Group 1 - The bond market has experienced significant adjustments in August, with many medium to long-term pure bond funds facing pressure on net value due to rising bond yields and frequent redemptions from bond funds [1] - Fund managers exhibit different strategies in response to the current market conditions, with some actively positioning for buying opportunities while others prefer to shorten duration and enhance liquidity [1] - The People's Bank of China has indicated a commitment to maintaining a moderately loose monetary policy, ensuring ample liquidity in the market, which reduces the likelihood of a significant rise in bond yields [1] Group 2 - The issuance and utilization of government bonds have accelerated this year, with a total of 996 billion yuan in ultra-long special government bonds issued by August 26, achieving a progress rate of 76.6% [2] - Local governments have issued 31,497.6 million yuan in new special bonds, surpassing the issuance scale of the same period last year, which is expected to provide strong support for stable growth [2] - The company bond ETF (511030) has shown a recent price of 106.09 yuan, with a cumulative increase of 1.01% over the past six months [2] Group 3 - The latest scale of the company bond ETF has reached 22.361 billion yuan, with recent fund inflows and outflows remaining balanced [3] - Over the past five trading days, the company bond ETF has attracted a total of 31.8173 million yuan in net inflows, indicating sustained interest from leveraged funds [3] - The company bond ETF has achieved a net value increase of 13.47% over the past five years, with a historical monthly return of up to 1.22% and a 100% probability of profit over a three-year holding period [3][4] Group 4 - The maximum drawdown for the company bond ETF in the past six months was 0.19%, with a relative benchmark drawdown of 0.08% [4] - The management fee for the company bond ETF is set at 0.15%, while the custody fee is 0.05% [5] Group 5 - The company bond ETF has maintained a tracking error of 0.013% this year, closely following the China Bond - Medium to High Grade Corporate Bond Spread Factor Index [6] - The index serves as a performance benchmark for investments in medium to high-grade corporate bonds, with adjustments made quarterly based on market conditions [6]

Summary of Key Points from Conference Call Industry Overview - The discussion primarily revolves around the U.S. Treasury bond market and its impact on interest rates in 2023 and 2025 [1][2][3][4][5]. Core Insights and Arguments - **Supply Shock and Yield Impact**: In 2023, the supply of U.S. Treasury bonds led to a yield increase primarily due to insufficient long-term demand, influenced by the Federal Reserve's balance sheet reduction and foreign investor sell-offs [1][2][3]. - **Market Expectations**: The market has adjusted to the anticipated increase in Treasury bond issuance, with the third-quarter financing scale raised to $1.007 trillion without causing significant disruption [1][4]. - **Short-Term vs Long-Term Bonds**: There is considerable pressure on short-term bond supply, but demand remains strong due to policy measures. The Treasury plans to supplement the Treasury General Account (TGA) to $850 billion, necessitating the issuance of $300 billion in short-term bonds [1][4][5]. - **Potential Risks**: There is a risk of long-term bond oversupply in August, which could affect yields. The actual issuance versus planned issuance will be critical in determining yield movements [1][4]. Additional Important Content - **Economic Resilience and Inflation**: The current economic environment shows marginal declines in resilience, with lower purchasing willingness among low-income groups. If interest rate cuts stimulate demand, it may lead to price increases, pushing up the Consumer Price Index (CPI) and hindering the decline in inflation expectations and long-term rates [5]. - **Federal Reserve's Position**: The Federal Reserve is expected to remain in a loose monetary policy phase, with one to two rate cuts anticipated. However, the transmission of tariffs on goods inflation has not fully materialized [5]. - **Future Yield Dynamics**: The potential for a steepening yield curve by the end of 2023 or early 2024 is noted, as long-term rates may rise faster than short-term rates due to the Fed's policy adjustments [5].

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints - The report comprehensively presents the performance of global asset markets on August 25, 2025, including the yields of 10 - year and 2 - year government bonds of major economies, exchange rates of the US dollar against major emerging - economy currencies, stock indices of major economies, stock index futures trading data, government bond futures trading data, and money market conditions [2][3][4] 3. Summary by Relevant Catalogs Global Asset Market Performance - **Government Bond Yields**: - **10 - year government bonds**: Yields and their changes (latest, weekly, monthly, and yearly) of 10 - year government bonds in major economies such as the US, UK, France, etc. are presented. For example, the US 10 - year government bond yield on August 25, 2025, was 4.276, with a latest change of 0.021, a weekly change of - 0.058, a monthly change of - 0.136, and a yearly change of 0.362 [2] - **2 - year government bonds**: Yields and their changes of 2 - year government bonds in major economies like the US, UK, Germany, etc. are provided. For instance, the US 2 - year government bond yield on August 25, 2025, was 3.790, with a latest change of 0.050, a weekly change of 0.050, a monthly change of 0.070, and a yearly change of - 0.140 [2] - **Exchange Rates**: - **US dollar against emerging - economy currencies**: Exchange rates and their percentage changes of the US dollar against currencies of emerging economies such as Brazil, Russia, South Africa, etc. are shown. For example, the US dollar - Brazilian real exchange rate on August 25, 2025, was 5.412, with a latest change of - 0.26%, a weekly change of - 0.45%, a monthly change of - 3.17%, and a yearly change of - 1.31% [2] - **Renminbi**: Exchange rates and their percentage changes of on - shore RMB, off - shore RMB, RMB central parity rate, and RMB 12 - month NDF are presented. For example, the on - shore RMB exchange rate on August 25, 2025, was 7.154, with a latest change of - 0.19%, a weekly change of - 0.44%, a monthly change of - 0.35%, and a yearly change of - 0.29% [2] - **Stock Indices**: - **Major economies**: Stock indices and their percentage changes of major economies such as the US (S&P 500, Dow Jones, Nasdaq), UK, France, etc. are given. For example, the S&P 500 index on August 25, 2025, was 6439.320, with a latest change of - 0.43%, a weekly change of - 0.15%, a monthly change of 0.78%, and a yearly change of 16.17% [2] - **Emerging economies**: Stock indices and their percentage changes of emerging economies such as Russia, Japan, Hong Kong, etc. are provided. For example, the Hang Seng Index on August 25, 2025, was 25829.910, with a latest change of 1.94%, a weekly change of 2.59%, a monthly change of 1.05%, and a yearly change of 50.97% [2] - **Credit Bond Indices**: - Yields and their percentage changes of investment - grade and high - yield credit bond indices in the US, eurozone, and emerging economies are presented. For example, the US investment - grade credit bond index on August 25, 2025, was 3463.860, with a latest change of - 0.08%, a weekly change of 0.37%, a monthly change of 1.36%, and a yearly change of 4.30% [2] Stock Index Futures Trading Data - **Index Performance**: Closing prices and percentage changes of A - shares, CSI 300, SSE 50, ChiNext, and CSI 500 are provided. For example, the closing price of A - shares was 3883.56, with a percentage change of 1.51% [3] - **Valuation**: PE(TTM) and their环比 changes of CSI 300, SSE 50, CSI 500, S&P 500, and German DAX are presented. For example, the PE(TTM) of CSI 300 was 13.97, with a环比 change of 0.00 [3] - **Risk Premium**: 1/PE - 10 - year interest rate and their环比 changes of S&P 500 and German DAX are given. For example, the 1/PE - 10 - year interest rate of S&P 500 was - 0.62, with a环比 change of - 0.01 [3] - **Fund Flow**: Latest values and 5 - day average values of fund flows in A - shares, main board, SME board, ChiNext, and CSI 300 are provided. For example, the latest value of A - share fund flow was - 177.24, and the 5 - day average value was - 340.99 [3] - **Trading Volume**: Latest values and环比 changes of trading volumes in Shanghai and Shenzhen stock markets, CSI 300, SSE 50, SME board, and ChiNext are presented. For example, the latest trading volume of Shanghai and Shenzhen stock markets was 31411.37, with a环比 change of 5944.27 [3] - **Main Contract Premium/Discount**: Basis and percentage basis of IF, IH, and IC are given. For example, the basis of IF was 5.38, with a percentage basis of 0.12% [3] Government Bond Futures Trading Data - Closing prices and percentage changes of government bond futures T00, TF00, T01, and TF01 are provided. For example, the closing price of T00 was 108.145, with a percentage change of 0.00% [4] - **Money Market**: - **Funding Rates**: R001, R007, and SHIBOR - 3M and their daily changes (in basis points) are presented. For example, R001 was 1.3901%, with a daily change of - 9.00 basis points [4] - **Big - Category Asset Morning Report**: Values and percentage changes of big - category assets on August 25, 2025, are provided. For example, the value was 1602.450, with a latest change of 0.31% [7]

Core Viewpoint - The article discusses the current trends in foreign investment in the U.S. stock market, highlighting a significant outflow of capital from regions like China, Hong Kong, and Singapore, amidst concerns over economic conditions and Federal Reserve policies [3][5][7]. Group 1: Foreign Investment Trends - In Q2 2025, foreign investors had a net sell-off of approximately $80 billion in the U.S. stock market, indicating a clear trend of capital outflow from regions such as China, Hong Kong, and Singapore [3]. - China's net outward foreign direct investment was about $170 billion in 2024, while foreign direct investment inflows were steadily recovering, suggesting that global capital flows are not completely collapsing but external risks are accumulating [7]. Group 2: Economic Indicators and Federal Reserve Policies - The Federal Reserve's dot plot from June 2025 indicates that there is still a strong likelihood of at least one or two more interest rate hikes, which may deter foreign capital from returning to the U.S. market [5]. - In June 2025, the UK's CPI annual rate reached 7.9%, and Germany's industrial output fell by 0.5% year-on-year, reflecting broader economic challenges in Europe [5]. Group 3: Market Valuations and Risks - The price-to-earnings ratio for the S&P 500 technology sector has surged to nearly 28 times, raising concerns about overvaluation [9]. - In June 2025, new housing starts in the U.S. decreased by 12% year-on-year, and mortgage applications continued to decline, indicating weakness in the real estate market [9]. Group 4: Investment Sentiment and Future Outlook - The article suggests that any potential capital inflow from foreign investors may be cautious and gradual, rather than a full-scale recovery, as indicated by Singapore's sovereign wealth fund's slight increase in U.S. equity allocation, which has not yet returned to pre-pandemic levels [11]. - The inverted yield curve in the U.S. bond market persists, with short-term yields remaining high, signaling that risk appetite among investors is still contracting [11].

Report Overview - The report is a fixed - income research report released on August 26, 2025, aiming to analyze the bond market adjustment and provide investment suggestions through historical review, institutional cost assessment, and market sentiment analysis [1][10] Industry Investment Rating - No industry investment rating is provided in the report Core Viewpoints - During the equity bull market from 2014 - 2025, the performance of the bond market was not unilaterally opposed to the stock market but depended on the dynamic balance of risk preference and capital flow [3] - The current bond market correction is more like a "topping - out period" rather than a "peaking period". The upward space and time of interest rates are constrained by factors such as the return of allocation, policy soft constraints, and marginal improvement in supply and demand [4] - It is recommended to adhere to the "bottom - line thinking", focusing on the upper - bound constraint of interest rates and entry opportunities. If the risk preference is extremely priced and the 10Y - 1Y spread reaches 50 - 60BP, the corresponding 10 - year Treasury bond yield of 1.85% - 1.95% is the bottom - line range [4] Summary by Directory 1. 2014 - 2025, Review of Bond Market Trends in Previous Stock Bull Markets 1.1 2014–2015: Bull and Divergence of Stocks and Bonds Driven by Loose Pattern and Expectation Divergence - In the early stage (June - November 2014), with the promotion of reform expectations and loose signals, the stock and bond markets showed a short - term "double - bull" pattern [11] - From November to December 2014, after the central bank's interest rate cut and price mechanism reform, the stock market accelerated, while the bond market showed "profit - taking", presenting a "stock - up, bond - down" situation [11] - From December 2014 to February 2015, during the stock market consolidation period, the bond market had a repair opportunity, and the 10 - year Treasury bond yield dropped by more than 45bp [11] - From March to April 2015, with the reduction of reserve requirements and interest rates and the expansion of leveraged funds, the stock market accelerated, and the bond market showed an "N - shaped" shock [11] - From May to June 2015, with the influx of leveraged funds into the stock market, the bond market was under pressure, showing a typical "strong - stock, weak - bond" situation [11] 1.2 2016 - 2017: "First Bull, Then Bear" in the Bond Market under the Background of Supply - side Reform and De - leveraging - From June to August 2016, due to the supply - side reform and loose monetary policy, the stock and bond markets both rose [14] - From September 2016 to February 2017, the stock market continued to rise, while the bond market was under pressure due to the expectation of economic stabilization and inflation recovery, presenting a "stock - up, bond - down" situation [14] - From March to May 2017, due to domestic de - leveraging, tightened monetary policy, and external shocks, the stock and bond markets both declined [14] - From the second half of 2017 to the end of 2017, the stock market was strong, and the bond market was weak, with the 10 - year Treasury bond yield approaching 4.0% [14][16] 1.3 2019–2021: Deduction of the Stock - Bond Seesaw and Structural Bull Market - In 2019, during the GEM bull market, the stock market was strong, and the bond market was stable with a narrow - range fluctuation of the 10 - year Treasury bond yield around 3.1% - 3.2% [17] - In 2020, affected by the epidemic, the bond market first entered a bull market, and then the stock market became strong again after the economic recovery, showing a seesaw effect [19] - In 2021, with the weakening of growth momentum, the bond market returned to a bull market, and the stock market still had structural opportunities, showing a phased resonance [19] 2. In the Assumption of an Equity Bull Market, What Stage is the Current Bond Market Correction in? 2.1 In This Round of Bond Market Correction, the Interest Rates of Some Varieties are Close to the Holding - Cost Lines of Product Accounts - For wealth management products, as of the week of August 24, the 1 - year cost yield of inter - bank certificates of deposit was 3.28BP higher than the average interest rate of certificates of deposit, and the 1 - year cost yield of 0 - 1Y policy - financial bonds was 1.86BP lower than the 1 - year CDB bond yield [22] - For funds, as of the week of August 24, the 1.5 - year cost yield of 7 - 10Y policy - financial bonds was 16.14BP higher than the 10 - year CDB bond average, and the 1.5 - year cost yield of 10Y+ Treasury bonds was 23.36BP lower than the 30 - year Treasury bond yield [22] - In terms of institutional trading behavior, insurance institutions increased their net positions in ultra - long - term bonds, rural financial institutions adjusted their positions, and wealth management products shifted from the interest - rate style to the credit style [23] 2.2 Analyzing the Market's Deduction Space from Micro - sentiment Indicators - The stock - bond seesaw effect is still significant, but the upper bound of long - term yields may be gradually clear. The stock market is hot, while the bond market sentiment is controllable [30] - The stock - bond yield spread shows that the cost - performance of bond assets has increased, attracting the return of some allocation - type institutions [30] - The scale of wealth management products is under pressure, with an increase weaker than the seasonal level, but it remains relatively stable. There is no large - scale redemption of fixed - income funds [31] 2.3 Bond Market Outlook: Adjustment May Have Intervals. Pay Attention to the "Topping - out - Returning" Rhythm with Bottom - line Thinking - The current bond market correction is relatively moderate, and the upward space and time of interest rates are constrained. Wealth management products and bond funds still have safety cushions and profit margins [34] - The central bank has increased liquidity injection. If interest rates over - adjust, the probability of the central bank's intervention will increase [34] - The supply - demand relationship may improve marginally. The peak of bond issuance has passed, and the return of allocation demand will help balance supply and demand [35] - The economic growth and inflation are in a moderate range, and the bond market pricing will return to the center determined by the fundamentals and policy interest rates. It is recommended to use bottom - line thinking for long - term interest - rate bond allocation [36]

Core Viewpoint - The article discusses the evolving dynamics of China's holdings of U.S. Treasury bonds, highlighting the shift from passive accumulation to a more strategic and diversified approach in response to changing global economic conditions and U.S. policy actions [1][12][27]. Group 1: Historical Context of China's U.S. Treasury Holdings - China's entry into the World Trade Organization in December 2001 marked the beginning of its rapid accumulation of foreign exchange reserves, primarily through exports to the U.S. [3] - By 2010, China's exports to the U.S. surged to $283.3 billion, up from $69.9 billion in 2002, reflecting an annual growth rate exceeding 20% [3] - The influx of U.S. dollars led to a significant increase in China's foreign exchange reserves, surpassing $4 trillion by 2013 [3][8] Group 2: The Appeal of U.S. Treasuries - During the 2000s, U.S. Treasuries were seen as the only viable safe asset for China, given the limited options in the global market [8][10] - The U.S. economy maintained a dominant position, with GDP accounting for over 25% of the global total and the dollar representing over 60% of global trade settlements [8] - The liquidity and government backing of U.S. Treasuries made them an attractive option for China, allowing for quick conversion to dollars when needed [9][10] Group 3: Changing Perceptions and Strategies - The perception of U.S. Treasuries as a "risk-free asset" has been challenged, particularly after the U.S. froze Russian assets in 2022, raising concerns about the political implications of holding U.S. debt [12][14] - As a result, global central banks began to diversify their reserves, with countries like India and Brazil reducing their dollar holdings [14][15] - China's response has been to gradually reduce its U.S. Treasury holdings by over $280 billion from 2022 to 2025, while maintaining market stability [17][19] Group 4: Diversification of Reserves - China is adopting a strategy of "gradual reduction and multi-faceted replacement," focusing on diversifying its foreign exchange reserves [19] - The share of gold in China's reserves increased from 3.1% in 2020 to 4.8% in 2025, as gold is viewed as a safe asset free from credit risk [19][21] - The internationalization of the renminbi is seen as a long-term alternative, with significant increases in renminbi settlements in trade with Russia and ASEAN countries [22][24] Group 5: Implications for Global Financial Order - The shift in China's strategy reflects a broader trend of diminishing U.S. dollar hegemony, as the U.S. actions have eroded the core appeal of U.S. Treasuries [27] - China's diversification efforts signal a transition from merely adapting to the dollar system to actively shaping a new global financial order [27]

1. Report Industry Investment Rating - Not provided in the content 2. Core View of the Report - The current bond market does not have a basis for significant adjustment. If confidence in the bond market is limited, investors may wait for the yield to adjust further before entering the market with a configuration mindset. If still confident in the bond market, the current point after breaking below the annual line may have obvious short - term trading value [1][4][42] 3. Summary by Relevant Catalogs 2020 - 2022 Scenarios of 10 - year Treasury Futures Breaking Below the Annual Line - **Scenario 1: July 6, 2020 (Breaking Below the Annual Line and Continuing to Weaken)** - After the closing price of the 10 - year Treasury futures main contract broke below the annual line, it experienced short - term fluctuations and rebounds but then continued to decline. The macro - trading logic reversed. The macro - economy showed strong resilience, and the recession expectation significantly cooled. The monetary policy shifted from loose to tight, and the supply of Treasury bond issuance increased, leading to liquidity shock pressure. The 10 - year Treasury futures did not form effective support at the annual line [13] - **Scenario 2: June 27, 2022 (Breaking Below the Annual Line and Then Rebounding Quickly)** - After the closing price of the 10 - year Treasury futures main contract broke below the annual line, it quickly rebounded after a short - term adjustment. In the second quarter of 2022, steady - growth policies were intensively implemented, driving up the expectation of economic recovery. However, due to risk events such as real - estate unfinished building mortgage suspension and rural bank thunderstorms and weak economic data, the recovery expectation declined. Coupled with obvious improvement in liquidity, the 10 - year Treasury futures got strong support near the annual line [23] - **Scenario 3: November 14, 2022 (Breaking Below the Annual Line and Then Oscillating at a Low Level)** - After the closing price of the 10 - year Treasury futures main contract broke below the annual line, the short - term market was weak but did not deviate significantly from the annual line, showing a low - level oscillation state. Real - estate support policies and the shift of epidemic - prevention policies drove up the expectation of economic improvement. The game between strong expectation and weak reality reappeared. After March 2023, the weak reality problem was confirmed again, and the bond market started the next round of upward trend under the logic of abundant funds [28] Analysis of the Current Round of 10 - year Treasury Futures Breaking Below the Annual Line - **Fundamentals** - The macro - economy performed relatively well in the first half of the year, but the economic and financial data in July were relatively weak, indicating that economic stabilization still needs time. The Politburo meeting in July had a relatively cautious tone, and the priority of implementing existing policies was higher than increasing new policy intensity, which may dampen market optimism. The fundamental expectation or current situation does not support a significant upward movement of Treasury yields [3][34] - **Funding Situation** - Since mid - March, the funding rate has been continuously declining, and the difference between the funding rate and the policy rate has gradually converged. The possibility of the central bank tightening liquidity unexpectedly in the next stage is relatively low. An abundant liquidity environment may prevent Treasury yields from rising further [38] - **Stock - Bond Seesaw** - The stock - bond seesaw is the main reason for the recent bond - market adjustment, but the bond market has shown signs of desensitization to the equity market. The equity market's upward slope has increased recently, and potential adjustment risks need to be guarded against. If the equity - market trend corrects, it may drive the bond - market trend to further recover [3][39] Bond - Market Strategy Thinking - The appropriate bond - market strategy depends on two aspects: the bull - bear state of the bond market and the investment purpose (trading or configuration). If confidence in the bond market is limited, wait for the yield to adjust further and then enter the market with a configuration mindset. If still confident in the bond market, the current point after breaking below the annual line has obvious short - term trading value [4][42]

Group 1 - The core viewpoint indicates that the stock market has decoupled from the bond market, with a continued bullish outlook on bonds [1] - The overall profit growth rate for all A-shares in the first half of 2025 has not improved compared to the first quarter, with revenue growth remaining sluggish [1] - Since September 24, 2024, the current stock bull market has lasted nearly one year, with the All A Index doubling in value [1] Group 2 - The bond market has seen a net issuance of 14.3 trillion yuan in the first seven months of this year, with banks increasing their bond investments significantly [1] - The stock bull market has not impacted the total deposits in the banking system, indicating a structural shift in financing needs [1] - The convertible bond index is nearing historical highs, suggesting a cautious optimism for convertible bonds, with future attention on stock market changes and approval for new convertible bond issuances [2] Group 3 - The recommendation is to cherish yields above 2% for 30-year government bonds and 5-year capital bonds, as there may be opportunities to approach 1.6% for 10-year government bonds in the coming months [2] - The recent performance of the Ping An Company Bond ETF (511030) has shown the best control over drawdowns, indicating relative stability and manageable risk [2]

Core Viewpoint - The "China Transition Bond White Paper (2025)" outlines the development trends of transition bonds in China, emphasizing their crucial role in the green low-carbon transition and future directions for growth [1][2]. Group 1: Development Opportunities - The transition bond market in China is experiencing significant growth opportunities, driven by policies such as the G20 Transition Finance Framework and local government initiatives promoting green transition industries [1][2]. - Various stakeholders, including industry self-regulatory organizations and financial infrastructure entities, are providing robust support for the transition bond market [1][2]. Group 2: Market Development - The transition bond market has steadily expanded, with a total of 244 bonds issued and a cumulative scale of 220.8 billion yuan by the end of 2024, reflecting a 2.6 times increase in the number of issuers from 21 to 59 [2][20]. - The product categories of transition bonds are diversifying, with company bonds and medium-term notes making up over 85% of the total issuance [2][22]. - The geographical distribution of transition bonds shows a concentration in major cities, with Beijing and Shanghai accounting for nearly 40% of the total issuance [2][26]. Group 3: Environmental Benefits - Transition bonds are primarily funding low-carbon transition industries, with over 85% of funds directed towards energy-saving and carbon-reduction projects [2][35]. - Quantifiable environmental benefits from transition bonds include an estimated annual saving of 15.81 million tons of standard coal and a reduction of 48.06 million tons of CO2 equivalent from 2021 to 2024 [2][38]. Group 4: High-Quality Development - The white paper proposes six key directions for promoting high-quality development of transition bonds, including the formulation of transition bond plans, encouragement of product innovation, and enhancement of information disclosure [2][42]. - Strengthening international cooperation and aligning domestic standards with international ones is also highlighted as a critical area for development [2][50].

Market Overview - On August 25, the equity market experienced a significant surge in trading volume, reaching the highest level since October 9, 2024, indicating heightened market sentiment and increased speculative demand [1] - Despite the strong performance in the equity market, the bond market exhibited an independent trend, with yields on government bonds across various maturities declining [1] Bond Market Performance - The recent bond market adjustment began on August 8, 2025, with the Ping An Company Bond ETF (511030) showing the best performance in terms of controlling drawdown, having the least market discount in the past week and maintaining a relatively stable net value [1] - The table provided lists various bond ETFs, detailing their scale, recent performance, and metrics such as pledge rates and drawdown statistics, highlighting the performance of different funds during the bond market adjustment [1]