Market Overview - The central bank conducted a 7-day reverse repurchase operation of 26.5 billion yuan at a fixed rate of 1.40%, with a net withdrawal of 14 billion yuan for the day after 40.5 billion yuan of reverse repos matured [3][4]. - The interbank market showed a slight tightening, with the weighted average rate of DR001 rising over 4 basis points to around 1.37% [5][6]. - The latest transaction rate for one-year interbank certificates of deposit was approximately 1.557%, showing a slight decline from the previous day [7]. Key Financial Events - The National Development Bank plans to issue up to 35 billion yuan in financial bonds on March 12 [17]. - Amazon intends to issue bonds to raise at least 37 billion dollars to support its significant investments in artificial intelligence infrastructure [17]. Global Macro Insights - The International Energy Agency (IEA) proposed the largest-ever release of oil reserves to stabilize soaring oil prices amid the conflict between the U.S. and Iran, exceeding the 182 million barrels released during the Russia-Ukraine conflict [15]. - European Central Bank officials expressed differing views on interest rate hikes due to the Iran situation, with some suggesting faster increases while others believe current rates should remain unchanged [15]. Investment Risks - Recent reports indicated various non-standard asset risks, including trust plans and financing lease disputes, highlighting potential vulnerabilities in the market [19].

Group 1: Monetary Policy and Market Operations - The central bank conducted a 190 billion yuan reverse repurchase operation with a fixed rate of 1.40% on March 2, resulting in a net injection of 190 billion yuan for the day [3]. - The interbank market has returned to a loose liquidity state, with the DR001 weighted average rate slightly declining to around 1.31% [5]. - The latest one-year interbank certificates of deposit (CD) transactions are at 1.575%, showing a slight decrease from the previous day [9]. Group 2: Bond Market Performance - The closing prices for government bond futures showed increases: 30-year contracts rose by 0.55%, 10-year by 0.13%, 5-year by 0.09%, and 2-year by 0.02% [12]. - Recent trends in urban investment bonds (AAA) indicate varying yield spreads across different maturities [10]. Group 3: Key News and Developments - Iran announced the closure of the Strait of Hormuz, prompting calls for de-escalation to prevent further economic impacts [12]. - The Sichuan provincial government issued opinions to enhance financial support for rural revitalization, aiming for sustained growth in agricultural loans [13]. - The pilot program for local government special bonds has shown strong progress, with the ten trial provinces completing an average of 94% of their annual quota by the third quarter of 2025, exceeding non-trial provinces by 25 percentage points [13]. Group 4: Bond Issuance and Events - Agricultural Development Bank plans to issue up to 110 billion yuan in financial bonds and 80 billion yuan in 5-year fixed-rate bonds on March 3 [17]. - The Inner Mongolia Autonomous Region will issue 212.4204 billion yuan in 10-year refinancing general bonds on March 9 [17]. - There has been a notable widening of the spread for high-rated Asian dollar bonds, increasing by 4 basis points, marking the largest rise in seven months [17].

1. Report's Industry Investment Rating - Not provided in the content. 2. Report's Core View - The floating - rate bond market in China is currently small in scale, with policy - bank bonds as the main component. Its relative investment value depends on the trend of the benchmark interest rate. It is recommended to allocate more when the benchmark interest rate is expected to rise and sell when it is expected to fall. Currently, the short - term allocation value of floating - rate bonds is not prominent [5]. 3. Summary by Directory 3.1 China's Floating - Rate Bond Market Situation 3.1.1 Main Features of Floating - Rate Bonds - Floating - rate bonds are favored in the "low - interest + high - volatility" environment due to the increased demand for reducing issuance costs and defensive allocation. They have a coupon reset mechanism to hedge against interest - rate risks and can reduce issuers' costs. Their coupon consists of a "benchmark interest rate + fixed spread", and the benchmark is often linked to market - based rates [11]. - Floating - rate bonds have unique advantages in interest - rate risk management. They can save financing costs for issuers in a low - interest environment and hedge against interest - rate and inflation risks for investors [12]. - The basic elements of floating - rate bonds include face value, term, interest - calculation method, and payment frequency. They differ from fixed - rate bonds in interest composition, return certainty, and interest - rate risk exposure [13]. 3.1.2 Development History of the Floating - Rate Bond Market - The development of China's floating - rate bond market has gone through multiple expansion phases. It started in 1995, experienced a start - up exploration period (1995 - 2000), a diversified expansion period (2003 - 2011), a mature optimization stage (2014 - 2021), and an adjustment and restart period (2022 - present) [15]. - In terms of variety structure, policy - bank bonds dominated in the early stage, and asset - backed securities once became the main driver of market growth. Since 2022, policy - bank bonds have regained the dominant position, and bank - type credit bonds have increased in 2025 [20]. - The benchmark interest - rate system has evolved from being concentrated on the one - year fixed - deposit rate to a more diversified system, including LPR, SHIBOR, and DR series [24]. - The issuance - term structure has changed from long - term in the early stage to a more concentrated 2 - 3 - year structure recently [27]. 3.1.3 Stock Size and Structure - As of February 4, 2026, the stock of floating - rate bonds in China is over 80 billion yuan, accounting for 0.44% of the overall bond market. Compared with the US, there is room for growth. The stock is concentrated in the medium - and short - term, with 2 - 3 - year bonds accounting for 68%. Policy - bank bonds have the highest proportion, followed by other financial bonds and asset - backed securities [30]. - The benchmark interest rates of the stock floating - rate bonds are mainly DR007 and LPR, with DR007 - based repo rates accounting for 54% and LPR series accounting for 35% [31]. 3.1.4 Liquidity of the Floating - Rate Bond Market - The secondary - market liquidity of floating - rate bonds is generally low due to complex pricing and valuation, limited market size, and reduced defensive and trading attractiveness. In January 2026, the trading volume of floating - rate bonds was about 7.89 billion yuan, lower than that of mainstream fixed - rate bonds [37]. - There is significant differentiation in liquidity among different types of floating - rate bonds, with policy - bank floating - rate bonds being the most active. In January 2026, the monthly trading volume of policy - bank bonds reached 7.11 billion yuan [40]. 3.2 Pricing and Valuation of Floating - Rate Bonds 3.2.1 Floating - Rate Bond Valuation Model (ChinaBond) - The price of a floating - rate bond is affected by the benchmark interest rate and the spread yield. The valuation model shows that the price is less sensitive to the benchmark interest rate but more sensitive to the spread yield [46]. 3.2.2 Floating - Rate Bond Duration Valuation Formula (ChinaBond) - The spread duration of a floating - rate bond has a more significant negative correlation with the price, similar to the relationship between the fixed - rate bond's yield to maturity and its price [55]. 3.2.3 Yield to Maturity of Floating - Rate Bonds in Actual Trading - The market still refers to comparable fixed - rate bonds when pricing the yield to maturity of floating - rate bonds. The spread of floating - rate bonds reflects the relative change between the long - term yield to maturity and the short - term benchmark interest rate [63]. 3.3 Relative Investment Value of Floating - Rate Bonds in Different Market Environments 3.3.1 Comparison between Floating - Rate Bonds with LPR as the Benchmark and Fixed - Rate Bonds - In most cases, floating - rate bonds linked to LPR underperformed fixed - rate bonds from 2023 to 2026 because the LPR was in a downward trend during the tenure of the floating - rate bond, and the coupon rate gradually decreased, failing to hedge against the increase in the yield to maturity [77]. 3.3.2 Comparison between Floating - Rate Bonds with DR007 as the Benchmark and Fixed - Rate Bonds - Floating - rate bonds underperformed fixed - rate bonds in bull and volatile markets. In bear markets, their performance was divided. When the DR007 central rate increased, floating - rate bonds outperformed; when it decreased, they underperformed [85]. 3.3.3 Floating - Rate Bond Investment Strategy - Investors should break the mindset of regarding floating - rate bonds as only "bear - market tools" and focus on the trend of the benchmark interest rate. Floating - rate bonds are more suitable for short - term investment. They are recommended to be allocated when the benchmark interest rate is expected to rise and sold when it is expected to fall. Currently, their relative cost - effectiveness is not prominent [94].

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

Group 1 - The report discusses floating rate bonds, which have interest rates that adjust periodically based on market benchmarks, highlighting their appeal in a declining interest rate environment [4][41] - The development of floating rate bonds in China has shifted from long-term to medium and short-term maturities, with a focus on financial bonds, particularly policy financial bonds [4][21] - The report indicates that the market for floating rate bonds is expected to expand further due to anticipated interest rate declines and increased volatility [4][29] Group 2 - Floating rate bonds exhibit a defensive characteristic, particularly in bear markets when benchmark interest rates rise, making them more attractive compared to fixed-rate bonds [4][89] - The report emphasizes the importance of the basis interest rate and spread yield, noting that their movements do not always align, which provides a self-hedging feature for floating rate bonds [4][86] - The investment structure of floating rate bonds is diverse, with money market funds being the primary holders due to the bonds' duration advantages [25][22] Group 3 - The pricing of floating rate bonds typically employs comparable bond pricing methods and interest rate swap pricing methods in the primary market [4][54][56] - The report outlines the historical development of floating rate bonds in China, noting significant milestones such as the introduction of Shibor and the reform of the Loan Prime Rate (LPR) [18][21] - The report suggests that the floating rate bond market may see a new wave of expansion driven by policy guidance and financing demands [41][39]

Core Viewpoint - The article discusses the evolution and valuation of floating rate bonds (FRBs) in China, highlighting their unique characteristics and the need for improved valuation methods in the context of interest rate marketization and green finance development [1][2]. Group 1: Market Evolution of Floating Rate Bonds - The development of FRBs reflects the phased characteristics of China's financial system reform, experiencing three expansion phases from 1995 to 2021, with a current outstanding amount exceeding 5 trillion yuan [3]. - The liquidity of the FRB market is notably low, with monthly transaction volumes around 50 billion yuan, accounting for less than 0.2% of the total market [3]. Group 2: Research Objectives and Methodology - The study focuses on the valuation and risk measurement of FRBs, using the Industrial and Commercial Bank of China's 2025 first green financial bond as a representative case [4]. - A dynamic valuation model is established using forward rate predictions, integrating risk measurement through the DV01 metric to assess interest rate sensitivity [4]. Group 3: Key Findings on Valuation and Risk Measurement - Dynamic valuation methods outperform static approaches, with the theoretical price of the selected green bond aligning closely with market performance, while static methods may incur valuation errors exceeding 0.5% [6]. - FRBs exhibit defensive characteristics during rising interest rate cycles, with a price decline of only 0.16% when rates rise by 100 basis points, compared to a 2.3% decline for fixed-rate bonds [6]. - In declining interest rate environments, FRBs show limited upside potential, with price increases of only 0.16% when rates drop by 100 basis points, significantly lower than the 2.3% increase for fixed-rate bonds [6]. - The DV01 measurement indicates a low sensitivity of FRBs to interest rate changes, providing a risk hedging tool for institutional investors [6]. Group 4: Comparison with Fixed Rate Bonds and Policy Implications - The study reveals the complementary nature of FRBs and fixed-rate bonds in asset allocation, suggesting that FRBs are suitable as defensive assets in rising rate environments, while fixed-rate bonds are preferable in declining rate scenarios [7]. - The research contributes to theoretical and policy discussions by proposing a dynamic valuation framework, localizing risk measurement applications, and offering practical insights for asset allocation strategies [7]. Group 5: Market Development and Future Outlook - Despite the advantages of FRBs, the market faces challenges such as weak liquidity, an underdeveloped forward rate derivatives market, and insufficient investor awareness [8]. - Future efforts should focus on enhancing market liquidity, improving valuation systems, and strengthening investor education to promote the adoption of FRBs [8]. - Overall, FRBs are positioned to become significant tools for institutional investors in asset allocation and risk management as China's financial market continues to evolve [8].

Core Viewpoint - The bond market experienced significant fluctuations on October 14, with a net injection of 91 billion yuan in the open market, indicating a supportive funding environment despite ongoing trade tensions and cautious market sentiment [1][5]. Market Performance - Government bond futures opened lower but closed higher across the board, with the 30-year main contract rising by 0.34% and the 10-year main contract increasing by 0.11% [2]. - The yield curve for major interbank bonds shifted downward in the afternoon, with the 10-year government bond yield decreasing by 1 basis point to 1.752% [2]. Overseas Market Trends - In North America, U.S. Treasury yields fell across the board, with the 10-year yield dropping by 6.37 basis points to 4.053% [3]. - In the Eurozone, the 10-year French bond yield decreased by 1 basis point to 3.467%, while the German bond yield fell by 0.8 basis points to 2.635% [3]. Primary Market Activity - The Ministry of Finance's 1-year fixed-rate bond had a weighted average yield of 1.38%, with a bid-to-cover ratio of 2.22 [4]. - The China Development Bank's 2-year, 5-year, and 10-year financial bonds had respective yields of 1.6085%, 1.7564%, and 2.0008%, with bid-to-cover ratios of 2.96, 4.03, and 4.94 [4]. Funding Conditions - The central bank conducted a 910 billion yuan reverse repo operation at a rate of 1.40%, resulting in a net injection of 910 billion yuan for the day [5]. - Shibor rates showed mixed performance, with the overnight rate rising slightly while the 7-day and 14-day rates fell, indicating a divergence in short-term funding conditions [5]. Institutional Insights - Institutions expect a neutral to slightly bullish bond market in October, with potential for a smoother decline post-December [6]. - Credit spreads are anticipated to remain volatile, with a focus on short to medium-term credit bonds as the market adjusts to ongoing economic conditions [7].

Core Viewpoint - The issuance of floating-rate bonds in China has significantly increased, driven by the need for interest rate risk management and policy support, with a year-to-date issuance of 97 bonds totaling 275.57 billion yuan, representing a year-on-year increase of 123.5% [1][2][3] Group 1: Market Dynamics - The floating-rate bond market has seen a resurgence, with policy bank bonds accounting for over 80% of the issuance, while commercial bank bonds and subordinated bonds have also resumed issuance since June, totaling 38.9 billion yuan [1][2] - The newly issued floating-rate bonds exhibit a pattern of high initial trading activity followed by a significant drop in liquidity, with many bonds experiencing zero transactions after the first month [2][3] Group 2: Cost and Risk Management - The primary driver for commercial banks to restart floating-rate bond issuance is the pressure to reduce funding costs amid narrowing net interest margins and increasing market interest rate volatility [3][4] - Floating-rate bonds allow banks to dynamically adjust their funding costs in a declining interest rate environment, helping to alleviate the mismatch between high-interest liabilities and low-interest assets [3][4] Group 3: Future Outlook - Experts predict that floating-rate bond issuance will become normalized, with expectations for a complete yield curve to be established, catering to different institutional funding duration needs [5][6] - The introduction of floating-rate mechanisms in local government bonds could further stimulate demand from banks and other institutions, leading to substantial growth in the floating-rate bond market [6]

Group 1: Report Industry Investment Rating - No relevant content found Group 2: Core Viewpoints of the Report - The issuance scale of floating - rate bonds in China has shown a fluctuating upward trend in the past 30 years, with significant shrinkage in the past three years. The benchmark interest rate has changed from single to diverse, and the dominant bond varieties have alternated between policy - bank bonds and asset - backed securities. The issuance term has evolved from high concentration to dispersion and then back to concentration [29][35][45]. - The valuation of floating - rate bonds is based on the discounted cash flow method (DCF). The key difficulties lie in predicting future coupon payments and selecting the discount rate. The change in the benchmark interest rate and the term spread △y can affect the value of floating - rate bonds [106][109][144]. - Floating - rate bonds are more resistant to decline in a bear market but weaker in a bull market compared to fixed - rate bonds. The absolute value change of floating - rate bonds is complex, and its value is affected by the relative changes of the benchmark interest rate and the market interest rate [161][168][197]. - Based on the analysis of the cash - flow simulation of floating - rate bonds, the market implies that the 1 - year LPR will decline steadily in the next two years and then rise. The floating - rate bonds of China Development Bank imply a stronger expectation of interest - rate cuts than those of Agricultural Development Bank [319][339]. - Considering the expected interest - rate cuts in the second half of the year, the allocation value of floating - rate bonds may be lower than that of fixed - rate bonds [353][356]. Group 3: Summary According to the Directory 1. Floating - Rate Bond Historical Changes and Current Situation - **Historical Changes** - **Issuance Scale**: It has experienced three rounds of expansion and adjustment in the past 30 years. The first round (1995 - 2002) was an exploration period with the first breakthrough to the 10 - billion - level. The second round (2003 - 2013) was a consolidation period with the scale reaching 50 - billion - level. The third round (2014 - 2024) was a mature and fluctuating period with the peak exceeding 60 - billion - level, but it has shrunk significantly in the past three years [35][37]. - **Benchmark Interest Rate**: It has changed from a single 1 - year fixed - deposit interest rate to a diverse range, including 7 - day repo rate average, LIBOR, SHIBOR, LPR, etc. Currently, LPR and DR series have become the mainstream [41][45][48]. - **Bond Varieties**: Policy - bank bonds and asset - backed securities have alternately dominated. Policy - bank bonds were dominant in the early stage, and asset - backed securities took the lead in 2014. Since 2022, policy - bank bonds have regained the dominant position [50][60][61]. - **Issuance Term**: It has evolved from high concentration in the 7 - 10 - year term to dispersion and then back to concentration in the 2 - 3 - year term [65][71][72]. - **Current Situation** - As of the end of 2024, the stock of floating - rate bonds in China was 50.08 billion yuan, accounting for 0.3% of the total bond balance. The top three in terms of bond varieties are policy - bank bonds, ABS, and non - financial corporate credit bonds. The top three in terms of benchmark interest rates are 1 - year LPR, DR007, and 5 - year LPR [78]. 2. Floating - Rate Bond Valuation Method - **Valuation Principle and Theoretical Calculation Method**: It is based on the DCF method. The key is to predict future coupon payments and select the discount rate. The China Foreign Exchange Trade System has a specific valuation formula for non - option - embedded and non - early - repayment floating - rate bonds. However, the simple model does not reflect the market's expectation of future interest rates [106][112][116]. - **Analysis of Factors Affecting Investment Value**: The change in the benchmark interest rate can affect the value of floating - rate bonds. Generally, an increase in the benchmark interest rate leads to a decline in bond value, and vice versa. The impact is greater when the valuation date is farther from the reset date. The term spread △y also affects the bond value, and its impact needs to be considered in combination with the benchmark interest rate [120][139][144]. 3. Relative Value Assessment of Floating - Rate Bonds (Based on Historical Backtracking) - Floating - rate bonds are more resistant to decline in a bear market but weaker in a bull market compared to fixed - rate bonds. In a rising - interest - rate environment, the price decline of floating - rate bonds is smaller than that of fixed - rate bonds. In a falling - interest - rate environment, the performance of fixed - rate bonds is better [161][162][180]. 4. Absolute Value Assessment of Floating - Rate Bonds (Based on Historical Backtracking) - The absolute value change of floating - rate bonds is complex. By observing the historical trends of two floating - rate bonds with DR007 as the benchmark interest rate, it is found that when the benchmark interest rate and the market interest rate change in opposite directions, the value change direction of floating - rate bonds is clear; when they move in the same direction, the value change direction cannot be determined; when they are flat, the value center is stable [197][269][271]. 5. Future Interest - Rate Cut Path Implied by Current Floating - Rate Bonds - By simulating the cash flows of three actively traded floating - rate bonds of Agricultural Development Bank, it is inferred that the 1 - year LPR will decline steadily in the next two years and then rise. The floating - rate bonds of China Development Bank imply a stronger expectation of interest - rate cuts and a faster interest - rate cut speed than those of Agricultural Development Bank [319][339]. 6. Consideration of Floating - Rate Bond Investment Value - Considering the expected interest - rate cuts in the second half of the year, the allocation value of floating - rate bonds may be lower than that of fixed - rate bonds. For DR007 floating - rate bonds, the decline of DR007 may compress the coupon income, and different interest - rate cut scenarios will affect the capital gains of floating - rate bonds [353][356][362].

Report Summary 1. Report Industry Investment Rating No industry investment rating information is provided in the report. 2. Core Viewpoints - The value of floating - rate bonds is affected by factors such as changes in the benchmark interest rate, term spreads, and market expectations of interest rate movements. In a rising interest - rate environment, floating - rate bonds are more resistant to price declines compared to fixed - rate bonds, but they perform relatively weakly in a falling interest - rate environment. - Based on simulations of floating - rate bonds, the market expects the 1 - year LPR to decline steadily in the next two years, reaching a low of 2.8% in April 2027, and then rise to 3.1% by the end of 2027. - Considering the potential for additional interest rate cuts in the second half of the year, the allocation value of floating - rate bonds may be lower than that of fixed - rate bonds. Similarly, the current allocation value of DR007 floating - rate bonds may also be lower than that of fixed - rate bonds [167][177]. 3. Directory Summaries 3.1 China's Floating - Rate Bond Historical Changes - **Issuance Scale**: Over the past 30 years, China's floating - rate bond issuance scale has shown a fluctuating upward trend, with three rounds of expansion and adjustment. The issuance scale reached a historical peak of 637.6 billion yuan in 2021, but has significantly decreased in the past three years [14]. - **Benchmark Interest Rate**: It has evolved from a single benchmark (1 - year fixed - deposit interest rate) to a diversified one. Currently, LPR and DR007 are the mainstream benchmark interest rates [20][27]. - **Bond Types**: Policy - bank bonds and asset - backed securities have alternately dominated the market. Since 2022, policy - bank bonds have once again become the main type of floating - rate bonds [34][41]. - **Issuance Term**: The issuance term has changed from being highly concentrated (7 - 10 years) to gradually diversified and then re - concentrated (2 - 3 years) [46][51]. 3.2 Floating - Rate Bond Valuation Method - **Valuation Principle**: Based on the discounted cash - flow method (DCF), the present value of a floating - rate bond is calculated by discounting future coupon payments and the principal at maturity to the current point in time. However, the difficulty lies in predicting future coupon payments and selecting the discount rate [63][64]. - **Factors Affecting Investment Value**: Changes in the benchmark interest rate and term spreads (∆y) affect the value of floating - rate bonds. Generally, an increase in the benchmark interest rate leads to a decrease in bond value, and vice versa. The impact of term spreads on bond value needs to be analyzed in combination with changes in the benchmark interest rate [77][80]. 3.3 Relative Value of Floating - Rate Bonds - **Comparison with Fixed - Rate Bonds**: In a rising interest - rate environment, the price decline of floating - rate bonds is smaller than that of fixed - rate bonds; in a falling interest - rate environment, floating - rate bonds perform slightly worse than fixed - rate bonds [86][94]. 3.4 Absolute Value of Floating - Rate Bonds (Based on Historical Backtracking) - By observing the historical trends of floating - rate bonds with DR007 as the benchmark, it is found that the value changes of floating - rate bonds are complex and are affected by the fluctuations of the National Development Bank bond rate and DR007. When the two rates move in opposite directions, the direction of the floating - rate bond value change is clear; when they are stable, the value center of the floating - rate bond is stable; when they move in the same direction, the direction of the value change is uncertain [101][134]. 3.5 Future Interest - Rate Cut Path Implied by Current Floating - Rate Bonds - By simulating the cash flows of floating - rate bonds, the market's implied interest - rate cut/ hike path for the 1 - year LPR in the next three years can be predicted. The market expects the 1 - year LPR to decline steadily in the next two years, reach a low of 2.8% in April 2027, and then rise to 3.1% by the end of 2027. The implied interest - rate cut expectations of floating - rate National Development Bank bonds are stronger than those of Agricultural Development Bank bonds [154][162]. 3.6 Investment Value of Floating - Rate Bonds - **1 - year LPR Floating - Rate Bonds**: Considering the potential for additional interest rate cuts in the second half of the year, the allocation value of floating - rate bonds may be lower than that of fixed - rate bonds [167]. - **DR007 Floating - Rate Bonds**: Through scenario analysis, it is found that under most scenarios, the current allocation value of DR007 floating - rate bonds is lower than that of fixed - rate bonds [172][175].