Macro and Strategy Research - The report discusses the evolution of exchange rate systems globally, categorizing them into four types: hard peg, soft peg, floating exchange rates, and others. It highlights that the choice of exchange rate systems is influenced by various constraints, including trade development and financial stability, alongside monetary policy independence [3] - The Chinese yuan's exchange rate mechanism is based on market supply and demand, referencing a basket of currencies, and follows a managed floating exchange rate system. This system has evolved through four stages, balancing government guidance and market demand while ensuring financial stability [3][4] Yuan Exchange Rate Analysis Framework - A "3+1" framework is established for analyzing the yuan's exchange rate from long, medium, and short-term perspectives, incorporating institutional regulation. Long-term factors focus on purchasing power parity, interest rate parity, and behavioral equilibrium exchange rate models. Medium-term factors emphasize the impact of the balance of payments, while short-term factors consider market sentiment and investor psychology [4] - The People's Bank of China plays a crucial role in stabilizing the foreign exchange market through various counter-cyclical adjustment measures to prevent market volatility and herd behavior [4] Yuan Exchange Rate Model Prediction - The report constructs a prediction model for the yuan's spot exchange rate using key indicators such as the US-China 2-year bond yield spread, PMI export orders, and the US dollar index. The model shows a good fit with an R^2 of 0.92, indicating a strong predictive capability for exchange rate turning points, although it notes limitations during periods of policy changes and external shocks [4] Fixed Income Research - The report indicates that the issuance guidance rates for credit bonds have generally increased, with a change of -13 basis points from the end of Q2 2025 to the end of Q3 2025. The total issuance scale in Q3 2025 saw a slight decrease, with corporate bonds and medium-term notes experiencing reduced issuance, while short-term financing bonds and targeted tools saw increases [6][7] - The credit bond market showed a slight increase in transaction volume in Q3 2025, with corporate bonds and medium-term notes seeing decreased transaction amounts. The overall yield on credit bonds has been on the rise, particularly in September [7] - The report suggests that despite market fluctuations, the conditions for a comprehensive bear market in credit bonds are insufficient, and a long-term downward trend in yields is anticipated. The strategy recommends increasing allocations during adjustments, focusing on the trend of interest rate bonds while considering individual bond coupon values [7][8] Fund Research - The report notes that all major equity market indices rose, with the largest increase in the Sci-Tech 50 index, which rose by 6.47%. The report also highlights that the public fund scale reached a new high [10][11] - In the ETF market, there was a net inflow of 103.12 billion yuan, with bond ETFs receiving the most significant inflow due to the establishment of new Sci-Tech bond ETFs. The average daily trading volume in the ETF market reached 476.15 billion yuan [11][12]

Group 1 - The report highlights that since July, long-term interest rates have been fluctuating upwards, influenced by macroeconomic narratives and regulatory factors, leading to changes in institutional behavior and trading friction, resulting in a structural resilience in certain credit varieties while others have experienced significant declines [1][10] - In the third quarter, the credit market showed structural resilience and significant declines in specific varieties, with short-term credit demonstrating relative stability, with yield increases mostly within 10 basis points, while long-end perpetual bonds saw yield increases exceeding 30 basis points, indicating a notable drop compared to standard bonds [12][13] - The report anticipates that if new regulations on public fund sales are implemented and the floating profits from wealth management products are fully released, there may be a revaluation of credit assets, with potential trading friction between exiting trading positions and entering allocation positions [3][10] Group 2 - The report notes a shift in trading behavior, with wealth management products increasing their net purchases of credit bonds, reflecting the emerging value of credit yields post-adjustment, while the net purchases of certificates of deposit have decreased [2][3] - The report emphasizes that the fourth quarter and the year 2026 will be critical for the credit bond market, as the challenges faced by institutional liabilities could drive a revaluation of credit asset values, particularly if the new public fund sales regulations are enacted [3][4] - The report suggests that the pricing center for perpetual bonds may rise due to the revaluation of credit attributes, and short-term credit may see a support level shift from 1.8% to 2.0% as the market adjusts to the new regulatory environment [4][5]

财政部将在香港发行110亿元人民币国债 中新网北京10月9日电 (记者 赵建华)根据有关工作安排，财政部将于10月15日在香港特别行政区发行 2025年第五期人民币国债，发行规模为110亿元，具体发行安排将在香港金融管理局债务工具中央结算 系统(CMU)公布。(完) 来源：中国新闻网 编辑：张澍楠 广告等商务合作，请点击这里 本文为转载内容，授权事宜请联系原著作权人 中新经纬版权所有，未经书面授权，任何单位及个人不得转载、摘编或以其它方式使用。 关注中新经纬微信公众号(微信搜索"中新经纬"或"jwview")，看更多精彩财经资讯。 ...

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core Views of the Report - In Q3, the bond market was mainly affected by anti - involution policies, the stock market, and new fund redemption rules, showing a continuous upward trend. The adjustment in Q3 was characterized by more long - end adjustments, fewer short - end adjustments, fewer low - grade credit adjustments, slightly more high - grade credit adjustments, more adjustments in secondary and perpetual bonds, and fewer adjustments in general credit bonds. In terms of investment returns, credit bonds with a maturity of 2 years or less performed well, while those with a maturity of 3 years or more mostly had negative returns [2]. - Currently, the interest rate may have fully priced in policy and fundamental disturbances. The pattern of weak fundamentals and weak financing demand remains unchanged, and the further upward space of the bond market may be limited [3]. - Historically, the bond market often declines in Q4, and credit spreads usually fluctuate. This year, due to weak bond fund returns and the importance of Q4 performance for the whole - year product performance, market gaming will be more intense, increasing market volatility. For credit bonds in Q4, it is still recommended to focus on coupons, be cautious about duration, and conduct periodic gaming [4][5]. - For different bond varieties, 2 - year short - term bonds are still a solid base and may perform well in the short - term after the holiday. Trading opportunities for secondary and perpetual bonds have emerged again, requiring quick entry and exit in the short - term, and depending on interest rate trends in the long - term. Institutions with unstable liability ends should be cautious about ultra - long - term credit bonds, but their trading volume has increased and shareholding banks have net - bought, indicating a recovery in allocation value, and trading strategies can be tried cautiously [6]. Group 3: Summary by Related Catalogs 1.1 How was the performance in Q3? - The bond market was affected by anti - involution policies, the stock market, and new fund redemption rules, showing a continuous upward trend. In July, anti - involution policies were further implemented, and the bond market rose significantly; in August, the stock market rose strongly, suppressing bond market sentiment; in September, new fund redemption rules were introduced, and various news such as good industrial enterprise profits in August, progress in Sino - US negotiations, and the cancellation of fund tax exemption impacted the market [13]. - The Q3 adjustment showed characteristics of more long - end adjustments, fewer short - end adjustments, fewer low - grade credit adjustments, slightly more high - grade credit adjustments, more adjustments in secondary and perpetual bonds, and fewer adjustments in general credit bonds [15]. - In terms of investment returns, 2 - year and shorter - term credit bonds performed well with positive returns, while bonds with a maturity of 3 years or more had poor investment returns, and the longer the maturity, the worse the performance. For example, the investment return of the 30 - year treasury bond in Q3 was only - 7.818% [19]. 1.2 Will the downward trend continue? - In August, the year - on - year growth rate of industrial enterprise profits was 20.4%, mainly driven by industries such as power, heat production and supply, and metal smelting and processing. However, the sustainability of the profit recovery is limited due to factors such as the continuous decline in futures prices and weak social demand. The growth rates of both social financing and core social financing are declining, and the further upward space of the social financing growth rate is limited [21]. - Currently, the market interest rate has fully reflected the marginal changes in fundamentals and inflation. Considering the term spread of interest - rate bonds and the comparison between long - term interest rates and certificates of deposit, the further upward space of interest rates is limited, and there may be a downward trend at the end of the year [22][31]. 1.3 How to view credit spreads? - If interest rates do not rise further, credit spreads will likely fluctuate. Historically, credit spreads in Q4 mostly fluctuate. If the capital interest rate can remain stable, the pricing logic system of capital - certificates of deposit - credit will be more stable. Currently, the comparison between medium - term notes and certificates of deposit has risen significantly but is expected to fall back, and the term spread of credit bonds has reached a relatively high level in the past two years and is expected to have limited further upward space [35][40]. 1.4 How to understand the seasonality of the bond market and institutional psychology? - The bond market tends to decline in Q4. In the past 9 years from 2016 to now, interest - rate bonds rose only in 2016, 2017, and 2022, and declined in other years. Credit bonds generally perform worse than interest - rate bonds of the same maturity in Q4. This year, due to the poor performance of medium - and long - term bond funds, market gaming in Q4 will be more intense, increasing market volatility. Products with good performance may focus on controlling drawdowns, while those under performance pressure may more aggressively play the long - duration strategy [43][47][49]. 1.5 How to construct a portfolio? - Medium - and short - term credit bonds should still focus on defense. Holding credit bonds with a maturity of less than 2 years until the end of Q4 can withstand an upward range of more than 30bp, and appropriate credit risk exposure can also lead to good coupon performance [52]. - Ultra - long - term credit bonds: Their credit spreads are close to the high point in the past two years, and their trading volume has increased, and shareholding banks have net - bought, indicating that they have allocation value. Currently, the comparison between secondary and perpetual bonds and general credit bonds has risen to a high level, presenting trading opportunities [56][58][59]. 2.1 It is recommended to focus on medium - and long - term secondary and perpetual bonds - At the end of September, the comparison between 5 - year secondary and perpetual bonds and medium - term notes rose rapidly. The comparison advantages of 5 - year secondary capital bonds of all grades over 5 - year medium - term notes increased significantly, and the comparisons of AAA, AA +, and AA grades are currently 9.96bp, 9.08bp, and 4.08bp respectively, still at a high level this year. The comparisons of 1 - year secondary bonds of all grades with medium - term notes are all negative [63]. - The comparison between short - end urban investment bonds and medium - term notes has declined significantly, breaking through the low point of the year, and the cost - performance of medium - and low - grade bonds is relatively low, so entry still needs to wait. The comparison between long - end weak - quality urban investment bonds and medium - term notes has increased [65]. 2.2 Focus on high - coupon assets with a maturity of about 2 years - Currently, the proportion of urban investment bonds with a valuation of over 2.3% is 38.0%, that of non - financial industrial bonds is 24.5%, and that of secondary and perpetual bonds is 33.3%. Bonds with a maturity of about 2 years and a valuation of over 2.3% have good value and are worth attention [67]. - For urban investment bonds, long - end bonds can combine coupon and band operations, and short - duration high - coupon varieties can still be participated in. It is recommended to focus on bonds with a maturity of about 2 years issued by companies such as Xi'an High - tech, Henan Aviation Port, and Zhuhai Huafa [68]. - For industrial bonds, among real - estate enterprises, it is recommended to focus on bonds of important local state - owned real - estate enterprises with a maturity of about 2 years, such as Shoukai, Jianfa, and CCCC Real Estate. Among non - real - estate industrial entities, focus on bonds with a maturity of less than 2 years issued by enterprises such as Jizhong Energy and AVIC Industry Finance, and bonds with a maturity of about 2 years issued by enterprises such as HBIS and Yunnan Investment [72]. 3.1 How was the market performance? - On September 29 - 30, credit bonds generally recovered, and spreads generally widened. Credit bond yields declined slightly, with short - end secondary and perpetual bonds performing more significantly, while 10Y secondary and perpetual bonds continued to rise. Credit spreads widened overall, and the spreads of secondary and perpetual bonds showed a differentiated trend, with short - end spreads declining and long - end spreads widening [74].

Group 1 - The Ministry of Finance will issue the fifth phase of RMB government bonds for 2025 in the Hong Kong Special Administrative Region on October 15, with a total issuance scale of 11 billion [1] - Specific issuance arrangements will be announced in the Central Moneymarkets Unit (CMU) of the Hong Kong Monetary Authority [1]

Global Asset Market Performance 10 - Year Treasury Yields of Major Economies - Yields and Changes: The yields and changes (latest, weekly, monthly, yearly) of 10 - year treasury bonds in various economies like the US, UK, France, etc. were presented. For example, the US 10 - year treasury yield on 2025/09/30 was 4.151, with a latest change of 0.011, a weekly change of 0.044, a monthly change of - 0.111, and a yearly change of 0.421 [2]. 2 - Year Treasury Yields of Major Economies - Yields and Changes: Similar to the 10 - year bonds, the yields and changes of 2 - year treasury bonds in economies such as the US, UK, Germany were provided. For instance, the US 2 - year treasury yield on 2025/09/30 was 3.630, with a latest change of - 0.010, a weekly change of 0.060, a monthly change of 0.070, and a yearly change of 0.080 [2]. Dollar - to - Major Emerging Economies Currency Exchange Rates - Rates and Changes: The exchange rates and their changes (latest, weekly, monthly, yearly) of the US dollar against major emerging economies' currencies like the Brazilian real, Russian ruble, etc. were shown. For example, the dollar - to - Brazilian real exchange rate on 2025/09/30 was 5.322 with a latest change of - 0.01% [2]. Major Economies' Stock Indices - Indices and Changes: The values and changes (latest, weekly, monthly, yearly) of major economies' stock indices including the S&P 500, Dow Jones Industrial Average, etc. were given. For example, the S&P 500 index value on 2025/09/30 was 6688.460, with a latest change of 0.41%, a weekly change of 0.47%, a monthly change of 4.25%, and a yearly change of 16.67% [2]. Credit Bond Indices - Indices and Changes: The changes (latest, weekly, monthly, yearly) of credit bond indices such as the US investment - grade credit bond index, euro - zone investment - grade credit bond index were presented. For example, the latest change of the US investment - grade credit bond index was - 0.06% [2]. Stock Index Futures Trading Data Index Performance - Closing Prices and Changes: The closing prices and percentage changes of A - shares, CSI 300, SSE 50, etc. were reported. For example, the closing price of A - shares was 3882.78 with a 0.52% increase [3]. Valuation - PE Ratios and Changes: The PE (TTM) ratios and their环比 changes of indices like the CSI 300, SSE 50 were provided. For example, the PE (TTM) of the CSI 300 was 14.22 with a环比 change of 0.03 [3]. Risk Premium - Calculation and Changes: The risk premiums (1/PE - 10 - year interest rate) and their环比 changes of indices such as the S&P 500, German DAX were shown. For example, the risk premium of the S&P 500 was - 0.56 with a环比 change of - 0.03 [3]. Fund Flows - Values and Averages: The latest values and 5 - day average values of fund flows in A - shares, the main board, etc. were given. For example, the latest fund flow value of A - shares was - 288.47, and the 5 - day average was - 46.80 [3]. Trading Volume - Values and Changes: The latest trading volume values and环比 changes of the Shanghai and Shenzhen stock markets, CSI 300, etc. were reported. For example, the latest trading volume of the Shanghai and Shenzhen stock markets was 21814.11 with a环比 change of 199.50 [3]. Basis and Spread - Basis and Magnitude: The basis and magnitude of the main index futures contracts like IF, IH, IC were presented. For example, the basis of IF was - 22.69 with a magnitude of - 0.49% [3]. Treasury Bond Futures Trading Data Closing Prices and Changes - Closing Prices and Percentage Changes: The closing prices and percentage changes of treasury bond futures T00, TF00, etc. were reported. All had a 0.00% change [4]. Funding Rates - Rates and Daily Changes: The funding rates (R001, R007, SHIBOR - 3M) and their daily changes (in BP) were provided. For example, R001 was 1.5331% with a daily change of - 34.00 BP [4].

Core Viewpoint - The election of Kishi Sanae has revealed potential weaknesses, with significant market reactions indicating both optimism and concern regarding her economic policies and political challenges [1][3]. Economic Policy - Kishi's economic stance continues the "Abenomics" approach, advocating for monetary easing and increased fiscal spending, but Japan is currently facing around 3% inflation, which poses a risk of further inflation if such policies continue [3][10]. - The Japanese stock market surged 5% to a historical high of 47,000 points following her election, while the yen depreciated sharply, falling below 150 against the dollar, and long-term bond yields reached their highest since 2008, indicating a split sentiment in the markets [1][3]. Political Landscape - Kishi faces political challenges as the ruling Liberal Democratic Party has lost its absolute majority in both houses, making it difficult to push through policies without cooperation from opposition parties [3][10]. - Her strong nationalist stance complicates potential collaborations with centrist parties, as her right-wing positions are largely unacceptable to them [3][5]. Foreign Relations - Kishi's foreign policy is marked by a strong nationalist image, particularly regarding China and Taiwan, which has led to domestic controversy and could strain international relations [5][10]. - Trump's congratulatory message mistakenly referred to Kishi as Japan's first female Prime Minister, highlighting a misunderstanding of Japanese political structure and potentially complicating U.S.-Japan relations [7][9]. - China has proactively responded to Kishi's election with three clear demands regarding historical issues and Taiwan, setting a cautious tone for future Sino-Japanese relations [9][10]. Broader Implications - Kishi's victory does not signify a new beginning but rather the continuation of existing challenges, including economic pressures, political divisions, and diplomatic complexities [10].

Group 1 - The U.S. federal government officially shut down on October 1, 2025, resulting in hundreds of thousands of federal employees being furloughed without pay and a complete halt to public services [1] - The shutdown was triggered by the failure to extend a temporary spending bill that expired on September 30, with a political deadlock between the Democratic-controlled House and the Republican-led Senate over healthcare benefits [2] - The shutdown has led to significant consequences, including the closure of national parks losing over 420,000 visitors daily and federal courts only handling emergency cases [4] Group 2 - China has been continuously reducing its holdings of U.S. Treasury bonds, with a total reduction of $309.6 billion, marking the lowest level since 2009 [1][6] - Over the past 30 months, China has decreased its U.S. Treasury holdings by more than $300 billion, with a notable acceleration in the past two months, reducing nearly $30 billion [6] - This trend is part of a broader global shift, with central banks worldwide adjusting their foreign exchange reserves and reducing reliance on U.S. debt, as the dollar's share in global reserves has fallen below 58%, the lowest in 25 years [8] Group 3 - The U.S. Treasury Secretary's recent comments indicate a softening stance amid increasing economic pressures, particularly concerning the production of F-35 fighter jets and the challenges faced by American farmers [9] - Despite the U.S. government's changing attitude, China maintains a calm approach, emphasizing that any cooperation must be based on mutual respect and benefit [11] - The current situation is reminiscent of the 2018 government shutdown, but the complexities are greater now, with inflation remaining high at 3.7%, potentially leading to further price increases if the shutdown continues [13] Group 4 - The government shutdown poses serious challenges for the U.S. government, with unions planning lawsuits for unpaid wages during the shutdown, and local businesses near national parks suffering losses [15] - As of now, China remains the second-largest holder of U.S. Treasury bonds, but if the current pace of reduction continues, it may be surpassed by Japan by 2026 [17] - The budget impasse and subsequent shutdown are raising profound questions about the dollar's status and U.S. global leadership, prompting China to adopt strategies to navigate this evolving landscape [17]

Core Viewpoint - China's holdings of U.S. Treasury bonds have been declining significantly, with a notable reduction of $53.7 billion from March to July this year, reaching a low of $730.7 billion in July, the lowest since the end of 2018 [1] Group 1: Reasons for Reducing U.S. Treasury Holdings - The "safety myth" of the U.S. dollar is weakening, as countries are concerned about the potential freezing of their dollar assets following the U.S. actions against Russia [1] - Continuous depreciation of the dollar and fluctuating U.S. Treasury yields allow China to manage its foreign exchange reserves more flexibly, supporting currency stability [1] - The trend of financial decoupling between China and the U.S. is accelerating, with U.S. Treasury bonds shifting from a cooperative asset to a bargaining chip in the geopolitical arena [1] Group 2: Strategic Asset Diversification - China's reduction of U.S. Treasury holdings is not merely a defensive move but also a proactive adjustment of its global asset structure [1] - There is a growing preference for diversifying into assets such as gold, euros, yen, and emerging market assets, which helps in risk dispersion and gaining more leverage in the global financial system [1]

Core Viewpoint - The financial competition between China and the United States has intensified, with both countries resorting to issuing government bonds to bolster their economies amid rising debt levels and inflation concerns [1][5]. Group 1: U.S. Debt Issuance - The U.S. government has been actively issuing bonds as a key method to raise funds, with a notable shift towards auctioning long-term bonds to counteract declining investor confidence in the economy [2][4]. - The Federal Reserve's prolonged high-interest rate policy has led to skepticism regarding the U.S. economic outlook, resulting in a growing preference for short-term bonds among investors [4][5]. - As of now, the total U.S. government debt has reached approximately $34.7 trillion, leading to an estimated per capita debt of around 750,000 RMB for the American population [9]. Group 2: China's Debt Issuance - In May, China's debt market saw the issuance of approximately 68,624.9 billion RMB in various debt instruments, including government bonds, local government bonds, and corporate bonds, aimed at boosting domestic economic confidence [6][12]. - The Chinese government has been more restrained in its debt issuance compared to the U.S., with a per capita debt estimate of about 20,000 RMB, significantly lower than that of the U.S. [9][11]. - The funds raised through China's debt issuance are primarily allocated to domestic infrastructure and development projects, contrasting with the U.S. approach of funding military and financial markets [8][11].