Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - The adjustment of the bond market may be nearing its end in the short term. The central bank's supportive attitude remains beneficial to the bond market. In the long term, the continuous transformation of pricing logic and macro - narrative requires further deepening of supply - side policies and marginal changes in demand to clarify market risk preferences and the direction of the bond market [35]. Summary by Directory 1. Stock and Commodity Rise, Tightening of Funds, Bear - Steep Curve - From July 21 - 25, the bond market continued its head - wind situation. The "anti - involution" sentiment supported the strength of the equity and commodity markets, diverting funds from the bond market. The 1.2 - trillion - yuan Yajiang investment strengthened the broad - credit expectation, suppressing the long - end performance. In the second half of the week, the unexpected tightening of the funds led to partial redemptions and bond - selling by funds and wealth management products, causing concerns about "negative feedback." However, on Friday, with the central bank's timely support, the bond market sentiment improved [1][7]. - On a daily basis, the bond market was weak throughout the week. By July 25, the yields of 1Y, 5Y, 10Y, and 30Y treasury bonds increased by 3.5, 7.9, 6.7, and 8.4 BP respectively compared to July 18, with a steeper bear - steep curve [7]. 2. Roller - Coaster of Funds and Timely Support from the Central Bank - This week, the funds situation fluctuated, tightening in the second half. The large liquidity demand (such as MLF redemption, large - scale reverse - repurchase maturity, over - trillion - yuan certificate - of - deposit maturity, and treasury bond issuance) and the central bank's net redemption in the first half of the week increased the funds demand. The overnight funds rate rose to a relatively high level since June, and the secondary prices of certificates of deposit increased slightly in the second half of the week [2][10][12]. - On July 25, the central bank's large - scale reverse - repurchase injection supported the cross - month liquidity. The weekly average of funds rates fluctuated with a relatively stable mean. The funds stratification remained at a low level, with mixed weekly average changes. The secondary yields of certificates of deposit increased across the board [12]. 3. Are the "Three Concerns" Temporarily Resolved? 3.1. From Stock - Bond to Commodity - Bond: Is the Market on "Pause"? - The recent rise in the market is mainly based on policy expectations. This week, the "commodity - bond" linkage was strengthened, with the commodity futures market rising due to infrastructure expectations and supply - side contraction expectations. However, the callback of "double - coke" and other varieties at the end of the week indicates that policy pricing may be nearing its end. The sustainability of the "commodity - bond" linkage depends on policy implementation and improvement in physical supply - demand [20][23]. - Whether policies can improve the fundamentals will be a key factor affecting the direction of risk assets. Additional policies may support the performance of risk assets [23]. 3.2. Liquidity: "Tightness" and "Stability" before Crossing the Month - The unexpected tightening of funds may be due to the central bank's net redemption in the first half of the week, the diversion of bond - market funds by the rise of the stock and commodity markets, and the increased redemption pressure in the bond market [3][24]. - With the central bank's large - scale reverse - repurchase injection on Friday and the approaching Politburo meeting, the central bank is likely to maintain neutral operations, and the cross - month funds may be stable but not overly loose [24]. 3.3. Institutional Behavior: Redemption Pressure Temporarily Eased - Recently, the redemption pressure has increased due to the large fluctuations in fund net values since July, the inflow of funds into the equity and commodity markets, and the deepening of the adjustment in the bond market [25]. - However, the possibility of the bond - market redemption evolving into a "negative feedback" is low. The increase in redemption pressure is mainly reflected in the significant increase in fund selling, while the scale and yield of wealth management products remain relatively stable. With the central bank's support on Friday, the bond market showed signs of stabilization [26]. 4. Future Focus of the Bond Market - Monetary policy: The central bank will maintain a supportive attitude, and there is no need to worry too much about liquidity. In the short term, the urgency for interest - rate cuts is reduced, and the downward space for the short - end is limited if the central bank's injection remains moderate [36]. - Fundamental aspects: The upward trend needs to be continuously consolidated. In the short term, focus on whether the linkage effect of the stock, bond, and commodity markets weakens, and the progress of Sino - US tariff negotiations [36]. - Pay attention to the policy signals from the July Politburo meeting, which is important for guiding the macro - policy adjustment [36]. 5. Next Week's Key Data to Watch - Next week, important data include Germany's and the EU's Q2 GDP, the US's July ADP employment, Q2 GDP, PCE price index, federal funds target rate, and China's July official manufacturing PMI, among others [37].