Core Insights - The Ministry of Finance issued 6 billion RMB in government bonds in Macau, marking a historic high in both scale and demand from investors [1] - This issuance includes a new 10-year long-term bond, enhancing the RMB government bond yield curve in Macau and supporting the development of the local bond market [1] - The issuance aims to position Macau as a new focal point in the internationalization of the RMB [1] Group 1 - The issuance of RMB government bonds in Macau has been supported by the establishment of the Macau Central Securities Depository (MCSD) to enhance the bond market's infrastructure [1] - Since 2019, efforts have been made to improve the influence of the Macau bond market, including the issuance of RMB government bonds and the establishment of the MCSD [1] - The limited number of international investors in the MCSD has constrained the development of the Macau bond market [1] Group 2 - In January, the MCSD and Hong Kong Monetary Authority's Central Moneymarkets Unit (CMU) established interconnectivity to facilitate international investor participation [2] - Over 50% of international investors placed orders through the Hong Kong CMU during this bond issuance, indicating increased liquidity and international influence of the Macau RMB bond market [2] - The collaboration between the Macau and Hong Kong bond markets is expected to enhance the offshore RMB market mechanism [2]

Core Viewpoint - The People's Bank of China (PBOC) has effectively supported the real economy through monetary policy, resulting in reasonable growth in financial volume, a decline in comprehensive financing costs, an optimized credit structure, and enhanced resilience in financial markets [1][2]. Financial Volume Reasonable Growth - Since 2020, the PBOC has implemented 12 reserve requirement ratio cuts, injecting approximately 9 trillion yuan into the market, with M2 to GDP ratio increasing by 35 percentage points compared to the end of 2019 [2] - The PBOC has lowered policy interest rates 9 times, leading to a decrease of 115 and 130 basis points in the 1-year and 5-year loan market quoted rates, respectively [2] - By the end of June, the social financing scale and M2 grew by 8.9% and 8.3% year-on-year, respectively, with growth rates higher than the previous year by 0.8 and 2.1 percentage points [2][3]. Social Financing Scale Increment Reasonable Growth - Government bond net financing reached 7.66 trillion yuan in the first half of the year, an increase of 4.32 trillion yuan year-on-year, with net financing of treasury bonds at 3.37 trillion yuan and local government bonds at 4.29 trillion yuan [3]. - Financial institutions issued 12.74 trillion yuan in loans to the real economy, an increase of 279.6 billion yuan year-on-year [3]. - M2 maintained ample liquidity, with expectations for continued reasonable growth in financial volume due to strong internal economic momentum [3]. Credit Structure Continues to Optimize - By the end of June, the balance of RMB loans was 268.56 trillion yuan, growing by 7.1% year-on-year, with new loans in the first half totaling 12.92 trillion yuan [4]. - Corporate loans accounted for 89.5% of new loans, with a year-on-year increase of 6.6 percentage points, while household loans increased by 1.17 trillion yuan [4]. - New loans were primarily directed towards manufacturing and infrastructure sectors, with manufacturing medium- and long-term loans growing by 8.7% and infrastructure loans by 7.4% year-on-year [4]. Financial Market Resilience Enhanced - The bond market saw stable operations in the first half of the year, with a total issuance of various bonds reaching 44.3 trillion yuan, a 16% year-on-year increase [7]. - Net financing from bonds was 8.8 trillion yuan, accounting for 38.6% of the increase in social financing scale, effectively supporting fiscal policy and enterprise financing [7]. - The PBOC emphasized the importance of balancing investment returns and risk for small and medium-sized banks in the bond market [7].

Core Insights - The establishment of the bond market technology board has led to the issuance of approximately 600 billion RMB in technology innovation bonds by 288 entities since its launch in May [1][2] - The initiative aims to support three types of institutions: financial institutions, technology enterprises, and equity investment institutions [1] - A risk-sharing tool has been created by the central bank to support equity investment institutions in issuing bonds, providing low-cost refinancing and credit enhancement [1][2] Summary by Categories - **Bond Issuance**: As of June 30, 27 equity investment institutions in the interbank market issued technology innovation bonds totaling 15.35 billion RMB, with five private equity institutions benefiting from the risk-sharing tool [2] - **Policy Effects**: The initiative has resulted in longer bond maturities, lower issuance costs, and effective promotion of innovative capital formation [2] - **Future Plans**: The central bank will continue to utilize the risk-sharing tool in collaboration with relevant departments to foster the development of the technology innovation bond market and enhance financial support for high-level technological self-reliance [2]

Core Viewpoint - The article highlights the significant increase in social financing (社融) in June, which amounted to 4.2 trillion yuan, exceeding market expectations and showing a year-on-year increase of 900.8 billion yuan, indicating a positive trend in credit and financing conditions [1][5]. Summary by Sections Social Financing Overview - In June, social financing increased by 4.2 trillion yuan, higher than the market average expectation of approximately 3.7 trillion yuan, with a year-on-year increase of 900.8 billion yuan. The stock growth rate of social financing was 8.9%, up by 0.2 percentage points from the previous month [1][5]. Factors Influencing Credit Growth - The increase in real credit amounted to 2.4 trillion yuan, with a year-on-year increase of 171 billion yuan, influenced by four main factors: stronger seasonal credit demand, the issuance of special government bonds, central bank liquidity support, and concentrated government-led project financing [1][6]. Structural Changes in Loans - Residential loans remained stable at low levels, while corporate loans showed significant changes. Short-term corporate loans increased by 490 billion yuan, reflecting stronger seasonal demand and the impact of structural tools. Corporate bill financing decreased by 371.6 billion yuan, and long-term loans saw a slight increase of 40 billion yuan [2][7]. Government Bond Financing - Government bonds increased by 1.35 trillion yuan, with a year-on-year increase of 507.2 billion yuan. The proportions of national bonds, local government new bonds, and special refinancing bonds were 58%, 30%, and 12%, respectively [2][8]. Foreign Currency Loans - Foreign currency loans increased by 32.6 billion yuan, with a year-on-year increase of 113.3 billion yuan, benefiting from a low base last year and a weaker US dollar [3][9]. M1 Growth - M1 growth in June was 4.6%, up by 2.3 percentage points from the previous month, with a monthly increase of 500 billion yuan, the highest in five years. This was attributed to strong financing from government projects, reduced debt repayment impacts, and high foreign trade settlement [3][10]. Overall Assessment - The overall expansion of credit and social financing in June, along with the initial elasticity in M1 growth, supports a positive market risk appetite. The first half of the year saw a year-on-year increase in real credit of 279.6 billion yuan and a total social financing increase of 4.74 trillion yuan, aligning with a moderately loose monetary policy [4][11].

1. Report Industry Investment Rating Not provided in the given content. 2. Core View of the Report It is expected that with the combined cooperation of the central bank's short - term reverse repurchase and outright reverse repurchase, the funds' volatility during the tax period may be small. The past week saw a slight tightening of funds, and in the coming week, attention should be paid to the disturbances of government bond net payments and tax period outflows. The trading demand from trading desks has weakened, and the net buying of general credit bonds and Tier 2 capital bonds by major non - bank buyers has significantly decreased. In the future, the disturbances from funds and the equity market to the bond market will increase, and recently, the market may return to active bond trading to avoid liquidity risks during adjustments [1][2]. 3. Summary According to Relevant Catalogs 3.1 Liquidity Tracking 3.1.1 Central Bank Operations - In the past week (7/7 - 7/11), the central bank's open - market operations led to a net liquidity withdrawal of 2265 billion yuan. As of 7/11, the central bank's reverse repurchase balance was 4257 billion yuan, significantly lower than that on 6/30 but still higher than the seasonal level in previous years. In the next week (7/14 - 7/18), the central bank's reverse repurchase will mature 4257 billion yuan, with a relatively small maturity scale evenly distributed daily. In July, the central bank has 1.5 trillion yuan of MLF and outright reverse repurchase maturing, including 3000 billion yuan of MLF, 7000 billion yuan of 3 - month outright reverse repurchase, and 5000 billion yuan of 6 - month outright reverse repurchase [9][10]. 3.1.2 Government Bond Issuance - In the past week, the government bond net payment was 2961 billion yuan, with 1849 billion yuan for national bonds and 1112 billion yuan for local bonds. In the next week, the expected government bond net payment is 3985 billion yuan, with 2761 billion yuan for national bonds and 1224 billion yuan for local bonds. The net payment pressure is relatively large on Monday and Tuesday. As of 7/11, the net financing progress of national bonds is 56.7%, and the remaining net financing space in 2025 is about 2.89 trillion yuan; the issuance progress of new local bonds is 51.8%, with a remaining issuance space of 2.51 trillion yuan; the issuance progress of refinancing special bonds is 89.8%, with a remaining issuance space of 2041 billion yuan. The supply of government bonds accelerated in the second week of July, and the issuance pressure is relatively large in August and September of the third quarter [17][18][20]. 3.1.3 Bill Market - In the past week, bill interest rates showed a divergent trend, with the 3 - month bill interest rate rising and the 6 - month bill interest rate falling. Seasonally, the current bill interest rate trend is still significantly weaker than the seasonal level, indicating that the recovery of credit demand remains slow [25]. 3.1.4 Funds Review - Funds tightened slightly, showing a trend of first loosening, then slightly tightening, and finally relaxing. The funds were the loosest at the opening on 7/7 and the tightest at the opening on 7/10. Most fund interest rates increased, and the term and market stratifications mostly converged [27][30][31]. 3.1.5 Inter - bank Certificates of Deposit - In the past week (7/7 - 7/13), the total issuance of certificates of deposit was 4271 billion yuan, with a net financing of - 833.9 billion yuan. The issuance scale increased compared with the previous week, but the net financing scale declined. As of 7/13, the cumulative net financing of certificates of deposit for the whole year was 1.73 trillion yuan. The issuance weighted term decreased. In the next week, the maturity scale is 8028 billion yuan, and the maturity pressure is relatively large from Tuesday to Friday [50][55]. 3.2 Institutional Behavior Tracking 3.2.1 Secondary Market Transactions - The trading demand from trading desks has weakened, and the net buying of general credit bonds and Tier 2 capital bonds by major non - bank buyers has decreased. Different types of bonds have different buying and selling situations among various institutions. For example, large banks' purchases of short - term national bonds have increased, and the net buying of credit bonds by major non - bank buyers has significantly decreased [61]. 3.2.2 Institutional Duration - The median duration of medium - and long - term bond funds has oscillated upwards. The 10 - day moving average of the median duration of medium - and long - term bond funds on 7/11 was 4.04 years, up from 3.96 years on 7/4. The secondary market trading duration of credit bonds showed mixed trends, with the 5 - day moving average of urban investment bond trading duration rising and that of Tier 2 capital bond trading duration falling [59][64]. 3.2.3 Institutional Leverage - The calculated bond market leverage ratio in the past week was 107.65%, a significant decrease compared with the previous week (107.96%) [66].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In the second half of 2025, the monetary policy will remain "moderately loose," with 1 - 2 times of RRR cuts and interest rate cuts possible, likely in September - October. The policy will focus on raising price levels, boosting domestic demand, strengthening cooperation with fiscal policy, and intensifying the use of structural tools such as relending. There is also a possibility of restarting treasury bond trading [4][32]. - The issuance of interest - rate bonds in the second half of the year may exceed 14 trillion yuan. The supply pressure will be high in the third quarter, and there may be an additional issuance of government bonds in the fourth quarter. The core trading range of the 10 - year treasury bond yield is expected to be 1.4% - 1.7% [4][36]. 3. Summary According to the Table of Contents 3.1 Monetary Policy and Liquidity Monitoring - **Implementation of a Package of Monetary Policy Measures with a Continuously "Moderately Loose" Tone**: The monetary policy framework has been continuously adjusted, with the policy - rate attribute of MLF fading out. The 7 - day reverse repurchase rate has become the core policy rate. The policy tone remains "moderately loose," with RRR cuts and interest rate cuts implemented again, and structural tools continuously exerting their effects. Open - market operations have been marginally relaxed, and more attention has been paid to asset prices [6][7][9]. - **Quarterly Decline in the Central Level of Capital Interest Rates**: In the first quarter, due to the central bank's emphasis on preventing capital idling, the capital market was relatively tight. In the second quarter, after the implementation of RRR cuts and interest rate cuts and the marginal easing of the central bank's attitude, the capital interest rates declined. The spread between DR007 and R007 remained at a low level [13]. 3.2 Operating Characteristics of the Interest - Rate Bond Market - **Year - on - Year Increase in the Issuance of All Types of Interest - Rate Bonds**: In the first half of 2025, the issuance scale of interest - rate bonds reached 16.88 trillion yuan, a year - on - year increase of 37.8%. The issuance of treasury bonds, local government bonds, and policy - bank bonds all increased. Special treasury bonds worth over 1 trillion yuan were issued [16]. - **Downward Trend in the Central Level of Interest - Rate Bond Yields**: The yields of interest - rate bonds generally showed a trend of rising first and then falling, with the central level declining quarterly. The operation of the 10 - year treasury bond yield can be divided into three rounds, with different influencing factors in each round [21][22]. - **Widening but Still Low Term Spread and Narrowing Local Bond Spread**: In the second quarter, the 10Y - 1Y spread widened marginally but remained at a historically low level. The local bond spread narrowed, which may be related to the previous decline in treasury bond yields and increased trading and allocation of local bonds by some institutions [28]. 3.3 Outlook for the Second Half of the Year - **Possible RRR Cuts and Interest Rate Cuts and Strengthened Use of Structural Tools**: Due to the uncertainty of external and domestic demand increasing the pressure on economic recovery, the monetary policy will remain "moderately loose" in the second half of the year, with 1 - 2 times of RRR cuts and interest rate cuts possible. The policy will focus on raising price levels, boosting domestic demand, strengthening cooperation with fiscal policy, and intensifying the use of structural tools [32]. - **Issuance of Interest - Rate Bonds May Exceed 14 Trillion Yuan and Declining Yield Central Level**: In the second half of the year, the issuance of interest - rate bonds may exceed 14 trillion yuan, with high supply pressure in the third quarter and a possible additional issuance of government bonds in the fourth quarter. The central level of yields will continue to decline, and the core trading range of the 10 - year treasury bond yield is expected to be 1.4% - 1.7% [36][39].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints of the Report - The Shanghai Stock Exchange piloted the continuous issuance business of corporate bonds, which enriches the issuance methods of corporate bonds, enhances financing flexibility, and promotes the development of the bond market [3][9]. - In April, the growth rates of major economic indicators slowed down, but the economic recovery still showed some resilience. The central bank net - injected funds, and the capital prices showed mixed trends. The issuance of credit bonds in the primary market heated up, while the trading activity in the secondary market declined, and the yields of most bonds decreased [4][5][6][31]. Summary by Relevant Catalogs Market Hotspot - On May 22, 2025, the Shanghai Stock Exchange issued a notice to pilot the continuous issuance of corporate bonds and the expansion of asset - backed securities. The continuous issuance of corporate bonds allows incremental issuance on existing bonds, which has advantages such as improving issuance efficiency and enhancing bond liquidity. Credit rating agencies need to optimize rating methods [3][9][10]. Macroeconomic Data - In April, the growth rates of production, consumption, and investment data slowed down slightly. The year - on - year growth rate of industrial added value was 6.1%, 1.6 percentage points lower than the previous month. The year - on - year growth rate of social retail sales was 5.1%, 0.8 percentage points lower than the previous month. The cumulative year - on - year growth rate of fixed - asset investment from January to April was 4.0%, 0.2 percentage points lower than in the first quarter. However, equipment purchase investment played a leading role [4][12]. Money Market - Last week, the central bank net - injected 960 billion yuan through open - market operations. The overnight and 7 - day pledged repurchase rates decreased by 7bp and 5bp respectively, while the other - term pledged repurchase rates increased by 1 - 5bp. The 3 - month Shibor remained unchanged from the previous week, and the 1 - year Shibor increased by 1bp, with the spread widening to 4bp [5][14]. Primary Market of Credit Bonds - Last week, the issuance of credit bonds heated up, with a scale of 241.311 billion yuan, an increase of 108.134 billion yuan from the previous period. The issuance scales of various bond types and industries increased. The average issuance interest rates of bonds of various terms and grades generally increased, with an increase range of 2bp - 44bp [6][17][18]. Secondary Market of Credit Bonds - Last week, the trading volume of cash bonds in the secondary market was 8.408721 trillion yuan, and the average daily trading volume decreased by 31.2034 billion yuan from the previous period. The yields of interest - rate bonds fluctuated slightly, and the yield of 10 - year treasury bonds increased by 4bp to 1.72%. The yields of credit bonds decreased comprehensively, with a change range of 1 - 7bp. The credit spreads narrowed comprehensively, with a range of 1bp - 9bp, and the rating spreads showed mixed trends [7][31][34]. Regulatory and Market Innovation Dynamics - Multiple regulatory policies were introduced in May 2025, including promoting the construction of a scientific and technological finance system, supporting the issuance of science and technology innovation bonds, and providing policy support such as fee reduction and exemption to encourage innovation in the bond market and support scientific and technological innovation [44][46][47]. Bond Market Credit Risk Events - There were multiple credit risk events in the bond market, including bond principal and interest extensions, defaults, etc., involving companies such as Wuhan Contemporary Technology Investment Co., Ltd. and Guangzhou R & F Properties Co., Ltd. [43].

Core Insights - The Shanghai Stock Exchange (SSE) has successfully launched 53 high-growth industry bonds with a total issuance scale of 37.3 billion yuan as of June 30, attracting significant attention from small issuers and private enterprises in the bond market [1][2] - Over 80 non-bank institutions have participated in investing in high-growth industry bonds this year, making them an important choice for various investment institutions to enhance returns [1] - The SSE has established a comprehensive service team for high-growth industry bonds, promoting a service model that encourages intermediary institutions to optimize project standards and support enterprises in financing [1][2] Industry Developments - The issuance of high-growth industry bonds has been positively influenced by policy support and market demand since 2025, with notable examples including the Guangxi Modern Logistics Group's bond with a coupon rate of 2.95% and the Shanxi Xinzhu Shenda Energy Group's bond at 2.58% [1][2] - High-growth industry bonds are designed to alleviate financing pressure for quality enterprises and seize opportunities for industrial upgrades, supported by enhanced investor protection clauses and optimized information disclosure mechanisms [2] Market Mechanisms - The SSE requires issuers of high-growth industry bonds to focus on their repayment capabilities, improving the timeliness and relevance of information disclosure to keep investors informed about operational dynamics [2] - The SSE guides lead underwriters to provide market-making or inquiry pricing services for high-growth industry bonds, enhancing market liquidity and allowing investors to enter and exit the market easily [2] Future Outlook - The SSE has established cooperative mechanisms with eight securities firms to create a dynamic project database for high-growth industry bonds, aiming for a targeted service approach to meet enterprise financing needs [3] - The SSE plans to conduct market-wide training sessions in the second half of the year to promote the regular issuance of high-growth industry products, with a goal of reaching 100 issuances by the end of the year [3]

Core Viewpoint - The expansion of the Bond Connect "Southbound" channel will facilitate the investment of domestic investors in offshore bond markets, allowing more non-bank institutions such as funds, brokerages, insurance, and wealth management firms to participate. This measure will take effect on August 25, 2025 [1][3]. Group 1: Expansion of Southbound Bond Connect - The Southbound Bond Connect previously targeted 41 bank-type financial institutions and qualified domestic institutional investors (QDII and RQDII) for offshore bond investments. The expansion will now include four types of non-bank institutions [3][6]. - The expansion is expected to enhance global asset allocation channels for non-bank institutions, improving investment flexibility and potential returns. It will also stimulate innovation in financial products and business development [3][4]. - The annual quota for the Southbound Bond Connect, currently set at 500 billion RMB, may be increased as more institutions participate, leading to higher demand for offshore bond assets and increased activity in the Hong Kong bond market [6][7]. Group 2: Market Impact and Future Expectations - The expansion is anticipated to inject new liquidity into the Hong Kong bond market and deepen the interconnection between domestic and foreign markets, potentially driving further policy and infrastructure optimization [3][7]. - The issuance of dim sum bonds (RMB-denominated bonds issued in Hong Kong) is projected to reach 94.4 billion USD in 2024, indicating a growing market for RMB-denominated assets [8]. - There are expectations for the introduction of a "Swap Connect" to help domestic investors manage interest rate risks associated with offshore bonds, as the current market environment presents significant interest rate volatility [10].

Group 1: Financial Market Developments - The People's Bank of China is actively researching measures to promote the RMB bond market as a global high-quality liquid asset [1] - The central bank aims to enhance cross-border investment and financing convenience, including establishing a one-stop account opening platform for foreign investors [1] - As of May, 835 foreign institutional investors have entered the interbank bond market through the Bond Connect, with a total of 1,169 foreign investors from nearly 80 countries and regions [5] Group 2: Offshore Repo Market Expansion - The PBOC plans to optimize the offshore repo business mechanism under the Bond Connect to facilitate liquidity management for foreign investors [2] - The scope of tradable currencies for offshore repos will expand from RMB to include USD, EUR, HKD, and other currencies [2] - The Hong Kong Central Moneymarkets Unit (CMU) will adopt international practices by removing the freeze on pledged securities to enhance liquidity [2] Group 3: Early Childhood Education Initiatives - Seven departments in China have jointly issued opinions to accelerate the construction of a universal childcare service system, establishing a "1+N" model [3][4] - The "1" refers to a comprehensive childcare service center, while "N" includes various forms of childcare services to meet diverse community needs [3] - The initiative includes providing free or low-cost facilities for childcare services, utilizing existing community resources [4] Group 4: Zero-Carbon Park Development - The National Development and Reform Commission and other departments have issued a notice to support the construction of zero-carbon parks [8][9] - The initiative encourages local governments to provide financial support for zero-carbon projects through special bonds and long-term credit from policy banks [8] - The plan includes promoting renewable energy development and direct green electricity supply models in industrial parks [9] Group 5: AI Industry Support - Hangzhou is soliciting opinions on measures to support the industrialization of brain-like intelligence projects [10] - The city aims to strengthen the innovation chain around the brain-like intelligence industry and support companies in scaling up [10] - The initiative encourages the development of core technological capabilities with independent intellectual property rights [10] Group 6: Government Cloud Market Growth - The IDC report indicates that China's government cloud market is projected to reach 93.94 billion RMB in 2024, with an 18.4% year-on-year growth [11] - The dedicated government cloud market is expected to grow by 19.0%, reaching 66.33 billion RMB [11] - The public government cloud market is anticipated to grow by 12.2%, reaching 17.24 billion RMB [11]