Core Viewpoint - The People's Bank of China emphasizes the high-quality construction and development of the bond market's "Technology Board" to support financing for tech enterprises, particularly startups, which face challenges in funding channels, costs, and mismatched timelines [1][2]. Group 1: Development of the Technology Board - The "Technology Board" was officially launched in May 2025, focusing on supporting financial institutions, tech companies, and equity investment institutions in issuing technology innovation bonds with flexible arrangements [1]. - As of January 7, 2026, 1,690 entities have issued technology innovation bonds totaling over 1.9 trillion yuan, with a growing share from private enterprises and significant participation from private equity and venture capital institutions [1]. - The "Technology Board" is still in its early development stage, requiring improvements in issuer coverage, issuance normalization mechanisms, secondary market liquidity, and coordination with other financial instruments [1]. Group 2: Recommendations for High-Quality Development - Enhancing specialized, market-oriented technology risk assessment and pricing capabilities is essential, as traditional financial rating methods struggle to quantify the value of "hard technology" [2]. - Strengthening risk-sharing and credit enhancement mechanisms is crucial, with the central bank creating tools to share risks associated with technology innovation bonds, aiming to reduce underwriting risk premiums through a "government guidance + market operation" approach [2]. - Deepening supporting mechanisms and ecosystem construction is necessary, including simplifying information disclosure requirements and promoting product innovations like convertible bonds and bond ETFs to enhance secondary market liquidity [2]. Group 3: Financial Ecosystem and Economic Growth - High-quality development requires a deep collaboration between the financial system and the real economy, with emerging and future industries becoming focal points for financial institutions seeking new growth opportunities [2][3]. - Data from the National Bureau of Statistics indicates that the value added of large-scale equipment manufacturing and high-tech manufacturing industries grew by 9.3% and 9.2% year-on-year, respectively, highlighting their potential as new economic growth engines [2]. - The evolution of the bond market towards a focus on future technologies rather than past assets is essential for meeting the financial service requirements of the real economy [3].

Report Industry Investment Rating No information provided in the content. Core Viewpoints - The state of the fundamental and capital markets determines the underlying tone of the bond market. The focus of the game remains the intensification of "loose monetary policy" and its specific implementation forms. In January 2026, the situation is neutral to optimistic. The primary issuance pressure of government bonds is controllable. The regulatory scale for non-banks is marginally relaxed, which is beneficial for the stability of the liabilities of public bond funds. The capital market may face potential seasonal pressure, but there is a high probability of additional central bank injections. The allocation demand at the beginning of the year can lock in the upper limit of interest rates. The coupons and spreads of the medium and long - term ends of interest - rate bonds are highly cost - effective, and the bond market may start a bullish trend [2][29][61]. Summary by Directory 1. December Bond Market: A Glimmer of Warmth Amidst the Cold - In December, the long - end interest rate showed an "up - down - up" N - shaped trend. The 10 - year Treasury yield reached a high of 1.87% at the beginning of the month and a second - high of 1.86% at the end of the month, and dropped to 1.83% in the middle of the month. The bond market mainly traded on four themes: the central government's policy orientation for the following year, the possibility of short - term intensification of the central bank's "loose monetary policy", the supply ratio of ultra - long government bonds, and the year - end ranking competition among institutions [1][13]. - Compared with October - November, in December, the capital interest rate was more stable and lower, and the bond market sentiment became more positive, shifting from completely ignoring the possibility of "loose monetary policy" to attempting to play the game [17]. - Regarding various bond market varieties, the issuance price of inter - bank certificates of deposit (NCDs) increased at the beginning of the month and decreased in the second half of the month. The interest - rate bond curve steepened significantly, with the yield of 30 - year Treasury bonds rising by 8bp. The credit bond market's development slowed down marginally, and only some over - adjusted varieties in November had a rebound [23][24]. 2. Learning from History: Fundamental and Capital Markets as Key References for the Bond Market in Early January - In the past five years, the movement of long - end interest rates in January has been inconsistent. When the economic fundamentals were good at the beginning of the year and the capital market gradually tightened, bond yields increased, as seen in 2021, 2023, and 2025. When the fundamental data was below expectations and the monetary policy was proactive, it was beneficial for the bond market, as in 2022 and 2024 [27]. - Looking forward to January 2026, in addition to the fundamental and capital market conditions, non - seasonal pricing factors also need to be considered, including the supply rhythm of government bonds, regulatory changes in bond fund redemption fees, policy directions, and institutional behaviors [29]. 3. Four Key Concerns for the Bond Market in January Supply Rhythm - The net supply pressure of government bonds in January is about 1.3 trillion yuan. The net financing scale of government bonds in the first quarter is about 4.00 - 4.12 trillion yuan, with a "V" - shaped monthly distribution [3][36]. - The sentiment towards ultra - long - term bonds may be cautious in the first half of January and may recover in the second half as bond issuance progresses. The specific term structure of government bond supply in the first quarter still needs observation [37]. Regulatory Changes - The constraints on bond fund redemption fees have been relaxed. The new regulations may have three regulatory intentions: stabilizing market pricing, weakening the liquidity management attribute of bond funds, and emphasizing fairness to investors. The issue of customized bond funds may continue to be the focus of rectification [4][41]. - After the new regulations were officially announced, the concerns of investors eased. In early January 2026, the bond market may achieve a good start, with interest - rate pricing potentially self - repairing and the possibility of an inflow of institutional incremental funds [41]. Policy Direction - In January, the capital market faces more disturbances than in December, including large - scale tax payments, Spring Festival cash - withdrawal demand, a credit boom, and proactive fiscal policies. The capital interest rate has an inherent upward momentum, and the inter - bank market's dependence on central bank injections will increase [6][42]. - There are two options for the central bank's monetary policy: "strong action" (possibly a reserve requirement ratio cut if the Q4 economic performance is significantly below expectations) and "weak action" (increasing the net injection of basic tools if the December data rebounds and the recovery continues into January) [48][49]. Institutional Behavior - Allocation - driven investors may be the key force in determining interest - rate pricing at the beginning of 2026. Banks and insurance companies' self - operated investments are evaluated annually, and the beginning of the year is an important allocation period. At present, the trading - driven investors' influence on the interest - rate center has weakened and they tend to follow the allocation - driven investors [7][51]. - For insurance companies, a 30 - year Treasury yield of 2.30% may be an important allocation point. For large banks, a 1.85% coupon rate on 7 - 10 - year Treasury bonds is acceptable when the spread is cost - effective [52][57]. 4. January Strategy: Seize the Opportunity - In general, the situation in January is neutral to optimistic. However, at the beginning of 2026, the bond market adjusted sharply. The direct reason may be the learning effect from the 2025 bond market adjustment, and the fundamental reason is the lack of significant profit - making effects in the bond market [61][62]. - The bond market is gradually entering a state where inter - bank market funds are relatively abundant and the duration of trading - type institutional portfolios is low. The coupons and spreads of the medium and long - term ends of interest - rate bonds are highly cost - effective. It is advisable to wait for allocation - driven investors to enter the market first, followed by trading - driven investors. In January, it may be a good time to seize opportunities. Short - term significantly adjusted varieties such as 5 - 10 - year Treasury bonds and 5 - 10 - year policy - bank bonds have trading value. When the 10 - year Treasury yield is above 1.85%, it may be a relatively safe replenishment window. For ultra - long - term bonds, it is advisable to wait until the end of the month when the supply term structure is clear [69][70].

Group 1 - The Shanghai Stock Exchange publicly reprimanded China Minmetals Investment Co., Ltd. and its executives for failing to disclose the mid-term report by the legal deadline [1] - In 2025, non-financial enterprises issued 15,800 bonds, raising over 1.4 trillion yuan, with a 12.04% year-on-year increase in exchange market bond issuance [3] - The People's Bank of China conducted a 28.6 billion yuan reverse repurchase operation, with a net withdrawal of 500.2 billion yuan [5] Group 2 - Beijing's State-owned Assets Supervision and Administration Commission issued new regulations for bond issuance by state-owned enterprises, tightening controls on companies exceeding the debt-to-asset ratio warning line [7] - Henan Zhongyu Industrial Investment Group plans to apply for 2 billion yuan in debt financing tools, selecting underwriters through a public bidding process [9] - Luoyang Guojin Industrial Investment Group's 5 billion yuan bond issuance project has been accepted by the Shanghai Stock Exchange [10] Group 3 - China National Railway Group announced plans to issue a total of 10 billion yuan in railway construction bonds, with proceeds used for debt structure adjustment [11] - The first low-altitude economy special bond for county-level entities was issued by Changshu City, totaling 250 million yuan [12] - Henan Huaihe Port Urban Development Company is integrating assets to establish a state-owned enterprise and is seeking credit rating services [13][14] Group 4 - The bond market experienced a decline at the beginning of the year, attributed to strong stock market performance and rising supply concerns [19][20] - The People's Bank of China's bond purchase volume remained low in December, contributing to market pressure [21] - Despite challenges, the bond market may stabilize as bond yields rise, improving relative value compared to loans and stocks [22]

Core Viewpoint - The article discusses the changing landscape of U.S. Treasury holdings, particularly the decline in the share of U.S. debt held by foreign investors, and emphasizes the need for China to diversify its reserve assets and enhance the internationalization of the renminbi [1]. Group 1: Overview of U.S. Treasury Holdings - The total amount of U.S. Treasury securities has reached a historical peak of $38.11 trillion as of October 30, 2025, an increase of nearly $2 trillion from the end of 2024 [4]. - The ratio of U.S. debt to GDP has remained high, reaching 118.78% by the second quarter of 2025 [4]. - The total holdings of U.S. Treasury securities by various investors have surged from $3.04 trillion in Q1 2000 to $26.84 trillion by Q2 2025 [4]. Group 2: Changes in Foreign Investor Holdings - The share of U.S. Treasury securities held by foreign investors has decreased from a peak of 57.30% in Q4 2008 to approximately 34.08% by Q2 2025 [5]. - Despite the decline in share, the total amount held by foreign investors has increased from $4.91 trillion in September 2011 to $9.16 trillion by July 2025, indicating a robust growth trend [8]. - The structure of foreign holdings is shifting, with a slight increase in short-term debt holdings from 12.93% to 15.43% since September 2011, reflecting a preference for liquidity amid uncertain global interest rates [9]. Group 3: Changes in Holder Composition - The composition of foreign holders has shifted significantly, with private investors increasing their holdings from $1.74 trillion in December 2013 to $5.24 trillion by July 2025, a growth of 201.21% [10]. - The share of private investors has risen from 30% in December 2013 to 57.16% by July 2025, surpassing that of official investors for the first time [10]. - Official foreign investors have reduced their holdings from $4.05 trillion in December 2013 to $3.92 trillion by July 2025, a decline of 3.22% [10]. Group 4: Implications for Reserve Diversification - The decline in U.S. Treasury holdings by official foreign investors may be attributed to a trend towards diversifying foreign exchange reserves, with a shift from U.S. dollar assets to gold [11]. - Global official dollar reserve assets have shown a declining trend since 1999, while gold reserves have increased significantly, indicating a strategic shift in reserve management [11].

Core Market Trends - Asian stock markets have entered a "technically overbought" zone, leading to a pause in the upward trend driven by the AI boom and expectations of Federal Reserve rate cuts [1] - U.S. stock index futures showed mixed results, while European markets opened with varied performance [2] - Precious metals experienced significant declines, with gold, silver, and palladium all dropping, and oil prices also under pressure [1][2] Commodity Market Adjustments - The Bloomberg Commodity Index (BCOM) is set for annual weight rebalancing from January 8 to 14, which is expected to trigger substantial passive fund reallocations [1][4] - The anticipated sell-off due to this rebalancing is projected to account for 9% of total silver holdings and 3% of total gold holdings, creating significant downward pressure on prices [1][4] Precious Metals Impact - The adjustment is causing notable selling pressure in the precious metals sector, particularly for silver, which faces a sell-off equivalent to 9% of its total holdings [4] - This "non-fundamental" selling triggered by index rules is forcing speculative funds to exit before the event, exacerbating short-term price volatility [4] Oil Market Developments - The announcement by the Venezuelan government to deliver 30 to 50 million barrels of oil to the U.S. has raised concerns about increased supply, contributing to a decline in WTI crude oil prices [9] - Goldman Sachs analysts noted that while short-term supply prospects are uncertain, a potential recovery in Venezuelan oil production could exert significant downward pressure on global oil prices in the long term [9]

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The bond market declined at the beginning of the year, with the yields of ultra - long - term interest - rate bonds rising significantly. The 10 - year and 30 - year treasury bond yields increased by 3.6bps and 4.3bps respectively to 1.88% and 2.31% compared to the previous week [1][9]. - The decline is due to multiple factors, including the strong performance of the stock market, concerns about bond supply, low central bank bond - buying volume, potential impacts from the surge in credit and social financing at the beginning of the year, and the temporary rebound in inflation data [1][2][9]. - Despite the current pressures, the relative value of bonds is changing. The impact of supply pressure is more about rhythm rather than trend, the inflation rebound's sustainability needs further observation, and the central bank's bond - buying has a cumulative effect and may increase [3][4]. - The stabilizing forces in the bond market are gradually strengthening. The bond market may remain volatile in January, and there may be a configuration opportunity at the end of the month [5][37]. 3. Summary by Related Content Reasons for the Bond Market Decline at the Beginning of the Year - **Stock Market Performance**: The strong stock market at the beginning of the year attracted non - bank funds from the bond market to the stock market and made investors more cautious about bond investment, shortening the duration and reducing long - term bond allocation. The Shanghai Composite Index exceeded 4000 points, rising more than 100 points in the first two trading days [2][9]. - **Supply Concerns**: The large - scale bond issuance in the first week and the significant increase in the single - issue size of treasury bonds raised concerns about future supply. The net financing of government bonds in the first week was 612.7 billion yuan, with treasury bond net financing of 495 billion yuan. The single - issue sizes of 2 - year and 10 - year treasury bonds this week were 175 billion yuan and 180 billion yuan respectively, significantly higher than the second half of last year [2][14]. - **Central Bank Bond - Buying**: The central bank's net purchase of treasury bonds in December was 5 billion yuan, the same as in November, which was lower than market expectations and increased the adjustment pressure on the bond market [2][19]. - **Other Factors**: At the beginning of the year, there may be impacts from the surge in credit and social financing and the temporary rebound in inflation. It is expected that the year - on - year CPI growth in December will expand to 1.1%, and the year - on - year decline in PPI may narrow to - 1.9% [2][22][23]. Analysis of the Mitigating Factors - **Stock - Bond Relative Value**: The stock - bond relative value is changing. The difference between the inverse of the P/E ratio of Wind All - A (excluding financial and petroleum sectors) and the 10 - year bond yield has returned to the level at the beginning of 2023. Bonds may even be more cost - effective compared to the current PMI [3][26]. - **Supply Pressure**: The increase in government bond supply is more of a rhythm issue. The incremental financing in 2026 may be limited compared to 2025. After the peak of credit and government bond issuance at the end of January, the impact on the bond market will gradually fade [3][29]. - **Inflation Rebound**: The temporary rebound in inflation is mainly driven by factors such as rising non - ferrous metal prices and short - term weather - related food price increases. Its impact on interest rates is limited, similar to the situation in 2019 - 2020 [4][30]. - **Central Bank Bond - Buying**: The central bank's bond - buying has a cumulative effect. Even with a monthly purchase of 5 billion yuan, the annual purchase will be about 60 billion yuan. As government bond supply increases, the purchase volume may also increase [4][31]. Outlook for the Bond Market - The bond market may remain volatile in January, with short - term interest rates potentially rising. After the supply shock at the end of the month, the bond market is expected to gradually recover. In the short term, a short - end leverage strategy can be adopted, waiting for configuration opportunities [5][37].

Group 1: Global Economic Trends - The world economy in 2026 is characterized by a "dual performance" driven by AI and fiscal expansion, with AI-related investments contributing nearly 1% to the US GDP [3][19] - Global trade growth is expected to slow significantly to 0.5% in 2026, down from a predicted 2.4% in 2025, due to high tariffs and declining overall demand [3][19] - Major central banks are entering a rate-cutting cycle, with the Federal Reserve expected to cut rates 3-4 times in 2026, while the European Central Bank maintains its rate at 2.0% [3][19] Group 2: China's Economic Narrative - 2026 marks the beginning of the "15th Five-Year Plan," with a target of maintaining an average annual GDP growth rate of around 4.4% to double per capita GDP by 2035 [4][20] - The "involution" issue stems from a bottleneck in growth models and a singular evaluation standard, leading to overcapacity and competition among local governments [5][21] - The central government's focus on national resource allocation efficiency contrasts with local governments' emphasis on local value, tax revenue, and employment, complicating the "anti-involution" process [5][21] Group 3: Policy Coordination - The macroeconomic policy approach emphasizes fiscal expansion while monetary policy plays a supportive role, with expectations of rapid government bond issuance in early 2026 [6][22] - There is potential for increasing the narrow deficit ratio, special government bonds, and local government special bonds to address fiscal pressures [6][22] - The central bank is expected to ensure adequate liquidity, potentially through interest rate cuts and increased bond purchases [6][22] Group 4: Interest Rate Bonds - The interest rate bond market in 2026 is anticipated to exhibit a "strong oscillation" pattern, with ten-year government bond yields expected to fluctuate within a defined range [7][23] - The lower boundary of this range is supported by a gradual decline in economic growth and moderate inflation, necessitating a conducive environment for fiscal and monetary policies [7][23] - The market structure is evolving, with insurance funds increasingly purchasing long-term government bonds, while brokerages and funds are net sellers [7][23] Group 5: Credit Bonds - The credit bond market is expected to enter a "high spread normalization" phase in 2026, with stable supply-demand dynamics leading to high volatility in credit spreads [9][25] - The supply structure is changing, with a significant increase in industrial bonds, particularly in the technology sector, contributing to a net supply increase of approximately 400 billion yuan [9][25] - The trend of "deposit migration" continues, with wealth management products reaching 32.13 trillion yuan, providing stable funding for credit bonds [9][25] Group 6: Convertible Bonds - The convertible bond market may experience a unique situation of "tight supply and expanding demand" in 2026, with over 100 convertible bonds delisted in 2025 [11][27] - The supply structure is highly concentrated in five industries, which may lead to increased dependence on these sectors for future convertible bond performance [11][27] - Public funds are becoming the main holders of convertible bonds, with their share rising from approximately 34% to 42% [11][27]

Core Viewpoint - The bond market is under pressure with a weak trend due to limited expectations for monetary easing at the beginning of the year and concerns over supply pressure [1] Market Performance - Government bond futures closed lower across the board, with the 30-year main contract down 0.44% at 110.47, the 10-year main contract down 0.08% at 107.61, the 5-year main contract down 0.06% at 105.5, and the 2-year main contract down 0.03% at 102.332 [2] - The interbank major interest rate bond yields briefly fell before rising again, with the 10-year policy bank bond yield up 1.15 basis points to 1.99%, and the 10-year government bond yield up 0.75 basis points to 1.891% [2] Monetary Policy and Market Outlook - The People's Bank of China emphasized maintaining a moderately loose monetary policy, enhancing financial services for high-quality economic development, and ensuring a stable financial environment [7][8] - Institutions expect the bond market to remain volatile, with a preference for carry trades and small positions in adjusted wave trading strategies [9] Funding Conditions - The central bank conducted a 286 billion yuan 7-day reverse repurchase operation at a rate of 1.40%, resulting in a net withdrawal of 500.2 billion yuan for the day [6] - Shibor rates showed mixed performance, with the overnight rate rising by 0.3 basis points to 1.266% and the 7-day rate rising by 2.8 basis points to 1.45% [6] Institutional Insights - Western fixed income analysts believe that new public fund sales regulations will positively impact the bond market, potentially improving institutional sentiment [9] - Expectations for monetary policy in 2026 include possible rate cuts and reserve requirement ratio reductions, with a focus on maintaining liquidity and supporting economic growth [9]

Group 1 - The credit bond market environment in Q1 2026 is expected to remain favorable for investment, with supply-demand imbalance pressures likely to ease and a moderate recovery in fundamentals, leading to a potential decline in bond rates [3][4] - The credit bond ETF surge at the end of 2025 may not continue into Q1 2026 due to redemption impacts from some banks, which could lead to liquidity and valuation pressures on component bonds [3][4] - The scale of open-ended bond funds entering the market in Q1 2026 is significant, exceeding 260 billion, with a focus on 2-5 year bonds, indicating potential demand support for mid-term credit bonds [3][4] Group 2 - The credit bond carry strategy involves using repurchase agreements for financing to invest in higher-yielding, longer-term credit bonds, aiming to profit from the interest rate spread [4] - Current market conditions, characterized by stable monetary policy and high carry space, suggest that mid-term high-grade credit bonds are suitable for leveraged carry strategies [4] - The performance of various credit bonds in Q4 2025 showed a strong recovery in the credit market, with significant increases in net financing for industrial bonds and a slight decrease for urban investment bonds [10][14] Group 3 - In Q4 2025, the issuance and net financing of traditional credit bonds were 35,336 billion and 8,053 billion respectively, with a notable increase in industrial bonds compared to urban investment bonds [10][14] - The yield on credit bonds across various ratings and maturities showed a downward trend in Q4 2025, with significant performance differences observed between different types of bonds [19][20] - The holding period yield for 5-year AAA/AAA- rated bonds was reported at 1.66%, outperforming other categories, indicating a favorable investment environment for mid-term bonds [29]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - The bond market has been continuously adjusting at the beginning of the year, with the 10-year and 30-year Treasury bond yields breaking through key levels. Historically, bond market yields usually choose a direction around mid-January. The probability of a unilateral upward movement in yields at the turn of the year is extremely low. Over the past 10 years, yields have shown a V-shaped pattern in 5 years, an inverted V-shaped pattern in 2 years, a unilateral downward movement in 2 years, and a unilateral upward movement in 1 year [2]. - The direction of yields after mid-January depends on the verification of expectations after the end of the information vacuum period. If the verification falls short of expectations, yields usually return to pre-expectation levels. Currently, market concerns focus on factors such as ultra-long bond supply, the spring rally in equities, and less-than-expected monetary easing. However, since the third quarter of last year, the bond market has already priced in these negative factors, and the likelihood of these factors further exceeding expectations seems low [2]. - The effective upper limits for the 10-year and 30-year Treasury bond yields are 1.85% and 2.3% respectively. Short-term deviations do not represent a sustained breakthrough. The bond market requires patience, and investors should wait for opportunities around mid-January [2]. Summary by Directory How to Evaluate the Indicators at the Beginning of the Year? How to View the Market Expectations and Actual Trends Since the Beginning of 2022? - In early 2022, the expectation gap was between the verification of loose monetary policy and strong credit growth. Interest rates first declined due to expectations of monetary easing after a mid-January interest rate cut, but then rebounded as the strong start of the year became more apparent [10]. - In early 2023, the expectation gap was the actual strength of the post-pandemic economic recovery. Despite a tightening of the money supply, bond yields declined as the economic recovery fell short of expectations and the government set a relatively modest economic growth target [11]. - In early 2024, the expectation gap was the disappointment in incremental policies and the strong start of the year. After initial expectations for further growth-stabilizing policies faded, bond yields entered a second phase of decline as property and fiscal policies underperformed and government bond issuance was slow [12]. - In early 2025, the expectation gap was a significant reversal in expectations of monetary easing. Rooted in factors such as the strong start of the year, Sino-US relations, and technological narratives, risk appetite increased, leading to a tightening of funds by the central bank [13]. How Much Impact Do the Quality of the Strong Start and Supply Have? - The final verification of the strong start will come in March or April. In the short term, the market focuses on financial data and the PMI. Over the past 4 years, the net financing increment of government bonds from January to February has been most correlated with yield changes. If the year-on-year increase exceeds 50 billion yuan, the bond market may face pressure. Credit, PMI, and yield changes have a weak correlation, and the relationship between social financing and yields depends on market expectations [18]. Does the Stock-Bond跷跷板 Relationship Hold at the Beginning of the Year? - Since 2022, the short-term performance of stocks and bonds has shown some correlation, but the relationship may weaken after mid-January [19]. How to View Sino-US Disturbances? - Sino-US relations are a key factor. The impact on the bond market depends on the comparison between actual situations and market expectations [23][24]. How Much Impact Does the Money Supply Have? - The money supply is affected by various factors such as the economic situation, Sino-US relations, and the stock market. At the beginning of the year, the money supply is crucial. Before the Spring Festival, interest rates tend to rise seasonally, and whether this leads to a tight money supply depends on the central bank's attitude. A tight money supply can impede yield declines [26]. Is There a Final Decline? What Experience Can We Learn from History? - Regarding social financing and government bond supply, it is expected that the social financing growth rate from January to February will remain flat or increase slightly by 0.1 percentage points, and the net financing of government bonds will increase by more than 70 billion yuan compared to the same period last year. However, the central bank's bond purchases may offset the impact of supply [28]. - Regarding the stock-bond relationship, the stock market's spring rally may disrupt the bond market, but the stock market's ability to continuously rise and the potential decoupling of stock and bond trends after mid-January suggest that the stock market may not pose a long-term negative impact on the bond market [29][30]. - Regarding Sino-US relations, the market has been optimistic about Sino-US relations since the third quarter of last year. The likelihood of further unexpected improvement in Sino-US relations is lower than the possibility of negative changes, which is relatively favorable for the bond market [31][32]. - Regarding the money supply, the money supply has been improving since December. With the early issuance of government bonds and the central bank's view that interest rates have returned to a reasonable level, the central bank is likely to maintain a supportive stance, at least avoiding a repeat of last year's first-quarter situation [34]. A Magical Market Rule - Observing bond yields from November of the previous year to March of the following year, a pattern has emerged. Since 2016, a phased reversal has been the most common, with a V-shaped pattern in 5 years, an inverted V-shaped pattern in 2 years, a unilateral downward movement in 2 years, and a unilateral upward movement in 1 year. The probability of a unilateral upward movement is extremely low [35]. How Has the Market Performed in the First Quarter in Recent Years? - In the first quarter of 2022, yields first declined and then rose. Interest rate cuts and the COVID-19 situation initially pushed yields down, but expectations of strong credit growth and local property policies led to an increase in yields [46]. - In the first quarter of 2023, yields first rose and then fell. A tightening of funds and expectations of post-pandemic economic recovery pushed yields up at the beginning of the year, but unmet expectations, a lower economic growth target, the Silicon Valley Bank collapse, and a reserve requirement ratio cut led to a decline in yields [47][49]. - In the first quarter of 2024, yields declined steadily. Weak fundamentals, a poor stock market performance, a reserve requirement ratio cut, disappointing incremental policies, and a reduction in deposit rates contributed to the decline. Regulatory concerns about interest rate risk in March provided some resistance to the downward trend [52]. - In the first quarter of 2025, yields rose steadily. The central bank's suspension of bond purchases, a rise in the stock market driven by Deepseek, a structural stabilization of the economy, and better-than-expected US tariff policies led to an increase in yields [54].