Report Industry Investment Rating No information provided in the content Core Viewpoints - In the second week of March 2026, the Iran-US conflict continued to escalate, causing oil prices to surge due to shipping disruptions and production cut expectations, which started to impact transportation demand and upstream costs. Food prices continued to decline. In the export sector, rising fuel transportation prices drove the SCFI index up significantly, but high transportation costs and geopolitical uncertainties led to postponed transportation demand and a year-on-year decline in port freight volume in March. In terms of investment, the apparent demand for rebar rebounded significantly, and prices stabilized, indicating accelerated downstream investment and construction, but the resumption rate was lower than the same period last year. In the real estate market, new and second-hand housing transactions continued their seasonal recovery, but the year-on-year growth rate weakened [4][27]. - For the bond market, the midstream operating rate continued to rise during the "Golden March" peak season. With high uncertainty in the Iran-US situation and rising oil prices, short-term inflation expectations remained high. However, shipping uncertainties and high costs increased the wait-and-see sentiment in trade demand. Attention should be paid to the possibility of export fluctuations in March. Domestically, the apparent demand for rebar increased, and the glass spot supply and demand improved. The construction site resumption rate continued to rise but was lower than the same period last year, indicating that the demand during the construction peak season was gradually being released, but the "good start" of investment in the first quarter might not exceed expectations compared to last year. The real estate transactions basically followed the seasonal pattern in March, but the "spring market" was not significantly better than the same period, and attention should be paid to the potential positive impact of data falling short of expectations on the bond market sentiment [4][27]. Summary by Directory 1. Inflation-related: Food prices continue to decline - Pork prices kept falling, with the national average wholesale price of pork down 2.7% week-on-week. Vegetable prices dropped 2.8% week-on-week. The 200-index of agricultural product wholesale prices and the wholesale price index of basket products decreased 1.1% and 1.2% week-on-week respectively [8]. 2. Import and export-related: Freight rate index accelerates upward - Affected by the continuous geopolitical tension, the comprehensive index of export container transportation continued to rise. The CCFI index increased 1.7% week-on-week, and the SCFI index rose 14.9% week-on-week. Due to the Middle East situation, the transportation fuel cost increased, and the freight rate of the Asia-Europe shipping market fluctuated slightly more, rising 13% week-on-week. In the North American route, high energy prices and increased inflation expectations led to weak transportation demand and a decline in cargo volume, but the spot booking price increased by about 14%-15% week-on-week [9]. - From March 2nd to March 8th, the port's container throughput and cargo throughput increased 1.4% and decreased 0.4% week-on-week respectively, with a year-on-year change of 1.7% and -2.1% for the single week. The average year-on-year change in March was -0.6% and -8.3%. Geopolitical factors led to the suppression or postponement of some freight demand and a decline in market cargo volume [9]. - The BDI and CDFI indices showed a divergence. The US and Israel's military strikes on Iran led to a record high in international fuel prices, causing a sharp increase in the charter freight of international dry bulk shipping routes and an increase in the charter freight of China's coal import routes. However, in the Panamax and Supramax ship markets, the soaring oil prices led to the postponement of some coal and grain trades, increasing the wait-and-see sentiment and dragging down the BDI index [9]. 3. Industry-related: The apparent demand for rebar rebounds significantly - Coal prices turned from rising to falling. The price of thermal coal (Q5500) at Qinhuangdao Port decreased 2.1% week-on-week. With the warming of the weather in many places, the residential power load weakened. In terms of supply, the main coal-producing areas resumed normal production, and the overall supply was loose. Affected by the weakening port market, the reduction of the external purchase price of large groups, and the increase in external transportation costs, terminal purchases decreased, putting downward pressure on coal prices [13]. - The price of rebar stopped falling and stabilized, and the apparent demand increased significantly. The spot price of rebar (HRB400 20mm) increased 0.8% week-on-week, the social inventory of rebar increased 2.6% week-on-week, and the inventory accumulation speed slowed down significantly. The apparent demand for rebar increased 80.9% week-on-week, indicating accelerated downstream investment and construction [13]. - The operating rate of asphalt decreased. This week, the operating rate of asphalt plants decreased 0.3 percentage points to 23.0%. The downstream asphalt shipment volume remained low year-on-year. Although the cost increased, the wait-and-see sentiment in the midstream and downstream demand remained strong [13]. - Copper prices continued to fall. This week, the average price of copper in the Yangtze River Nonferrous Metals Market decreased 0.8% week-on-week, and the decline widened. The continuous Iran-US conflict and the lack of a缓和 signal suppressed market risk appetite and increased the risk aversion sentiment, causing the copper price to decline more rapidly [16]. - The glass futures price stopped falling and rebounded. Firstly, the high energy prices at the cost end drove up the price of upstream soda ash, providing strong support for the glass price. Secondly, in the spot market, the production and sales improved significantly compared to the previous period. The overall price continued to rise, downstream purchases were active, the manufacturer's shipment speed accelerated, and the inventory in various places decreased, indicating an improvement in the supply and demand fundamentals and a growing atmosphere of price increase [16]. 4. Investment-related: The "spring market" is basically on par with the same period - The decline of cement prices widened. This week, the cement price index decreased 0.5% week-on-week, continuing the downward trend. As of March 11th (the 23rd day of the first lunar month), the resumption rate of 10,692 construction sites across the country was 42.5%, a 19-percentage-point increase week-on-week and a 5.2-percentage-point decrease compared to the same period last year; the labor attendance rate was 43.9%, a 14.2-percentage-point increase week-on-week and a 5.8-percentage-point decrease compared to the same period last year; the fund arrival rate was 42.8%, a 7.4-percentage-point increase week-on-week and a 0.8-percentage-point decrease compared to the same period last year. Overall, the construction situation was gradually improving, but the investment demand had not exceeded that of last year [17][19]. - New housing transactions continued to recover, but the growth rate narrowed. This week (as of Friday), the transaction area of new houses in 30 cities increased 26.7% week-on-week. As of March 13th, the transaction area of new houses in 30 cities (7-day rolling sum) was 1.1075 million square meters, a 9.4% decrease compared to the same period last year, turning from positive to negative; the average value in March decreased 32.6% year-on-year (28.0% in February) [21]. - Second-hand housing transactions recovered moderately. This week (as of Friday), the transaction area of second-hand houses in 17 cities increased 9.6% week-on-week. As of March 13th, the transaction area of second-hand houses (7-day rolling sum) was 126,000 square meters, a 3.0% increase year-on-year, maintaining a seasonal recovery, but the year-on-year growth rate was narrower than last week; the average value in March decreased 23.3% year-on-year (25% in February) [21]. 5. Consumption: International oil prices continue to rise - The subway passenger volume in 25 cities continued to increase. From last Saturday to this Friday, the average daily subway passenger volume in 25 cities was 3.222 million person-times, a 1.0% increase week-on-week. According to the Baidu Migration Scale Index, as of March 13th, the index increased 3.0% year-on-year, indicating strong travel enthusiasm [24]. - The Iran-US conflict has not been alleviated, and international oil prices continued to rise. As of March 13th, the prices of Brent crude oil and WTI crude oil increased 11.3% and 8.6% respectively compared to last Friday, reaching $103.1 per barrel and $98.7 per barrel. During the week, the escalation of the conflict between the US, Israel, and Iran led to the interruption of crude oil supply and shipping in many Middle Eastern countries. Due to the obstruction of shipping in the Strait of Hormuz, the pressure of full storage forced OPEC member countries to consider production cuts, increasing market concerns and boosting oil prices [24][26].

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - Short - term, be aware of bond market disturbances caused by the boost in equity risk preference and positive economic data. Mid - term, the capital and institutional behavior are relatively favorable, so investors can make arrangements during market fluctuations [8][11][99]. - There's no need to overly worry about the bond supply - demand pattern at the end of the quarter. The supply side has a high maturity volume of government bonds in March with limited net financing. The demand side, though the power of allocation funds weakens, still has support. The bond - selling pressure of banks is controllable. Insurance companies usually allocate the remaining funds after the Two Sessions [8][11][99]. - Non - bank funds usually recover gradually near the second quarter. The allocation of wealth management products to the bond market often increases in April. Some non - bank funds may seize opportunities in advance at the end of the quarter. Pay attention to the increased probability of success in the bond market after the Two Sessions [8][11][99]. 3. Summary According to the Directory 3.1 1 - month Central Bank Balance Sheet and Custody Volume Interpretation 3.1.1 2026 January Central Bank Balance Sheet Changes - The central bank's balance sheet size increased from 48.16 trillion yuan to 49.32 trillion yuan, up 11599 billion yuan. The main increase item on the asset side is "claims on other depository corporations", and the main decrease item is "claims on other financial corporations". On the liability side, the main increase items are "government deposits" and "currency issuance", and the main decrease item is "deposits of other depository corporations" [16]. - **Asset side**: The central bank actively injected "long - term" liquidity. "Claims on other depository corporations" increased significantly. The central bank injected long - term liquidity to offset the impact of the approaching Spring Festival and the fast supply of government bonds. The net investment of innovative tools was 3493 billion yuan, close to the 2915 - billion - yuan increase in the "ChinaBond - Other" account. With the improvement of equity risk preference, the central bank's market - stabilizing tools were gradually withdrawn, and "claims on other financial corporations" decreased by 2239 billion yuan [17][23][28]. - **Liability side**: "Deposits of other depository corporations" seasonally flowed to "government deposits" and "currency issuance". January is a big tax - paying month, and with the approaching Spring Festival, "government deposits" and "currency issuance" consumed some reserves [25]. 3.1.2 Impact of January 2026 Central Bank Operations on Custody Volume - In terms of quantity, the scale of innovative tools is consistent with the change in the custody volume account. The net investment of innovative tools was 3493 billion yuan, and the balance of the "ChinaBond - Other (Central Bank)" account increased by 2915 billion yuan. - In terms of structure, the main incremental bond types are treasury bonds and policy - financial bonds. The "ChinaBond - Other (Central Bank)" item mainly increased treasury bonds (1716 billion yuan) and policy - financial bonds (1123 billion yuan), and the increase in local government bonds decreased from 1389 billion yuan to 81 billion yuan [28]. 3.2 Leverage Ratio - The combination of loose funds and a bullish bond market led to a strong institutional leverage sentiment. In January 2026, although funds fluctuated briefly, they generally ran smoothly. The average monthly trading volume of the whole - market pledged repurchase increased from 8.0 trillion yuan in December to 8.1 trillion yuan in January and further to 8.8 trillion yuan in early February. The average leverage ratio of bond funds decreased from 121.4% in December 2025 to 120.0% in January and rebounded to 121.1% since February. The leverage levels in January and February were higher than the same period of the previous year [34]. 3.3 By Institution - **Banks**: - **Large banks**: They bought long - term treasury bonds beyond the season, driving the narrowing of the 10 - 1 - year spread. In January, large - bank bond investment was at a high level. Benefiting from the good start of deposits, better - than - expected retention rates, and the relaxation of the EVE indicator, they bought 7 - 10 - year treasury bonds beyond the season. Since February, their preference for certificates of deposit has strengthened [52]. - **Small and medium - sized banks**: They mainly increased their holdings of certificates of deposit and ultra - long - term bonds, driving the compression of the spread. In January, they adopted a dumbbell strategy, mainly increasing their holdings of certificates of deposit, 7 - 10 - year policy - financial bonds, and 20 - 30 - year treasury bonds. Since February, they continued to prefer certificates of deposit but took profits on 7 - 10 - year policy - financial bonds and 20 - 30 - year treasury bonds [56]. - **Insurance companies**: Benefiting from the rapid growth of dividend - insurance income, their bond - allocation strength was at a seasonal high in January, mainly increasing their holdings of government bonds. They mainly increased their holdings of 15 - 30 - year local government bonds and bought certificates of deposit and perpetual bonds to maintain liquidity. Since February, they sold certificates of deposit and perpetual bonds to extract liquidity and continued to rigidly allocate 15 - 30 - year local government bonds [64]. - **General funds**: - **Funds**: In early January, they sold a large amount of bonds due to multiple negative factors. Since the middle of the month, their bond - allocation sentiment improved, and the duration was extended. The share of bond ETFs resumed growth in February [75]. - **Wealth management products**: After the New Year, the scale of wealth management products did not return as expected. Affected by the Spring Festival cash - withdrawal demand, the bond - allocation scale in January and February was weak [77]. - **Foreign investors**: The comprehensive income of foreign investors from buying certificates of deposit remained at a low level, and they continued to have a net outflow, mainly reducing their holdings of certificates of deposit and treasury bonds. In January 2026, the comprehensive income of foreign investors from buying certificates of deposit decreased, and the bond custody volume of overseas institutions decreased by 1078 billion yuan, mainly reducing their holdings of 938 - billion - yuan certificates of deposit and 209 - billion - yuan treasury bonds [87]. 3.4 By Bond Type - In January, the incremental custody volume of the bond market increased, with government bonds being the main support, and the contraction of certificates of deposit accelerated. The incremental custody volume of the bond market increased from 3026 billion yuan to 7576 billion yuan. Government bonds were the main support, with treasury bonds and local government bonds increasing by 4270 billion yuan and 5494 billion yuan respectively. The incremental scale of certificates of deposit decreased from - 6224 billion yuan to - 6562 billion yuan [90]. - **Interest - rate bonds**: The net financing scale increased month - on - month. The issuance rhythm of local government bonds was significantly faster than the same period last year. In January, the net financing scale of interest - rate bonds increased from 4789 billion yuan to 13312 billion yuan, significantly higher than 10335 billion yuan in the same period last year [94]. - **Certificates of deposit**: Banks had limited willingness to renew issuance, and certificates of deposit had negative growth for three consecutive months. Since November, the central bank's capital injection has maintained the characteristic of "short - term withdrawal and long - term injection". Banks' overall liability - side pressure was not large, and their willingness to renew certificates of deposit was limited. In January, the net financing of certificates of deposit further decreased to - 6230 billion yuan, and the incremental custody volume decreased from - 6224 billion yuan to - 6562 billion yuan [98].

Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report In the third week of December, year - end food prices continued to rise, the operating rate continued to decline, and real estate sales started the year - end sprint, but the slope was significantly lower than that of last year. In terms of inflation, the increase in the food price index narrowed, and the decline in pork prices widened. In terms of exports, container shipping prices continued a slight increase, mainly boosted by the year - end signing season. In terms of investment, cement prices increased slightly for three consecutive weeks, mainly due to rising demand and price hikes in the central and southern regions, while demand in other regions remained weak. The apparent demand for building materials and rebar improved slightly. In the real estate sector, both new and second - hand housing sales increased month - on - month, and the year - end sprint slope may be similar to the rhythm of 2023. For the bond market, the economic data in November showed a continued decline in momentum, but the bond market was insensitive. There may be certain expectations for the "good start" in the first quarter of next year. In the short term, potential disturbances to the bond market sentiment such as the new regulations on fund fees still exist, but as the cross - year allocation window approaches, some allocation funds have begun to enter the market gradually. Looking forward to 2026, fiscal and macro - policies may continue to be implemented earlier, and the probability of a "good start" in data is relatively high, which may jointly suppress sentiment. Especially with the base adjustment in 2026, the inflation performance in the first quarter may further affect expectations and requires careful observation [3][37]. Summary by Directory Inflation - related: Food price increases narrowed - This week, the 200 - index of agricultural product wholesale prices and the wholesale price index of vegetable basket products increased by 0.8% and 1.0% week - on - week respectively, with the increase lower than last week. The average wholesale price of pork in the country decreased by 1.1% week - on - week, and the decline widened; the average wholesale price of 28 key - monitored vegetables decreased by 0.3% week - on - week, turning from an increase to a decrease; the average wholesale price of 7 key - monitored fruits increased by 1.7% week - on - week, and the increase narrowed [6][7]. Import and Export - related: Container shipping prices continued a slight increase - The CCFI and SCFI indices continued to rise. This week, the CCFI index increased by 0.6% week - on - week, and the SCFI index increased by 3.1% week - on - week. Affected by the year - end signing season, the spot booking prices on the North American routes continued to rise, and the freight rates on the West and East US routes increased by 11.9% and 7.3% respectively compared with last week. From December 8th to December 14th, the container throughput and cargo throughput of ports decreased by 0.9% and 1.2% week - on - week respectively, continuing to decline compared with the previous week. The decline of the BDI and CDFI indices widened [8][11]. Industry - related: The operating rate generally declined - The decline of coal prices continued to expand. This week, the price of thermal coal (Q5500) at Qinhuangdao Port decreased by 5.5% week - on - week. The rebar price stopped falling and rebounded, with the spot price of rebar (HRB400 20mm) increasing by 0.3% week - on - week. The asphalt operating rate continued to decline, with the asphalt plant operating rate decreasing by 0.2 percentage points to 27.6% week - on - week, a year - on - year decrease of 0.9%. The increase of international copper prices converged, and the glass price continued to fall [16][20]. Investment - related: New home sales increased slightly - Cement prices continued a slight increase. This week, the weekly average of the cement price index increased by 0.44% week - on - week, rising for three consecutive weeks. The transaction area of new homes in 30 large and medium - sized cities stopped falling and rebounded, with a week - on - week increase of 15.4% from December 12th to December 18th. The transaction area of second - hand homes in 17 cities increased by 5.3% week - on - week, showing a seasonal upward trend [25][28]. Consumption: Passenger car retail sales in mid - and early December decreased by 24% year - on - year - From December 1st to 14th, the retail sales of the national passenger car market were 764,000 vehicles, a year - on - year decrease of 24% and a month - on - month increase of 2%. As of December 19th, the prices of Brent crude oil and WTI crude oil decreased by 1.1% and 1.6% week - on - week respectively, continuing to fall [31].

Report Industry Investment Rating - The report does not provide an industry investment rating. Core Viewpoints - Referring to the experience of Japan and South Korea during their technology transformation phases, the technology bull market did not significantly impact the bond market. Bond investors need not overly worry about the ongoing technology bull market in the equity market. The linkage between stock and bond markets is more of a short - term factor, and long - term bond market pricing should still consider fundamental factors [1][3][31]. Summary According to the Table of Contents 1. Overseas Experience of the Impact of the Technology Stock Bull Market on the Bond Market Japan: From "Trade - Oriented" to "Technology - Oriented" - After World War II, Japan implemented a "trade - oriented" economic strategy, achieving relatively high economic growth from 1956 - 1973. In the 1970s, due to the loss of labor dividends and the oil crisis, Japan shifted towards a technology - oriented economy [1][10]. - The government introduced a series of policies to support high - tech industries. The VLSI plan promoted the development of the semiconductor industry, leading to a technology stock bull market. From 1970 - 1985, the Nikkei 225 index rose from about 2300 to about 13000, and the information and communication industry index reached 31.75 in 1985, compared to 1 in January 1970 [13][14]. - From 1975 - 1985, the Japanese bond market was highly volatile, mainly due to the two oil crises in 1973 and 1980. The bond yield changed with inflation and policy interest rates, and the stock - bond seesaw effect was not significant. After 1980, there was a period of stock - bond double - bull [18]. South Korea: Comprehensive Promotion of Technology Transformation - South Korea's economic transformation was similar to Japan's, gradually shifting from labor - intensive to capital - intensive and then to technology - intensive. In 1986, it proposed a technology - oriented strategy and launched a series of plans to support high - tech industries [2][23]. - After 1986, the South Korean stock market entered two accelerated growth periods. In the first half of 1997, the stock market rebounded, led by the electrical and electronic equipment industry, while the national bond yield remained stable or declined, showing a simultaneous strengthening of stock and bond markets [2][26]. Comparison with China - China is currently in an important economic transformation stage, with the economic growth engine shifting from traditional industries to emerging industries, and the role of consumption in driving domestic demand increasing. China has formed a technology - led equity market bullish atmosphere [3][29]. - Similar to Japan and South Korea, the linkage between the stock and bond markets in China may be limited. The stock - bond seesaw effect in the third quarter was likely due to short - term factors, and the long - term bond market pricing depends on fundamental and policy factors [3][30].