1. Report Industry Investment Rating - Not provided in the report 2. Core Viewpoints of the Report - The stock index is expected to be volatile. Although geopolitical risks such as the US - Iran conflict and Trump's tariff policy may impact the global equity market, the overall influence is limited. The technology theme is a relatively certain main line in the first half of this year, while the stabilization and recovery of the consumption and pro - cyclical sectors may occur after the inflation data turns warmer [1]. - The bond market is expected to be volatile with a bearish bias. The core drivers of the bond market recently are the loose capital supply and the weak economic recovery, but it is restricted by factors such as government bond supply pressure and the warming of the equity market. With the 10 - year Treasury yield breaking below the important 1.8% mark, the "odds of going long" for further decline are insufficient [2]. 3. Summary by Directory 3.1 Research Views - **Stock Index**: On February 24, most stocks in the A - share market rose. The Wind All - A index rose 1.06% with a trading volume of 222 million yuan. The CSI 1000 index rose 1.16%, the CSI 500 index rose 1.12%, the SSE 300 index rose 1.01%, and the SSE 50 index rose 0.23%. Geopolitical risks are still brewing, and the US - Iran conflict may break out soon. Trump's tariff policy may impact the global equity market, but the overall influence is limited. The style switch after the Spring Festival is a market concern, and the technology theme is a strong main line in the first half of the year [1]. - **Treasury Bonds**: Treasury bond futures closed with gains. The 30 - year main contract rose 0.35%, the 10 - year main contract rose 0.08%, the 5 - year main contract rose 0.07%, and the 2 - year main contract rose 0.03%. The central bank carried out 526 billion yuan of 7 - day reverse repurchase on February 24, with a winning bid rate of 1.4%. The open - market operations achieved a net withdrawal of 926.4 billion yuan. The bond market is currently in a state of "narrow - range yield fluctuations with the ultra - long end leading the rise", and is expected to be bearishly volatile [1][2]. 3.2 Daily Price Changes - **Stock Index Futures**: The IH contract decreased by 8.4 points (- 0.27%), the IF contract increased by 2.0 points (0.04%), the IC contract increased by 112.4 points (1.35%), and the IM contract increased by 97.0 points (1.18%) [3]. - **Stock Indexes**: The SSE 50 index decreased by 8.7 points (- 0.28%), the SSE 300 index increased by 5.8 points (0.12%), the CSI 500 index increased by 97.8 points (1.17%), and the CSI 1000 index increased by 75.3 points (0.91%) [3]. - **Treasury Bond Futures**: The TS contract increased by 0.036 points (0.04%), the TF contract increased by 0.015 points (0.01%), the T contract increased by 0.045 points (0.04%), and the TL contract increased by 0.12 points (0.11%) [3]. 3.3 Market News - During the 9 - day Spring Festival holiday, the travel scale reached a new high. The cumulative cross - regional personnel flow in the whole society exceeded 28 billion person - times, with an average daily flow of 311 million person - times, a year - on - year increase of 8.2% [4]. 3.4 Chart Analysis - **Stock Index Futures**: The report provides various charts showing the trends of IH, IF, IM, IC main contracts and their corresponding basis [6][7][8][9][10]. - **Treasury Bond Futures**: The report includes charts showing the trends of Treasury bond futures main contracts, Treasury bond spot yields, basis, inter - period spreads, cross - variety spreads, and capital interest rates [13][14][15][16][17][19]. - **Exchange Rates**: The report presents charts of the central parity rate of the US dollar against the RMB, the euro against the RMB, forward exchange rates, the US dollar index, and exchange rates between different currencies [22][23][24][26][27].

Market Overview - The A-share market saw most stocks rise, with Wind All A increasing by 1.06% and a trading volume of 2.22 billion [3] - The geopolitical risks remain in the background, particularly with the potential for conflict between the US and Iran, which could impact market sentiment [3] - The US Supreme Court ruled that Trump's tariff policy under the IEEPA was illegal, but this does not affect his ability to impose tariffs through other domestic laws [3] Bond Market - The bond futures closed with the 30-year main contract up by 0.35%, and the 10-year main contract up by 0.08% [10] - The People's Bank of China conducted a 7-day reverse repurchase operation of 526 billion yuan at a rate of 1.4%, maintaining liquidity in the banking system [10] - The bond market is driven by a loose funding environment and a weak economic recovery, with long-term bond yields declining more than short-term yields [10][5] Precious Metals - Gold and silver prices showed weak fluctuations, while platinum and palladium experienced stronger movements [11] - The uncertainty surrounding US tariffs has increased global economic uncertainty, impacting precious metal prices [11] - Gold is expected to trade in a wide range around $5,000 per ounce post-holiday, with a focus on geopolitical developments and potential interest rate cuts [11]

Core Viewpoint - The short-term spring market continues, with A-shares maintaining a trend of oscillation and strength, while the economy and earnings are in a weak recovery phase [1] Economic Trends - The short-term economy is still showing a weak recovery trend [1] - Short-term earnings growth may continue in a recovery cycle, with the PPI year-on-year growth expected to rise and A-share earnings maintaining a structural recovery trend [1] Liquidity Conditions - Short-term macro liquidity remains loose, with the US dollar index further declining, reducing constraints on domestic liquidity, and potential for further reserve requirement ratio cuts and interest rate reductions domestically [1] - Short-term market funds are likely to continue flowing in rapidly [1] Risk Appetite - Short-term risk appetite may further increase due to rising positive policy expectations and relatively limited external risks [1]

Group 1 - The 30-year Treasury ETF (511090) has seen a slight increase of 0.02% as of December 30, 2025, with a trading volume of 5.66 billion yuan and a turnover rate of 2.23% [1] - The average daily trading volume of the 30-year Treasury ETF over the past year is reported at 83.89 billion yuan, indicating strong market activity [1] - The latest scale of the 30-year Treasury ETF has reached 25.346 billion yuan, reflecting its growing significance in the market [1] Group 2 - The Central Political Bureau meeting emphasized the need to activate existing policies and expand domestic demand, suggesting a more proactive fiscal policy and moderately loose monetary policy to create a supportive environment for the bond market [1] - The expectation of a rate cut by the Federal Reserve and the potential for domestic reserve requirement ratio (RRR) cuts and interest rate reductions are likely to enhance support for the bond market [1] - According to Shenwan Hongyuan, the current economic fundamentals are in a state of strong expectations but weak reality, which may provide support for the bond market despite low actual performance [2] Group 3 - The 30-year Treasury ETF closely tracks the China Bond 30-Year Treasury Index, which consists of publicly issued 30-year government bonds, serving as a benchmark for investment in this category [2]

Group 1 - The central bank has adopted a supportive monetary policy since June, leading to a significant decline in funding rates, with overnight funding rates (DR001) remaining around 1.3%, providing strong support for the bond market [1][5][6] - The bond market has shown a low volatility and narrow fluctuation pattern since July, with the key to breaking this pattern lying in the implementation of a loose monetary policy [1][2] - The yield spread between key and non-key term government bonds has been significantly compressed, indicating cautious market sentiment, with the 50-year and 30-year bond spread narrowing from nearly 15 basis points to less than 9 basis points [2][3] Group 2 - The central bank's monetary policy has shifted focus from "risk prevention" to "stabilizing growth," with a low probability of new incremental monetary policy measures in the short term [3][5] - Government bond issuance has accelerated this year, with a total issuance of 7.62 trillion yuan by the end of June, which is a significant increase compared to the previous year [3][4] - The domestic economy is experiencing a weak recovery, with a strong performance in consumption but continued weakness in investment, particularly in the real estate sector [4][5] Group 3 - The bond market is expected to maintain a range-bound fluctuation in the short term, with the probability of unexpected policy measures being low, while liquidity remains supportive for the bond market [5][6] - The 10-year government bond yield is projected to reach a low point of around 1.5% this year, suggesting potential entry points for investors if further adjustments occur in the bond market [6]

Summary of Conference Call Records Industry Overview - The A-share market is currently facing fundamental pressures, with May export growth unexpectedly declining, and the pace of policy implementation likely slowing down. It is expected that fundamental pressures may ease around mid to late July [1][2] - Structural pressures exist in the A-share mid-year report performance, particularly for high-earning expectations in new consumer sectors and thematic stocks, which may face valuation adjustment risks [1][3] - Ongoing geopolitical risks, such as the Iran nuclear conflict, are suppressing market sentiment and increasing uncertainty [1][4] Core Insights and Arguments - **Market Performance**: The A-share market is expected to continue its weak performance in the short term, with a potential for stabilization only by mid to late July if positive fundamental and policy factors emerge [2][3] - **Key Factors for Weakness**: 1. **Fundamental Pressure**: Export growth is anticipated to continue declining from June to August, increasing economic growth pressure [3] 2. **Mid-Year Report Performance**: While overall performance is stable, certain sectors may face significant structural pressures [3] 3. **Geopolitical Risks**: Ongoing geopolitical tensions are expected to further suppress market sentiment [4] Important Policies and Measures - Recent policies from the Lujiazui Forum have positively impacted market sentiment, including measures from the central bank related to foreign exchange and the introduction of more favorable conditions for technology innovation companies to list [6] - The introduction of new listing standards for the Sci-Tech Innovation Board and the Growth Enterprise Market is expected to facilitate the entry of more innovative companies into the capital market, although the immediate impact on the market's weak state is limited [8] Macro Environment Impact - The current macro environment is characterized by weak economic recovery and declining exports, which historically correlates with weak A-share performance [7][10] - The liquidity environment is neutral to slightly positive, but potential dollar rebounds and geopolitical tensions could impact global liquidity negatively [9] Industry Allocation Recommendations - A balanced allocation strategy is recommended, focusing on defensive sectors and high-potential technology sub-sectors, such as artificial intelligence and robotics, as well as undervalued blue-chip stocks in banking, construction, transportation, and electricity [11][13] - High-performing sectors historically during weak economic phases include high-growth industries and defensive sectors, such as low-valuation blue-chip stocks [12] Investment Opportunities - From a value investment perspective, sectors with low historical PE percentiles, such as non-bank financials, transportation, and non-ferrous metals, are highlighted as attractive for short-term allocation [14] - Short-term investment strategies should include a balanced mix of growth and blue-chip stocks, with a focus on undervalued sectors and those that have undergone significant adjustments [15]

Group 1 - The A-share market experienced a range-bound fluctuation near the 20-day moving average, with a decline in average daily trading volume to 1.14 trillion yuan [1] - Market performance was characterized by a hierarchy: consumption > growth > finance > cyclical [1] - Economic indicators such as the May PMI showed signs of recovery, but the overall economic situation remains weak due to trade friction uncertainties [1] Group 2 - Short-term risk appetite is limited, but declining interest rates favor safe-haven assets like gold and new consumption sectors with inherent growth support [2] - The long-term trade landscape has been disrupted by tariff impacts, benefiting safe-haven assets despite short-term fluctuations in gold prices [2] - The technology growth sector, particularly in AI, robotics, innovative pharmaceuticals, and military industries, may see renewed performance as earnings reports are released [2]

Report Summary 1. Report Industry Investment Ratings - The investment rating for stock index futures is to defend and wait and see [2] - The investment rating for treasury bond futures is to be bullish in the short - term [4] 2. Core Views Stock Index - Trump talked with the leaders of Russia and Ukraine. Putin is willing to draft a peace memorandum with Ukraine, and Zelensky is also willing to sign a peace memorandum and conduct negotiations but refuses territorial compromise and withdrawal. Fed officials poured cold water on interest - rate cuts, hinting that rates may stay high until at least September. China's April social retail sales growth slowed to 5.1% year - on - year, industrial added - value of enterprises above designated size increased by 6.1%, January - April urban fixed - asset investment rose 4%, and national real - estate development investment fell 10.3% year - on - year. China's Ministry of Commerce demanded the US to correct its actions. Without a clear market driver, the stock index may move in a volatile manner [1] Treasury Bond - The bond market is in an environment of weak economic recovery, and the trading logic is returning to pricing the endogenous economic momentum. The market's expectation of a deposit - rate cut is reasonable due to the narrowing net interest margin of banks. A new round of deposit - rate adjustment is a measure to match the decline in policy rates, and stabilizing the interest margin is a long - term task. The rumored cut in deposit rates is higher than that of policy rates, providing new support for the decline in yields [3] 3. Market Review Stock Index - The main contracts of CSI 300, SSE 50, CSI 500, and CSI 1000 stock - index futures rose 0.05%, 0.05%, 0.09%, and 0.15% respectively [6] Treasury Bond - The 10 - year, 5 - year, 30 - year, and 2 - year main contracts of treasury - bond futures rose 0.02%, 0.0%, 0.03%, and 0.0% respectively [9] 4. Technical Analysis Stock Index - The KDJ indicator of the Shanghai Composite Index shows a possible volatile movement with adjustment risks [7] Treasury Bond - The KDJ indicator of the T main contract shows a volatile movement [10] 5. Futures Data | Date | Futures Variety | Closing Price (Yuan/Contract) | Change (%) | Volume (Lots) | Open Interest (Lots) | | --- | --- | --- | --- | --- | --- | | 2025 - 05 - 19 | CSI 300 Continuous | 3843.20 | 0.05 | 48882 | 149439 | | 2025 - 05 - 19 | SSE 50 Continuous | 2688.80 | 0.05 | 27081 | 51445 | | 2025 - 05 - 19 | CSI 500 Continuous | 5623.00 | 0.09 | 51297 | 118428 | | 2025 - 05 - 19 | CSI 1000 Continuous | 5975.40 | 0.15 | 140984 | 192261 | | 2025 - 05 - 19 | 10 - year Treasury Bond Continuous | 108.61 | 0.02 | 57954 | 82926 | | 2025 - 05 - 19 | 5 - year Treasury Bond Continuous | 105.73 | - 0.00 | 42586 | 66890 | | 2025 - 05 - 19 | 30 - year Treasury Bond Continuous | 119.32 | 0.03 | 43076 | 47914 | | 2025 - 05 - 19 | 2 - year Treasury Bond Continuous | 102.38 | - 0.00 | 48335 | 87939 | [12]