Investment Rating - The industry rating is maintained as "Recommended" indicating a positive outlook for the industry fundamentals and an expectation that the industry index will outperform the benchmark index [6]. Core Insights - The report highlights four key points from the 2025 Q3 monetary policy report released by the central bank, focusing on loan interest rates, the shift in monetary policy language, the relationship between monetary aggregates, and the importance of maintaining reasonable interest rate relationships [1][2][3][4]. Summary by Sections Loan Interest Rates - As of September 2025, the weighted average loan interest rate is 3.24%, down 5 basis points from the previous month. The average interest rate for general loans is 3.67%, down 2 basis points, while the personal housing loan rate remains stable at 3.06%. The corporate loan rate is 3.14%, down 8 basis points. The excess reserve ratio is 1.4%, down 0.4 percentage points year-on-year [1][12]. Monetary Policy Language - The monetary policy language has shifted from "strengthening counter-cyclical adjustments" to "doing a good job in both counter-cyclical and cross-cyclical adjustments." The outlook does not mention the likelihood of reserve requirement ratio cuts or interest rate reductions, indicating a stable capital market and improving inflation trends [2]. Financial Aggregates - The report emphasizes that the current high level of financial data means future monetary policy effects will focus more on "price" rather than "quantity." Without real demand and fiscal policy support, the expansion of base money may not effectively translate into broad money supply growth [3]. Interest Rate Relationships - The central bank aims to ensure that banks do not issue loans at post-tax rates lower than the yields of government bonds of the same maturity. This is to maintain a reasonable interest rate relationship and support banks in stabilizing their net interest margins, thereby expanding the space for counter-cyclical monetary policy adjustments [4][5].

Group 1 - The simulated portfolio returns have rebounded this week, with most credit style portfolios outperforming interest rate style portfolios. The weekly returns for secondary ultra-long and city investment ultra-long strategies were 0.34% and 0.28% respectively, while credit style portfolios saw returns of 0.65% and 0.41% for the same strategies [2][14][15] - The recovery in returns has shifted from interest rate and medium-long duration strategies to ultra-long bond strategies. The average weekly return for credit style time deposit heavy portfolios increased by 3.6 basis points to 0.12%, the highest since August, while city investment heavy portfolios rose to 0.22%, an increase of approximately 12.1 basis points [2][16] - The average return for secondary capital bond heavy portfolios increased by nearly 20 basis points, with the secondary bond duration and mixed duration strategies showing weekly returns nearly equal to the ultra-long strategy. The secondary bond bullet strategy has shown a faster recovery, with cumulative negative returns since the third quarter narrowing to -0.36% [2][16] Group 2 - In terms of return sources, the coupon income from various strategy portfolios has declined, while the contribution from capital gains has increased. Among mainstream strategies, the coupon income for secondary bond bullet and duration strategies fell by more than 0.04 basis points, while city investment bonds and bank perpetual bonds maintained annualized coupon rates around 2.24% and 2.26% respectively [3][25] - The capital gains contribution for credit style portfolios accounted for most of the returns this week, with coupon contributions falling within the range of 5% to 30%, further compressing and increasing concentration compared to the previous week [3][25] Group 3 - Over the past four weeks, medium-long duration secondary perpetual strategies have shown cumulative returns at the forefront. The cumulative excess returns for perpetual bond duration, secondary bond bullet, and secondary bond duration strategies were 13 basis points, 11.2 basis points, and 11.1 basis points respectively [4][29] - The medium-long duration secondary perpetual bond strategy has rebounded significantly, but its volatility exceeds that of the downshift strategies. The cumulative return for the secondary bond downshift strategy reached 9.2 basis points, demonstrating both low volatility and strong recovery advantages [4][29] - From a strategy duration perspective, medium-long duration secondary perpetual bonds and ultra-long strategies exhibit stronger offensive attributes. The short-end time deposit strategy's excess returns have dropped to the lowest in three months, lacking aggressiveness in a bond bull market [4][32]

Group 1 - The core view of the report indicates that the simulated portfolio returns have generally recovered, with absolute returns of interest rate style portfolios outperforming credit style portfolios overall [2][10][14] - In the interest rate style portfolio, the top weekly returns were from the industrial ultra-long and secondary bond duration strategies, recording returns of 0.17% and 0.16% respectively [2][14] - In the credit style portfolio, the leading strategies were the industrial ultra-long and perpetual bond duration strategies, achieving returns of 0.2% and 0.16% respectively [15][2] Group 2 - The average weekly return of the credit style time deposit heavy portfolio increased by 3.5 basis points to 0.09%, reaching the highest absolute level since mid-August [2][16] - The average weekly return of the city investment heavy portfolio rose to 0.1%, similar to the time deposit strategy, with long-duration city investment bonds showing a recovery in the market [2][16] - The ultra-long bond heavy strategy saw a return increase of nearly 25 basis points, with the industrial ultra-long strategy reaching a high return level of 0.2% [2][16] Group 3 - The report highlights that the secondary perpetual bond duration strategy has significant profit potential, with capital gains contributing substantially this week [3][25] - The annualized coupon rate of the perpetual bond duration strategy is around 2.28%, and the distance from the lowest point this year is over 42 basis points [3][25] - The credit style portfolio's returns were primarily driven by capital gains, with coupon contributions falling within the range of 25% to 50% [3][25] Group 4 - In the past four weeks, the recovery signals for excess returns in secondary bond heavy strategies appeared first in bullet-type and down-sinking combinations [4][30] - The cumulative excess returns for city investment short-end sinking, commercial bank bond bullet-type, and brokerage bond duration strategies reached 11.8 basis points, 11.4 basis points, and 8.2 basis points respectively [4][30] - The report notes that medium to long-duration strategies generally yielded excess returns, with the secondary perpetual bond duration strategy achieving excess returns of 4.8 basis points and 5.3 basis points [33][30]

Group 1: Quantitative Credit Strategy - The duration strategy has continued to perform poorly as of September 30, with the cumulative excess return of the AA+ city investment bonds in a barbell strategy dropping to around -34 basis points [2][12] - The duration strategy for perpetual bonds has shown significant volatility, with cumulative excess returns remaining low at -18 basis points and -30 basis points despite a larger recovery after declines in September [2][12] - In contrast, short-end city investment bonds and bullet-type commercial bank bonds have shown relatively better excess returns [2][12] Group 2: Duration Tracking of Various Bonds - As of September 30, the weighted average transaction durations for city investment bonds and industrial bonds are 1.76 years and 2.22 years, respectively, indicating a defensive characteristic and falling within the 65%-80% historical percentile range since 2021 [3][16] - The weighted average transaction durations for secondary capital bonds, perpetual bonds, and general commercial bank bonds are 3.67 years, 3.70 years, and 1.92 years, respectively, showing a notable decline in their percentile levels [3][16] - Other financial bonds, such as securities company bonds and insurance company bonds, have also shown low historical duration percentiles, with durations of 1.51 years, 1.73 years, 4.11 years, and 1.23 years [3][16] Group 3: Yield Heatmap of Coupon Assets - As of September 29, 2025, yields for non-financial and non-real estate industrial bonds have generally increased, with significant rises exceeding 9.5 basis points for certain private non-perpetual bonds and state-owned enterprise perpetual bonds [4][20] - The yields for financial bonds have also risen, particularly for mid-to-long-term secondary capital bonds and state-owned bank perpetual bonds, which have increased by over 12 basis points [4][20] - Some short-end products have stabilized, with yields for certain city and rural commercial bank bonds showing minimal changes [4][20] Group 4: Long-term Credit Bond Analysis - The spread between active long-term credit bonds and comparable government bonds has reached a 24-year high, with the spread for 10-year bonds widening to a new annual high [5][22] - Despite the apparent advantages of long-term credit bonds post-adjustment, the lack of incremental funding support suggests that duration strategies should remain cautious until market sentiment improves [5][22] Group 5: Local Government Bond Supply and Trading - The latest week has seen a weak sentiment in the bond market, with the average issuance rates for local government bonds continuing to rise, reaching new highs for bonds with maturities of 20 years and above [6][27] - The issuance rates for local government bonds with maturities of 10 years and above have widened to over 20 basis points compared to similar maturity government bonds, indicating a higher percentile reading for the year [6][27]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In August, the "stock - bond seesaw" effect was significant. Interest rates first declined and then rose. Credit bond yields generally followed the upward trend of interest - rate bonds. Short - duration varieties were more resistant to decline, while medium - and long - duration ones were weaker. Looking ahead to September, credit bonds still need defensive strategies [1][11][12]. - After the adjustment in August, some bank capital bonds have fallen to show relative value. For example, 3 - year AA and above second - tier capital bonds are oversold, and 4 - 5 - year large - bank capital bonds also have certain value for accounts with different liability characteristics [29][33][37]. 3. Summary According to the Directory 3.1 High - Coupon Short - Term Bonds as Shields, Oversold Perpetual and Second - Tier Capital Bonds as Spears 3.1.1 Credit Bond Defense with Short - and Medium - Duration - In August, the "stock - bond seesaw" effect was prominent. Short - end bonds outperformed long - end ones. Credit bond yields generally rose with interest - rate bonds. Short - duration credit bonds were more resistant to decline, and institutions further shortened the duration to within 3 years. The net buying scale of credit bonds decreased, and the trading activity also declined [1][11][12]. - In September, credit bonds need defense. Bank wealth - management scale usually declines at the end of the quarter, reducing the demand for credit bonds. Credit spreads are at a relatively low level, and institutions will pay more attention to controlling drawdowns when investing in credit bonds [16]. - There are two defensive ideas for credit bonds. One is to select high - coupon individual bonds within 3 years. The other is to appropriately allocate defensive varieties such as 1Y inter - bank certificates of deposit and 2Y commercial financial bonds, which have certain cost - effectiveness compared with medium - and short - term notes of the same term [3][19][22]. 3.1.2 Bank Capital Bonds: Opportunities Arising from Declines - In August, the yields of bank capital bonds generally rose, and spreads widened. After the adjustment, some varieties showed relative value. For example, 3 - year AA and above second - tier capital bonds were oversold, and the yields of 3 - year AA second - tier capital bonds were equivalent to those of 3 - year AA perpetual bonds [28][29][30]. - The yields of 4 - 5 - year large - bank capital bonds rose significantly in August. As the decline deepened, insurance, wealth - management, and other asset - management products increased their allocation. For accounts with stable liability ends, they are still cost - effective coupon assets. For accounts with unstable liability ends, it is recommended to follow the interest - rate bond market for right - side layout [33][36][37]. 3.2 Urban Investment Bonds: Supply Recovery, Short - End and Low - Rating Bonds Resistant to Declines - In August, the net financing of urban investment bonds was positive and increased year - on - year but decreased month - on - month. The issuance of long - duration bonds decreased, and the weighted average issuance interest rate increased. The net financing performance varied by province [39]. - The yields of urban investment bonds generally rose in August. Short - end and low - rating bonds were more resistant to decline, while 10 - year ultra - long - term bonds were the weakest. Credit spreads showed differentiation [45]. - The trading activity of urban investment bonds was not high in August. The proportion of TKN and low - valuation transactions decreased compared with July. Short - duration bonds had an increase in trading volume, while 3 - 5 - year bonds had weaker trading [51]. 3.3 Industrial Bonds: Supply Contraction, Yields Generally Rising - In August, the issuance and net financing of industrial bonds decreased year - on - year. The issuance sentiment weakened, and the issuance proportion of short - duration bonds within 1 year decreased, while the proportion of 1 - 3 - year bonds increased. The issuance interest rates rose across the board, with medium - and long - duration bonds having a larger increase [54]. 3.4 Bank Capital Bonds: Net Financing Turns Negative, Trading Sentiment is Weak No detailed content provided in the given text for this part other than the title. It can be inferred from the previous content that in August, the net financing of bank capital bonds may have turned negative, and the trading sentiment was weak as the yields generally rose and spreads widened, and the relative performance was inferior to that of general credit bonds [28].

1. Report Industry Investment Rating No relevant content provided in the report. 2. Core Viewpoints of the Report - Since July, the allocation demand for credit bonds from funds, other product categories, and insurance has increased. Credit spreads have mostly narrowed or remained flat due to strong demand, with 1Y varieties showing strong resistance to decline and lower-rated bonds performing better than higher-rated ones [1][10][11]. - Currently, both credit bond coupons and credit spreads are at low levels, and the market trend is more dependent on institutional allocation demand. It is necessary to closely monitor institutional behavior, buying sentiment, and the potential compression space of credit spreads [1][12]. - Overall, the supply - demand pattern in July is favorable for credit bonds, and there is still a small amount of compression space for credit spreads. Specific strategies include focusing on short - to medium - duration bonds with credit rating sinking, and high - grade 10Y bonds have relatively large potential compression space for credit spreads [3][22]. - In the bank capital bond market, although the spread protection is thin, there is still compression space. Long - duration bonds of large banks and 2 - 3 year bonds of small and medium - sized banks are recommended [5]. 3. Summary by Related Catalogs 3.1. Credit Bond Market Overview - From July 1 - 11, funds' net purchase of credit bonds reached 88.5 billion yuan, a year - on - year increase of 39.1 billion yuan. Other product categories and insurance had net purchases of 31.3 billion and 15.2 billion yuan respectively, with year - on - year increases of 7.8 billion and 5 billion yuan [1][11]. - From July 7 - 11, with the convergence of funds and the rotation of negative factors, the bond market fluctuated upwards. Credit bonds, due to strong allocation demand, saw most credit spreads narrow or remain flat [10]. 3.2. Factors Affecting Credit Bond Market 3.2.1. Institutional Behavior - Fund net trading volume of credit bonds is a sensitive indicator related to credit spread trends. Maintaining a daily net purchase of over 500 million yuan helps keep credit spreads low. From July 7 - 10, the rolling 5 - day net purchase was 1 - 1.4 billion yuan, but it dropped to 740 million yuan on the 11th, and was below 500 million yuan on the 10th and 11th [2][12]. 3.2.2. Buying Sentiment - The TKN成交占比 is used to measure buying sentiment. A stable TKN成交占比 above 75% indicates good buying sentiment. From July 7 - 11, as yields rose, the TKN成交占比 declined, with three days below 70%, but the rolling 5 - day average was around 70% [2][16]. 3.2.3. Potential Compression Space of Credit Spreads - By observing the position of credit spreads relative to the mean - 2 times the standard deviation, it is found that currently, each variety still has a small amount of compression space, with 10Y varieties having relatively large potential [3][22]. 3.3. Specific Bond Types Analysis 3.3.1. Urban Investment Bonds - From July 1 - 13, urban investment bonds had a net financing of 28.8 billion yuan. The primary market issuance sentiment was good, with the proportion of full - subscription multiples over 3 times remaining at 61%. The issuance rate of long - term bonds decreased significantly, with the 10 - year average dropping to 2.14% [30][32]. - In the secondary market, short - term bonds were resistant to decline, while the yields of 3 - 10Y bonds increased. The trading activity decreased, and Shenzhen Metro had many high - valuation transactions [35][38]. 3.3.2. Industrial Bonds - From July 1 - 13, industrial bond issuance and net financing increased year - on - year. The issuance sentiment weakened slightly, and the proportion of long - term issuance over 5 years decreased significantly. The buying sentiment in the secondary market weakened, and the trading duration increased [40][42]. 3.3.3. Bank Capital Bonds - From July 7 - 13, several banks issued secondary capital bonds and perpetual bonds. In the secondary market, yields generally rose, spreads showed differentiation, and low - grade, short - duration bonds performed better. Currently, credit spreads are at relatively low levels, but there is still compression space [45][46]. 3.3.4. TLAC Bonds - By comparing the yields of 3Y, 5Y, and 10Y AAA - secondary capital bonds with TLAC bonds, the spreads are analyzed. As of July 11, 2025, the 3Y, 5Y, and 10Y spreads were 3.1bp, 3.8bp, and 1.4bp respectively, indicating that 10 - year TLAC bonds are more cost - effective [53]. 3.3.5. Commercial Financial Bonds - Since 2021, the valuation of 3Y AAA commercial financial bonds has generally followed the trend of interest - rate bonds, with a stable spread center. As of July 11, the credit spread was 14bp, at a relatively low level [57].

1. Report Industry Investment Rating - No information provided regarding the industry investment rating [1] 2. Core Viewpoints of the Report - In the past two weeks, interest - rate bonds fluctuated downward. Institutions continued to explore credit - bond spreads, with long - duration bonds becoming the focus. The 10 - year credit spread has significantly compressed. The trading sentiment of credit bonds is quite extreme. Considering the usual significant decline in wealth - management scale in the last week of June, credit bonds may experience short - term fluctuations. Accounts with unstable liability ends are not advised to chase the rising market but can make arrangements during adjustments. Accounts that have already invested in long - duration credit bonds earlier do not need to rush to take profits as there is still some allocation demand in July. Additionally, there is still room for the spread of long - duration credit bonds to compress [1][3] 3. Summary According to Related Catalogs 3.1 City Investment Bonds - Net financing remains weak. From June 1 - 22, 2025, city investment bonds issued 3781 billion yuan, matured 3767 billion yuan, and only achieved a net financing of 14 billion yuan, a year - on - year decrease of 791 billion yuan. The primary issuance sentiment declined, with the proportion of full - field multiples above 3 times dropping by 14 percentage points to 62%. The proportion of issuances with a term of over 3 years further increased to 45% [31] - Short - end issuance rates continued to reach new lows. In June, the issuance rates of city investment bonds continued to decline. The rates for bonds with a term of less than 1 year, 1 - 3 years, and 3 - 5 years decreased by 10bp, 7bp, and 15bp respectively compared to May, reaching 1.76%, 2.19%, and 2.51% [33] - In the secondary market, long - end bonds performed strongly, with yields of many terms reaching new lows. From June 16 - 20, yields of city investment bonds across all terms declined. The decline in medium - and short - end yields was limited, mostly within 3bp, while most long - end bonds with a term of over 5 years declined by more than 5bp, and credit spreads also compressed [36] - From the broker transaction data, bonds of all terms were traded at a discount to valuation, with long - term bonds over 5 years performing the best. The daily transactions of city investment bonds were still active, with daily transactions often exceeding 800, and the average discount to valuation per trading day was around 2bp. The average discount to valuation of long - term bonds over 5 years was 2.8bp [41] 3.2 Industrial Bonds - In June, the issuance and net - financing scale of industrial bonds increased significantly year - on - year. From June 1 - 22, industrial bonds issued 6187 billion yuan, a year - on - year increase of 1345 billion yuan, and achieved a net financing of 3050 billion yuan, a year - on - year increase of 1425 billion yuan. The comprehensive, public - utility, and non - bank financial industries had relatively large net - financing scales [43] - The issuance sentiment weakened. The proportion of full - field multiples above 3 times decreased from 38% to 30%, while the proportion of 2 - 3 times increased from 24% to 30% [43] - The proportion of medium - and long - term issuances increased. Since June, the proportion of industrial bonds with a term of less than 1 year decreased from 40% in May to 31%, while the proportions of 1 - 3 years, 3 - 5 years (including 5 years but excluding 3 years), and over 5 years increased to 40%, 18%, and 12% respectively [43] - From the broker transactions, the buying sentiment of industrial bonds was high. The TKN proportion remained at 79%, and the proportion of discount - to - valuation transactions increased from 65% to 66%. The transaction duration lengthened, with the proportion of transactions over 5 years increasing by 5 percentage points to 19% [45] 3.3 Bank Capital Bonds - In the primary market, from June 16 - 22, 2025, Xi'an Bank and Qingdao Rural Commercial Bank each issued a 20 - billion - yuan 5 + 5 - year secondary capital bond. The issuance rate of Xi'an Bank was 2.30%. Minsheng Bank issued a 300 - billion - yuan 5 + N - year perpetual bond with an issuance rate of 2.30% [48] - In the secondary market, yields of bank capital bonds declined across the board, and spreads showed differentiation. 10 - year secondary capital bonds and medium - and long - term perpetual bonds performed better. Specifically, yields of 1 - 5 - year secondary capital bonds generally declined by 2 - 4bp, with credit spreads fluctuating narrowly. The 10 - year secondary capital bond yield declined by 5bp, and the spread narrowed by 2bp. Bank perpetual bonds outperformed secondary capital bonds, with most credit spreads narrowing by 0 - 4bp [48] - From the broker transactions, from June 16 - 20, the number of bank capital bond transactions increased significantly month - on - month, and the trading sentiment was good. The TKN proportion was above 68%. The proportions of discount - to - valuation transactions of secondary capital bonds and perpetual bonds increased by 2 and 1 percentage points respectively to 70% and 77%. In terms of the term structure, state - owned bank transactions were still concentrated in long - duration bonds with good liquidity. The proportion of 4 - 5 - year secondary capital bond transactions of state - owned banks increased by 3 percentage points to 54%, while that of perpetual bonds decreased by 4 percentage points to 60%. Joint - stock bank transactions reduced the duration [51] - Regarding TLAC bonds, by subtracting the average yields of 3 + 1, 5 + 1, and 10 + 1 TLAC bonds from the yields to maturity of 3Y, 5Y, and 10Y AAA - secondary capital bonds, the spreads of secondary capital bonds over TLAC bonds were obtained. As of June 20, 2025, the spreads of 3Y, 5Y, and 10Y secondary capital bonds over TLAC bonds were 3.5bp, 7.5bp, and 4.8bp respectively, indicating that the 10 - year TLAC bond was more cost - effective at present [54] - For commercial financial bonds, taking the 3Y AAA commercial financial bond as an example, since 2021, its spread has mostly fluctuated between 10 - 30bp, with a stable spread center at 20bp. As of June 20, the credit spread of the 3Y AAA commercial financial bond was 14bp, at a relatively low level compared to the spread center [58]

Report Title - "The Divergence of Long - Short Term Spreads - Credit Spread Weekly Report (5/4)" [1][6] Report Industry Investment Rating - Not provided in the given content Core Viewpoints - From April 27th to April 30th, most bond yields declined. For 0.5 - 1Y industrial bonds, commercial bank second - tier capital bonds, securities company subordinated bonds, and securities company perpetual bonds, most yields dropped by over 2bp; for 0.5 - 1Y urban investment bonds and commercial financial bonds, most yields decreased by over 1bp; for 2Y industrial bonds and commercial financial bonds, most yields declined by over 1bp; the 2Y securities company subordinated bond yield rose by over 2bp; and the 3 - 5Y commercial financial bond yield dropped by over 2bp. Regarding credit spreads, the 0.5Y industrial bonds and commercial bank second - tier capital bond credit spreads mostly narrowed by over 5bp; the 1Y commercial bank second - tier capital bond credit spread narrowed by over 3bp; the 2Y securities company subordinated bonds and securities company perpetual bond credit spreads widened by over 3bp; and the 5Y urban investment bonds and industrial bond credit spreads mostly widened by over 2bp [2][6] Summary by Relevant Catalogs Yield and Spread Overview Yield and Spread of Each Maturity - Treasury bond yields at 0.5Y, 1Y, 2Y, 3Y, and 5Y were 1.47%, 1.46%, 1.45%, 1.48%, and 1.52% respectively, with weekly changes of - 3.5bp, 0.9bp, - 2.2bp, - 2.5bp, and - 2.2bp. Their historical quantiles were 11.9%, 13.2%, 8.7%, 6.2%, and 3.9% respectively. Similar data for other bond types such as national development bonds, local government bonds, etc., are also presented in detail [14] Credit Spread and Its Changes for Each Maturity - The 0.5Y, 1Y, 2Y, 3Y, and 5Y credit spreads of local government bonds were -, 12.01bp, 13.93bp, 14.34bp, and 14.37bp respectively, with weekly changes of -, 0.1bp, 0.2bp, - 1.5bp, and - 2.8bp. Their historical quantiles were -, 44.9%, 43.7%, 45.1%, and 38.6% respectively. Similar data for other bond types are also provided [16] Credit Bond Yields and Spreads by Category (Hermite Algorithm) Urban Investment Bonds by Region - In terms of yields, from April 27th to April 30th, most provincial urban investment bond yields declined. For example, the 5Y Guizhou urban investment bond yield dropped by about 35bp. In terms of credit spreads, the 0.5 - 1Y urban investment bond credit spreads mostly narrowed; the 2Y urban investment bond credit spreads mostly widened; the 3 - 5Y urban investment bond credit spreads showed differentiation, with the 3 - 5Y Guizhou urban investment bond credit spreads narrowing significantly [7] Industrial Bonds by Industry - From April 27th to April 30th, industrial bond yields generally declined. The 0.5 - 1Y industrial bond credit spreads generally narrowed, the 2 - 3Y industrial bond credit spreads showed differentiation, and the 5Y industrial bond credit spreads generally widened [7] Financial Bonds by Subject - From April 27th to April 30th, financial bond yields generally declined, with the 5Y city commercial bank second - tier capital bond yield dropping by about 55bp. The 0.5 - 1Y financial bond credit spreads generally narrowed, and the 2 - 5Y financial bond credit spreads showed differentiation [7] Credit Bond Yields and Spreads by Category (Balance Average Algorithm) Urban Investment Bonds by Region - Based on the balance average algorithm, from April 27th to April 30th, the 5Y Yunnan urban investment bond could target a return of over 3.2%, and the 5Y Qinghai urban investment bond could target a return of 3.0% or more. The 5Y Yunnan urban investment bond credit spread was significantly higher than that of medium - and short - term bonds, with high riding returns [8] Real Estate Private Enterprise Bonds - From April 27th to April 30th, the yields of real estate private enterprise bonds at all maturities were higher than those of other bond types, and the 0.5 - 1Y real estate private enterprise bond yields dropped by over 17bp [8] Financial Bonds - From April 27th to April 30th, the financial bond credit spreads generally narrowed, and the 3 - 5Y private securities company subordinated bonds could target a return of 4.7% or more [8]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In different bull - bear stages of the bond market, low - grade credit bonds show different performance patterns. In bull markets, low - grade urban investment bonds have the highest narrowing amplitude of valuation yields, and in bear markets, low - grade bonds are relatively "resilient" [1][2]. - In response to the US tariff adjustment policy, from the national to local levels, efforts are being made to support the development of "integrated domestic and foreign trade" market entities and help foreign - trade enterprises expand the domestic market. In the short term, the market may fluctuate due to tariff policies, but in the long term, the impact of tariffs may gradually decrease [3][42]. - This week, the bond market was volatile. Most varieties of financial bonds had a decline in valuation yields compared with last week, and most credit spreads widened. It is not recommended to trade second - tier perpetual bonds too much currently, and attention can be paid to AMC company - related bonds [59][60]. 3. Summary According to Relevant Catalogs 3.1 Different Bull - Bear Stages of Low - Grade Credit Bonds - **Bull Market**: Low - grade urban investment bonds have the highest narrowing amplitude of valuation yields, with the order of AA > AA+ > AAA. For example, from 2022/12/15 to 2023/6/14, the narrowing amplitudes of the yields of 3 - year urban investment bonds of AAA, AA+, and AA were 81BP, 95BP, and 104BP respectively, while the narrowing amplitude of the 3 - year Treasury bond yield was 30BP. This is due to the reduced risk of credit bonds and the high market risk appetite [1][13]. - **Bear Market**: The narrowing amplitude of the yields of AA - rated urban investment bonds is generally lower than that of AAA and AA+ grades (except for a short - term and rapid bear - market stage in 2024/9/23 - 2024/9/29). High - grade credit bonds have better liquidity, and investors have a high demand for coupon assets, so low - grade bonds are relatively "resilient" [2][13]. - **Individual Bonds in Bear Market**: The individual bonds with narrowing valuations in the bear market are mainly concentrated in real estate and some regions with large debt scales. For example, in the bear - market stage from 2025/3/18 to 2025/4/7, many central and state - owned enterprise entities' bond valuations narrowed, which may be because investors thought the bear market would not last long and high - coupon credit bonds were attractive [11]. 3.2 Urban Investment Bonds Weekly Viewpoint 3.2.1 Local Governments Support "Integrated Domestic and Foreign Trade" Market Entities to Cope with Tariff Impacts - The US has continuously adjusted tariff policies, and China has taken a series of counter - measures and internal economic - stabilizing policies. From the national to local levels, efforts are being made to support the development of "integrated domestic and foreign trade" market entities [22][23][26]. - Fujian Province has taken the lead in formulating a specific implementation plan, including establishing a key - enterprise contact mechanism, organizing foreign - trade enterprises to participate in domestic exhibitions, and providing financial and policy support to help enterprises expand the domestic market and international market [27][32]. 3.2.2 Investment Recommendations - **Focus on "Economic Powerhouses"**: Pay attention to provinces with good development momentum and debt management, such as Guangdong, Jiangsu, etc. Their provincial, prefecture - level, and district - county - level platforms are relatively stable, and the duration can be appropriately extended to 5 years [41][42]. - **Regions with Debt - Resolution Policies**: Focus on regions where significant debt - resolution policies or substantial capital inflows have occurred, such as Chongqing, Tianjin, etc. Consider bonds with a duration of 3 - 5 years [42][43]. - **Cities with Strong Industrial Bases**: Pay attention to prefecture - level cities with strong industrial bases and financial support, such as some cities in Guangxi, Hubei, etc. Choose bonds with a duration of 2 - 3 years [46][47]. 3.3 Financial Bonds Weekly Viewpoint - **Overall Performance**: This week, the bond market was volatile. Most varieties of financial bonds had a decline in valuation yields compared with last week, and most credit spreads widened. The widening amplitudes of insurance perpetual bonds and bank second - tier perpetual bonds were larger, while the credit spreads of some bonds such as securities firms' ordinary bonds and short - term financing bonds narrowed [59]. - **Investment Suggestions**: It is not recommended to trade second - tier perpetual bonds too much currently. For short - term commercial financial bonds, partial profit - taking can be considered. Pay attention to 2Y/AAA - and AA+ commercial financial bonds. Also, pay attention to AMC company - related bonds, as the AMC financial bond market is expected to expand [59][60]. 3.4 Primary Market Tracking - The report provides charts on the issuance of credit bonds, financial bonds, the subscription of urban investment bonds and industrial bonds, the issuance costs, the review and registration of credit bonds, and the completion of registration by the credit bond association, but no specific data analysis is given in the summary part [67][68][72]. 3.5 Secondary Market Observation 3.5.1 "Volume" of Secondary Transactions - The report provides a chart showing the trading volume and number of transactions in the secondary market over time, but no specific data analysis is given in the summary part [83][85]. 3.5.2 "Price" of Secondary Transactions No relevant content provided.