Group 1: Open Market Operations - The central bank announced a fixed-rate reverse repurchase operation of 48.5 billion yuan for a 7-day term on March 9, with an interest rate of 1.40%. The total bid and awarded amount was 48.5 billion yuan. On the same day, 135 billion yuan in reverse repos matured, resulting in a net withdrawal of 86.5 billion yuan [3]. Group 2: Funding Conditions - The interbank market maintained a warm funding condition, with the weighted average interest rate of DR001 slightly rising to around 1.32%. The overnight quotes on the anonymous click system (X-repo) remained at 1.3%, indicating sufficient supply. In the overseas market, the overnight financing guarantee rate in the U.S. was 3.66% [5]. Group 3: Interbank Certificates of Deposit - The latest transaction for one-year interbank certificates of deposit among national and major joint-stock banks was around 1.56%, showing a slight increase compared to the previous day [7]. Group 4: Bond Yield Trends - The yields on major interbank bonds showed a downward trend, with the 30-year main contract dropping by 1.11%, marking the largest decline in nearly seven months. The 10-year, 5-year, and 2-year main contracts fell by 0.21%, 0.14%, and 0.04%, respectively [12]. Group 5: Economic Indicators - The National Bureau of Statistics reported that in February, the Consumer Price Index (CPI) rose by 1% month-on-month, the highest in nearly two years, and by 1.3% year-on-year, also the highest in three years. The core CPI, excluding food and energy, increased by 1.8% year-on-year. The Producer Price Index (PPI) rose by 0.4% month-on-month, marking five consecutive months of increase, while the year-on-year decline was 0.9%, with the rate of decline narrowing for three consecutive months [13]. Group 6: Legislative Developments - The work report submitted for review at the Fourth Session of the 14th National People's Congress highlighted new legislative focuses for 2026, including the formulation of a state-owned assets law and amendments to bankruptcy and tax collection laws. Additionally, laws related to financial stability and anti-corruption will be developed [13]. Group 7: Global Macro Developments - U.S. President Trump indicated that the war with Iran may soon conclude, stating that it has progressed faster than expected. The G7 finance ministers held an emergency meeting to discuss the potential coordinated release of emergency oil reserves in response to rising oil prices due to conflicts in the Gulf region [16].

1. Report Industry Investment Rating No relevant information provided. 2. Core View of the Report - Yields mostly increased, and credit spreads showed differentiation. General credit bonds (Pu Xin) performed better than Tier 2 and perpetual bonds. It is recommended to be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years [5]. 3. Summary by Directory 3.1 Primary Market - **General Credit Bonds**: The net supply of general credit bonds decreased compared to the previous period. The issuance of industrial bonds decreased to 503 billion yuan, and the net financing turned negative to - 294 billion yuan. The issuance of urban investment bonds decreased to 449 billion yuan, and the net financing turned negative to - 598 billion yuan. The weighted issuance term was 2.17 years, a decrease from the previous period [5][9]. - **Bank Tier 2 and Perpetual Bonds**: There was no new issuance or maturity of bank Tier 2 and perpetual bonds this period. This has been the case for 8 consecutive weeks this year [5][27]. 3.2 Secondary Market - **Yields**: Yields generally increased. Except for some low - quality medium - term notes, 3 - year non - public and perpetual bonds, most general credit bonds' yields increased. Tier 2 and perpetual bonds' yields increased across the board except for the 5 - year AA - perpetual bonds, with larger increases in the medium - and long - term [5][40]. - **Credit Spreads**: Credit spreads showed differentiation. General credit bonds' spreads mostly narrowed except for the 7 - year ones, and low - quality bonds within 5 years performed well. Tier 2 and perpetual bonds' spreads mostly widened except for the 1 - year and 10 - year ones [5][44]. - **Turnover Rate**: The turnover rates of general credit bonds and bank Tier 2 and perpetual bonds both decreased this week [55]. 3.3 Credit Strategy - Be cautious about long - term assets and focus on medium - and short - term credit bonds within 5 years. Consider the ticket - coupon value of some varieties and grade - sinking. Pay attention to investment opportunities in certain bonds such as real estate bonds of leading central and state - owned enterprises within 2 years, low - quality urban investment bonds within 3 years, medium - and high - grade perpetual or private general credit bonds around 3 years, and high - grade insurance sub - bonds from 3 - 5 years [5]. - For Tier 2 and perpetual bonds, pay attention to the approval progress of the People's Bank of China in March and the possibility of resuming issuance. In the short term, focus on the trading value of 6 - 7 - year Tier 2 and perpetual bonds [5]. 3.4 Urban Investment Bonds - Yields and credit spreads in different regions showed differentiation, with high - grade yields increasing and low - grade yields decreasing [58]. - The trading volume and turnover rate in different regions also showed different trends [63][65]. 3.5 Industrial Bonds - Yields and credit spreads in different industries showed differentiation, with low - grade bonds performing better than high - grade ones [66]. - The trading volume and turnover rate in different industries also showed different trends [70][73]. 3.6 Financial Bonds - Yields mostly increased, Tier 2 and perpetual bond spreads mostly widened, and the spreads of securities and insurance sub - bonds showed differentiation [74]. - The performance of yields, credit spreads, and excess spreads of bank Tier 2 and perpetual bonds, as well as securities and insurance sub - bonds in different regions and with different ratings, is presented in detail [93][105]. 3.7 Stock Bond Distribution - The current yields are mostly distributed within 2.4%. The average yield distributions of industrial bonds in different industries and urban investment bonds in different regions are provided, including different implicit ratings and remaining maturities [107][108][110].

Group 1 - The article highlights a significant shift in global financial dynamics, with many countries collectively selling U.S. Treasury bonds, indicating a precarious situation for the U.S. financial system [1] - China's holdings of U.S. debt have decreased to $682 billion, the lowest level since 2009, reflecting a strategic decision to reduce exposure to U.S. assets [5][32] - The article discusses the contrasting actions of Western allies increasing their U.S. debt holdings while Southern countries are withdrawing, indicating a divergence in financial strategies [6] Group 2 - The U.S. debt is projected to exceed $38 trillion by the end of 2025, with interest payments alone surpassing $1.2 trillion, which is more than the defense budget [18][20] - The article notes that the yield on 10-year U.S. Treasury bonds has experienced significant volatility, reflecting investor uncertainty about U.S. debt pricing [22][24] - The narrative emphasizes that the era of unquestioned demand for U.S. debt and the dollar's supremacy is over, as countries reassess their asset allocations in light of recent geopolitical events [43]

Group 1 - The yield on U.S. Treasury bonds remained relatively stable after the Presidents' Day holiday [1] - The Empire State Manufacturing Survey indicated a slight decline in the business conditions index for February, dropping from 7.7 in January to 7.1, while economists had expected a figure of 10 [1] - Initial jobless claims are projected to decrease from 227,000 to 220,000 [1] Group 2 - The Personal Consumption Expenditures Price Index for December is expected to show a year-over-year increase of 2.8%, consistent with November's figures [1] - Market expectations indicate a 90% probability that the Federal Reserve will maintain interest rates in March [1] - The 10-year Treasury yield is reported at 4.037%, down from 4.055% on Friday, while the 2-year Treasury yield increased slightly from 3.409% to 3.416% [1]

Core Viewpoint - China's foreign exchange management authority has issued guidelines for banks to adjust asset allocations based on market fluctuations, gradually reducing the proportion of U.S. Treasury holdings, which have decreased from a peak of $1.3 trillion in 2013 to $682.6 billion, the lowest since September 2008 [2][4] Group 1: U.S. Treasury Holdings and China's Strategy - The reduction in U.S. Treasury holdings is part of a long-term strategy, with funds being redirected towards gold reserves and essential material procurement to diversify risks [2][4] - As of January 2026, China's gold reserves have increased to 74.19 million ounces, marking 15 consecutive months of growth, with over 1,200 tons imported [4][6] - The share of U.S. Treasuries in China's reserves has fallen below 15%, reflecting a significant shift in asset allocation [4][12] Group 2: Global Market Reactions - The U.S. debt has surpassed $38 trillion, with annual interest payments of $1.2 trillion, leading to credit rating downgrades by Moody's and Fitch [4][6] - Major global holders of U.S. debt, including India and Saudi Arabia, have also reduced their holdings, indicating a broader trend of divestment from U.S. Treasuries [4][12] - The reduction in U.S. Treasury holdings has led to a slight decline in prices and an increase in yields, putting short-term pressure on the dollar index [2][4] Group 3: U.S.-China Economic Relations - U.S. Treasury Secretary Scott Bessenet emphasized the importance of stable U.S.-China relations, acknowledging the deep economic interdependence and the need for a balanced approach to competition [6][10] - Bessenet's statements reflect a shift in U.S. strategy from confrontation to a more pragmatic engagement with China, aiming to mitigate risks while maintaining economic ties [10][12] - The U.S. is also focusing on rebuilding domestic production capabilities, particularly in critical sectors like semiconductors and pharmaceuticals, to reduce reliance on foreign supply chains [10][12] Group 4: Global Financial Landscape - The global landscape for U.S. Treasuries is changing, with central banks increasingly turning to gold, which now constitutes over 30% of their reserves, surpassing U.S. Treasuries [12][14] - The dollar's share of global foreign exchange reserves has fallen to 40%, the lowest in 20 years, indicating a decline in its dominance as a primary reserve currency [12][14] - The ongoing divestment from U.S. Treasuries and the shift towards alternative currencies like the yuan and euro suggest a gradual end to the era of dollar hegemony [14]

Key Points - The report indicates that there is still potential for credit spread compression, particularly in the context of different bond types and their excess spreads compared to similar maturity and rating bonds [1][3][35] - As of January 30, 2026, the excess spreads for 3Y AAA-rated bank subordinated bonds, perpetual bonds, and industrial bonds are 6.1BP, 6.6BP, and 11.0BP, respectively, which are at the 92%, 79%, and 44% percentiles since early 2025 [1][3][35] - The report suggests that the selection of bonds based on value for money ranks as follows: bank subordinated bonds > perpetual bonds > urban investment bonds > industrial bonds [1][35] Credit Strategy Review for January 2026 - The yield of bank subordinated bonds has significantly decreased, and the excess spreads remain high, indicating potential for further compression [3][6] - The report notes that the 3Y AA+ urban investment bond yield decreased by 9BP, with the yield at the end of January 2026 being 1.91% [11] - Factors contributing to the decline in credit bond yields include limited corporate financing demand, stable credit issuance, and a loose funding environment [11][14] Performance of Different Credit Strategies - In January 2026, the performance of various credit strategies ranked as follows: duration extension > barbell strategy > 3Y bullet strategy > short-end sinking [15] - The returns for the duration extension strategy for urban investment bonds, industrial bonds, bank subordinated bonds, and perpetual bonds were 0.65%, 0.85%, 0.76%, and 0.82%, respectively [15][18] - The report highlights that the short-end sinking strategy yielded returns of 0.16%-0.19% across different bond types, although its performance was generally average [17][18] Outlook for February 2026 - The report anticipates that the overall funding environment will remain tight, with a weak recovery in the fundamentals [35] - It is expected that the central bank's operations will lead to a decrease in funding rates, potentially resulting in a further decline in long-term bond yields by 5-10BP in Q1 2026 [35] - The report emphasizes that the credit spread compression trend is likely to continue, with a focus on the performance of various bond types [35]

Core Viewpoint - The People's Bank of China (PBOC) will continue to implement a moderately accommodative monetary policy to support economic growth and stabilize market expectations, with a focus on the effectiveness of previously implemented policies [4][5]. Group 1: Monetary Policy Implementation - In the first half of 2025, the total social financing increased by 22.83 trillion yuan, which is 4.74 trillion yuan more than the same period last year [1]. - The PBOC has reduced the reserve requirement ratio (RRR) 12 times and policy interest rates 9 times since 2020, leading to a decrease of 115 basis points for the 1-year Loan Prime Rate (LPR) and 130 basis points for the 5-year LPR [2]. - The average interest rate for newly issued corporate loans in the first half of 2025 was approximately 3.3%, down about 45 basis points from the previous year [3]. Group 2: Financial Market Developments - The bond market in China issued various bonds totaling 44.3 trillion yuan in the first half of 2025, a year-on-year increase of 16% [7]. - The balance of loans in the "Five Major Financial Articles" reached 103.3 trillion yuan, with a year-on-year growth of 14% [6]. - The average issuance rate for corporate credit bonds was 2.08%, which is a decrease of 32 basis points compared to the same period last year [7]. Group 3: Structural Policies and Support - The PBOC has established a 500 billion yuan re-lending facility for service consumption and elderly care to stimulate demand in these sectors [9]. - Structural monetary policy tools will continue to focus on supporting technological innovation and boosting consumption, enhancing the effectiveness of economic restructuring [14]. - A total of 288 entities issued technology innovation bonds amounting to approximately 600 billion yuan, promoting the development of emerging industries [12].

Market Overview - The central bank conducted a 315 billion yuan 7-day reverse repurchase operation at a fixed rate of 1.40%, with a total bid and awarded amount of 315 billion yuan. Additionally, a 3000 billion yuan 14-day reverse repurchase operation was carried out, indicating a total of 6000 billion yuan in reverse repos over two days to support liquidity during the Spring Festival [1][3] - The interbank market showed a more relaxed liquidity environment, with the weighted average rate of DR001 dropping over 4 basis points to around 1.27%. Overnight quotes in the anonymous click (X-repo) system fell to 1.25%, indicating ample supply [3] - The latest overnight financing rate in the U.S. was reported at 3.65% [3] Interbank Certificates of Deposit - The latest transaction for one-year interbank certificates of deposit in the secondary market was around 1.590% [7] Bond Market - The yields on major interbank bonds mostly declined, reflecting a downward trend in bond prices [9] - The closing prices for government bond futures showed slight increases, with the 30-year main contract rising by 0.42%, the 10-year by 0.08%, the 5-year by 0.03%, and the 2-year by 0.02% [14] Global Macro - The European Central Bank maintained its benchmark interest rate, marking the fifth consecutive pause since June of the previous year. However, no clear signals regarding future policy direction were provided, leading to expectations of stable monetary policy in the near term [14]

Market Overview - The central bank conducted a 750 billion yuan reverse repo operation with a fixed interest rate of 1.40% on February 4, with a net withdrawal of 3025 billion yuan for the day due to 3775 billion yuan of reverse repos maturing [3][4]. Funding Conditions - The interbank market has returned to a stable and loose state, with the weighted average interest rate of D R001 slightly rising to around 1.32%. Overnight quotes in the anonymous click (X-repo) system remained at 1.3%, with a significant increase in supply compared to the previous day [5]. - The latest overnight financing guarantee rate in the U.S. is 3.69% [6]. - The latest transaction rate for one-year interbank certificates of deposit among major banks is stable at 1.60% [7]. Bond Market - The closing prices for government bond futures showed a decline: the 30-year main contract fell by 0.23%, the 10-year by 0.01%, the 5-year by 0.04%, and the 2-year by 0.02% [13]. Key News - The State Council held a press conference discussing the modernization of agriculture and rural areas, emphasizing four key tasks for this year, including enhancing agricultural production capacity and quality, and promoting stable income growth for farmers [15]. - The People's Bank of China emphasized the need for quality financial services in key strategic areas and sectors, aiming to support domestic demand and technological innovation [15]. - Hong Kong is developing into an international bond issuance hub, with plans for an electronic trading platform to enhance market liquidity [16]. Bond Events - The National Development Bank plans to issue up to 330 billion yuan in financial bonds on February 5 [20]. - A series of negative events related to bond issuers were reported, including rating downgrades for several companies [21]. Non-standard Asset Risks - Several non-standard assets have been flagged for risks, including investment plans and private equity funds facing potential defaults [22].

Market Overview - The central bank conducted a 7-day reverse repo operation of 9.9 billion yuan at a fixed rate of 1.40%, resulting in a net injection of 9.9 billion yuan for the day [1] - The interbank market remains stable with a slight increase in the weighted average rate of DR001, hovering around 1.27% [3] - The latest one-year interbank certificates of deposit (CDs) traded at approximately 1.62%, down 1 basis point from the previous day [5] - Major interest rate bonds in the interbank market saw a general decline in yields [7] - The main contracts for government bonds showed positive performance, with the 30-year contract up by 0.37%, the 10-year contract up by 0.15%, and the 5-year contract up by 0.09% [9] Key News - The Ministry of Commerce emphasized the commitment to high-level opening-up, highlighting Hainan Free Trade Port as a significant initiative for building an open economy [10] - A meeting by the Ministry of Industry and Information Technology addressed the rapid development of the power and energy storage battery industry, noting issues like irrational competition and the need for regulatory measures [10] - The Guizhou provincial government issued policies to support high-quality development in county-level development zones, focusing on infrastructure projects [10] Global Macro - U.S. President Trump indicated that U.S. oversight of Venezuela may last for years, with plans for Venezuela to use oil sales to purchase U.S. goods [12] - The Deputy Governor of the Reserve Bank of Australia stated that the likelihood of a rate cut is "very low" [12] - The global bond market saw a record issuance of $260 billion at the start of 2026 [13] - Gold may have surpassed U.S. Treasuries as the world's top reserve asset for the first time in 30 years [13]