Report Overview - The report is a commentary on the January 2026 PMI data by the fixed - income research team [2] - The analysts are Chen Xi and the contact person is Wang Shuaizhong [3] Report Industry Investment Rating - Not provided in the report Core Viewpoints - The economic repair falling short of expectations is refuted, and the economy is expected to pick up in the cycle. The target range for the 10 - year Treasury bond is 2 - 3%, with a central value of around 2.5% [7][8] Summary by Related Content PMI Data Overview - In January 2026, the manufacturing PMI was 49.3% (previous value 50.1%), down 0.8 pct month - on - month; the non - manufacturing PMI was 49.4% (50.2%), down 0.8 pct month - on - month; the composite PMI was 49.8% (50.7%), down 0.9 pct month - on - month [4] Reasons for the Decline in January PMI - The manufacturing PMI decline was due to some industries entering the off - season and overall market demand being insufficient. The Spring Festival holiday and supply - demand contradictions might have caused the unexpected decline. Also, a possible correction after the unexpected growth in December should be considered [5] - In the short term, the lack of domestic market demand may continue, as both the manufacturing and non - manufacturing new order indices are in the contraction range [5] Positive Signals in Prices - The main raw material purchase price index and ex - factory price index increased by 3.0 pct and 1.7 pct respectively month - on - month. The ex - factory price index rose to the expansion range for the first time in nearly 20 months, indicating an improvement in the overall price level of the manufacturing market [6] Construction Industry Outlook - The construction industry business activity expectation index dropped to 49.8%, below the critical level. This shows that construction enterprises are cautious about the industry's development, and the Spring Festival holiday has weakened business activities. Attention should be paid to data such as the direction of real estate listing and transaction volumes [6] Structural Highlights in the Data - The view that the economic repair falls short of expectations is often refuted by policy support in history. After repeated refutations, the market will gradually become optimistic [7] Bond Market Views - Fundamental aspect: The refutation of the view that the economic repair falls short of expectations, combined with possible broad credit and broad fiscal policies at the beginning of 2026, will accelerate the cycle recovery [8] - Broad - money aspect: If there are broad - money policies (such as reserve requirement ratio cuts, interest rate cuts, bond purchases), it will be a chance to reduce holdings, similar to 2025 [8] - Inflation aspect: Pay attention to whether the PPI month - on - month can remain positive [8] - Capital interest rate aspect: If inflation rises month - on - month continuously, there is a possibility of capital tightening, and the yield of short - term bonds will rise [8] - Real estate aspect: Real estate is not used as a means to stabilize growth this time. Similar to the situation in the US after 2008, real estate is a lagging indicator and may bottom out after the recovery of various economic indicators and the rise of the stock market [8] - Bond aspect: The target range for the 10 - year Treasury bond is 2 - 3%, with a central value of around 2.5% [8]