Group 1 - The trading activity of 30-year Treasury futures has significantly declined due to dual impacts of capital migration and supply pressure, with a notable drop in trading volume since mid-July [1] - The overall bond market remains under pressure, particularly in the ultra-long Treasury futures segment, despite a potential for a short-term rebound if stock market sentiment cools or interest rate cut expectations rise [1] - Analysts suggest that a new round of opportunities in the bond market may be emerging, driven by economic downturn pressures and a potential shift in monetary policy [2] Group 2 - The company bond ETF (511030) has shown a year-to-date increase of 1.01%, with a recent trading volume of 18.03 billion yuan and a turnover rate of 8.07% [3] - The latest scale of the company bond ETF has reached 22.351 billion yuan, with recent inflows and outflows remaining balanced [4] - The company bond ETF has demonstrated strong historical performance, with a maximum monthly return of 1.22% and a 100% probability of profit over a three-year holding period [4][6] Group 3 - The management fee for the company bond ETF is set at 0.15%, while the custody fee is 0.05% [5] - The tracking error for the company bond ETF this year is reported at 0.013%, indicating a close alignment with the underlying index [6]

Summary of Conference Call Notes Industry Overview - The current economic environment shows weak loan demand and a decline in interest rate cut expectations, with fiscal policy becoming the main economic driver [1][4] - The financial industry is experiencing a reversal of internal competition, with new loans in July falling significantly below seasonal expectations, potentially leading to bank balance sheet contraction [1][4][5] Key Points and Arguments - **Loan Demand and Credit Market**: The increase in social financing is primarily driven by government financing, while loan growth is declining year-on-year, indicating weak market demand for loans [3][4] - **Government's Role**: The government is increasingly seen as a key economic driver, with fiscal flexibility taking precedence over large-scale interest rate cuts [4][7] - **Bank Balance Sheets**: Contraction in bank balance sheets due to limited bonds and loans will reduce the availability of quality investment assets, leading to a scarcity of investment opportunities [1][5] - **Interest Rate Policies**: The subsidy policy aims to lower loan rates but is not functioning smoothly, leading to cautious expectations for the bond market in the second half of the year [1][6] - **Monetary Policy Focus**: The current monetary policy emphasizes direct support for the real economy rather than relying on interbank market liquidity or significant interest rate cuts [7][9] Financial Data Insights - **M2 and M1 Growth**: M2 growth increased from 8.3% to 8.8%, while M1 showed significant changes, reflecting a shift in residents' risk preferences towards risk assets [8] - **Bond Market Challenges**: The bond market faces challenges from expected fluctuations and a lack of strong supportive factors, with potential adjustments in the 10-year treasury yield expected to be around 30-40 basis points [9][10] Investment Opportunities - **Credit Bond Market**: The credit bond market is currently weak, but structural opportunities exist, particularly in technology innovation bonds and green finance bonds [2][13][16] - **Green Finance Bonds**: There is a noticeable shift from green credit bonds to green finance bonds, with increased demand from institutions like insurance companies [14][15] - **Future Outlook for Credit Bonds**: The outlook for thematic credit bonds remains positive, especially for technology and green finance, supported by policy changes and competitive issuance costs [16] Market Trends and Strategies - **Yield Curve Expectations**: The yield curve for government bonds is expected to remain weak with upward pressure, suggesting that structural strategies may be more advantageous than simply expecting a downward shift [10][11] - **Investment Strategy Recommendations**: Focus on technology growth sectors and stable industries such as public utilities and traditional cyclical sectors for stable returns [20] Additional Insights - **Convertible Bond Market**: The convertible bond market is nearing historical valuation extremes, with limited upward price potential unless driven by equity market changes [18] - **Strong Redemption Impact**: Strong redemptions have led to price declines in convertible bonds, emphasizing the need to monitor high premium bonds to avoid forced redemptions [19]

Group 1: Open Market Operations - The central bank conducted a 7-day reverse repurchase operation on August 15, with a fixed rate and quantity tendering, amounting to 238 billion yuan at an interest rate of 1.40%, with a net injection of 116 billion yuan for the day after considering the maturity of 122 billion yuan in reverse repos [1]. Group 2: Funding Conditions - The interbank market saw a tightening of funding conditions, with overnight repurchase weighted rates exceeding 1.4% in the morning, stabilizing around 1.40% in the afternoon. Non-bank institutions' overnight borrowing rates rose above 1.45% [3]. - The latest overnight financing rate in the U.S. was reported at 4.33% [3]. Group 3: Interbank Certificates of Deposit - The latest transaction rate for one-year interbank certificates of deposit in the secondary market was approximately 1.6425% [7]. Group 4: Bond Market Overview - The yields on major interbank bonds mostly increased, with specific rates for various maturities as follows: - 1Y government bond at 1.3600% - 2Y government bond at 1.3975% - 5Y government bond at 1.5825% - 10Y government bond at 1.7460% [9]. Group 5: Recent Trends in Local Government Bonds - The yield spreads for AAA-rated local government bonds across various maturities were analyzed, indicating trends in the bond market [11]. Group 6: National Economic Outlook - The National Bureau of Statistics indicated a stable economic foundation for China, with positive long-term growth prospects supported by macroeconomic policies and increased market demand. The IMF raised its growth forecast for China by 0.8 percentage points, reflecting growing international confidence in China's economic development [13]. Group 7: Real Estate Market Data - In July, the sales prices of commercial residential properties in 70 major cities showed a month-on-month decline, with first-tier cities experiencing a 0.2% decrease, a reduction in the decline compared to the previous month [13]. Group 8: Global Economic Indicators - The U.S. PPI rose to 3.3% year-on-year in July, the highest since February, exceeding expectations, which has impacted the Fed's interest rate outlook [16].

Group 1 - Credit bond yields have generally risen, with financial bond spreads widening more than non-financial credit bonds. The 5-year and 7-year spreads for lower-rated bonds narrowed significantly, by 4-8 basis points [2][10] - The 3-year financial bonds saw a notable widening in spreads, particularly for perpetual bonds, with 3-year spreads widening by 3-4 basis points [2][10] - The overall turnover rate of credit bonds decreased from 1.99% to 1.93%, indicating a decline in market activity. The weighted average transaction duration for all credit bonds fell from 3.1 years to 3.0 years [3][10] Group 2 - Institutional behavior shows an increased allocation to credit bonds by wealth management and insurance sectors, while funds have reduced their holdings in secondary capital bonds. Wealth management has focused on increasing positions in bonds with maturities of one year or less [4][10] - Market sentiment remains cautious, with a recommendation to prioritize defensive strategies. It is suggested to adopt a short-duration strategy to enhance returns while maintaining portfolio stability [5][10] Group 3 - The average yield for city investment bonds with an implied rating of AA- and above is 2.12%, with significant variations across provinces. High-yield city investment bonds are concentrated in longer-term bonds [13][17] - The average yield for industrial bonds with an implied rating of AA- and above is 1.90%, with the textile and social services sectors showing higher yields [17]

Group 1 - The report highlights a significant shift in market sentiment, with the stock market showing strength while the bond market faces pressure, leading to a rapid change in risk appetite [3][13][14] - The yield on the 10-year government bond has risen to 1.75%, while the 30-year bond approaches 2%, indicating a challenging environment for long-duration bonds [3][13] - The report notes that the recent decline in bond prices is characterized by a "local" feature, particularly affecting long-term credit bonds, while short-term credit bonds have shown relative stability [5][48] Group 2 - The report discusses the performance of various bond strategies, indicating that the 30-year government bond strategy has faced the most significant drawdown, with a loss of 192 basis points in the past week [4][21] - Credit strategies have also experienced substantial drawdowns, particularly in bank subordinated bonds and long-duration portfolios [4][21] - Short-term bond strategies have managed to retain some gains from earlier in the year, with certain portfolios even showing positive returns recently [4][21] Group 3 - The report emphasizes that the current bond market environment is marked by a lack of liquidity, particularly in long-term credit bonds, which have seen a sharp decline in trading volume [6][48] - Despite the challenges, the pricing of medium to short-duration credit bonds remains stable, with limited upward movement in yields compared to the adjustments seen at the end of July [6][17] - The report suggests that the stability of the non-bank funding side has contributed to the resilience of short-duration credit bonds [6][70] Group 4 - The report outlines short-term strategies, recommending a cautious approach due to overall low absolute returns [7][71] - It suggests focusing on price spread trading opportunities in bank subordinated bonds and emphasizes the potential for acquiring high-quality city investment bonds with AA+ ratings [7][71] - The report also notes that new credit bond pricing is susceptible to market fluctuations, indicating a need for careful monitoring of market conditions [7][71]

Report Industry Investment Rating - The report is bullish on the bond market [2][4][12][83][85] Core Viewpoints of the Report - The economic downward pressure may increase in the second half of the year. Price is the key variable for economic recovery. The price recovery at the supply level is starting to show at the meso - level, but the economic fundamentals in July were poor, and the improvement of CPI and PPI was less than expected. Consumption and exports may face pressure in the second half of the year [2][10][11][83] - The recent correction in the bond market is due to the systematic and active reduction of duration by bond funds and securities firms' proprietary trading, which has nothing to do with redemptions and economic fundamentals. When many institutions reduce their bond investment duration, a new market may start [2][11][83] - In 2025, the bond market lacks a trending market and requires correct band - trading. It is predicted that the yield of the 10Y Treasury bond will fluctuate between 1.6% - 1.8% in the second half of the year. After the recent correction, the 10Y Treasury bond is close to 1.75%, with high cost - effectiveness [4][12][85] Summary by Relevant Catalogs 1. Macro News - In July, the total retail sales of consumer goods were 3.9 trillion yuan, a year - on - year increase of 3.7%, 1.1 percentage points lower than the previous month. From January to July, the total retail sales of consumer goods increased by 4.8% year - on - year, 0.2 percentage points lower than from January to June. From January to July, fixed - asset investment increased by 1.6% year - on - year, 1.2 percentage points lower than in the first half of the year. In July, the added value of industrial enterprises above the designated size increased by 5.7% year - on - year, 1.1 percentage points lower than in June [13] - Three departments jointly issued the "Implementation Plan for the Fiscal Interest Subsidy Policy for Personal Consumption Loans", with a subsidy ratio of 1 percentage point, starting from September 1, 2025, for a period of 1 year [4][16] - On August 15, the central bank released the "China Monetary Policy Implementation Report for the Second Quarter of 2025", continuing the moderately loose tone, and the probability of recent reserve requirement ratio cuts and interest rate cuts is low. The monetary policy focuses on implementation, emphasizing "interest rate guidance", "preventing idle funds", "improving the efficiency of fund use", and "making good use of various structural monetary policy tools" [4][16] - The US CPI in July increased by 2.7% year - on - year, lower than the expected 2.8%, and the core CPI increased by 3.1% year - on - year, higher than the expected 3% [18] 2. Meso - level High - frequency Data 2.1 Consumption - As of August 10, the average daily retail volume of passenger car manufacturers was 45,000 vehicles, a year - on - year decrease of 3.8%, and the average daily wholesale volume was 40,000 vehicles, a year - on - year increase of 16.5%. As of August 15, the total box office revenue of national movies in the past 7 days was 144,668,300 yuan, a year - on - year increase of 46.1% [22] - As of August 1, the total retail volume of three major household appliances was 1.739 million units, a year - on - year decrease of 3.7%, and the total retail sales were 4.05 billion yuan, a year - on - year increase of 2.7% [27] 2.2 Transportation - As of August 10, the container throughput of ports was 6.792 million twenty - foot equivalent units, a year - on - year increase of 7.3%. As of August 15, the average subway passenger volume in first - tier cities in the past 7 days was 4.0767 million person - times, a year - on - year increase of 2.7% [28] - As of August 10, the postal express pick - up volume was 3.53 billion pieces, a year - on - year increase of 13.4%. The railway freight volume was 78.697 million tons, a year - on - year increase of 4.6%, and the highway truck traffic volume was 5.33 million vehicles, a year - on - year increase of 2.4% [35][37] 2.3 Industrial Operating Rates - As of August 13, the blast furnace operating rate of major steel enterprises in the country was 77.5%, a year - on - year increase of 3.6 percentage points. As of August 14, the average asphalt operating rate was 27.0%, a year - on - year increase of 5.0 percentage points [43] - As of August 14, the soda ash operating rate was 87.1%, a year - on - year increase of 5.3 percentage points, and the PVC operating rate was 76.7%, a year - on - year increase of 1.9 percentage points. As of August 15, the average PX operating rate was 85.0%, and the average PTA operating rate was 78.9% [46] 2.4 Real Estate - As of August 15, the total commercial housing transaction area in 30 large - and medium - sized cities in the past 7 days was 1.209 million square meters, a year - on - year decrease of 18.1%. The total number of commercial housing transactions was 12,667 units, a year - on - year decrease of 13.6% [48][50] 2.5 Prices - As of August 15, the average wholesale price of pork was 20.2 yuan per kilogram, a year - on - year decrease of 25.7%, and a 2.2% decrease compared to four weeks ago. The average wholesale price of vegetables was 4.7 yuan per kilogram, a year - on - year decrease of 20.9%, and a 7.4% increase compared to four weeks ago. The average wholesale price of six key fruits was 7.0 yuan per kilogram, a year - on - year decrease of 6.3%, and a 4.5% decrease compared to four weeks ago [51] - As of August 15, the average price of thermal coal at northern ports was 689.0 yuan per ton, a year - on - year decrease of 18.1%, and a 9.9% increase compared to four weeks ago. The average spot price of WTI crude oil was 63.5 US dollars per barrel, a year - on - year decrease of 18.6%, and a 5.4% decrease compared to four weeks ago. The average spot price of rebar was 3321.2 yuan per ton, a year - on - year increase of 6.1%, and a 4.5% increase compared to four weeks ago [52] - As of August 15, the average spot price of iron ore was 792.9 yuan per ton, a year - on - year increase of 3.3%, and a 2.7% increase compared to four weeks ago. The average spot price of glass was 14.6 yuan per square meter, a year - on - year decrease of 15.5%, and a 2.2% increase compared to four weeks ago [58] 3. Bond and Foreign Exchange Markets - On August 15, overnight Shibor was 1.40%, up 8.30 BP from August 11. R001 was 1.44%, up 9.33 BP; R007 was 1.49%, up 3.21 BP. DR001 was 1.40%, up 8.75 BP; DR007 was 1.48%, up 3.94 BP. IBO001 was 1.44%, up 9.11 BP; IBO007 was 1.52%, up 5.32 BP [60] - Most Treasury bond yields rose. On August 15, the yields of 1 - year, 5 - year, 10 - year, and 30 - year Treasury bonds were 1.37%, 1.59%, 1.75%, and 2.05% respectively, up 1.3 BP, 4.9 BP, 5.8 BP, and 9.0 BP respectively from August 8 [66] - On August 15, the yields of 1 - year, 5 - year, 10 - year, and 30 - year China Development Bank bonds were 1.53%, 1.74%, 1.86%, and 2.15% respectively, up 3.2 BP, 7.5 BP, 7.9 BP, and 9.8 BP respectively from August 8 [66] - On August 15, the yields of 1 - year, 5 - year, and 10 - year local government bonds were 1.38%, 1.69%, and 1.84% respectively, down 0.7 BP, up 3.4 BP, and up 2.0 BP respectively from August 8 [71] - On August 15, the yields of AAA - rated 1 - month and 1 - year and AA + - rated 1 - month and 1 - year inter - bank certificates of deposit were 1.47%, 1.64%, 1.49%, and 1.67% respectively, up 1.1 BP, 2.0 BP, 1.1 BP, and 1.0 BP respectively from August 8 [71] - As of August 15, 2025, the yields of 10 - year Treasury bonds in the US, Japan, the UK, and Germany were 4.3%, 1.6%, 4.7%, and 2.8% respectively, up 6 BP, 7 BP, 11 BP, and 9 BP respectively from August 8 [75] - On August 15, the central parity rate and spot exchange rate of the US dollar against the Chinese yuan were 7.14 and 7.18 respectively, down 11 and 3 pips respectively from August 8 [76] 4. Institutional Behavior - Since the beginning of 2025, the duration of medium - and long - term pure bond funds for interest - rate bonds has shown a trend of first decreasing and then increasing, and has been continuously decreasing in the past three weeks. As of August 15, 2025, the estimated average duration was about 5.2 years, a decrease of about 0.04 years compared to last week (August 8) [79] - Since the beginning of 2025, the duration of medium - and long - term pure bond funds for credit bonds has shown a volatile trend. In the past three weeks, the duration has risen rapidly and then fluctuated. As of August 15, 2025, the estimated median duration was about 2.8 years, and the estimated average duration was about 2.7 years, an increase of about 0.14 years compared to last week (August 8) [81] 5. Investment Recommendations - The report is firmly bullish on the bond market. It is predicted that the yield of the 10Y Treasury bond will fluctuate between 1.6% - 1.8% in the second half of the year. After the recent correction, the 10Y Treasury bond is close to 1.75%, with high cost - effectiveness. The yield of the 10Y Treasury bond may gradually return to around 1.65%, and the yield of 5Y national - share second - tier bonds may fall below 1.9% [4][12][85] - Be bullish on long - duration sinking urban investment and capital bonds, urban investment dim - sum bonds and US dollar bonds. Strongly recommend perpetual bonds of Minsheng, Bohai, and Hengfeng Banks. Pay attention to capital bond opportunities of Tianjin Bank, Beibu Gulf Bank, and China Property Insurance [4][12][85]

Group 1: Report Summary - The report analyzes the impact of the stock market rally on the bond market, suggesting that while the stock market's rise suppresses the bond market, the bond market's adjustment space is limited [6][26]. Group 2: Market Performance - This week, the bond market declined significantly, especially long - term bonds. The yields of 10 - year and 30 - year treasury bonds rose by 5.7bps and 8.7bps to 1.75% and 2.05% respectively, reaching new highs since April this year. The short - end was relatively stable, with the 1 - year treasury bond yield rising slightly by 1.6bps to 1.37%, and the 1 - year AAA certificate of deposit yield rising slightly by 2.0bps to 1.64% [1][9]. - The stock market has been strong recently, rising 1.7% this week, closing near 3700 points on the 15th, with significantly enlarged trading volume [9]. Group 3: Reasons for Bond Market Decline - The decline in the bond market is mainly due to the increased risk appetite brought about by the stock market rally. The market's expectation of the continuous rise of the stock market has increased, leading to significant selling by trading desks with long - duration and heavy - position bond holdings, resulting in a market pullback [1][9]. Group 4: Factors Unaffected by the Stock Market - **Funding situation**: The current loose funding situation is determined by weak financing demand and the central bank's maintenance of abundant liquidity. The "anti - arbitrage" measure aims to improve credit quality rather than change the loose funding situation. If credit data remains low, funding may become even looser [2][16]. - **Banks' bond - buying power**: Although the stock market rally causes a shift in household deposits, total bank deposits remain unchanged, so the stock market rise does not affect banks' asset - allocation ability. Banks, especially small and medium - sized banks, face a large asset shortage gap and need to increase bond investments. Assuming a 20% year - on - year growth rate by the end of the year, banks need to increase bond holdings by 8.3 trillion yuan in the next five months, which is significantly larger than the remaining government bond supply, indicating a continued asset shortage [3][17]. - **Interest rate spread and bond yields**: The stock market rally does not change loan interest rates. The short - end interest rate remains stable due to loose funding, while the long - end interest rate is affected by market sentiment in the short term. In the long run, long - end interest rates are more in line with loan interest rates. Assuming the interest rate spread between the general loan weighted average rate and R007 in Q3 remains the same as in Q2 at 200bps, the corresponding 10 - year treasury bond yield is around 1.8% [4][21]. Group 5: Relationship between the Stock and Bond Markets - The stock - bond seesaw effect does not always hold. During the 2014 - 2015 bull market, bond yields remained stable. The stock market's net financing in 2024 was only about 2% of the bond market's, so the stock market's impact on the bond market's trend is limited [5][10]. Group 6: Investment Suggestions - Although the stock market rally suppresses the bond market, the bond market's adjustment space is limited. The 10 - year treasury bond's adjustment upper limit is estimated to be between 1.75% - 1.8%. Investors should pay attention to stock market changes and fund duration. When the stock market stops rising unilaterally or the fund duration drops to a low level, it may be a signal to increase bond positions [6][26].

Group 1 - The core viewpoint of the report indicates that the bond market is currently dominated by risk appetite, leading to a steepening adjustment in yields. This is primarily influenced by the performance of risk assets such as equities and commodities, which have shown a trend of upward movement [3][8][16] - The report highlights four specific scenarios that contribute to the current dominance of risk appetite in the bond market: 1) A trend in risk assets like equities and commodities; 2) A lack of clear direction from policy statements; 3) Interest rates being at historical lows, reducing attractiveness; 4) External market influences affecting sentiment [3][16][21] - The report suggests that if the influence of these factors diminishes, the market will eventually revert to being driven by fundamentals and liquidity conditions. Key indicators to watch include the operational space of monetary policy in the second half of the year and whether social financing (社融) shows signs of a turning point [3][16] Group 2 - The report notes that while there is an increasing expectation of "absence of total easing" in the short term, the core tone of monetary policy remains one of "moderate easing" and "maintaining ample liquidity," indicating that policy space has not been closed off [5][20] - It emphasizes that the urgency for total easing in the third quarter has decreased, with a shift in focus towards structural policies and stabilizing prices. However, the possibility of total policy re-engagement in the fourth quarter remains, especially if the fundamentals come under pressure [5][20] - The report also points out that the current market's expectations for monetary easing are relatively low, suggesting that the likelihood of a significant market adjustment similar to earlier in the year is reduced [5][20][21] Group 3 - The report indicates that the short-term market is influenced by insufficient release of risk appetite and institutional sentiment, leading to weaker performance. However, it cautions against overemphasizing concerns about an upward turning point in interest rates [6][33] - It highlights that the growth rate of social financing is likely to peak in the fourth quarter, and price increases may be a result of financing expansion rather than a sign of a new cycle [6][33] - The report concludes that while the market's expectations for monetary easing are low, the actual probability of easing remains significant, suggesting that interest rates may form a mid-term top after the current pullback [6][33]

Report Industry Investment Rating - The report maintains a cautious stance on the bond market. It suggests that if there is a significant adjustment, one can use a small position to bet on an oversold rebound (not for buying at high prices) [3][41]. Core Viewpoints - The bond market has experienced a steep decline this week despite weak fundamental data, and the problem lies in the bond itself, as it lacks the conditions to rise from both the asset and liability sides [3]. - The current trading main - line of the bond market may not be data, and single - month data may not confirm trends. The re - inflation trading brought by anti - involution may be in the first stage, with signs possibly appearing at the price level by the end of the year at the earliest [3][16]. - The view that the stock - bond seesaw causes the bond market to fall has logical flaws. The bond market's potential positives mainly rely on other assets and central bank actions, indicating insufficient internal positives [3][21]. - This year, the incremental funds of traditional bond market allocators such as banks and insurance in the bond market have significantly decreased, and it is hard to say that it is still an asset - shortage pattern [3][33]. - Mid - to long - term pure bond funds with shorter durations and earlier duration - reduction timings have achieved better returns this year [35]. Summary by Directory 1. Bond Market Weekly Review (2025.8.11 - 8.15) - This week, the bond market sentiment was suppressed by equities. Despite negative credit growth and economic data falling short of expectations, the bond market continued to be weak. By August 15, the 10Y Treasury yield rose 5.74BP to 1.75% compared to August 8, and the 30Y Treasury yield reached 2.05%. The 10Y - 1Y spread widened [6]. 2. Why Isn't There Weak - Data Trading Despite Weak Data? - There are differences in the bond market from multiple perspectives: - Inflation: There is a divergence between the limited price - pulling effect of anti - involution and the view that inflation has bottomed out. The bulls focus on the limited improvement in PPI and the time lag in price transmission, while the bears focus on the phased stabilization of PPI and the super - seasonal improvement of CPI. In July, PPI was - 3.6% year - on - year and - 0.2% month - on - month, with the month - on - month decline narrowing for the first time since March. CPI increased 0.4% month - on - month [3][9]. - Financial data: There are divergences between social financing and credit, and between negative credit growth and M1 growth. The bulls note that the rise in social financing is mainly driven by government bond financing, and credit was unexpectedly weak in July, with a rare negative growth of 50 billion yuan. The bears point out that M1 growth continued to rise to 5.60% in July, indicating active capital activation [3][11]. - Economic data: There is a divergence between trends and single - month fluctuations in production, investment, and consumption growth. The bulls see a slowdown in July's economic data, while the bears believe that the annual economic target is likely to be achieved, and consumption will support the economy in the second half of the year [3][13]. - The bond market's trading main - line may not be data, and single - month data may not confirm trends. The re - inflation trading brought by anti - involution may be in the first stage, with signs possibly appearing at the price level by the end of the year at the earliest [3][16]. 3. Did the Bond Market Fall Due to Anti - Involution and Stock Market Suppression? - Many market views believe that anti - involution and the stock market's suppression led to the bond market adjustment. However, this week, the commodity performance was average, and there were cases where stocks fell but bonds did not rise, accelerating market doubts about bond assets themselves [18][20]. - Using high - volatility assets to judge the trend of low - volatility assets has logical flaws. The view that the stock - bond seesaw causes the bond market to fall implies that the bond market's opportunities mainly rely on other assets' weakness, indicating limited long - term opportunities [3][21]. 4. The Problem of Bonds Lies in Themselves - Asset side: Since July, policies related to anti - involution have increased market expectations of rising inflation. At the same time, the good performance of the equity market has driven up market risk appetite. From the perspective of insurance institutions, the cost - effectiveness of bond assets is insufficient. The average net investment yield of five major insurance companies has declined from 5.35% in 2017 to 3.6% in 2024 [23][26]. - Liability side: The allocation funds of insurance and banks are limited. Insurance has shifted to equity assets, and the incremental funds for bond allocation have not increased significantly compared to last year. Banks' liability sides have suffered serious losses due to factors such as deposit rate cuts and resident deposit migration. In July, the growth of wealth management scale was weak, with a monthly incremental of only 26 billion yuan, far lower than the seasonal level of 1.8 trillion yuan in the past four years [3][29]. - Asset - shortage pattern: The incremental funds of banks and insurance in the bond market have significantly decreased this year. Banks' bond investment increments are close to zero, and insurance's incremental funds for bond investment have dropped to 66.98 billion yuan [33]. 5. Should Bond Market Investment "Focus on Trading"? - Mid - to long - term pure bond funds with better performance have shorter durations, around 3 - 4 years, while the median duration of mid - performance funds is around 4 - 5 years [35]. - The top - performing bond funds reduced their durations earlier. As of August 15, the median duration of mid - to long - term pure bond funds generally increased compared to the beginning of the year, but the duration of the bottom 20% of funds changed little. The median duration of top - performing funds reached its maximum in late April, and the duration reduction was more significant compared to other funds [35]. - Technically, the long - end varieties of Treasury bond futures have shown oversold signals. Attention can be paid to short - term oversold trading opportunities [37].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The sharp adjustment of the bond market this week is still a short - term emotional shock, and the pricing logic of assets has not changed much. The upward momentum of the 10 - year Treasury bond rate breaking through 1.75% will weaken marginally, but the downward space for interest rates is also limited. In the face of fluctuations, investors should choose trading strategies carefully according to their liability - side stability and safety cushion [2][17][32]. 3. Summary by Relevant Catalogs 3.1 This Week's Bond Market Review: Risk Assets Continuously Suppress, Curve Bear - Steepens - The Shanghai Composite Index strongly broke through the key points of 3674 and 3700, boosting market risk appetite and leading to a significant adjustment in the bond market. Economic data in July, single - month negative credit growth, and the central bank's outright reverse repurchase operations failed to drive the bullish power of the bond market. By Friday, the yields of 10Y and 30Y Treasury active bonds reached 1.7490% and 1.9980% respectively, approaching key levels [1][8]. - From Monday to Friday, influenced by factors such as the performance of risk assets, policy expectations, and economic data, the yields of 10Y and 30Y Treasury active bonds fluctuated. Compared with August 8th, by August 15th, the yields of 1Y, 5Y, 10Y, and 30Y Treasury bonds increased by 1.6BP, 4.9BP, 5.7BP, and 8.7BP respectively [8][9][10]. 3.2 Before the Key Resistance Level, the "Catalysts" and "Risk Points" of the Bond Market Catalysts - The limited bullish power in the bond market after the release of social financing and economic data this week may be due to the significant decline in bill rates at the end of June, which has already been expected by the market, rather than the unimportance of fundamental factors [2][17]. - The central bank closely monitors and precisely regulates the money market. Although there was a continuous net withdrawal from Monday to Thursday, the money market rate remained stable. On Friday, a 5000 - billion - yuan outright reverse repurchase was implemented in time, and the central bank's open - market operations turned to net injection [17]. - The allocation demand is gradually increasing. Since August is the "sales rush" period before the reduction of insurance's预定 interest rate, the subsequent insurance purchase strength is expected to further increase [17]. Risk Points - There is a risk of negative feedback from bond - fund redemptions. As of August 17th, the scale of stock - funds and bond - funds in August increased by 145.7 billion yuan and 50.3 billion yuan respectively compared with the previous month, and it is the second consecutive month that the growth rate of stock - fund scale is greater than that of bond - funds [3][19]. - The central bank's monetary policy focuses on multiple goals and may tolerate fluctuations in the money market and the bond market caused by the temporary amplification of supply - demand frictions at individual times [4][28]. - Compared with the stock - bond seesaw effect after the "924" package of policies last year, the upward range of interest rates in this round is not large. Since the "anti - involution" market in early July, the yields of 10Y and 30Y Treasury active bonds have increased by 11BP and 15BP respectively [4][28]. 3.3 Strategy Thinking: Ultra - Long Bonds Will See Intensive Issuance, Focus on the Switch of Individual Bond Relative Values - In the unstable bond - market situation, investors are advised to focus on bonds with both liquidity and relative value and conduct refined bond selection. They can seize the trading opportunities brought by the intensive issuance of ultra - long bonds from August to September [5][33]. - Usually, in the early stage of the issuance and subsequent re - issuance of new bonds, the spread between new and old bonds will widen. Next Friday, the 30 - year "25 Ultra - Long Special Treasury Bond 06" will be issued for the first time [5][33]. - Based on the issuance of 11 30 - year Treasury bonds since 2021, the spread between new and old bonds will reach its peak 2 - 9 trading days after the listing of the first - issued bond (except for 250002), with the spread widening by 2.1 - 9.5BP compared with the issuance start date and 1.6 - 15.8BP compared with the listing date (except for 2500005 which is narrowing). For the first issuance and the first two re - issuances, the spreads of active bonds, sub - active bonds, and new bonds compared with the 10 - year Treasury bond rate usually compress within the listing day and the following three trading days [5][34]. - For trading desks that can short, they can short old bonds before issuance, buy new bonds in the primary market, and then sell new bonds and buy back old bonds after the spread between new and old bonds widens. For allocation desks that cannot short, they can sell old bonds in their current holdings before issuance, buy new bonds in the primary market, and decide whether to sell and buy back old bonds after the new bonds are listed. In addition, lending bonds can further increase returns [38].