Group 1 - The core viewpoint of the report indicates that the undervaluation of credit bonds (the difference between issuance rates and market valuations on listing day) is more pronounced in 2026 compared to 2025, with an average difference of 4.14 basis points (BP) as of March 29, 2026, compared to 3.03 BP in 2025, driven by strong demand for credit bond allocations [7][8][12] - Key characteristics of the credit bond primary market include: (1) More pronounced undervaluation in the interbank market compared to exchanges, with an average difference of 3.8 BP for interbank versus 2.4 BP for exchanges since 2025; (2) Short-term financing bonds show greater undervaluation than other types, averaging 5.6 BP and 5.8 BP in 2025 and 2026 respectively, while other bond types range from 2 to 4 BP; (3) Innovation bonds exhibit more significant undervaluation compared to non-innovation bonds, particularly in the first three quarters of 2025, with a narrowing trend since Q4 2025; (4) High-grade credit bonds show more pronounced undervaluation compared to medium and low-grade bonds, with AAA-rated bonds averaging 5.6 BP lower than market valuations in 2026, compared to -4.3 BP in 2025 [8][12][17] Group 2 - In the weekly review of the credit bond market, net financing has been positive for two consecutive weeks, with total issuance of 4,212.7 billion yuan and net financing of 1,430.3 billion yuan, an increase from 949.7 billion yuan in the previous week [12][17] - The secondary market saw a decrease in transaction volume, with total transactions amounting to 9,099 billion yuan, down by 115 billion yuan from the previous week, and most medium-term note yields declining, with 3-year AAA medium-term note yields down by 0.98 BP to 1.77% [17][18] - The report highlights that the distribution of credit bond issuances by rating shows that AAA-rated issuers accounted for the largest share at 48.1%, with the largest industry share coming from comprehensive issuers at 24.17% and construction industry issuers at 23.28% [12][13]

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - The issuing guidance rates announced by the National Association of Financial Market Institutional Investors (NAFMII) during the period from March 16th to March 22nd showed a divergence, with most rates for medium - and short - term maturities decreasing and most for long - term maturities increasing, with an overall change range of -2 BP to 1 BP [1][51]. - The issuance scale of credit bonds continued to increase on a week - on - week basis and was at a historically high level. Corporate bonds remained at zero issuance, the issuance amount of private placement notes decreased, and the issuance amounts of other varieties increased. The net financing of credit bonds increased on a week - on - week basis [1][51]. - In the secondary market, the trading volume of credit bonds increased on a week - on - week basis, with the trading volume of corporate bonds decreasing and that of other varieties increasing [1][51]. - The yields of credit bonds declined overall, with a larger decline in the medium - and short - term [1][51]. - In terms of credit spreads, the medium - and short - term credit spreads of medium - and short - term notes and corporate bonds generally narrowed, while the long - term spreads widened; the 5 - year credit spread of urban investment bonds widened, and most spreads of other maturities narrowed [1][51]. - From an absolute return perspective, the relatively strong allocation demand will drive the credit bond market to continue its recovery. Although fluctuations and adjustments are inevitable under the influence of multiple factors, the conditions for a full - scale bear market in credit bonds are still insufficient. In the long run, future yields are still in a downward channel, and the idea of increasing allocation during adjustments is still feasible [1][51]. - From a relative return perspective, the compression space of credit spreads at all maturities is insufficient at present, and the cost - effectiveness of most varieties for allocation is not high. The coupon strategy in the current allocation should be cautious, while the trading strategy can be moderately optimistic. The key to bond selection is to focus on the trend of interest - rate bonds and the coupon value of individual bonds [1][51]. - The end - of - quarter factor may cause some disturbances. Considering the possible volatile market in the near future, it is necessary to coordinate and transform the allocation and trading strategies in line with the trend. Attention should also be paid to the effectiveness of growth - stabilizing policies, the impact of the equity market on the bond market, and the influence of changes in the capital market and supply - demand pattern on market sentiment [1][51]. - The central and local governments are continuously and actively optimizing real - estate policies, which have played a positive role in promoting the stabilization of the real - estate market. For real - estate bonds, investors with higher risk tolerance can consider early layout, focusing on enterprises with outstanding new financing and sales recovery, and balancing risks and returns. The focus of allocation should be on central and local state - owned enterprises with stable historical valuations and excellent performance, as well as high - quality private enterprise bonds with strong guarantees. Longer durations can be used to increase returns, and trading opportunities from the valuation repair of oversold real - estate enterprise bonds can also be appropriately explored [2][52][53]. - For urban investment bonds, the possibility of default is low, and they can still be a key allocation variety for credit bonds. The debt resolution has achieved remarkable results, and the reform and transformation of financing platforms are in the final stage. Attention can be paid to the reform and transformation opportunities of "entity - type" financing platforms [3][53]. 3. Summary by Directory 3.1 Primary Market Situation 3.1.1 Issuance and Maturity Scale - From March 16th to March 22nd, a total of 482 credit bonds were issued, with an issuance amount of 396.635 billion yuan, a week - on - week increase of 17.70%. The net financing of credit bonds was 92.633 billion yuan, an increase of 11.306 billion yuan on a week - on - week basis [12]. - By variety, corporate bonds had zero issuance with a net financing of -9.783 billion yuan, an increase of 0.999 billion yuan on a week - on - week basis; 182 corporate bonds were issued, with an issuance amount of 138.026 billion yuan, a week - on - week increase of 19.10%, and a net financing of 45.560 billion yuan, an increase of 28.919 billion yuan on a week - on - week basis; 148 medium - term notes were issued, with an issuance amount of 124.231 billion yuan, a week - on - week increase of 3.52%, and a net financing of 53.343 billion yuan, a decrease of 6.639 billion yuan on a week - on - week basis; 122 short - term financing bills were issued, with an issuance amount of 119.022 billion yuan, a week - on - week increase of 46.39%, and a net financing of 9.016 billion yuan, a decrease of 1.171 billion yuan on a week - on - week basis; 30 private placement notes were issued, with an issuance amount of 15.356 billion yuan, a week - on - week decrease of 22.38%, and a net financing of -5.503 billion yuan, a decrease of 10.802 billion yuan on a week - on - week basis [12]. 3.1.2 Issuance Interest Rates - The issuing guidance rates announced by the NAFMII showed a divergence, with most rates for medium - and short - term maturities decreasing and most for long - term maturities increasing, with an overall change range of -2 BP to 1 BP. By maturity, the rate change range for 1 - year varieties was -1 BP to 1 BP, for 3 - year varieties was -2 BP to 0 BP, for 5 - year varieties was -1 BP to 1 BP, and for 7 - year varieties was -2 BP to 1 BP. By rating, the rate change range for key AAA - rated and AAA - rated varieties was -1 BP to 1 BP, for AA + - rated varieties was 0 BP to 1 BP, for AA - rated varieties was -2 BP to -1 BP, and for AA - - rated varieties was -1 BP to 1 BP [13]. 3.2 Secondary Market Situation 3.2.1 Market Trading Volume - From March 16th to March 22nd, the total trading volume of credit bonds was 980.127 billion yuan, a week - on - week increase of 10.10%. The trading volumes of corporate bonds, corporate bonds, medium - term notes, short - term financing bills, and private placement notes were 17.686 billion yuan, 382.526 billion yuan, 358.574 billion yuan, 162.769 billion yuan, and 58.572 billion yuan respectively. The trading volume of credit bonds increased on a week - on - week basis, with the trading volume of corporate bonds decreasing and that of other varieties increasing [16]. 3.2.2 Credit Spreads - For medium - and short - term notes, most varieties' credit spreads widened. Specifically, the 1 - year AAA - rated variety's credit spread widened, while those of other varieties narrowed; for the 3 - year period, the credit spreads of AAA - rated and AA + - rated varieties widened, while those of other varieties narrowed; the 5 - year and 7 - year credit spreads widened [19]. - For corporate bonds, most varieties' credit spreads widened. Specifically, for the 1 - year and 3 - year periods, the credit spread of the AAA - rated variety widened, while those of other varieties narrowed; the 5 - year and 7 - year credit spreads widened [26]. - For urban investment bonds, the credit spreads of each variety showed mixed trends. Specifically, for the 1 - year and 7 - year periods, the credit spread of the AAA - rated variety widened, while those of other varieties narrowed; for the 3 - year period, the credit spreads of AAA - rated and AA + - rated varieties widened, while those of other varieties narrowed; the 5 - year credit spread widened [29]. 3.2.3 Term Spreads and Rating Spreads - For AA + medium - and short - term notes, the 3Y - 1Y term spread widened by 0.79 BP, the 5Y - 3Y term spread widened by 1.52 BP, and the 7Y - 3Y term spread narrowed by 1.65 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 25.8% percentile; the 5Y - 3Y term spread was at the 28.3% percentile; the 7Y - 3Y term spread was at the 35.0% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year medium - and short - term notes narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread remained the same as the previous period. The (AA - )-(AAA) spread was at a historically low level, at the 0.6% percentile; the (AA)-(AAA) spread was at the 5.0% percentile; the (AA + )-(AAA) spread was at the 1.6% percentile [36]. - For AA + corporate bonds, the 3Y - 1Y term spread widened by 0.41 BP, the 5Y - 3Y term spread widened by 2.31 BP, and the 7Y - 3Y term spread widened by 2.39 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 27.1% percentile; the 5Y - 3Y term spread was at the 25.8% percentile; the 7Y - 3Y term spread was at the 33.8% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year corporate bonds narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 2.00 BP. The (AA - )-(AAA) spread was at a historically low level, at the 0.1% percentile; the (AA)-(AAA) spread was at the 5.2% percentile; the (AA + )-(AAA) spread was at the 3.0% percentile [41]. - For AA + urban investment bonds, the 3Y - 1Y term spread widened by 0.40 BP, the 5Y - 3Y term spread widened by 1.07 BP, and the 7Y - 3Y term spread widened by 0.07 BP. The 3Y - 1Y term spread was at a historically low - to - medium percentile, at the 23.0% percentile; the 5Y - 3Y term spread was at the 20.4% percentile; the 7Y - 3Y term spread was at the 37.7% percentile. In terms of rating spreads, the (AA - )-(AAA) spread of 3 - year urban investment bonds narrowed by 2.00 BP, the (AA)-(AAA) spread narrowed by 2.00 BP, and the (AA + )-(AAA) spread narrowed by 1.00 BP. The (AA - )-(AAA) spread was at a historically low level, at the 2.1% percentile; the (AA)-(AAA) spread was at the 0.5% percentile; the (AA + )-(AAA) spread was at the 0.5% percentile [44]. 3.3 Credit Rating Adjustment and Default Bond Statistics 3.3.1 Credit Rating Adjustment Statistics - According to iFinD statistics, during the period from March 16th to March 22nd, the ratings (including outlooks) of 2 companies were adjusted, with 1 downgraded and 1 upgraded [48]. 3.3.2 Default and Extended - Maturity Bond Statistics - There were no defaults of credit bonds under any issuer during the period from March 16th to March 22nd. There were also no extended - maturity credit bonds under any issuer during this period [50]. 3.4 Investment Views - The same as the core views of the report, including the analysis of primary and secondary markets, yield, credit spreads, and investment strategies from absolute and relative return perspectives, as well as investment suggestions for real - estate bonds and urban investment bonds [1][51][52][53].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In late Q1, institutional behavior in the bond market has changed. The allocation disk has strong buying power, while funds and wealth management products are relatively weak. The "fixed - income +" products are facing significant redemption pressure, and the bond market strategy focuses on short - term 3 - 5y term spread compression and long - term opportunities after over - decline [1][3][4]. 3. Summary by Directory 3.1 First Quarter: Characteristics of Bond Buying by Various Institutions 3.1.1 Overall Bond Buying by Institutions in Q1: Strong Allocation Disk, Weak Funds and Wealth Management - **Allocation Disk**: Large banks significantly increased net purchases of government bonds over 5y. Small and medium - sized banks increased net purchases of 30y government bonds and 20y local bonds. Insurance companies, driven by dividend - paying insurance, included 3 - 5y Tier 2 and perpetual bonds in their top five holdings [13]. - **Trading Disk**: Securities firms' net purchases were in line with seasonality, with a significant reduction in duration, more allocation to 1y interest rates and Tier 2 and perpetual bonds, and reduction of ultra - long bonds. Funds still focused on credit coupons, increasing the proportion of 1 - 5y credit and Tier 2 and perpetual bonds [13]. - **Bank Wealth Management**: In Q1, due to the priority of "deposit rush" tasks in the banking system, the scale growth of bank wealth management was weak, and the net purchases of direct investment and entrusted investment in the secondary market both increased less. In terms of structure, direct investment shortened the term, and entrusted investment increased the exploration of spreads in policy - financial bonds [14]. 3.1.2 By Institution: Insurance Enters the Allocation Window at the End of the Quarter, and Wealth Management Will Follow in Q2 - **Banks**: They have a strong demand for long - term bonds. At the end of the quarter, the pressure to realize profits is not large, and there is still a need for bond allocation in the future [18]. - **Insurance**: The "good start" funds entered the allocation window in March, and the bond - allocation progress is slower than last year, with potential for further allocation. Attention should be paid to the spread compression opportunities of ultra - long local bonds in Q2 [23]. - **Funds**: From the end of Q1 to Q2, there is usually a seasonal recovery in bond - buying power. In Q2, it is conducive to the spread compression of policy - financial bonds [25][28]. - **Wealth Management**: It is expected to see scale growth and a peak season for bond allocation in Q2. Attention can be paid to the spread compression opportunities of Tier 2 and perpetual bonds [29]. - **Securities Firms**: They continue to short - sell 30y government bonds and start to buy 50y government bonds [30]. 3.2 "Fixed - Income +" Redemption: How Big Is the Pressure? 3.2.1 Recent "Fixed - Income +" Redemption: Greater Pressure than in November 2025 and January 2026, Close to the Russia - Ukraine Conflict Period - In March, the equity market declined, and the Shanghai Composite Index fell below 4000 points, leading to a significant increase in the redemption pressure of "fixed - income +" funds. The redemption pressure is stronger than in the previous two rounds and is close to that during the Russia - Ukraine conflict [34][41]. 3.2.2 When Will the Redemption Ease? Pay Attention to the Policy - making Layer's Expectations for Market Stability and the Use of Tools - The central bank recently held a party committee meeting, showing an earlier demand to maintain the stable operation of the stock market. Looking back at the situation after the Russia - Ukraine conflict in 2022, relevant meetings and policies helped stabilize the market. The central bank has innovated a series of financial policies to support the stable operation of the capital market. In the future, attention should be paid to the changes in the "claims on other financial corporations" item [43][44][47]. 3.3 Bond Market Strategy: Focus on 3 - 5y Term Spread Compression in the Short - Term and Seize Opportunities after Over - Decline in the Long - Term 3.3.1 This Week: α Spread Compression for Bonds within 5y - This week, the short - term bonds performed well. The certificate of deposit (CD) yield dropped close to 1.5%, driving the α spread compression of bonds within 5y [48]. 3.3.2 Short - Term: Limited Downward Space for 1y Bonds, Potential for Continuous Compression of 3 - 5y Spreads - The space for 1y short - term leverage to capture interest rate spreads has been extremely compressed, and the focus of bond selection may shift to 3 - 5y bonds. CDs may fluctuate at a low level of 1.5 - 1.55% in the short term, and attention should be paid to the marginal changes in funds at the end of the quarter [51][56]. 3.3.3 Long - Term: 10y Government Bonds to Fluctuate between 1.8% - 1.85%, 30y Government Bonds' Sentiment to Stabilize, Pay Attention to Over - Decline Recovery - **10y Government Bonds**: It is expected to fluctuate in a narrow range of 1.8% - 1.85%. It is recommended to hold existing assets and gradually increase positions for incremental funds if the yield continues to rise. - **30y Government Bonds**: The core fluctuation range of the 30 - 10y active bond spread may be 40 - 50bp. Traders can pay attention to trading opportunities when the spread widens to over 50bp, and allocators can gradually enter the market when the 30y government bond yield rises above 2.3%. Attention can also be paid to the spread - mining value of 4 - 5y China Development Bank bonds, 10y China Development Bank bonds, and 20y local bonds [57][60][61]. 3.4 Interest - Rate Bond Market Review: CDs Hit a New Low, and the Yield Curve Steepened - **Funding**: The central bank's open - market operations (OMO) had a net injection, and the funding situation was balanced and loose [76]. - **Primary Issuance**: The net financing of government bonds and local bonds increased, while that of policy - financial bonds and inter - bank CDs decreased [80]. - **Benchmark Changes**: The term spreads of government bonds and China Development Bank bonds both widened [86].

Group 1: Credit Market Insights - The lower limit for 1-year certificates of deposit (CDs) is estimated to be 1.5%, with a potential compression towards this limit expected by early April[1] - Recent trends show that both CDs and short-term bonds have been declining, raising concerns about potential overcorrection and subsequent risks of rebound[7] - The current pricing logic for the bond market's short and long ends is significantly different, making mean reversion logic less applicable[7] Group 2: Market Drivers and Trends - The central bank's monetary policy adjustments have led to a gradual decrease in funding volatility, supporting a sustained liquidity environment[9] - The issuance of CDs has been continuously shrinking, reflecting limited enthusiasm from banks to supplement liabilities due to general credit issuance intensity[9] - The recent upgrade in interbank demand deposit self-discipline has positively impacted short-term bonds, with market reactions stronger than anticipated[11] Group 3: Financial Data and Projections - February credit growth showed a year-on-year decrease compared to January, but this is not expected to significantly alter the outlook for credit issuance in 2026[16] - The net maturity of 6-month buyout operations is projected at 100 billion, similar to the previous 3-month buyout of 200 billion, indicating banks are proactively reducing buyout volumes rather than the central bank cutting back on liquidity[16] - The 1-year government bond yield has recently dropped below 1.5%, which may open up further downward space for CDs[10] Group 4: Risk Considerations - Potential risks include unexpected liquidity tightening, accelerated economic recovery, and increased bond supply[46]

Core Insights - The report highlights the seasonal growth characteristics of bank wealth management in Q2 and Q3, which will support short-term allocation demand, particularly around the 4Y curve point [6][11] - It suggests focusing on riding opportunities near the 4Y curve point, as the current short- to medium-term credit spreads are at historically low levels, supported by the growth of bank wealth management and the opening of amortized debt funds [6][9] Group 1: Bank Wealth Management Growth - Bank wealth management growth in Q2 from 2022 to 2025 is projected at 906.2 billion, 532.6 billion, 1,758.5 billion, and 1,385.4 billion respectively, with Q3 growth at 1,454.2 billion, 775.8 billion, 932.3 billion, and 995.6 billion [6][11] - The monthly growth in April over the past two years has exceeded 2 trillion, providing support for the credit bond market [6][11] Group 2: Amortized Debt Funds - The opening of amortized debt funds is concentrated in two periods: January to March and May to July, with a focus on 3-year maturities during the latter period [6][11] - The allocation structure indicates that bank funds are more inclined towards interest rate bonds, while bank wealth management favors credit, commercial paper, and broker bonds [6][11] Group 3: Credit Bond Market Review - In the primary market, net financing was positive for two consecutive weeks, with a total issuance of 3,172 billion and a net financing of 730 billion for the week of March 9 to March 13, 2026 [11][12] - The secondary market saw a decrease in transaction volume, with total transactions amounting to 8,348 billion, down by 260 billion from the previous week [11][12] Group 4: Credit Rating Adjustments - During the week of March 9 to March 13, 2026, there were two issuers with upgraded ratings and one issuer with a downgraded rating, with no bonds experiencing extensions or defaults [11][12]

Group 1: Open Market Operations - The central bank conducted a 375 billion yuan 7-day reverse repurchase operation on March 13, with a fixed rate of 1.40%, and the full bid amount was 375 billion yuan [1] - On the same day, 448 billion yuan in reverse repos matured, resulting in a net withdrawal of 73 billion yuan for the day, and a total net withdrawal of 1,011 billion yuan for the week [1] - For the week of March 16-20, 1,765 billion yuan in reverse repos will mature [1] Group 2: Funding Conditions - The interbank market remains relatively loose, with the weighted average rate of DR001 slightly declining to around 1.32% [3] - Overnight quotes on the anonymous click system (X-repo) stabilized at 1.3%, with supply exceeding 1 trillion yuan [3] - The overnight financing rate in the U.S. stands at 3.64% [3] Group 3: Interbank Certificates of Deposit - The latest transaction for one-year interbank certificates of deposit among major banks is around 1.535%, down 1.75 basis points from the previous day [7] Group 4: Bond Market Overview - The yields on major interbank bonds show divergence, with medium to long-term government bonds performing weakly [11] - The closing prices for government bond futures indicate a decline, with the 30-year main contract down 0.25% and the 10-year main contract down 0.07% [14] Group 5: Recent Economic Data - In the first two months, RMB loans increased by 5.61 trillion yuan, and RMB deposits rose by 9.26 trillion yuan, with the social financing scale increasing by 9.6 trillion yuan, 3,162 billion yuan more than the same period last year [15] - The M2 balance at the end of February was 349.22 trillion yuan, a year-on-year increase of 9% [15] - The central bank plans to conduct a 500 billion yuan fixed-rate, multi-price reverse repurchase operation on March 16, with 6,000 billion yuan in 182-day reverse repos maturing on the same day [15] Group 6: Global Macro Insights - Goldman Sachs has lowered its 2026 U.S. economic growth forecast from 2.8% to 2.6% due to the negative impact of ongoing conflicts in the Middle East [19] - Amazon issued $54 billion in bonds in the U.S. and Euro markets, setting a record for corporate bond issuance in Europe, driven by its significant investments in artificial intelligence [19]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints - On March 11, the liquidity situation was slightly tightened while remaining stable. Market sentiment weakened, and the bond market experienced overall volatile adjustments. Convertible bond market indices followed the upward trend, but most individual convertible bonds declined. Yields of U.S. Treasuries across various maturities generally rose, and yields of 10 - year government bonds in major European economies also generally increased [1][2] 3. Summary by Directory Bond Market News Domestic News - The Fourth Session of the 14th National Committee of the Chinese People's Political Consultative Conference concluded successfully on the morning of March 11 [4] - The 14th National People's Congress Financial and Economic Committee proposed to actively and orderly resolve local debt risks, optimize the debt structure of central and local governments, strengthen the efficiency assessment of local government special bond projects, and increase support for resolving non - standard and "double non" debts [5] - The committee also suggested continuing to implement a moderately loose monetary policy, reducing capital costs, and guiding funds to flow into the real economy [6][7] International News - On March 11, the U.S. Bureau of Labor Statistics announced that the CPI in February increased by 2.4% year - on - year, and the core CPI increased by 2.5% year - on - year. The market generally expected the Fed to keep interest rates unchanged in the next week's meeting, but some investors thought the Fed might need to maintain high interest rates for a longer period due to potential inflationary pressures from the war [8] - On March 11, the U.S. government announced a "Section 301" investigation targeting 16 economies including South Korea, China, and Japan, aiming to seek new tax measures [9] Commodities - On March 11, WTI April crude oil futures rose 4.55% to $87.25 per barrel, Brent May crude oil futures rose 4.76% to $91.98 per barrel, COMEX April gold futures fell 0.28% to $5183.9 per ounce, and NYMEX April natural gas futures rose 5.46% to $3.227 per million British thermal units [10] Liquidity Situation Open Market Operations - On March 11, the central bank conducted 265 billion yuan of 7 - day reverse repurchase operations at a fixed - rate and quantity - tender method with an operation rate of 1.40%. With 405 billion yuan of reverse repurchases maturing on the same day, the net capital withdrawal was 140 billion yuan [12] Funding Rates - On March 11, the liquidity situation was slightly tightened while remaining stable, and major repurchase rates increased. DR001 rose 4.51bp to 1.370%, and DR007 rose 2.42bp to 1.465% [13] Bond Market Dynamics Interest - rate Bonds - Spot bond yields: On March 11, market sentiment weakened, and the bond market experienced overall volatile adjustments. As of 20:00 Beijing time, the yield of the 10 - year Treasury active bond 250016 rose 0.65bp to 1.8140%, and the yield of the 10 - year CDB active bond 250220 rose 0.55bp to 1.9795% [16] - Bond issuance: Information on the issuance scale, winning bid yields, and other aspects of multiple bonds such as 25进出清发007 (additional issue 26) and 26贴现国债16 was provided [18] Credit Bonds - Secondary market trading anomalies: On March 11, 5 industrial bonds had a trading price deviation of over 10%, and 1 urban investment bond had a trading price deviation of over 10% [18][19] - Credit bond events: Huazhong Group may face a book loss of about 797 million yuan due to the potential recovery of idle land, and a subsidiary of Weinan Urban Investment Group was subject to an enforcement of 144 million yuan [20] Convertible Bonds - Equity and convertible bond indices: On March 11, the three major A - share indices rose, and the convertible bond market followed the upward trend. The CSI Convertible Bond Index, Shanghai Stock Exchange Convertible Bond Index, and Shenzhen Stock Exchange Convertible Bond Index rose 0.34%, 0.14%, and 0.65% respectively. Most individual convertible bonds declined, with 161 rising, 192 falling, and 21 remaining flat [21] - Convertible bond tracking: News such as the upcoming listing of Haitian Convertible Bond, the potential downward revision of the conversion price of Zhongte Convertible Bond, and the early redemption of Baichuan Convertible Bond 2 was reported [27] Overseas Bond Markets - U.S. bond market: On March 11, yields of U.S. Treasuries across various maturities generally rose. The 2 - year U.S. Treasury yield rose 7bp to 3.64%, and the 10 - year U.S. Treasury yield rose 6bp to 4.21%. The yield spread between 2 - year and 10 - year U.S. Treasuries narrowed by 1bp to 57bp, and the yield spread between 5 - year and 30 - year U.S. Treasuries widened by 2bp to 107bp [23][24] - European bond market: On March 11, yields of 10 - year government bonds in major European economies generally rose. The 10 - year German government bond yield rose 8bp to 2.93%, and the 10 - year government bond yields of France, Italy, Spain, and the UK rose 9bp, 13bp, 9bp, and 12bp respectively [26] - Daily price changes of Chinese - funded U.S. dollar bonds: Information on the daily price changes, credit entities, bond balances, and other aspects of multiple Chinese - funded U.S. dollar bonds was provided [29]

Group 1 - The core view of the report suggests that the credit spread compression space is gradually narrowing, and the strategy should focus on "downward exploration + variety selection + structural opportunities" [1][7][8] Group 2 - In the primary market, net financing turned positive with a total issuance of 2,521.3 billion and a net financing of 919.8 billion, compared to a net repayment of 834.6 billion in the previous week [11] - The secondary market saw a significant increase in trading volume, with total transactions reaching 8,608.69 billion, up from 4,883.78 billion the previous week [14] - The yield on medium-term notes (MTN) generally declined, with the 3-year AAA MTN yield decreasing by 2.65 basis points to 1.79% [14][15] Group 3 - The report highlights a structural differentiation in credit spreads, with market sentiment shifting from short-term to medium and long-term bonds, indicating a preference for high-quality issuers [7][8] - The demand for credit bonds is expected to be supported by seasonal factors, including insurance premium inflows and the reopening of bond funds, which may lead to a low-level oscillation in credit spreads [8] - The report recommends focusing on short-term high-grade credit bonds for safety and liquidity, while also exploring opportunities in perpetual bonds and ETFs for potential valuation recovery [8][9]

Group 1 - The report indicates that the recent geopolitical conflicts have led to significant volatility in overseas markets, particularly in commodities and equities, with a shift towards "stagflation" expectations [6][7][12] - The impact of overseas stagflation on the domestic bond market is viewed as neutral to positive, suggesting that it may stabilize the bond market rather than create negative pressure [14][20] - The report emphasizes that the transmission paths of overseas asset price increases to the domestic bond market are primarily through stock-bond sentiment and inflation inputs, with the former likely providing more support to the bond market [14][16][22] Group 2 - The bond market has shown resilience despite external pressures, with the long-end and ultra-long-end bond pricing benefiting from risk-averse sentiment [22][24] - The report notes that the recent increase in PPI may not significantly impact the bond market, as the transmission of cost increases from upstream to downstream is often limited [16][20] - The report highlights that the domestic policy response to stagflation expectations may include monetary easing measures, which could further support the bond market [21][23] Group 3 - The weekly review of the bond market indicates a mixed performance in interest rates, with some rates declining while others increased, reflecting the ongoing volatility influenced by geopolitical events and policy expectations [24][29] - The report details that the yield spreads for government bonds have widened, indicating a shift in market dynamics, while credit spreads have generally narrowed [35][37] - The analysis of asset relative value shows that the yield differentials for various bond types have exhibited divergence, with some categories experiencing tightening while others have expanded [35][37]

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - On March 3, the capital market at the beginning of the month remained loose, the bond market was generally strong but long - term bonds weakened slightly, convertible bond market indices fell collectively, and most convertible bond issues declined. Yields of U.S. Treasuries across maturities generally rose, and 10 - year government bond yields of major European economies also generally increased [1] 3. Summary by Directory 3.1 Bond Market News 3.1.1 Domestic News - The press conference of the 4th Session of the 14th National Committee of the Chinese People's Political Consultative Conference was held on March 3. The spokesperson Liu Jieyi answered questions on China's economic situation, development prospects, opening - up, and the integration and development of the Greater Bay Area, stating that China's economy has strong resilience and long - term positive fundamentals [3] - The central bank released the operation of the financial market in January 2026 on March 3. In January 2026, net financing of government bonds was 976.39 billion yuan, an increase of 283.13 billion yuan year - on - year; net financing of corporate bonds was 503.26 billion yuan, an increase of 57.9 billion yuan year - on - year. At the end of January 2026, the bond market custody balance was 197.7 trillion yuan. In the money market, the average daily turnover of inter - bank lending was 493.75 billion yuan, a year - on - year increase of 84.4%; the average daily turnover of bond repurchase in the inter - bank market was 8.5 trillion yuan, a year - on - year increase of 47.7%. At the end of January 2026, the outstanding balance of inter - bank lending was 0.8 trillion yuan, and the outstanding balance of bond repurchase in the inter - bank market was 12.0 trillion yuan [4] 3.1.2 International News - Minneapolis Fed President Kashkari, a voting member of the FOMC, said that if inflation cools, one or two interest rate cuts later this year might be appropriate, but the Middle East war could lead to a longer - term pause in action. He considered the current 3.5% - 3.75% interest rate range to be close to the "neutral level" [5] - New York Fed President Williams said that if inflation continues to decline after the impact of tariffs fades, the Fed will have reason to further cut interest rates. He expected that tariffs would put additional pressure on consumer prices in the first half of this year, and the inflation rate would drop to 2.5% by the end of 2026 and to 2% in 2027. He also expected the unemployment rate to decline slightly in the next two years and the economic growth rate to be about 2.5% this year [6] 3.1.3 Commodities - On March 3, WTI April crude oil futures rose 4.67% to $74.56 per barrel, with a cumulative increase of 14.34% since February 26; Brent May crude oil futures rose 4.71% to $81.40 per barrel; COMEX gold futures fell 3.98% to $5099.40 per ounce; NYMEX natural gas futures rose 1.98% to $3.039 per ounce [7] 3.2 Capital Market 3.2.1 Open Market Operations - On March 3, the central bank conducted 3.43 billion yuan of 7 - day reverse repurchase operations at a fixed - rate and quantity - tender method, with an operating rate of 1.40%. There were 52.6 billion yuan of reverse repurchases due on the same day, resulting in a net withdrawal of 49.17 billion yuan [9] 3.2.2 Capital Interest Rates - On March 3, despite the central bank's net withdrawal in the open market, the capital market at the beginning of the month remained loose, and major repurchase interest rates declined significantly. DR001 dropped 4.52bp to 1.3266%, and DR007 dropped 1.24bp to 1.452% [10] 3.3 Bond Market Dynamics 3.3.1 Interest - Bearing Bonds - **Yield Trends of Spot Bonds**: On March 3, affected by the stock market decline and loose capital market, the bond market was generally strong, but long - term bonds weakened slightly due to the lower - than - expected bond - buying scale of the central bank in February. As of 20:00, the yield of the 10 - year Treasury bond active issue 250016 rose 0.45bp to 1.7935%, and the yield of the 10 - year CDB bond active issue 250220 rose 0.35bp to 1.9630% [13] - **Bond Tendering Situation**: Various bonds such as 26 Guokai 02, 25 Guokai 18 (Increment 28), etc., were tendered, with different issuance scales, winning yields, full - field multiples, and marginal multiples [15] 3.3.2 Credit Bonds - **Abnormal Secondary - Market Transactions**: On March 3, the trading prices of 4 industrial bonds deviated by more than 10%. "H1 Vanke 06" rose more than 11%, "H1 Vanke 04" rose more than 14%, "H0 Baolong 04" rose more than 66%, and "H1 Bidi 03" rose more than 100% [16] - **Credit Bond Events**: Companies such as Vanke, Agile Group, and Zhongnan Construction announced loan renewals, postponement of liquidation hearings, and meetings to discuss bond extensions [19] 3.3.3 Convertible Bonds - **Equity and Convertible Bond Indices**: On March 3, the A - share market fell with heavy trading volume, and the three major stock indices declined. The convertible bond market also followed the equity market down significantly. The CSI Convertible Bond Index, Shanghai Stock Exchange Convertible Bond Index, and Shenzhen Stock Exchange Convertible Bond Index fell 1.81%, 1.71%, and 1.98% respectively. Most convertible bond issues declined [20] - **Convertible Bond Tracking**: On March 3, Wentai Convertible Bond and Hongtu Convertible Bond announced that the board of directors proposed to lower the conversion price; Kehua Convertible Bond announced that it was about to trigger the condition for lowering the conversion price. Anji Convertible Bond and Hengyi Convertible Bond announced early redemptions; Baichuan Convertible Bond 2 and Liyang Convertible Bond announced that they were about to meet the early redemption conditions [24] 3.3.4 Overseas Bond Markets - **U.S. Bond Market**: On March 3, yields of U.S. Treasuries across maturities generally rose. The 2 - year U.S. Treasury yield rose 4bp to 3.51%, and the 10 - year U.S. Treasury yield rose 1bp to 4.06%. The yield spread between the 2 - year and 10 - year U.S. Treasuries narrowed 3bp to 55bp; the yield spread between the 5 - year and 30 - year U.S. Treasuries narrowed 1bp to 107bp. The break - even inflation rate of the 10 - year U.S. Treasury Inflation - Protected Securities (TIPS) remained unchanged at 2.29% [23][25][26] - **European Bond Market**: On March 3, 10 - year government bond yields of major European economies generally rose. Germany's 10 - year government bond yield rose 7bp to 2.78%, and those of France, Italy, Spain, and the UK rose 8bp, 11bp, 6bp, and 8bp respectively [27] - **Daily Price Changes of Chinese - Issued U.S. Dollar Bonds**: As of the close on March 3, some Chinese - issued U.S. dollar bonds had price increases or decreases, with different daily and monthly changes [29]