Core Viewpoint - The bond market rebounded on July 15, driven by a series of significant economic data released by the National Bureau of Statistics, indicating resilience in the domestic economy and supporting the likelihood of achieving the annual GDP growth target of 5% [1][2]. Economic Data Summary - The GDP growth rate for the first half of the year was reported at 5.3%, exceeding market expectations [1]. - Industrial added value in June increased by 6.8% year-on-year, up from a previous value of 5.8% [1]. - Retail sales of consumer goods in June totaled 42,287 billion yuan, with a year-on-year growth of 4.8%, down from 6.4% previously [1]. - Fixed asset investment (excluding rural households) grew by 2.8% year-on-year in the first half, compared to a previous growth of 3.7% [1]. Market Reaction - The bond market saw a significant increase, with the 30-year government bond futures rising by 0.53%, marking the largest increase since May 30 [1]. - By the end of the trading day, all government bond futures closed higher, with the 30-year main contract up 0.47% to 120.760 yuan, and the 10-year main contract up 0.18% to 108.890 yuan [2]. - The yields on major interbank bonds mostly declined, with the 10-year government bond yield falling by 1.06 basis points to 1.656% [2]. Trading Behavior - The primary buyers in the bond market on July 15 were banking institutions, while brokers and funds were the main sellers [4]. Future Outlook - Southwest Securities indicated that traditional seasonal factors affecting the bond market in the third quarter may have limited impact in 2025, with overall market sentiment remaining active [5]. - Analysts noted that despite recent adjustments in the bond market, key variables influencing bond direction, such as fundamentals and central bank attitudes, have not changed [5].

Group 1 - The report indicates that since late May, the long-term credit bond market has seen significant net buying activity, reflecting high market participation enthusiasm [1][9] - The long-term credit bond market began to show independent trends in both last year and this year under extreme conditions of short-term yield compression, leading to a focus on duration for yield [9][12] - The report highlights that the current long-term credit bond market is influenced by the "stock-bond" effect, with institutions being cautious and focusing on profit-taking points [1][9] Group 2 - For the 5-7 year medium-term bonds, institutional net buying has significantly increased since late May, with peak net buying volumes reaching around 3.5 billion [2][14] - In the 7-10 year medium-term bonds, the fluctuation of fund net buying is a crucial factor affecting credit spreads, with insurance companies showing stronger net buying compared to last year [2][17] - For bonds over 10 years, the participation of funds has been limited this year, with the main buying force coming from insurance and other product categories, resulting in weaker effects on credit spread compression [2][18] Group 3 - The report states that the compression of credit spreads has reached an extreme level for short-term bonds (3 years and under), while there is still some room for long-term bonds (5 years and above) [3][23] - The report suggests that if funds continue to buy long-term credit bonds significantly, it could further compress spreads; otherwise, the compression potential may be limited [3][23] - The report identifies three key points for profit-taking in long-term credit bonds, including observing fund buying trends and credit spread movements [3][9] Group 4 - The report recommends that institutions with weaker liability stability should focus on 2-3 year low-grade bonds and 4-5 year high-yield bonds, while those with stronger stability should actively allocate long-term bonds [4][9] - The yield range for 7-year AA+ rated bonds and 10-15 year AA+ rated bonds is noted to be between 2.07% and 2.39%, indicating potential for yield exploration [4][9]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints - The market for ultra - long credit bonds has slowed down, but the index of ultra - long credit bonds has shown stable performance. The trading volume of ultra - long industrial bonds over 10 years has increased, while the subscription sentiment for new ultra - long industrial bonds has significantly cooled. The spread between active ultra - long credit bonds and Treasury bonds of similar maturities continues to narrow. Accounts with stable liability ends need to reasonably control the position of ultra - long credit bonds [2][4][5] 3. Summary by Directory 3.1 Stock Market Characteristics - The market for ultra - long credit bonds has slowed down. Factors such as the slight tightening of cross - quarter funds, the tilt of the stock - bond balance, and the net value fluctuations of credit bond ETFs have disturbed the sentiment of going long on ultra - long credit bonds. The yield distribution of existing ultra - long credit bonds this week is generally the same as last week, and the number of existing ultra - long credit bonds with a yield below 2.2% remains at 650 [2][13] 3.2 Primary Issuance Situation - The supply of new ultra - long industrial bonds remains high. The issuance scale of new ultra - long credit bonds this week totals 29.5 billion, basically the same as last week, and ultra - long industrial bonds are still the main new addition. However, the subscription sentiment for new ultra - long industrial bonds has significantly cooled this week, which is related to the average issuance interest rate of new ultra - long industrial bonds dropping to a new low and the increased volatility of the capital market near the end of the quarter [3][22] 3.3 Secondary Trading Performance - The index of ultra - long credit bonds has shown stable performance. In the latest week, the equity market has strengthened. Due to the stock - bond seesaw effect, the indexes of mainstream bond varieties have weakened, but the index of credit bonds over 7 years has been relatively stable, with the weekly increase of the AA+ credit bond index over 10 years being 0.18%. - The trading volume of ultra - long industrial bonds over 10 years has increased. Although the preference for ultra - long credit bonds has been disturbed by the strengthening of equity assets this week, the weekly trading volume of industrial bonds from 7 - 10 years has dropped to 448, while the trading volume of industrial bonds over 10 years has increased to 176, reaching a new high in weekly trading volume since 2024. In terms of trading returns, the average weekly trading return of industrial bonds over 7 years has dropped to a new low, and the spread between 7 - 10 - year varieties and 20 - 30 - year Treasury bonds has narrowed to 25BP. - The trading of ultra - long credit bonds is still mainly at a low valuation, and the low - valuation trading margin of industrial bonds from 20 - 30 years is at the forefront. However, the proportion of TKN trades in credit bonds over 7 years has decreased significantly, indicating that investors still have concerns about the sustainability of the market for this variety. - In terms of investor structure, insurance companies and funds have continued to buy ultra - long credit bonds this week, but the intensity of funds chasing long - term credit has slowed down, and the scale of increasing the position of 5 - 10 - year credit bonds this week has dropped to 3.2 billion [4][32][42]