1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - The report presents the performance of global asset markets including 10 - year and 2 - year government bonds of major economies, exchange rates of the US dollar against major emerging - economy currencies, major economy stock indices, and credit bond indices [3] 3. Summary by Relevant Catalogs Global Asset Market Performance - **10 - year government bonds**: The latest yields of 10 - year government bonds in the US, UK, France, Germany, Italy, Spain, Switzerland, Greece, Japan, Brazil, China, South Korea, Australia, and New Zealand are 4.345, 4.915, 3.709, 3.002, 3.875, 3.513, 0.382, 3.855, 2.304, 6.298, 1.840, N/A, 5.118, 4.883 respectively [3] - **2 - year government bonds**: The latest yields of 2 - year government bonds in the US, UK, Germany, Japan, Italy, China (1 - year yield), South Korea, and Australia are 3.854, 4.412, 2.571, 1.293, 2.827, 1.250, N/A, 4.817 respectively [3] - **Exchange rates**: The latest exchange rates of the US dollar against the Brazilian real, Russian ruble, South African rand, South Korean won, Thai baht, and Malaysian ringgit are 5.235, N/A, 16.820, 1488.350, 33.000, N/A respectively. The latest on - shore and off - shore RMB exchange rates are 6.884, the RMB central parity rate is 6.904, and the 12 - month NDF is 6.728 [3] - **Stock indices**: The latest values of major economy stock indices such as the S&P 500, Dow Jones Industrial Index, NASDAQ, Mexican index, UK index, French CAC, German DAX, Spanish index, Russian index, Nikkei, Hang Seng Index, Shanghai Composite Index, Taiwan index, South Korean index, Indian index, Thai index, Malaysian index, Australian index, and emerging - economy index are 6581.000, 46208.470, 21946.760, 64370.950, 9894.150, 7726.200, 22653.860, 16888.200, N/A, 51515.490, 24382.470, 3813.283, 32722.500, 5405.750, N/A, 1397.340, N/A, 8552.642, 1419.950 respectively [3] - **Credit bond indices**: The latest values of US investment - grade, euro - area investment - grade, emerging - economy investment - grade, US high - yield, euro - area high - yield, and emerging - economy high - yield credit bond indices are 3518.560, 263.418, 286.650, 2900.390, 404.460, 1807.438 respectively [3] Stock Index Futures Trading Data - **Index performance**: The closing prices of A - shares, CSI 300, SSE 50, ChiNext, and CSI 500 are 3813.28, 4418.00, 2792.33, 3235.22, 7440.75 respectively, with percentage changes of - 3.63%, - 3.26%, - 3.17%, - 3.49%, - 4.11% [4] - **Valuation**: The PE (TTM) of CSI 300, SSE 50, CSI 500, S&P 500, and German DAX are 13.61, 11.11, 33.60, 25.75, 16.36 respectively, with环比 changes of - 0.41, - 0.33, - 1.48, 0.29, 0.20 [4] - **Risk premium**: The 1/PE - 10 - year interest rate of S&P 500 and German DAX are - 0.46, 3.11 respectively, with环比 changes of - 0.01, - 0.04 [4] - **Fund flow**: The latest values of fund flow in A - shares, the main board, small and medium - sized enterprise board, ChiNext, and CSI 300 are - 1165.82, - 790.08, N/A, - 247.62, - 273.17 respectively, and the 5 - day average values are - 1062.59, - 815.58, N/A, - 166.72, - 172.62 respectively [4] Transaction Data of Other Markets - **Transaction amount**: The latest transaction amounts of the Shanghai and Shenzhen stock markets, CSI 300, SSE 50, small and medium - sized board, and ChiNext are 24315.18, 6717.20, 1739.93, 4659.68, 6124.16 respectively, with环比 changes of 1447.07, 562.57, 382.62, 494.51, - 471.44 [5] - **Main contract basis**: The basis of IF, IH, and IC are - 73.60, - 16.33, - 205.75 respectively, with basis spreads of - 1.67%, - 0.58%, - 2.77% [5] - **Treasury futures**: The closing prices of T2303, TF2303, T2306, and TF2306 are 108.15, 105.92, 108.11, 105.72 respectively, with percentage changes of - 0.10%, - 0.06%, - 0.08%, - 0.07% [5] - **Funding rates**: The R001, R007, and SHIBOR - 3M are 1.3961%, 1.4763%, 1.5182% respectively, with daily changes of - 8.00 BP, 0.00 BP, 0.00 BP [5]

Group 1: Futures Data - The Friday settlement price of 10 - year Treasury bond futures T2606.CFE is 108.235 with a weekly decline of 0.29%, and T2609.CFE is 108.210 with a weekly decline of 0.30% [8] - The Friday settlement price of 5 - year Treasury bond futures TF2606.CFE is 105.965 with a weekly decline of 0.16%, and TF2609.CFE is 105.795 with a weekly decline of 0.16% [8] - The Friday settlement price of 2 - year Treasury bond futures TS2606.CFE is 102.470 with a weekly decline of 0.04%, and TS2609.CFE is 102.490 with a weekly decline of 0.04% [8] - The Friday settlement price of 30 - year Treasury bond futures TL2606.CFE is 111.110 with a weekly decline of 1.47%, and TL2609.CFE is 110.830 with a weekly decline of 1.48% [8] Group 2: Spread Data - The inter - delivery spread of T2606 - T2609 is 0.025 with a weekly increase of 0.015, TF2606 - TF2609 is 0.170 with a weekly increase of 0.005, and TS2606 - TS2609 is - 0.020 with a weekly increase of 0.004 [8] - The cross - variety spreads: 2TS - T is 301.645 with a weekly increase of 0.166, 2TF - T is 103.695 with a weekly decline of 0.020, and TS - TF is 98.975 with a weekly increase of 0.093 [8] Group 3: Spot Bond Yields - The Friday closing price of 1Y Treasury bond yield is 1.28% with a weekly decline of 0.90 BP, 2Y is 1.35% with a weekly increase of 0.53 BP, 3Y is 1.37% with a weekly increase of 0.75 BP, 5Y is 1.56% with a weekly increase of 2.69 BP, 7Y is 1.70% with a weekly increase of 3.72 BP, 10Y is 1.81% with a weekly increase of 3.33 BP, 30Y is 2.37% with a weekly increase of 8.52 BP [8] - The Friday closing price of 1Y China Development Bank bond yield is 1.49% with a weekly decline of 1.36 BP, 3Y is 1.62% with a weekly decline of 1.45 BP, 5Y is 1.72% with a weekly decline of 0.27 BP, 7Y is 1.84% with a weekly decline of 0.48 BP, 10Y is 1.96% with a weekly increase of 0.60 BP, 30Y is 2.50% with a weekly increase of 8.52 BP [8] Group 4: Funding Rates - The Friday price of bank - to - bank pledged repo rate DR001 is 1.32% with a weekly increase of 0.22 BP, DR007 is 1.46% with a weekly increase of 4.67 BP, DR014 is 1.49% with a weekly increase of 2.15 BP [8] - The Friday price of SHIBOR rate SHIBOR1M is 1.53% with a weekly decline of 0.87 BP, SHIBOR3N is 1.54% with a weekly decline of 1.28 BP [8] Group 5: Other Information - The OMO rate is 1.4%, and the range is 10% - 20% [15] - There is information about TACO, with a 30% ratio and a quantity of 100, and related to G7 TACO [15] - The IOER is 0.35%, and there are some related quantity and rate information such as 100 at 1.4%, 20 at 0.4%, 80 at 1.65%, 25bp for 1Y and 10bp [18]

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the given content. 2. Core Viewpoints of the Report - The export growth in January - February 2026 exceeded expectations. The cumulative export from January to February increased by 21.8% year - on - year, and the export in February alone increased by 39.6% year - on - year, far exceeding the market's forecast [3]. - The reasons for the export growth exceeding expectations are the later Spring Festival in 2026 and the improvement of external demand. The development of the AI - related industrial chain, export diversification, and positive port high - frequency data also contributed to the growth. Although the Spring Festival holiday in March may put pressure on imports and exports, the long - term positive trend remains unchanged [4][5]. - The root cause of China's continuous export exceeding expectations lies in the high cost - performance of Chinese goods, which is the result of domestic "involution" and technological progress. Even after "anti - involution", China's price advantage may last for a long time, so the report is optimistic about China's exports [6]. - In the bond market, on March 10, the long - term yield first rose and then fell. The report predicts that the target range of the 10 - year Treasury bond is 2 - 3%, with a central value of 2.5% [7][8]. 3. Summary by Relevant Catalogs 3.1 2026 January - February Import and Export Data - **Import and Export Growth**: In February 2026, imports increased by 13.8% year - on - year (25.7% in January), and exports increased by 39.6% year - on - year (10.0% in January). The trade surplus increased by 190.9% year - on - year. The cumulative export from January to February increased by 21.8% year - on - year, and imports increased by 19.8% year - on - year [3]. - **Exceeding Expectations**: The export in February far exceeded the market's forecast. The median and average of the 4 - institution forecast for February's export year - on - year growth were +4.0% and +3.8% respectively, while the actual growth was 39.6%. The median and average of the 6 - institution forecast for the cumulative export year - on - year growth from January to February were +7.5% and +7.3% respectively, and the actual growth was 21.8% [3]. 3.2 Reasons for the Export Growth Exceeding Expectations in January - February 2026 - **Spring Festival Factor**: The Spring Festival in 2026 was in late February, later than in 2025. The holiday disturbance was postponed, which was one of the reasons for the export growth exceeding expectations [4]. - **External Demand Improvement**: The external demand improved, and the export momentum was strong, with the export amount at a historical high [4]. - **Product Structure**: The development of the AI - related industrial chain promoted the high - growth of exports of electromechanical products and high - tech products. From January to February, the cumulative export of electromechanical products increased by 27.1% year - on - year, and the export of integrated circuits increased by 72.6% year - on - year, while high - tech products increased by 26.9% year - on - year [5]. - **Export Destination**: Except for the United States, exports to other major countries increased significantly. From January to February, exports to ASEAN increased by 29.4% year - on - year, and exports to Africa increased by 49.9% year - on - year [5]. - **Port High - Frequency Data**: The monthly average weekly container throughput of key ports in January and February increased by 13.5% and 10.9% year - on - year respectively, and the weekly throughput in the first 7 weeks was higher than that in the same period of 2025 [5]. 3.3 Root Cause of China's Continuous Export Exceeding Expectations The root cause is the high cost - performance of Chinese goods, which is the result of domestic "involution" and technological progress. Even after "anti - involution", China's price advantage may last for a long time due to the faster price increase in other countries [6]. 3.4 Bond Market Situation - **Market Performance on March 10**: The long - term yield first rose and then fell. The yield of the 10 - year Treasury bond's second - active bond reached 1.8190% in the early trading, and then the bond market recovered in the afternoon [7]. - **Bond Market Outlook**: It is predicted that the target range of the 10 - year Treasury bond is 2 - 3%, with a central value of 2.5%. The factors considered include economic fundamentals, monetary policy, inflation, capital interest rates, and the real estate market [8].

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - Not mentioned in the provided content Summary by Directory Global Asset Market Performance - **10 - year Treasury Bonds**: Latest yields for major economies include 4.158% in the US, 4.552% in the UK, 3.443% in France, 2.834% in Germany, 3.524% in Italy, 3.290% in Spain, 0.351% in Switzerland, 3.514% in Greece, 2.171% in Japan, 6.076% in Brazil, 1.817% in China, and 4.847% in Australia [1] - **2 - year Treasury Bonds**: Latest yields are 3.593% in the US, 3.860% in the UK, 2.248% in Germany, 1.245% in Japan, 2.426% in Italy, 1.271% in China (1Y yield), and 4.433% in Australia [1] - **Dollar - Emerging Economy Currency Exchange Rates**: Latest rates are 5.159 for the dollar against the Brazilian real, 16.291 against the South African rand, 1466.050 against the South Korean won, 31.615 against the Thai baht, and 3.924 against the Malaysian ringgit. The on - shore RMB is 6.869, the off - shore RMB is 6.879, the RMB central parity rate is 6.898, and the RMB 12 - month NDF is 6.748 [1] - **Major Economies' Stock Indices**: Latest values are 6781.480 for the S&P 500, 47706.510 for the Dow Jones Industrial Average, 22697.100 for the Nasdaq, 67397.940 for the Mexican index, 10412.240 for the UK index, 8057.360 for the French CAC, 23968.630 for the German DAX, 17445.000 for the Spanish index, 54248.390 for the Nikkei, 25959.900 for the Hang Seng Index, 4123.138 for the Shanghai Composite Index, 32771.870 for the Taiwan index, 5532.590 for the South Korean index, 7440.913 for the Indian index, 1405.760 for the Thai index, 1701.680 for the Malaysian index, 8924.227 for the Australian index, and 1504.330 for the emerging economies' index [1] - **Credit Bond Indices**: Latest values are 3561.750 for the US investment - grade credit bond index, 266.918 for the euro - zone investment - grade credit bond index, 290.890 for the emerging economies' investment - grade credit bond index, 2928.260 for the US high - yield credit bond index, 410.440 for the euro - zone high - yield credit bond index, and 1842.996 for the emerging economies' high - yield credit bond index [1] Stock Index Futures Trading Data - **Index Performance**: Closing prices are 4123.14 for A - shares, 4674.76 for the CSI 300, 2981.84 for the SSE 50, 3306.14 for the ChiNext, and 8410.30 for the CSI 500. The percentage changes are 0.65%, 1.28%, 0.64%, 3.04%, and 1.58% respectively [2] - **Valuation**: PE (TTM) values are 14.15 for the CSI 300, 11.48 for the SSE 50, 37.76 for the CSI 500, 26.51 for the S&P 500, and 17.90 for the German DAX. The环比 changes are 0.00, - 0.06, 0.58, - 0.06, and 0.33 respectively [2] - **Risk Premium**: The 1/PE - 10 - year interest rate is - 0.39 for the S&P 500 and 2.75 for the German DAX. The环比 changes are - 0.06 and - 0.09 respectively [2] - **Fund Flows**: The latest values are 349.57 for A - shares, 3.60 for the main board, 216.78 for the ChiNext, and 93.77 for the CSI 300. The 5 - day average values are - 119.52 for A - shares, - 182.70 for the main board, 44.93 for the ChiNext, and - 11.84 for the CSI 300 [2] Other Trading Data - **Transaction Amount**: The latest transaction amount for the Shanghai and Shenzhen stock markets is 23978.88, with a环比 change of - 2496.57. For the CSI 300, it is 1217.62 with a环比 change of - 495.95; for the SSE 50, it is 4641.20 with a环比 change of - 423.03; for the small - and medium - sized board, it is 6449.02 with a环比 change of - 52.77 [3] - **Main Contract Basis**: The basis for IF is - 10.76 with a basis amplitude of - 0.23%, for IH it is - 0.44 with a basis amplitude of - 0.01%, and for IC it is - 16.70 with a basis amplitude of - 0.20% [3] - **Treasury Bond Futures**: Closing prices are 108.34 for T2303, 105.93 for TF2303, 108.31 for T2306, and 105.98 for TF2306. The percentage changes are - 0.02%, - 0.04%, - 0.01%, and - 0.00% respectively [3] - **Funding Rates**: R001 is 1.3917% with a daily change of - 11.00 BP, R007 is 1.5029% with a daily change of 0.00 BP, and SHIBOR - 3M is 1.5492% with a daily change of 0.00 BP [3]

Report Information - Report Title: Treasury Bond Derivatives Weekly Report - Date: March 6, 2026 - Author: Xu Liang Z0002220 - Reviewer: Tang Yun Z0002422 - Consulting Business Qualification: Shanghai Securities Regulatory Commission License [2012] No. 1515 [1] Industry Investment Rating - Not provided Core Views - There are both positive and negative factors affecting the treasury bond market Positive factors include the central bank's continuous net injection of liquidity, which supports the downward trend of the 10 - year treasury bond yield, and the inflow of funds into the bond market due to intensive policies during the Two Sessions, leading to a narrowing of the spread and a decline in yields Negative factors include the increasing expectation of CPI recovery, which may raise yields due to inflation pressure, and the central bank's renewal of MLF, which causes short - term yields to rise and the market sentiment to be bearish [2] - The current yield is approaching the support area It is recommended to pay attention to price - comparison opportunities and maintain a wait - and - see or light - short strategy [2] Summary by Related Content Treasury Bond Yields and Interest Rates - The report shows the trends of 2Y, 5Y, 10Y, 30Y, and 7Y treasury bond yields from June 2024 to December 2025, as well as the trends of deposit - type institutional pledged repurchase weighted interest rates (1 - day and 7 - day) and 7 - day reverse repurchase rate from December 2023 to December 2025 [3] Treasury Bond Term Spreads - The trends of the 7Y - 2Y and 30Y - 7Y treasury bond term spreads from June 2024 to December 2025 are presented [4] Treasury Bond Futures Basis - The report shows the basis trends of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures' current - quarter contracts at different time points [7][8][9][11] Inter - delivery Spreads - The inter - delivery spreads (current - quarter minus next - quarter) of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are presented at different time points [13][12][17][15] Cross - variety Spreads - The cross - variety spreads of TS*4 - T and T*3 - TL are shown at different time points [18][19] Trading Volume - The trading volumes of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures from December 2015 to December 2025 and from June 2024 to December 2025 are presented [16]

Group 1: Investment Rating - No investment rating information is provided in the report. Group 2: Core Views - **Likely Positive Factors**: The central bank conducted large - scale net reverse repurchase operations, injecting 44.8 billion yuan, leading to loose liquidity. The increased demand of institutions to hold bonds during the holiday supports the price of 10 - year treasury bonds [2]. - **Likely Negative Factors**: Structural interest rate cuts have been implemented, weakening the expectation of monetary easing. There is a large supply pressure of local government bonds. The inter - bank capital market has tightened, with a decline in reverse repurchase operations, putting pressure on the market [2]. - **Trading Advice**: It is recommended to wait and see the post - holiday market and pay attention to changes in the capital market and supply pressure [2]. Group 3: Data Summaries Treasury Bond Yields - The report shows the trends of 2Y, 5Y, 7Y, 10Y, and 30Y treasury bond yields from 2024/06 to 2025/12 [3]. Funding Rates - The trends of the weighted average interest rate of pledged repurchase by deposit - taking institutions for 1 - day and 7 - day tenors, as well as the 7 - day reverse repurchase rate, are presented from 2023/12 to 2025/12 [3]. Treasury Bond Term Spreads - The trends of the 7Y - 2Y and 30Y - 7Y treasury bond spreads are shown from 2024/06 to 2025/12 [4]. Treasury Bond Futures Positions - The positions of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are presented from 2015/12 to 2025/12 [6]. Treasury Bond Futures Trading Volumes - The trading volumes of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are shown from 2024/06 to 2025/12 [7]. Treasury Bond Futures Basis - The basis of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures for the current quarter contracts are presented at different time points [8][9][10][13]. Treasury Bond Futures Inter - delivery Spreads - The inter - delivery spreads (current quarter - next quarter) of 2 - year, 5 - year, 10 - year, and 30 - year treasury bond futures are shown at different time points [16][17]. Treasury Bond Futures Cross - variety Spreads - The cross - variety spreads of TS*4 - T and T*3 - TL are presented at different time points [18][19].

Global Asset Market Performance - The yields of 10 - year government bonds in major economies are as follows: US 4.005, UK 4.273, France 3.248, Germany 2.690, Italy 3.299, Spain 3.097, Switzerland 0.197, Greece 3.297, Japan 2.149, Brazil 5.915, China 1.819, Australia 4.701, New Zealand 4.353 [3] - The yields of 2 - year government bonds in major economies are: US 3.431, UK 3.540, Germany 2.037, Japan 1.233, Italy 2.183, China (1Y yield) 1.323, Australia 4.222 [3] - The exchange rates of the US dollar against major emerging - economy currencies are: Brazil 5.138, South Africa zar 15.936, Korean won 1433.450, Thai baht 31.037, Malaysian ringgit 3.889 [3] - The latest values of on - shore RMB, off - shore RMB, RMB central parity rate and RMB 12 - month NDF are 6.848, 6.844, 6.923 and 6.721 respectively [3] - The latest values of major economies' stock indices are: S&P 500 6908.860, Dow Jones Industrial Average 49499.200, Nasdaq 22878.380, Mexican stock index 71390.100, UK stock index 10846.700, France CAC 8620.930, Germany DAX 25289.020, Spanish stock index 18496.600, etc [3] - The latest values of credit - bond indices are: US investment - grade credit - bond index 3593.560, euro - zone investment - grade credit - bond index 269.082, emerging - economy investment - grade credit - bond index 293.520, US high - yield credit - bond index 2938.640, euro - zone high - yield credit - bond index 414.380, emerging - economy high - yield credit - bond index 1860.366 [3] Stock Index Futures Trading Data - For A - shares, the closing price is 4146.63 with a change of - 0.01%; for CSI 300, the closing price is 4726.87 with a change of - 0.19%, for SSE 50, the closing price is 3035.07 with a change of - 0.65%, for ChiNext, the closing price is 3344.98 with a change of - 0.29%, for CSI 500, the closing price is 8557.22 with a change of 0.35% [4] - The PEs (TTM) of CSI 300, SSE 50, CSI 500, S&P 500 and Germany DAX are 14.15, 11.48, 38.56, 26.91 and 18.37 respectively, with环比 changes of - 0.05, - 0.09, 0.09, - 0.15 and - 1.19 [4] - The risk premiums (1/PE - 10 - year interest rate) of S&P 500 and Germany DAX are - 0.29 and 2.75 respectively, with环比 changes of 0.07 and 0.34 [4] - The latest capital flows of A - shares, main board, small - and - medium - sized enterprise board, ChiNext and CSI 300 are - 790.12, - 730.51, N/A, - 89.06 and - 198.87 respectively, and the 5 - day average values are - 326.47, - 330.41, N/A, - 6.75 and - 134.02 [4] - The latest trading volumes of Shanghai and Shenzhen stock markets, CSI 300, SSE 50, small - and - medium - sized board and ChiNext are 25384.46, 5998.49, 1410.05, 5079.94 and 6927.70 respectively, with环比 changes of 758.98, 29.45, - 96.18, 196.71 and 705.37 [5] - The basis and basis spreads of IF, IH and IC are - 14.67 (- 0.31%), - 0.47 (- 0.02%) and - 19.82 (- 0.23%) respectively [5] Treasury Futures Trading Data - The closing prices of T2303, TF2303, T2306 and TF2306 treasury futures are 108.33, 105.89, 108.37 and 105.98 respectively, with changes of - 0.06%, 0.00%, - 0.10% and - 0.08% [5] - The capital interest rates of R001, R007 and SHIBOR - 3M are 1.4270%, 1.5624% and 1.5748% respectively, with daily changes of - 16.00BP, - 3.00BP and - 1.00BP [5]

Core Insights - The report highlights a decrease in the bond custody amount at the Shanghai Clearing House, with a total of 49.71 trillion yuan at the end of January, down from 49.88 trillion yuan, reflecting a net decrease of 176.29 billion yuan [5][7][8] - The total bond custody amount at both the Shanghai Clearing House and China Central Depository & Clearing Co., Ltd. (CCDC) increased to 179.31 trillion yuan, with a net increase of 757.62 billion yuan [7][8] - The report indicates that the overall leverage ratio in the bond market remained stable at 107.14% in January, with commercial banks being the main contributors to bond purchases [11][12] Total Research - The Shanghai Clearing House's bond custody amount decreased by 176.29 billion yuan, while CCDC's increased by 933.91 billion yuan, leading to a combined net increase of 757.62 billion yuan [7][8] - The main contributors to the net increase in bond custody were interest rate bonds, which saw a significant rise, while interbank certificates of deposit experienced a notable decrease [9] - Commercial banks were identified as the primary buyers of bonds, with a net increase of 10.22 trillion yuan in bond custody, while other financial institutions showed negative net increases [10] Market Outlook - The report suggests a target range for the 10-year government bond yield of 2-3%, with a central tendency around 2.5% [12][13] - Economic recovery is not meeting expectations, and there may be a shift towards looser monetary and fiscal policies in early 2026, which could accelerate the economic cycle [12] - The report emphasizes the importance of monitoring inflation trends, particularly the Producer Price Index (PPI), to gauge potential tightening of monetary policy [13]

Group 1 - The basis between the 5-year National Development Bonds and the same-term FR007 interest rate swap is 20 basis points (BP), which has increased by 17 BP compared to the end of 2024 [1] - In 2025, the overall basis between cash bonds and swaps is expected to rise, with the 1-year National Development Bonds and FR007 interest rate swap basis at 5 BP, up 31 BP from the end of 2024, and the 5-year basis at 20 BP, up 17 BP [1] - At the beginning of 2025, due to rising funding rates, interest rate swaps lead cash bonds, causing the basis to drop to a low of -20 BP for the 1-year National Development Bonds and 3 BP for the 5-year basis [1] Group 2 - Since February, the rise in the equity market has led to some capital diversion, impacting cash bonds and causing yields to rise, which has gradually expanded the basis between cash bonds and interest rate swaps [1] - In the second quarter, as the cash bond market recovered, yields fell, leading to a narrowing of the basis between cash bonds and interest rate swaps [1] - In the second half of the year, the cash bond market faced multiple disruptions from VAT collection, institutional behavior, and new rate regulations, resulting in a greater increase in yields and a subsequent expansion of the basis [1]

Core Viewpoint - The article discusses the current state of the financial market, highlighting a slight decline in the stock market and a balanced, loose funding environment, which may indicate potential investment opportunities and risks in the near future [3]. Group 1: Market Conditions - The funding environment is described as balanced and loose, with a slight decline in long-term bond yields [3]. - The central bank conducted a reverse repurchase operation of 315 billion yuan for 7-day and 3000 billion yuan for 14-day terms, with a net withdrawal of 1460 billion yuan due to the maturity of 4775 billion yuan in 7-day reverse repos [3]. - The overnight interbank funding rates showed a slight decrease, with DR001 around 1.28% and DR007 around 1.46% [3]. Group 2: Interest Rates and Bond Market - The weighted average rates for various funding types showed a decline, with R001 at 1.36% (down 6 basis points), R007 at 1.53% (down 2 basis points), and R014 at 1.59% [4]. - The 10-year government bond yield fluctuated, starting at 1.805% and dropping to a low of 1.80% during the day, indicating a mixed sentiment in the bond market [5]. - The article suggests that the 10-year bond yield of 1.80% is perceived as a significant psychological barrier for investors, with previous ranges not effectively containing the yield [5]. Group 3: Investor Sentiment and AI Industry - Investor sentiment appears cautious, with two-thirds of investors planning to hold bonds through the holiday, anticipating a potential rally to break the 1.80% yield barrier [5]. - The article critiques the current state of the AI industry, suggesting that it lacks imagination and is overly focused on competition rather than innovation [5].