Market Overview and Analysis - The issuance scale of government bonds, local bonds, and policy financial bonds in the primary market last week was 310.3 billion, 91.4 billion, and 154 billion respectively, with net financing amounts of 214.6 billion, -13.7 billion, and 142.9 billion [1] - Financial bonds (excluding policy financial bonds) totaled an issuance scale of 111.7 billion, with a net financing amount of -19.2 billion. Non-financial credit bonds had an issuance scale of 251.4 billion, with a net financing amount of -9 billion [1] Secondary Market Review - The bond market experienced significant adjustments under weak financial economic data, influenced by factors such as rising anonymous interest rates, the stock-bond relationship, and the progress of US-China negotiations [2] Liquidity Tracking - After the month-end, the funding environment became naturally loose, with the central bank's announcement of a buyout-style reverse repurchase operation supporting new bond issuance. The overnight funding rate briefly fell below 1.3%, further pushing down funding prices. Ultimately, R001 and R007 decreased by 1.3 basis points and 3.3 basis points respectively compared to the previous week [3] Policy and Fundamentals - July economic and financial data indicated that insufficient domestic demand is beginning to exert pressure on economic growth in the second half of the year, with weak real financing demand. High-frequency data shows that production has mostly rebounded month-on-month, while consumption remains low, with food prices declining but industrial product prices rising [4] Overseas Market - Despite a mild performance in the US July CPI, the PPI exceeded expectations, and the unexpected decline in the University of Michigan consumer confidence index for August has led to rising long-term and short-term inflation expectations, maintaining concerns about inflation in overseas markets. The 10-year US Treasury bond closed at 4.33%, up 6 basis points from the previous week [5] Equity Market - The market continued its upward trend this week, with trading volume gradually increasing. The Shanghai Composite Index touched a high of 3700 since 2021, with the Wind All A Index rising by 2.95% during the week. The ChiNext and STAR Market surged by 8.58% and 5.53% respectively. The average daily trading volume for the Wind All A Index remained above 2 trillion. As of August 14, 2025, the financing balance for the Wind All A Index was 2041.039 billion, an increase of 42.131 billion from August 7, indicating a continuous net inflow of financing, particularly focused on the ChiNext and STAR Market [6] Bond Market Strategy Outlook - In an environment of fundamental pressure and weak financing demand, the central bank's liquidity support stance is unlikely to change fundamentally, and continued loose funding is a high-probability event. This is favorable for short-term bonds and certificates of deposit. However, for the long end of the bond market, July financial data indicates a trend of residents shifting deposits. Recent market risk sentiment remains high, and the initiation of a new round of yield decline may require patience until the stock market's rapid rise subsides and the central bank resumes buying and selling government bonds. The period around September 3rd is an important observation point for the stock market, during which more attention should be paid to high-level configurations and maintaining liquidity in the portfolio. In the convertible bond market, valuation is currently a focal point of market debate. The median valuation of convertible bonds has exceeded 130, and as equity strengthens, the number of strong redemption targets will increase, leading to a decrease in relatively high-quality convertible bond targets. High valuations do not necessarily indicate a bearish outlook but suggest a weakening of volatility and risk-return asymmetry, making it more challenging for low-volatility strategy investors to participate. From a beta perspective, convertible bonds are expected to absorb equity elastic funds, and under a low-interest-rate environment, they will not adjust ahead of stocks. In terms of detailed strategy selection, there is still room for bond selection in convertible bonds [7]