Group 1 - Henan Province plans to expand the issuance of innovative bonds focused on technology innovation, green initiatives, and rural revitalization, aiming for over 80 billion yuan in bond market financing in the first quarter of 2026 [1] - The People's Bank of China has outlined seven key tasks for 2026, including the implementation of a moderately loose monetary policy and enhancing financial services for high-quality economic development [3] - The National Development and Reform Commission will assess the consistency of various economic policies to create a favorable macro policy environment for the development of new productive forces [5] Group 2 - The People's Bank of China conducted a reverse repurchase operation, resulting in a net withdrawal of 296.3 billion yuan on January 6 [7] - The Henan Provincial Finance Department plans to utilize the 2026 advance batch of local government special bonds to support effective investment and expedite project funding [8][9] - Zhengzhou has announced the addition of 13 urban renewal projects with a total investment of 7.25 billion yuan [10] Group 3 - Shanghai has issued measures to encourage foreign investment enterprises to reinvest domestically, including facilitating loan applications and issuing "Panda bonds" [11] - Guizhou Province has included eligible travel projects in the scope of local government special bond support, promoting financial products for the travel industry [11] - The Henan Airport Investment Group successfully issued 500 million yuan in medium-term notes with a 2.25% interest rate [12] Group 4 - Gansu Iron Investment Group issued the first "green infrastructure + regional coordinated development" sustainable development-linked bond, totaling 2 billion yuan with a 2.27% interest rate [14] - Zhongyuan Yuzhi Investment Holding Group plans to issue 3 billion yuan in corporate bonds, receiving feedback from the Shanghai Stock Exchange [15] - The Longyang City Investment Group announced a change in its controlling shareholder to the Longyang City Finance Bureau [16] Group 5 - The Luoyang Urban Renewal State-owned Capital Holding Company is planning to issue up to 900 million yuan in corporate bonds [18] - Jiangxi Province has transferred 90% of the shares of the Jiangxi Transportation Investment Group to the provincial state-owned assets supervision and administration commission [20] - Jinan Zhangqiu Holding Group's subsidiary is under investigation by the China Securities Regulatory Commission for financial information disclosure violations [21] Group 6 - A report from Yichuang Fixed Income suggests that unless there is substantial monetary policy easing, the bond market will continue to adjust due to supply-demand imbalances [22]

Core Viewpoint - The issuance of local government bonds for 2026 has officially commenced, with a total planned issuance of approximately 2.02 trillion yuan across 27 provinces in the first quarter, indicating a proactive fiscal policy approach despite being lower than the previous year's actual issuance [1][2]. Group 1: Bond Issuance Details - Shandong Province has issued 72.381 billion yuan in local government bonds, becoming the first province to do so in 2026 [1]. - The total planned issuance includes 1.4674 billion yuan in new general bonds, 6.71397 billion yuan in new special bonds, 3.07822 billion yuan in refinancing general bonds, and 8.71356 billion yuan in refinancing special bonds [2]. - Seven provinces, including Sichuan (188.7 billion yuan) and Shandong (172.481 billion yuan), plan to issue over 100 billion yuan each [2]. Group 2: Debt Limitations and Policy Implications - The new debt limit for local governments in 2026 is capped at 3.12 trillion yuan, which is 60% of the 5.2 trillion yuan limit set for 2025 [3]. - The early allocation of new local government debt limits reflects the proactive and targeted nature of macroeconomic policies in China [3]. Group 3: Debt Management and Economic Stability - The total hidden local government debt has been significantly reduced from 14.3 trillion yuan to 10.5 trillion yuan, a decrease of 3.8 trillion yuan, representing a reduction of over 26% [4]. - The 2026 local bond issuance will focus on supporting infrastructure projects and addressing hidden debt, with an estimated net supply of local bonds reaching approximately 7.8 trillion yuan [6][7]. Group 4: Future Projections and Trends - The issuance of new special bonds is expected to increase significantly in 2026, driven by higher infrastructure investment needs and the ongoing adjustments in the real estate market [7]. - The overall trend for 2026 will feature expanded issuance, optimized structure, refined management, and improved efficiency, playing a crucial role in stabilizing growth and mitigating risks [7].

Core Insights - Municipal bonds are experiencing a resurgence, driven by investor enthusiasm following the Federal Reserve's rate cut and favorable economic indicators [4][6] - The ALPS Intermediate Municipal Bond ETF (MNBD) is positioned to benefit from this trend, with increasing inflows and attractive tax-equivalent yields compared to Treasuries [2][4][6] Group 1: Market Conditions - Concerns about the U.S. economy and new issuances have affected municipal bonds, but they ended the previous year with positive momentum [1] - The Federal Reserve's first rate cut in September 2025 has sparked renewed interest in bonds, leading to significant inflows into fixed-income funds [4] Group 2: Investment Opportunities - The active management of MNBD aligns with the growing preference for tax-advantaged income-generating assets among investors [2][3] - The passage of the Big Beautiful Bill, which preserved tax exemptions, has further enhanced the attractiveness of municipal bonds [4] Group 3: Future Outlook - With expected slowing in new issuances and increasingly attractive valuations, municipal bonds are likely to maintain their momentum into 2026 [6] - Active management strategies in ETFs like MNBD could position them as leaders in the anticipated resurgence of municipal bond investments [6]

Report Industry Investment Rating - No information provided on the industry investment rating Core Viewpoints - Asia IG names were unchanged to 2bps tighter in the morning, with flows favoring higher - yielding issues in greater Asia and LGFV spaces [3] - Macau's gaming industry had solid GGR growth in 2025, and the 2026 target seems conservative [6] - China's PMI signaled a temporary improvement, with expected GDP growth decline from 5% in 2025 to 4.8% in 2026, and potential policy stimulus [3][10][11][15] Summary by Related Catalogs Trading Desk Comments - ARAMCO 35s tightened 1bp, FABUH 30 widened 5bps last Friday [2] - Chinese IG names had spreads changes of 5bps tighter to 4bps wider, NWDEVL Perps rose 0.2 - 1.9pts, VDNWDL 9 Perp increased by 1.4pts [2] - The buy recommendation on NWDEVL 5.25 Perp and NWDEVL 8.675 02/06/28 was changed to neutral, and a buy on VDNWDL 9 Perp was initiated [2] - Lai Sun Development's Chairman made a profit of USD11.3mn from trading LASUDE 26, and LASUDE 26 was up by 0.8pt [2] - Various bonds in different regions and industries had price and spread changes, such as Macau gaming, Chinese properties, JP, and SE Asia [2] Last Trading Day's Top Movers - Top performers included VLLPM 9 3/8 07/29/29 with a 3.3 price change, NWDEVL 5 1/4 PERP with a 1.9 change [4] - Top underperformers included FTLNHD 11.88 09/30/27 with a - 0.9 change, COSL 2 1/2 06/24/30 with a - 0.9 change [4] Macro News Recap - S&P (+0.19%), Dow (+0.66%) and Nasdaq (-0.03%) were mixed last Friday, and Trump made a statement about Venezuela [5] - 5/10/30 year UST yield was higher, with 2/5/10/30 year yield at 3.47%/3.74%/4.19%/4.86% [5] Desk Analyst Comments - Macau Gaming - Macau's GGR in Dec'25 increased 14.8% yoy to MOP20.9bn, and cumulatively in 2025, it increased 9.1% to MOP247.4bn, 84.6% of 2019 level [6] - In 2025, tourist arrival was 40.1mn, up 15% yoy and exceeding the 2019 record [6] - Macau government's 2026 GGR target of MOP236bn seems conservative [6] - MPELs and STCITYs are top picks, WYNMAC'27 and '29 are yield - pick - up plays, and neutral on MGMCHIs, SANLTDs, and SJMHOLs [7] Desk Analyst Comments - China Economy - China's manufacturing PMI rebounded in December but recovery was fragile due to seasonality [10][11][12] - Demand improved with new orders expanding and export orders approaching expansion, deflation pressure eased [10][11][12] - Service PMI remained in contraction, construction PMI rebounded [11][13] - Growth is expected to be under pressure in early 2026, potentially triggering policy stimulus [11][14][15] - Expect a 50bp cut in RRR and a 10bp cut in LPR in 1Q26, an additional 10bp LPR cut in 3Q26, and broad fiscal deficit at 8.5% in 2026 [11][14][15] Offshore Asia New Issues - No new offshore Asia issues were priced on the last trading day [17] - Pipeline issues include BOC Aviation, Export - Import Bank of India, and Hyundai Capital America with various tenors and coupon rates [18] News and Market Color - Onshore primary issuances suspended last Friday during the New Year Holiday [21] - China will broaden fiscal spending in 2026 and prioritize domestic demand [21] - Multiple corporate events such as China Jinmao's redemption, CTF Services' acquisition lapse, and rating changes [21]

Group 1 - JGBs (Japanese Government Bonds) experienced a decline in price during the morning session of the first trading day of 2026 [1]

Summary of Key Points from the Conference Call Industry Overview - The discussion primarily revolves around the **2025 bond market** and its complexities compared to previous years, particularly **2017**. The bond market is facing significant challenges due to changing investor strategies and market conditions [3][4][5]. Core Insights and Arguments - **Investor Sentiment and Strategy Changes**: The bond market in 2025 has seen a shift in investor sentiment, with many traditional frameworks proving inadequate in the current environment. The overall performance of the comprehensive bond wealth index is decent, but the yield on certificates of deposit has not reached the levels seen in 2017, which were between **4.5% and 4.7%** [3][4]. - **Long Duration of Assets**: Currently, all assets have a long duration, leading to a poor holding experience for investors. This contrasts with 2017, where the average duration was lower, and higher coupon rates on credit bonds (some exceeding **7.5%**) made them more attractive [3][4]. - **Impact of Technology Stocks**: The rise of technology stocks, which increased by nearly **50 points**, has significantly influenced the U.S. stock market and caused a diversion of funds from fixed income to equity markets [3][4]. - **Market Seasonal Patterns**: The traditional seasonal pattern of bond market performance in March has failed in 2025, with a downturn instead of the expected upturn. This is attributed to changes in bank deposit behaviors and the superior performance of the stock market over fixed deposits [5]. - **Pricing Dynamics**: The **50 basis points** pricing in the market is influenced by two main frameworks: "Japanification" and "de-globalization," each contributing approximately **20 basis points**. The reliance on strong export predictions has led to market mispricing [6][11]. - **Commodity Prices and Interest Rates**: Despite a decline in commodity prices, interest rates have not followed suit, indicating a need for cautious fundamental assessments [8]. - **Narrative Shifts in the Market**: The importance of narrative shifts in capital markets is emphasized, suggesting that reconstructing story frameworks can alter subjective value judgments and investment strategies [9]. - **Basic Research vs. Trading Sentiment**: There is an ongoing debate about the relevance of fundamental research versus trading sentiment in the current investment environment. Some argue that solid fundamental research is essential, while others believe that flexibility in trading strategies is more advantageous [10]. Other Important Insights - **Market Reactions to Policy Announcements**: The announcement of bond purchases by financial forums led to a temporary increase in 30-year Treasury futures, but the sustainability of such trends remains uncertain [12]. - **Performance of Different Bond Durations**: Shorter-term bonds (under 10 years) have shown more stability compared to longer-term bonds, which are facing challenges due to the withdrawal of trading institutions [13]. - **Outlook for 2026**: There is uncertainty regarding fiscal policy adjustments in early 2026, with local government bonds being more attractive than national bonds due to higher liquidity premiums [15]. - **Lessons from 2025**: The year highlighted the need to shift from traditional frameworks to behavior-based research, emphasizing the importance of distinguishing between assets and burdens in the AI era [16].

Group 1 - The report highlights that the bond market experienced significant volatility at the end of 2025, with a notable increase in trading volume contrary to typical year-end trends, indicating a dominant position of short positions and profit-taking strategies [7][8]. - The report identifies two main reasons for the observed market behavior: persistent bearish sentiment and speculative trading strategies that exploit low trading volumes to create market fluctuations [8][9]. - It suggests that in a low-interest-rate and high-volatility environment, such phenomena are likely to increase, recommending two strategies for investors: hedging strategies for those seeking to smooth volatility and reverse trading strategies for those looking to capitalize on price corrections [9][11]. Group 2 - The report discusses the outlook for government bond futures, indicating that the cost-effectiveness of positive spread strategies is currently low due to a significant bearish sentiment, with IRR values for main contracts showing a decline [16]. - It emphasizes the importance of monitoring long-end basis convergence opportunities, as recent market conditions have led to a widening of basis spreads, suggesting potential for mean reversion [19]. - The report notes limited short-term trading opportunities in cross-period strategies due to consistent price movements across contracts, recommending a cautious approach [21]. Group 3 - The report outlines a curve strategy that suggests potential for flat trading opportunities post-holiday, as the long-end and ultra-long-end segments have shown significant declines, indicating a possible rebound [24].

Group 1 - The article discusses the ongoing trends and significant events in the bond market from 2012 to 2025, highlighting key developments and changes in the industry [1] - It emphasizes the importance of staying informed about the bond market for investment strategies and decision-making [1] - The article offers insights into the expected performance of the bond market in 2024, suggesting potential opportunities for investors [1]

新华财经北京1月1日电（王菁）2025年的我国国债市场，是在宏观叙事频繁切换、多空逻辑激烈博弈中展开的深度校准。这一年，市场在"稳增长"与"防风 险"、"强政策"与"弱现实"的张力间，走出了一条独特的路径：一级市场以创纪录的供给规模和前置的发行节奏，有力支撑了积极的财政政策；二级市场以 10年期国债收益率为代表在狭窄区间内演绎了一场高频率的"折返跑"，全年波动中枢温和下移。 随着多方面政策升级优化的加持下，国债市场在扩容中深化了韧性，在波动中重塑了平衡，不仅高效完成了财政筹资与流动性供给的核心使命，更在服务国 家战略、畅通货币政策传导中发挥了不可替代的枢纽作用。 一级市场：稳健扩容与结构优化，财政融资主渠道功能凸显 2025年，国债一级市场在"积极的财政政策适度加力、提质增效"的基调下，实现了历史性的跨越。其核心特征体现为供给规模有所放量、发行节奏科学前 置、期限结构持续优化，精准有力地保障了国家重大战略实施的资金需求。 ——发行规模创历史新高，中央加杠杆支撑稳增长。据新华财经梳理，2025年全年国债发行总额达到160,140.20亿元，较2024年的124,748.31亿元同比大幅增 长28.37% ；全年 ...

Group 1 - The bond market has significant influence over U.S. government decisions, as evidenced by a recent spike in bond yields that led President Trump to pause tariffs [2][3] - President Trump is considering Kevin Hassett, a top economic aide, as a potential nominee to replace Fed Chair Jerome Powell, with bond investors closely monitoring the situation [3][4] - Bond yields rose by 0.1% in early December, reflecting bond traders' recognition of Hassett as the frontrunner for the Fed position [4] Group 2 - Concerns have been raised regarding Hassett's potential to blur the lines between the Federal Reserve and the executive branch, with bond investors warning against his nomination [6] - Hassett has criticized the central bank for allowing political factors to interfere with interest rate decisions, indicating a contentious relationship with the Fed [7] - The bond market remains relatively stable, with ten-year Treasury yields currently at 4.14%, suggesting no immediate concerns about significant market disruptions [8][9]