Core Insights - The report highlights a strengthening of self-discipline in interbank deposits, an expansion of the yield curve, and the uncertainty regarding economic and policy turning points, leading to a cost-reduction strategy for banks and a focus on 3-5 year yield spreads [3][9]. - The strategy suggests investing in 1-year low-grade certificates of deposit, 3-5 year perpetual bonds, and 3-year state-owned enterprise real estate bonds [3][11]. Market Trading Logic - The market trading this week revolves around three main themes: strong inflation readings, robust import and export data, and enhanced self-discipline in interbank demand deposits, which further strengthens expectations for banks to reduce costs [9][10]. - The self-discipline upgrade in interbank deposits is expected to lower the central cost of bank liabilities, which will subsequently reduce the issuance costs of short-term products like interbank certificates of deposit, providing substantial support for short-term interest rates [9][10]. Inflation and Economic Data - Strong inflation readings have disturbed market sentiment, but they are unlikely to trigger a policy shift. The current inflation pressure is primarily driven by supply-side factors rather than a broad-based recovery in demand [10][11]. - The strong performance of import and export data is seen as a seasonal effect rather than a trend improvement signal, with expectations of a natural decline in March as the seasonal effects dissipate [10][11]. Future Strategies - The report indicates that the market is at a crossroads between short and long ends, with opportunities to flatten the yield curve. It recommends continuing to allocate funds to 1-year AA- certificates of deposit and 3-5 year perpetual bonds while considering high-rated real estate bonds for their defensive characteristics [11][12]. - The past week saw a continuation of a differentiated market pattern, with short-term products performing relatively strongly while mid to long-term products experienced notable adjustments [11][12]. Portfolio Recommendations - The suggested portfolio allocation includes 20% in 3-year AAA perpetual bonds, 30% in 5-year AAA bank bonds, 30% in 1-year AA certificates of deposit, and 20% in 3-year AAA real estate bonds [13][14]. - The cumulative return of the weekly strategy since the beginning of 2025 is 3.83%, outperforming both short-term and mid-long-term bond indices [13][14].