Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - In the first week of 2026, the bond market experienced significant adjustments. The main reasons were that the central bank's open - market bond purchases in December 2025 were only 50 billion yuan, not increasing as expected, and the stock market had a strong start, causing funds to flow from the bond market to the stock market. The "stock - bond seesaw" effect was the more important factor suppressing the bond market. It is expected that the allocation funds in the bond market will be diverted by the stock market. In the next week, the release of December's financial data is expected to have limited impact on the bond market. Short - term interest rates will remain stable, while long - term interest rates are more affected by the stock market, and the yield curve is expected to steepen. When the 10 - year Treasury yield approaches the 1.9% stage high, investors can enter the market at an appropriate time [1][16][17] - Last week, gold in the cross - year market quickly rebounded to the previous high of $4,500 per ounce after a short - term plunge and is about to break through the previous high. The RMB exchange rate also had a short - term correction, but based on the expectation of loose fiscal and monetary policies in major global economies and their higher tendency of fiscal deficit monetization than China, the previous bullish view is continued. Crude oil is marginally bullish in terms of total demand and short - term bullish but long - term bearish in terms of total supply, and is expected to maintain a low - level volatile pattern [2] - In the medium - term thinking framework, the two - sector model of "an overheated technology sector + a cold traditional sector" should be continued. The growth engine shows structural characteristics, with monetary policy supporting the traditional sector and fiscal policy guiding the technology sector. The driving force of investment is greater than that of consumption, and domestic demand is more important than external demand, which is not limited to specific transitional economies [2][20] - The US unemployment rate in December 2026 slightly decreased, but new employment was lower than expected. The number of non - farm payrolls also decreased, and the labor market is gradually entering a low - speed equilibrium stage, which makes the Fed more inclined to maintain the current interest rate level. The probability of the Fed cutting interest rates in January is 24.4%, which is relatively low [4][21][26] Summary According to the Directory 1. One - Week Viewpoints - **Analysis of bond market adjustment in the first week of 2026**: From December 31, 2025, to January 9, 2026, the yield of the 10 - year Treasury active bond rose 1.8bp. Through daily analysis, factors such as the relaxation of bond fund redemption fee regulations, the "stock - bond seesaw" effect, the central bank's bond - buying volume, and market expectations all affected the bond market. The main reasons for the bond market adjustment were the central bank's bond - buying volume in December 2025 not meeting expectations and the strong start of the stock market [1][11][16] - **Analysis of future trends**: The release of December's financial data is expected to have limited impact on the bond market. Short - term interest rates will remain stable, long - term interest rates are more affected by the stock market, and the yield curve is expected to steepen. When the 10 - year Treasury yield approaches 1.9%, investors can enter the market [1][16][17] 2. Summary of Domestic and Foreign Data 2.1 Liquidity Tracking - **Open - market operations**: From January 5 to 9, 2026, the net investment in open - market operations showed a large - scale net withdrawal in the early stage and a net investment in the later stage. The total amount of net investment was - 122.14 billion yuan [36] - **Interest rate data**: The money market interest rate decreased last week compared with the previous week. The issuance volume of interest - rate bonds last week was 918.813 billion yuan, and the total repayment amount was 697.556 billion yuan, with a net financing amount of 221.257 billion yuan [37][38][41] 2.2 Domestic and Foreign Macroeconomic Data Tracking - **Commodity price data**: Steel prices generally rose, and the official prices of LME non - ferrous metal futures all increased. The price of rebar rose by 17 yuan/ton, and the price of hot - rolled coils rose by 20 yuan/ton. The prices of zinc, lead, copper, and aluminum futures all increased to varying degrees [55] 3. One - Week Review of Local Government Bonds 3.1 Primary Market Issuance Overview - **Issuance scale and type**: Last week, 26 local government bonds were issued in the primary market, with a total issuance amount of 117.664 billion yuan, including 29.23 billion yuan of refinancing bonds, 87.434 billion yuan of new special bonds, and 1 billion yuan of new general bonds. The net financing amount was 117.664 billion yuan, mainly invested in comprehensive projects [65] - **Issuing regions**: Three provinces and cities issued local government bonds, and two provinces and cities issued local special refinancing special bonds for replacing hidden debts, with a total issuance amount of 29.23 billion yuan. From January 1 to last week, the total amount of local special refinancing special bonds issued nationwide was 2,202.521 billion yuan [69] - **Early redemption of urban investment bonds**: The total early redemption scale of urban investment bonds last week was 1.33 billion yuan, from Zhejiang and Gansu provinces. From November 15, 2024, to last week, the total early redemption scale of urban investment bonds nationwide was 118.207 billion yuan, with Chongqing having the highest redemption scale [75][79] 3.2 Secondary Market Overview - **Transaction volume and turnover rate**: The stock of local government bonds last week was 54.73 trillion yuan, the trading volume was 310.211 billion yuan, and the turnover rate was 0.57%. The top three provinces in terms of trading activity were Shandong, Guangdong, and Jiangsu, and the top three trading - active maturities were 30Y, 10Y, and 7Y [82] - **Yield to maturity**: The yield to maturity of local government bonds decreased across the board last week [87] 3.3 Local Government Bond Issuance Plan for this Month - Not elaborated in detail, only a chart of the issuance plan is provided [88] 4. One - Week Review of the Credit Bond Market 4.1 Primary Market Issuance Overview - **Total issuance and net financing amount**: Last week, 336 credit bonds were issued in the primary market, with a total issuance amount of 269.892 billion yuan, a total repayment amount of 138.743 billion yuan, and a net financing amount of 131.149 billion yuan, an increase of 192.849 billion yuan compared with the previous week [88] - **Issuance by type**: The net financing amount of urban investment bonds was 28.226 billion yuan, and that of industrial bonds was 102.923 billion yuan. By bond type, the net financing amount of short - term financing bills was 38.817 billion yuan, that of medium - term notes was 47.129 billion yuan, that of enterprise bonds was - 2.881 billion yuan, that of corporate bonds was 45.019 billion yuan, and that of private placement notes was 3.065 billion yuan [90][93] 4.2 Issuance Interest Rates - The actual issuance interest rates of short - term financing bills decreased by 4.43bp, those of medium - term notes increased by 11.93bp, and those of corporate bonds decreased by 58.69bp [103] 4.3 Secondary Market Transaction Overview - The total trading volume of credit bonds last week was 558.53 billion yuan, with short - term financing bills having a trading volume of 159.816 billion yuan, medium - term notes having a trading volume of 294.315 billion yuan, enterprise bonds having a trading volume of 11.128 billion yuan, corporate bonds having a trading volume of 38.844 billion yuan, and private placement notes having a trading volume of 54.428 billion yuan [103] 4.4 Yield to Maturity - The yield to maturity of state - owned development bonds increased across the board. The yields of short - term financing bills and medium - term notes showed a differentiated trend, the yields of enterprise bonds generally increased, and the yields of urban investment bonds showed a differentiated trend [104][105][106] 4.5 Credit Spreads - The credit spreads of short - term financing bills and medium - term notes narrowed across the board, the credit spreads of enterprise bonds generally showed a differentiated trend, and the credit spreads of urban investment bonds narrowed across the board [108][109][113] 4.6 Grade Spreads - The grade spreads of short - term financing bills and medium - term notes showed a differentiated trend, the grade spreads of enterprise bonds showed a differentiated trend, and the grade spreads of urban investment bonds narrowed across the board [115][119][123] 4.7 Trading Activity - The most actively traded credit bonds last week were mainly from large - scale enterprises such as Yili and Huijin. The industrial sector had the largest weekly trading volume of bonds, followed by public utilities, finance, daily consumption, and materials [127] 4.8 Issuer's Rating Changes - Not elaborated in detail, only a table of issuer's rating or outlook improvement is provided [128]

Core Insights - The current U.S. labor market is undergoing a structural adjustment, with non-farm payroll data indicating a divergence that reshapes Federal Reserve policy expectations and triggers a new round of global asset market dynamics [2] Group 1: Non-Farm Data Analysis - In September, non-farm payrolls increased by 119,000, significantly exceeding the market expectation of 51,000, while the unemployment rate rose to 4.4%, indicating a rare divergence of rising employment alongside increasing unemployment [3] - The increase in labor supply, with approximately 500,000 workers re-entering the market, counteracted the positive effects of new job creation, leading to this data divergence [3] - Statistical peculiarities, such as a 75.6% response rate from surveyed companies in August and the late reporting of employment data, contributed to the inflated job numbers in September [3] Group 2: December Non-Farm Report Insights - The December non-farm report showed a seasonally adjusted increase of only 50,000 jobs, below the market expectation of 60,000, with the unemployment rate at 4.4% [4] - The total non-farm employment increase for 2025 was only 584,000, the weakest performance since 2020, significantly lower than the 2 million increase in 2024 [4] - The three-month moving average indicated a decline of 22,000 jobs, suggesting potential suppression of consumer spending [4] Group 3: Federal Reserve Policy Implications - The non-farm data has been pivotal in shaping market expectations regarding Federal Reserve interest rate adjustments, with a significant drop in the probability of a rate cut in January from 11.6% to 2.8% [6] - The market's cautious stance reflects a balance between economic resilience and policy uncertainty, as indicated by the high yields on long-term U.S. Treasury bonds [9] Group 4: Asset Market Reactions - The precious metals market saw gold prices rise above $4,600 per ounce, driven by soft non-farm data and geopolitical risks, while silver prices also reached historical highs [7] - The U.S. dollar index fell by 1.2%, showing a typical negative correlation with precious metal prices, while the stock market may see renewed support for growth stocks if labor market weakness persists [9] Group 5: Comprehensive Data Analysis Approach - A multi-dimensional analysis approach is emphasized, focusing on employment quality, labor participation rate dynamics, and cross-verification with other economic indicators to avoid misinterpretation of single data points [10][13] - The upcoming December CPI data is expected to play a crucial role in determining future Federal Reserve policy, with potential implications for market discussions on policy easing [14]

Core Insights - Green bonds are increasingly recognized as a vital financial tool in addressing climate change and promoting sustainable development, with issuance volumes reaching new heights globally [2][5] - The rapid growth of the green bond market is driven by policy support, market demand, and investor preferences, with significant contributions from government incentives and the rise of ESG investment principles [5] Definition and Characteristics - Green bonds are specifically designed to fund environmentally friendly projects, with proceeds allocated to renewable energy, energy efficiency, pollution prevention, green buildings, and low-carbon transportation [4] - Unlike traditional bonds, green bonds require adherence to specific standards and independent third-party certification to ensure funds are used for genuine green projects, enhancing transparency and credibility in the capital markets [4] Market Growth - The global green bond issuance surpassed $1 trillion in 2023, marking a historic milestone, with China being a major player in the market, covering a wide range of projects from large infrastructure to small and medium-sized enterprises [5] - The growth trend is supported by various government policies, such as subsidies for carbon-neutral technology research and tax incentives for green projects, which provide a favorable environment for green bond issuance [5] Contribution to Low-Carbon Transition - Green bonds effectively channel social capital into green industries, accelerating the transition to a low-carbon economy by funding projects in renewable energy, energy-efficient buildings, and low-carbon transportation infrastructure [6] - They also lower financing costs for companies, as investors are often willing to accept lower yields for green projects, creating a "green premium" that encourages more issuances [6] Participation of Individual Investors - Green bonds are accessible to individual investors through various green financial products offered by banks and financial institutions, allowing them to contribute to sustainable development while earning stable returns [7] - Investors should pay attention to certification standards, transparency of fund usage, and the credibility of issuing institutions to ensure that investments yield both financial returns and environmental benefits [7] Future Outlook - The green bond market has significant growth potential as the global carbon neutrality agenda progresses, with more green innovation projects emerging and international green standards becoming more unified [9] - All stakeholders, including businesses, governments, and individuals, can engage in this global green transformation through green bonds, moving closer to a cleaner, low-carbon future [9]

Equity Market Review and Outlook - The A-share market continued its upward trend in the first week of 2026 (January 5-9), with the Shanghai Composite Index achieving a 16-day winning streak and surpassing 4100 points. Major broad-based indices generally rose and reached new highs during the week [1][5] - Market trading remained highly active, with Friday's trading volume returning to the peak of 3 trillion yuan, and the margin financing and securities lending scale exceeding 2.6 trillion yuan, setting a new historical high [1][5] - The market's robust performance was primarily driven by bottom-up growth themes, particularly in technology sectors such as AI applications, commercial aerospace, and brain-computer interfaces, with small and mid-cap stocks significantly outperforming [1][5] - The brain-computer interface sector was notably active, driven by expectations of Neuralink's mass production and the establishment of domestic companies, alongside positive sentiment from the "14th Five-Year Plan" [5][6] - The commercial aerospace sector also saw continuous attention due to an IPO boom and supportive policies, with funds increasingly focusing on sub-sectors like space computing and solar power in space [6] Fixed Income Market Review and Outlook - The bond market experienced a "V-shaped reversal" during the week, with the 1-year government bond yield declining by 4.35 basis points to 1.29%, while the 10-year and 30-year government bond yields rose by 3.55 basis points to 1.88% and 4.95 basis points to 2.30%, respectively [2][9] - The bond market sentiment showed slight stabilization, but the likelihood of interest rate cuts in the medium term remains low, and further monetary policy easing is not expected [2][9] - Despite the better-than-expected implementation of new public fund fee regulations, the bond market lacks positive catalysts, and with the ongoing spring rally in the equity market, the bond market may experience short-term rebounds but is likely to maintain a neutral stance in the medium term [2][9] Macro Economic Outlook - The U.S. job market shows resilience but also structural pressures, with inflation data expected to have limited risk of a strong rebound. The market has already priced in the likelihood of the Federal Reserve not cutting interest rates in January [7][8] - Overall market liquidity is neutral to optimistic, with potential continued inflows of external funds due to profit-taking effects, suggesting that the market may continue its upward trend [7][8]

Core Viewpoint - The bond secondary market experienced a continuous increase in trading atmosphere in December 2025, with total transaction amounts showing year-on-year and month-on-month growth, particularly in credit bonds [1][3]. Group 1: Market Performance - In December, the total transaction amount in the bond secondary market reached 376,780.29 billion, reflecting a year-on-year increase of 7.75% and a month-on-month increase of 10.60% [1]. - The transaction amount for interest rate bonds was 219,753.95 billion, with year-on-year and month-on-month growth of 7.15% and 2.49%, respectively [3]. - Credit bonds saw a significant increase in transaction amounts, totaling 88,964.95 billion, with year-on-year growth of 17.90% and month-on-month growth of 21.31%, becoming the main driver of market growth [3]. Group 2: Credit Spread Analysis - The overall credit spread in December continued its fluctuating trend, ending the month at 42.32 basis points, with a cumulative narrowing of 24.01 basis points for the year, indicating an improved credit environment compared to the beginning of the year [3][4]. - Most industry credit spreads widened in December, with real estate, power equipment, basic chemicals, pharmaceutical biology, and social services having high spreads, while communication, electronics, public utilities, transportation, and non-ferrous metals had lower spreads [4]. Group 3: Future Outlook - The credit spread is expected to continue a narrow fluctuation and slight narrowing trend, supported by stable economic growth and a moderately loose liquidity environment, while facing pressures from government bond supply and overseas policy fluctuations [5]. - Factors supporting the narrowing of credit spreads include ongoing economic stability, continued easing of liquidity policies, and improvements in credit quality for local government financing platforms [5].

Group 1 - The report emphasizes a continued focus on short-term credit bonds, particularly those with maturities of 3 years or less, due to a stable funding environment and potential for interest rate arbitrage [6][9] - It suggests exploring opportunities in municipal bonds with maturities of 2-3 years and industrial bonds with maturities of 1-2 years, while advising caution on longer-term bonds due to increased uncertainty [6][9] - The report notes that the recent regulatory changes regarding bond fund fees have had limited positive impact, and thus, short-term bonds remain a more prudent investment choice [6][9] Group 2 - The credit bond market has seen a recovery in issuance levels, with a total of 269.9 billion yuan issued from January 5 to January 11, 2026, marking a significant net inflow of 131.1 billion yuan, the highest weekly net inflow since December of the previous year [14] - The average issuance costs for AAA and AA+ rated bonds have increased, with average coupon rates rising by 16 basis points and 7 basis points respectively [14][15] - Secondary market activity showed a slight increase in turnover rates, with credit spreads generally narrowing, although long-term bonds faced more pressure [14][19] Group 3 - The report indicates that credit spreads for various bond ratings have generally widened, with 5Y-1Y spreads increasing by 2-3 basis points, while AA rated bonds saw a slight narrowing of 2 basis points [20][22] - Municipal bond credit spreads have shown a slight contraction, averaging a reduction of about 3 basis points across provinces, with Tibet experiencing the largest decrease of 5 basis points [22] - Most industry credit spreads also contracted by 2-4 basis points, indicating a generally favorable trend in the credit market [22]

Core Viewpoint - Signs of economic optimism are reflected in the rallying retail stocks and persistently high bond yields [1] Group 1: Economic Indicators - Retail stocks are experiencing a rally, indicating positive sentiment in consumer spending and economic recovery [1] - Bond yields remain stubbornly high, suggesting that investors are anticipating inflation or economic growth [1]

Group 1: Core Viewpoints - Bullish factors for the 10-year Treasury bond last week include the recovery of allocation demand due to alleviated concerns about ultra-long-term supply and increased institutional allocation willingness, and a loose funding environment with the entry of incremental funds at the beginning of the year, leading to downward pressure on interest rates [2] - Bearish factors are the weak expectation of monetary easing as the Fed's rate cut expectation lacks strong fundamental support in the short term, and the pressure from the stock-bond seesaw, with capital preference for the bond market causing selling pressure on the stock market and yield fluctuations [2] - The trading advisory view is that the bond market sentiment was generally cautious last week. It is recommended to focus on the allocation window brought by the widening of spreads, buy configuration-type contracts on dips, maintain a wait-and-see attitude, and avoid unilateral chasing [2] Group 2: Data Presentations Yields - The document presents the historical data of 2Y, 5Y, 7Y, 10Y, and 30Y Treasury bond yields from 2024 to 2025 [3] Funding Rates - It shows the historical data of the weighted average interest rate of pledged repurchase by deposit-taking institutions for 1-day and 7-day tenors and the 7-day reverse repurchase rate from 2023 to 2025 [3] Term Spreads - The historical data of the 7Y - 2Y and 30Y - 7Y Treasury bond term spreads from 2024 to 2025 are presented [4] Futures Basis - The historical data of the basis of 2Y, 5Y, 10Y, and 30Y Treasury bond futures' current-quarter contracts are shown [7][8][9][15] Futures Inter - Delivery Spreads - The historical data of the inter - delivery spreads (current - quarter minus next - quarter) of 2Y, 5Y, 10Y, and 30Y Treasury bond futures are presented [11][13][16] Futures Trading Volume - The historical trading volume data of 2Y, 5Y, 10Y, and 30Y Treasury bond futures from 2015 to 2025 are shown [14] Futures Cross - Product Spreads - The historical data of the cross - product spreads of TS*4 - T and T*3 - TL are presented [17][18]

Group 1 - The report from Zhongtai Securities indicates that a true bull-bear transition in China's bond market requires two key policy signals: the Ministry of Finance must clearly shorten the issuance period of local special bonds or special government bonds, and the central bank must announce or implement a debt purchase plan significantly exceeding the current scale [1] - The report highlights that seasonal funds that should flow into the bond market have been "taken away" by the equity market, which is a significant source of the recent "spring fever" in the stock market, further intensifying the outflow pressure in the bond market [1] - It is projected that approximately 67 trillion yuan and 75 trillion yuan of household time deposits will mature in 2025 and 2026, respectively. Even if 10% of these funds "move," the scale will reach several trillion yuan [1] Group 2 - The report identifies two main product categories where these funds are likely to flow: "fixed income +" wealth management products, which typically allocate 3%-5% of equity assets to enhance returns, and dividend-type insurance, which aims to achieve expected returns above 3.4%, with a more aggressive allocation in the stock market [1]

Core Viewpoint - The A-share market continues to strengthen at the beginning of the new year, while the bond market is experiencing consecutive adjustments, with the 10-year government bond yield rising to around 1.90% [1] Group 1: Market Trends - The 10-year government bond yield has reached 1.90%, a level it previously touched twice last year before entering a downward trend [1] - There is market speculation on whether the current yield will replicate past trends, drawing attention from investors [1] Group 2: Investment Strategies - Private equity institutions believe that the bond market's acceptance of recession narratives has significantly decreased [1] - The previous "lying win" investment strategy, which relied on declining interest rates and extended durations, is gradually becoming ineffective [1] - Fixed-income-like products are expected to see growth opportunities within investment portfolios [1]