Report Industry Investment Rating No information provided in the given content. Core Viewpoints of the Report - The bond market showed a volatile trend last week. The long - term yield fluctuated under the influence of multiple factors and finally returned to around 1.80%. The Fed restarted rate cuts in September, and there is a probability of further cuts in Q4. The domestic 9 - month LPR did not cut rates in September, and the total policy tools may not be introduced in the short term. However, the probability of bond trading and reserve requirement cuts is relatively high [1][3] - The 8 - month economic data released at the beginning of the week was weak, but the bond market's reaction was limited. News of Sino - US economic and trade talks and important articles affected market expectations. The restart of bond trading operations and the Fed's rate cut expectation drove the 10 - year Treasury yield down, while the Fed's statement and the adjustment of the central bank's reverse - repurchase operation mode also influenced the bond market [2] Summary by Directory 1. Interest - rate Bond Data Review for Last Week - **Funding Rates**: DR001 fluctuated between September 15 - 19, closing at 1.46% on September 19. R001 rose and then fell, closing at 1.50%. DR007 and FR007 also showed upward - then - downward trends [8] - **Open - market Operations**: The central bank's reverse - repurchase投放量 was 1.83 trillion yuan, with a total maturity of 1.26 trillion yuan, resulting in a net capital injection of 5623 billion yuan [8] - **Sino - US Market Interest Rate Comparison**: The interest - rate spread between Sino - US bonds inverted, and the inversion amplitude of long - and short - term spreads widened. The term spread of Chinese bonds slightly decreased, while that of US bonds slightly increased. The yield curve of Chinese bonds changed little, and that of US bonds shifted to the right [15][16] 2. High - frequency Real - estate Data Tracking - **First - tier Cities**: The average daily transaction area was 7.31 million square meters, and the average daily transaction volume was 680 units, showing a low - level volatile trend [24] - **Top Ten Cities**: The transaction data rebounded compared to last week, with an average daily transaction area of about 11.07 million square meters, an increase of 1.43 million square meters per day [25] - **30 Large and Medium - sized Cities**: The transaction volume remained at a historical low. The average daily transaction area was about 21.38 million square meters, and the average daily transaction volume was about 1914 units [26]

Report Summary 1. Investment Rating The document does not mention the industry investment rating. 2. Core View - The probability of reserve requirement ratio cuts, OMO rate cuts (and guiding LPR down), and structural monetary policy tool rate cuts within this year is relatively high. Different types of rate cuts and reserve requirement ratio cuts have different impacts on the bond market [1][8]. - Reserve requirement ratio cuts can release long - term funds at zero cost, stabilize bank net interest margins, and boost confidence, but they do not necessarily lead to a decline in bond yields. DR007 has already dropped significantly, and it is expected to steadily fall to near the OMO rate in the near future [2][9]. - Structural monetary policy tool rate cuts are slightly bearish for the bond market. In most cases, OMO rate cuts lead to a decline in bond yields. The 7D OMO rate may drop from the current 1.5% to 1.3%, and the 10Y Treasury yield may reach 1.5% this year [3][12]. - Bond investment should not adopt an "end - game mindset". When the market interest rate drops excessively, regulators will guide market expectations, and investors should maintain rationality in bond pricing [3][12]. 3. Summary by Related Content "Timely Reserve Requirement Ratio Cuts and Rate Cuts" and Their Impact on the Bond Market - The Politburo meeting on April 25, 2025, called for "timely reserve requirement ratio cuts and rate cuts", different from the "opportunistic" statement in the first - quarter monetary policy committee meeting on March 18. "Timely" emphasizes adapting to the actual economic needs [1][8]. - The probability of reserve requirement ratio cuts, OMO rate cuts (and guiding LPR down), and structural monetary policy tool rate cuts within this year is high, but their impacts on the bond market vary [1][8]. Impact of Reserve Requirement Ratio Cuts - Reserve requirement ratio cuts can release long - term funds at zero cost, stabilize bank net interest margins, and have a signaling effect, but they do not necessarily lead to a decline in bond yields [2][9]. - Although no reserve requirement ratio cut has been implemented, DR007 has declined significantly. The average value of DR007 from early April to now is 1.72%, lower than the 1.88% average in March. It is expected to fall to near the OMO rate in the future [2][9]. Impact of Different Types of Rate Cuts - Structural monetary policy tool rate cuts are slightly bearish for the bond market as they do not guide DR down and reduce the urgency of OMO rate and DR cuts in the next stage [3][12]. - In most cases, OMO rate cuts lead to a decline in bond yields. The 7D OMO rate may drop from 1.5% to 1.3%, and the 10Y Treasury yield may reach 1.5% this year. Currently, bond yields have a relatively small upside and a relatively high probability of decline [3][12].