inflation data [14]. - The specific data release schedule includes China's May CPI on Monday, and the US's May unadjusted CPI monthly rate on Wednesday [15]. 3.2.2 This Week's Estimated Supply Scale of Interest - Bearing Bonds - This week, it is expected to issue 862.8 billion yuan of interest - bearing bonds, at a high level in the same period. Among them, treasury bonds are expected to be issued with a scale of 655 billion yuan, and local bonds are planned to be issued with a scale of 107.8 billion yuan [15]. 3.3 Interest - Bearing Bond Review and Outlook: Yield Bull - Steepening 3.3.1 Central Bank's Operations and Capital - Side Situation - At the beginning of the month, the central bank's reverse repurchase volume decreased, with a net withdrawal of 671.7 billion yuan in open - market operations. However, the early announcement of the outright reverse repurchase boosted market confidence [18]. - The capital - side pressure eased significantly at the beginning of the month. The trading volume of inter - bank pledged repurchase increased, and the capital interest rate declined. The overnight and 7 - day DR and R interest rates all decreased [19]. - The secondary yields of medium - and long - term certificates of deposit (CDs) declined rapidly. The net financing of CDs was - 80.4 billion yuan this week, and the proportion of 9M and 1Y CDs decreased. The issuance and secondary yields of CDs also changed [24]. 3.3.2 Rising Expectations of Easing - Last week, the bond market sentiment recovered due to the central bank's favorable attitude. The easing of capital pressure and the large - scale banks' purchase of short - term bonds led to expectations of further central bank easing [36]. - On June 6, the yields of 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year treasury bonds decreased, and the yield curve showed a bull - steepening trend [39]. 3.4 High - Frequency Data: Significant Negative Year - on - Year Growth in Commercial Housing Sales - On the production side, the operating rates of various industries were differentiated. The operating rates of blast furnaces, semi - steel tires, petroleum asphalt, and PTA changed, and the year - on - year growth rate of daily average crude steel production in late May further declined [48]. - On the demand side, the year - on - year growth rates of passenger car manufacturers' wholesale and retail sales declined from high levels. The year - on - year growth rate of commercial housing transaction area fluctuated greatly, with a - 33% growth rate in the week of June 8. The SCFI and CCFI composite indices changed by 8.1% and 3.3% respectively [49]. - On the price side, crude oil prices rose, copper and aluminum prices diverged, coal prices were also differentiated, and the prices of building materials, steel, and downstream consumer products changed to varying degrees [49].