Report Industry Investment Rating - The report does not mention the industry investment rating [1] Core Viewpoints - Multiple regulatory indicators form the "fence" for banks' allocation behavior, and banks' "choices" within these fences determine their asset allocation structure [1][3][24] Summary by Relevant Catalog 1. Fence Within: How Regulatory Constraints Determine Banks' Bond Market Choices - **"Ballast Stone" Status of Bank Allocation in the Bond Market**: As the main bond allocators in the bond market, commercial banks' "ballast stone" status is rooted in three logics: scale dominance, counter - cyclical characteristics, and stability under regulatory constraints. As of the end of February 2026, commercial banks' bond allocation in the inter - bank market was 82.16 trillion yuan, ranking first among various institutions, mainly investing in interest - rate bonds. Their counter - cyclical allocation provides a buffer for the market, and regulatory constraints make them natural buyers of interest - rate bonds [2][17][18] - **Commercial Bank Regulation: Macro - Prudential + Micro - Constraints**: Understanding banks' bond allocation behavior requires understanding their regulatory constraints, including the Macro - Prudential Assessment System (MPA), interest - rate risk indicators (ΔEVE/NII), liquidity risk indicators (LCR/NSFR), and capital adequacy ratio. These indicators form the "fence" for banks' allocation behavior [3][24] 2. Central Bank MPA: From Broad Credit to Bond Allocation - **Overview of MPA Indicator System**: MPA reshapes banks' bond - allocation behavior in three dimensions: total amount, structure, and timing. In terms of total amount, the broad - credit growth constraint makes bond investment a "regulatory item" after loan issuance. Structurally, capital - adequacy pressure forces banks' self - operated funds to concentrate on interest - rate bonds with zero risk - weight. Temporally, liquidity assessment indicators create a rigid "quarter - end effect". Under these constraints, banks' self - operated bond - allocation behavior shows characteristics of "quota restricted by credit, concentration on interest - rate bonds, and rhythm restricted by quarter - ends" [4][29] - **Three Transmission Paths of MPA on Banks' Bond Allocation**: - **Broad - Credit Growth Constraint → Limited Bond Allocation Quota**: The upper limit of broad - credit growth locks the growth rate of bond investment, squeezing out bond allocation when loan growth is fast, especially at quarter - ends [32][33] - **Capital - Adequacy Constraint → Decreased Risk Appetite + Increased Supply of Capital Instruments**: To meet capital - adequacy requirements, banks issue secondary - capital bonds and perpetual bonds and increase the allocation of low - capital - occupancy interest - rate bonds while reducing high - capital - occupancy credit bonds. In a period of strict capital regulation, the spread between interest - rate bonds and credit bonds tends to widen [34] - **Liquidity Indicator Constraint → Quarter - End Fund Pulse + Solidified Maturity Preference**: LCR assessment tightens the quarter - end capital market and releases concentrated demand for interest - rate bonds. NSFR constraint restricts banks from lending to non - bank institutions at quarter - ends, inhibits excessive maturity mismatch, and solidifies banks' preference for short - term bonds or long - term interest - rate bonds [35] 3. Triple Constraints of the Banking Risk Supervision System under the Financial Regulatory System - **Capital - Adequacy Constraint: Risk Weights Guide Allocation**: Capital - adequacy ratio is the core regulatory indicator. Risk weights determine the capital occupancy of bonds, and banks prefer bonds with lower risk weights. The investment priority of bond types is: treasury bonds, policy - financial bonds > local - government bonds > general - credit bonds, commercial - financial bonds > secondary - capital bonds > perpetual bonds. When capital adequacy is under pressure, banks compress high - weight assets, and the regulatory rating affects business qualifications and asset structure. Capital - supplement pressure increases the supply of capital instruments [37][44][45] - **Liquidity Risk Indicators: LCR and NSFR's "Rigid Demand" for High - Liquidity Assets**: The core goal of liquidity - risk supervision is to guide banks to match the maturity structure of assets and liabilities. LCR and NSFR are the two pillars. Different bonds have different conversion rates in HQLA and RSF coefficients, which affect banks' bond - type preferences. The comprehensive impact includes a significant quarter - end effect, solidified maturity preference, and structural differentiation [47][51][57] - **Interest - Rate Risk Supervision Indicators: How ΔEVE and ΔNII Constrain Allocation Maturity**: ΔEVE measures the maximum loss of the net present value of banks' assets and liabilities under different interest - rate shocks, and ΔNII measures the impact of interest - rate changes on net interest income. These two indicators jointly restrict large domestic banks' long - bond allocation. Banks tend to "buy short and sell long" to control bond maturity [58][59][60]

Report Investment Rating - No industry investment rating is provided in the report [1] Core Viewpoints - In March, the bond market showed a divergence in short - and long - term trends. Short - term yields mostly declined, while long - term yields mostly rose. On March 27, the yields of 1 - year/3 - year/5 - year/10 - year/30 - year treasury bonds were 1.25%, 1.33%, 1.55%, 1.82%, and 2.35% respectively, down - 7.0BP/ - 5.2BP/+1.0BP/+4.2BP/+7.8BP compared to February 28 [2][80] - From January to February 2026, the total profit of industrial enterprises above designated size reached 1.02 trillion yuan, a year - on - year increase of 15.2%. The conflict between the US and Iran may narrow the decline of PPI, but due to international energy price fluctuations, enterprise profits in March may be under pressure [2][80] - The recent significant appreciation of the RMB is beneficial to the Chinese bond market. Currently, the long - bond positions of trading desks are still relatively small. The year - on - year recovery of PPI is a general market expectation, and the risk of long - term bonds may be low. It is recommended to seize trading opportunities [2][80] Summary by Directory 1. Macro News - From January to February 2026, the total profit of industrial enterprises above designated size was 1.02 trillion yuan, a year - on - year increase of 15.2%. The operating income was 20.84 trillion yuan, a year - on - year increase of 5.3%. The operating cost was 17.68 trillion yuan, a year - on - year increase of 5.0%. The operating income profit margin was 4.92%, a year - on - year increase of 0.43 percentage points [8] - In January - February 2026, both the general public budget revenue and expenditure increased year - on - year. The general public budget revenue was 4.4 trillion yuan, a year - on - year increase of 0.7%. Tax revenue was 3.6 trillion yuan, a year - on - year increase of 0.1%; non - tax revenue was 0.8 trillion yuan, a year - on - year increase of 3.4%. The general public budget expenditure was 4.7 trillion yuan, a year - on - year increase of 3.6% [10] 2. Mid - level High - frequency Data 2.1 Consumption - As of March 22, the daily average retail volume of passenger cars by manufacturers was 5.1 million vehicles, a year - on - year decrease of 7.0%, and the daily average wholesale volume was 6.2 million vehicles, a year - on - year decrease of 3.0% [17] - As of March 27, the total box office revenue of national movies in the past 7 days was 321.205 million yuan, a year - on - year increase of 35.1% [17] - As of March 20, the total retail volume of three major household appliances was 1.003 million units, a year - on - year decrease of 27.2%, and the total retail sales were 2.19 billion yuan, a year - on - year decrease of 28.9% [23] 2.2 Transportation - As of March 28, the average migration scale index in the past 7 days was 472.3, a year - on - year increase of 6.1% [27] - As of March 22, the number of civil aviation flights guaranteed in the current week was 1.23 million, a year - on - year increase of 3.4% [27] - As of March 27, the average daily passenger volume of the subway in first - tier cities in the past 7 days was 40.56 million person - times, a year - on - year increase of 0.6% [27] - As of March 22, the current - week express delivery collection volume was 3.85 billion pieces, a year - on - year increase of 4.4%, the delivery volume was 3.89 billion pieces, a year - on - year increase of 5.5%, the railway freight volume was 80.312 million tons, a year - on - year increase of 1.0%, and the highway truck traffic volume was 54.585 million vehicles, a year - on - year decrease of 0.1% [30] 2.3 Industry - As of March 27, the iron ore inventory in the current week was 176.668 million tons, a year - on - year increase of 17.9%, the rebar inventory was 6.428 million tons, a year - on - year increase of 5.4%, and the float glass enterprise inventory was 73.622 million tons, a year - on - year increase of 9.9% [32] - As of March 13, the daily coal consumption of key power plants in the current week was 4.85 million tons, a year - on - year decrease of 0.2% [35] - As of March 27, the apparent consumption of steel products in the current week was 8.88 million tons, a year - on - year decrease of 3.5%, the apparent consumption of rebar was 2.254 million tons, a year - on - year decrease of 8.1%, and the apparent consumption of wire rods was 0.92 million tons, a year - on - year decrease of 4.3% [35] - As of March 25, the blast furnace operating rate of major steel enterprises in the current week was 75.3%, a year - on - year decrease of 1.3 percentage points. As of March 26, the average asphalt operating rate was 15.0%, a year - on - year decrease of 8.0 percentage points, the soda ash operating rate was 82.0%, a year - on - year increase of 0.6 percentage points, and the PVC operating rate was 76.1%, a year - on - year decrease of 3.0 percentage points [43] 2.4 Real Estate - As of March 27, the total commercial housing transaction area in 30 large - and medium - sized cities in the past 7 days was 2.706 million square meters, a year - on - year decrease of 10.9% [44] 2.5 Prices - As of March 29, the average wholesale price of pork in the current week was 15.6 yuan/kg, a year - on - year decrease of 25.2%, and a decrease of 8.4% compared to four weeks ago [47] - As of March 27, the average wholesale price of vegetables was 4.8 yuan/kg, a year - on - year increase of 0.3%, and a decrease of 9.8% compared to four weeks ago. The average wholesale price of six key fruits was 7.8 yuan/kg, a year - on - year increase of 3.0%, and a decrease of 2.8% compared to four weeks ago [47] - As of March 27, the average price of thermal coal at northern ports was 755 yuan/ton, a year - on - year increase of 11.7%, and an increase of 3.9% compared to four weeks ago. The average spot price of WTI crude oil was 92.7 US dollars/barrel, a year - on - year increase of 34.0%, and an increase of 42.4% compared to four weeks ago [47] - As of March 27, the average spot price of rebar was 3184.4 yuan/ton, a year - on - year decrease of 0.6%, and an increase of 1.6% compared to four weeks ago. The average spot price of iron ore was 810.1 yuan/ton, a year - on - year increase of 1.6%, and an increase of 5.1% compared to four weeks ago. The average spot price of glass was 13.5 yuan/square meter, a year - on - year decrease of 10.8%, and an increase of 1.7% compared to four weeks ago [54] 3. Bond and Foreign Exchange Markets - On March 27, the overnight Shibor was 1.32%, unchanged from March 23 and down 0.30BP from March 16. R001 was 1.39%, down 0.90BP from March 23 and down 1.22BP from March 16; R007 was 1.51%, up 3.06BP from March 23 and down 0.53BP from March 16. DR001 was 1.32%, down 0.24BP from March 23 and down 0.38BP from March 16; DR007 was 1.44%, up 1.39BP from March 23 and down 1.25BP from March 16. IBO001 was 1.37%, up 0.03BP from March 23 and down 0.27BP from March 16; IBO007 was 1.47%, up 0.57BP from March 23 and down 0.97BP from March 16 [56] - The yields of most treasury bonds declined in the past week. On March 27, the yields of 1 - year/5 - year/10 - year/30 - year treasury bonds were 1.25%/1.55%/1.82%/2.35% respectively, down - 0.7BP/ - 1.0BP/ - 1.2BP/ - 3.7BP compared to March 20 and down - 2.7BP/ - 0.8BP/+0.3BP/ - 1.5BP compared to March 13. The yields to maturity of 1 - year/5 - year/10 - year/30 - year China Development Bank bonds were 1.46%/1.69%/1.96%/2.48% respectively, down - 1.3BP/ - 0.7BP/ - 1.1BP/ - 3.7BP compared to March 20 and down - 3.5BP/ - 2.9BP/ - 0.4BP/ - 2.1BP compared to March 13 [61] - On March 27, the yields to maturity of 1 - year/5 - year/10 - year local government bonds were 1.33%/1.69%/2.00% respectively, down - 4.5BP/ - 1.0BP/+1.7BP compared to March 20 and down - 1.5BP/+1.7BP/+1.7BP compared to March 13. The yields to maturity of AAA 1 - month/1 - year, AA+1 - month/1 - year inter - bank certificates of deposit were 1.43%/1.53%/1.45%/1.55% respectively, down - 3.0BP/+1.3BP/ - 3.0BP/+1.3BP compared to March 20 and down - 7.7BP/ - 0.4BP/ - 7.7BP/ - 0.4BP compared to March 13 [68] - As of March 27, 2026, the yields of 10 - year treasury bonds in the US, Japan, the UK, and Germany were 4.44%, 2.38%, 4.97%, and 3.18% respectively, up 16BP/13.5BP/21.4BP/17BP compared to March 13 [73] - On March 27, the central parity and spot exchange rate of the US dollar against the RMB were 6.91/6.91 respectively, up 243/288 pips compared to March 20 and up 134/75 pips compared to March 13 [76] 4. Institutional Behavior - The duration of medium - and long - term pure bond funds has decreased. On March 27, 2026, the median duration of medium - and long - term interest - rate bond funds was about 2.8 years, a decrease of about 0.48 years compared to March 13. The median duration of credit bond funds was about 1.7 years, a decrease of about 0.97 years compared to March 13 [77][78] 5. Investment Recommendations - In 2026, the total supply of the bond market is expected to be stable, and the supply - demand relationship in the bond market is expected to improve. It is predicted that the yield of 10 - year treasury bonds will fluctuate in the range of 1.6% - 1.9%, and the yield of 30 - year treasury bonds will fluctuate in the range of 1.9% - 2.4%. Currently, it is recommended to pay attention to the opportunities of 30 - year old treasury bonds, 10 - year China Development Bank bonds, and long - duration subordinated capital bonds [82] - The Fed's interest rate cut may be postponed to May 2026 or later. China's exports are resilient, and domestic policy rate cuts may be late, possibly in the middle of the year or later. It is expected that bond market investments may be relatively favorable in the second half of the year [82]

1. Report Industry Investment Rating No information provided in the document. 2. Core Viewpoints of the Report - The Ministry of Finance emphasizes expanding domestic demand, investing in people, and open sharing in fiscal policies during the 14th Five - Year Plan period, aiming to promote high - quality economic development [8]. - Hunan Xiangxi Prefecture has achieved zero implicit debt at the prefecture - level, with 77 out of 97 financing platforms exiting, indicating significant progress in debt resolution [12]. - The issuance scale and net financing scale of local government bonds have increased, and the progress of new bonds has exceeded 20%, accelerating compared to the same period last year. The issuance scale of urban investment bonds has risen, and the net financing scale has turned to zero [19][22]. 3. Summary According to Relevant Catalogs 3.1. News Comments - **China Development Forum Emphasizes Fiscal Policy Focus**: The forum emphasizes that fiscal policies in the 14th Five - Year Plan period will focus on expanding domestic demand, investing in people, and open sharing. To expand domestic demand, efforts will be made to boost consumption and expand effective investment. To invest in people, support will be increased, implementation entry - points will be identified, and relevant policies will be improved [8][11]. - **Hunan Xiangxi Prefecture's Debt Resolution**: The state - level implicit debt in Hunan Xiangxi Prefecture has been cleared, and 77 out of 97 financing platforms have exited. In 2025, interest expenses were reduced by 2.8 billion yuan, 42 financing platforms were reduced and exited, and the task of repaying overdue enterprise accounts was over - fulfilled. The state - owned enterprises' "three capitals" were effectively revitalized, with an income of 3.45 billion yuan [12][13]. - **Tracking of Urban Investment Enterprises' "Exit from Platform"**: This week, 14 urban investment enterprises declared to become market - oriented business entities or exit the financing platform list. Since October 2023, a total of 1,084 enterprises have made such declarations, mainly in eastern provinces, with AA + level as the main body rating and district - county level as the main administrative level [15]. - **Early Redemption of Bonds by Urban Investment Enterprises**: This week, 26 urban investment enterprises redeemed bond principal and interest in advance, involving 27 bonds with a total scale of 4.705 billion yuan, a decrease of 1.295 billion yuan compared to the previous value [17]. - **Cancellation of Bond Issuance**: The issuance of the urban investment bond "26 Liujian 03" was cancelled this week, with a scale of 899 million yuan [18]. 3.2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local Government Bonds**: This week, 73 local government bonds were issued, with a total issuance scale of 342.234 billion yuan, a 152.49% increase from the previous value, and a net financing of 213.822 billion yuan, a 230.80% increase. As of March 22, the outstanding local government bond scale was 56.91 trillion yuan. The issuance of new bonds has completed 24.67% of the annual quota, and 45.07% of the 2 - trillion - yuan replacement quota has been issued [19]. - **Urban Investment Bonds**: This week, 210 urban investment bonds were issued, with a total issuance scale of 150.265 billion yuan, an 8.27% increase from the previous value, and a net financing of 0 yuan. As of March 22, the outstanding urban investment bond scale was 14.20 trillion yuan. The overall issuance interest rate of urban investment bonds was 2.06%, a 3.77 - BP decrease from the previous value, and the issuance spread was 60.91 BP, a 4.77 - BP decrease [22]. 3.3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Central Bank's Open - Market Operations and Fund Prices**: The central bank conducted 242.3 billion yuan of reverse repurchase operations this week, with 176.5 billion yuan of reverse repurchases maturing. After considering the 250 - billion - yuan treasury cash fixed - term deposit, the net investment was 315.8 billion yuan. Short - term fund interest rates fluctuated, with overnight and one - week SHIBOR decreasing by 0.20 BP and 4.00 BP respectively, and two - week SHIBOR increasing by 2.80 BP [28]. - **Urban Investment Enterprise Credit Rating Adjustment**: On March 16, Zhongchengxin International upgraded the credit rating of Zhangjiagang Economic Development Zone Holding Group Co., Ltd. from AA + to AAA, with the bond rating unchanged and the outlook remaining stable [28]. - **Local Government Bonds**: This week, the spot trading volume of local government bonds was 468.086 billion yuan, an 8.58% decrease from the previous value. The maturity yields of local government bonds fluctuated, with an average increase of 1.33 BP [28]. - **Urban Investment Bonds**: This week, the trading volume of urban investment bonds was 302.805 billion yuan, a 10.26% increase from the previous value. The maturity yields of urban investment bonds mostly decreased, with an average decrease of 2.03 BP. The spreads of 1 - year and 5 - year AA + urban investment bonds narrowed by 0.29 BP and 0.88 BP respectively, while the spread of 3 - year AA + urban investment bonds widened by 0.64 BP [29]. - **Abnormal Trading of Urban Investment Bonds**: This week, 7 bonds of 6 urban investment entities had 10 abnormal trades, with a decrease in the number of entities, bonds, and abnormal trades compared to the previous value [29]. 3.4. Important Announcements of Urban Investment Enterprises This week, 34 urban investment enterprises issued announcements regarding changes in senior management, legal representatives, directors, supervisors, etc., changes in controlling shareholders and actual controllers, equity/asset transfers, changes in the use of raised funds, and name changes [32].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the content. 2. Core Viewpoints of the Report - In the context of inflation recovery expectations and concerns about ultra - long bond supply, the 30 - 10Y treasury bond term spread has further widened and reached the highest level since 2023. The spread may have some room for compression in the future, but the volatility remains high [1][9]. - In April, the bond market has more positive factors, but the downside space for interest rates is limited, and the market is difficult to break out of the volatile trend. The core driving factors of the current market are still the Middle East situation and inflation expectations [3][22]. 3. Summary According to the Directory 3.1 4 - Month Bond Market Outlook - Recently, due to inflation recovery expectations and concerns about ultra - long bond supply, the 30 - 10Y treasury bond term spread has risen above 50BP, reaching the highest level since 2023. The Chinese government will issue 1.3 trillion yuan of ultra - long special treasury bonds in 2026 [9]. - From the perspective of trading desks, securities firms' short - selling power at the end of the quarter is restricted and they turned to net buyers this week, while funds remain cautious about ultra - long bonds. As of March 27, the cumulative net purchase of 20 - 30Y treasury bonds by funds this month was 670 million yuan [12]. - From the perspective of allocation desks, large - scale banks only buy to stabilize at the end of the quarter, small and medium - sized banks become the main undertakers, and insurance institutions have a weak willingness to allocate. Insurance institutions have a stronger willingness to allocate local bonds than treasury bonds since 2025 and had a net sell of 20 - 30Y treasury bonds in March [16]. - The 30Y - 10Y treasury bond term spread may have some room for compression, but the volatility remains high. Funds' participation in ultra - long bonds this year has been low, and the short - covering of securities firms may drive the repair of ultra - long - end interest rates. For banks, 30 - year treasury bonds are more cost - effective, while insurance institutions' operations are mainly for band trading [18]. - Attention should be paid to the upcoming issuance plan of ultra - long special treasury bonds. In 2024 and 2025, after the plan was announced and before the issuance started, supply concerns drove up ultra - long bond interest rates. After the issuance started, the 30 - year treasury bond interest rate gradually declined. When trading in bands, attention should be paid to preventing the volatility risk of Bond 25 Special 6 [2][20]. - In April, the market has more positive factors, but the downside space for interest rates is limited. The core driving factors are the Middle East situation and inflation expectations. Short - term negative factors have not yet emerged. Positive factors include a loose capital situation and strong allocation desk power, but insurance institutions' purchases of long - term bonds are mainly for band trading [22]. 3.2 3 - Month Bond Market Review 3.2.1 Bond Market Trend Review - In the first week of March, the 10Y treasury bond yield rose 1bp to 1.78%. The bond market first traded risk appetite and Two Sessions expectations, with the short - end performing better than the long - end [24]. - In the second week, the 10Y treasury bond yield rose 3bp to 1.81%. Inflation shocks and inter - bank news alternately disturbed the bond market, with the long - end performing worse than the short - end [24]. - In the third week, the 10Y treasury bond yield rose 2bp to 1.83%. Influenced by the economic start - up, inflation recovery expectations, and external market fluctuations, the bond market fluctuated under the tug - of - war between bulls and bears [25]. - In the fourth week, the 10Y treasury bond yield fell 1bp to 1.82%. Geopolitical risks recurred, and the term differentiation of the bond market continued. The ultra - long end showed resistance to decline at the beginning of the week and then fluctuated [25]. 3.2.2 Capital Situation - The central bank net withdrew 141.68 billion yuan through four major tools in March. The capital price declined in March. The monthly average of R001 decreased by 1BP to 1.39%, and the monthly average of R007 decreased by 5bp to 1.50% [26][27]. 3.2.3 Secondary Market Trends - In March, the yield performance showed term differentiation, and the curve steepened. Except for 3m, 1y, and 3y, the interest rates of other key - term treasury bonds rose, and the term spreads of all key - term treasury bonds widened [33]. - As of March 27, the 10Y treasury bond new - old bond spread narrowed, the 10Y CDB bond new - old bond spread slightly widened after the new bond was listed, and the spread between the second - active and active 30Y treasury bonds first widened and then narrowed [34]. 3.2.4 Bond Market Sentiment - In March, the inter - bank leverage ratio first rose and then fell, the 30Y - 10Y treasury bond spread continued to widen, and the median duration of the full - sample bond funds increased significantly. The 10 - year CDB bond implicit tax rate narrowed overall in March [39]. 3.2.5 Bond Supply - In March, the net financing of interest - rate bonds decreased compared with February and March 2025. The net financing of treasury bonds, local government bonds decreased, and policy - financial bonds changed from net repayment to net financing [51]. - The issuance scale of treasury bonds in March increased both year - on - year and month - on - month. The issuance scale of local government bonds decreased month - on - month and increased year - on - year. The net repayment of inter - bank certificates of deposit increased, and the monthly issuance interest rate decreased significantly [54][56]. 3.3 Economic Data - From January to February, the profits of industrial enterprises above designated size achieved rapid growth. The total profit of industrial enterprises above designated size was 1.02456 trillion yuan, a year - on - year increase of 15.2% [60]. - Since March, second - hand housing transactions and port throughput have been stronger than the Spring Festival seasonality. In terms of infrastructure and price high - frequency data, the asphalt开工率 has been weak, and the prices of crude oil and asphalt have risen sharply and then stabilized [61][62]. 3.4 Overseas Bond Market - The US March composite PMI dropped to 51.4. Concerns about stagflation have increased, and the probability of the Fed raising interest rates within the year has exceeded 50% for the first time. Global bond markets generally declined in March [67][68][69]. 3.5 Major Asset Classes - The CSI 300 index adjusted. As of March 27, it closed at 4477.5 points, a 4.95% decline from February 27. The Nanhua Crude Oil Index strengthened significantly, the US dollar index strengthened slightly, and the Nanhua Pig Index and Shanghai Gold weakened [74]. 3.6 4 - Month Bond Market Calendar - The calendar provides information on liquidity injection and maturity, government bond supply, fundamental data, and important domestic and foreign events from March 30 to April 30, 2026 [79].

Report Industry Investment Rating - Not provided in the document Core Viewpoints - The scale of operating financial debts of financing platforms may decline to 5.7 trillion yuan or less, and the National People's Congress Financial and Economic Committee emphasizes increasing support for resolving "non-standard" and "dual non" debts [7]. - The National People's Congress Financial and Economic Committee proposes to study and implement measures to maintain a reasonable macro - tax burden level and sustainable fiscal operation, and to explore the establishment of a tax - expenditure system [8][9]. - Hunan will use policies such as new local government special bonds to increase the repayment of "chain debts", and the scale of special bonds for "debt clearance" nationwide is expected to remain at a high level this year [10]. - This week, 7 urban investment enterprises declared to become market - oriented operating entities or withdraw from the financing platform list, and 18 urban investment enterprises prepaid bond principal and interest [11][14]. Summary by Directory 1. News Review - **Financing platform debt and tax - system reform**: As of the end of 2025, compared with the beginning of 2023, the number and debt scale of financing platforms decreased by more than 70%. The operating financial debt scale of financing platforms may decline to 5.7 trillion yuan or less. The National People's Congress Financial and Economic Committee emphasizes increasing support for resolving "non - standard" and "dual non" debts. The committee also proposes to study the establishment of a tax - expenditure system to improve the standardization of the tax system and the effectiveness of tax macro - regulation [7][8][9]. - **Hunan's debt repayment measures**: Hunan will use new local government special bonds and other policies, explore ways such as盘活存量 assets and debt replacement to raise repayment funds, and increase the repayment of "chain debts". The scale of special bonds for "debt clearance" nationwide may range from 300 billion to 600 billion yuan this year [10]. - **Urban investment enterprises' "exit from platform"**: This week, 7 urban investment enterprises declared to become market - oriented operating entities or withdraw from the financing platform list, with a decrease in quantity compared to the previous period. Since October 2023, a total of 1,062 enterprises have made such declarations [11][12]. - **Pre - payment of urban investment bonds**: This week, 18 urban investment enterprises prepaid bond principal and interest, involving 19 bonds with a total scale of 2.412 billion yuan, a decrease of 473 million yuan compared to the previous period [14]. 2. Issuance of Local Government Bonds and Urban Investment Enterprise Bonds - **Local government bonds**: This week, the issuance scale and net financing scale of local government bonds both decreased. New bonds completed over 20% of the quota, and about 40% of the 2 - trillion - yuan replacement quota was issued. The weighted average issuance term was 17.95 years, and the weighted average issuance interest rate increased. Guangdong had the largest issuance scale [15][16]. - **Urban investment bonds**: The issuance scale of urban investment bonds decreased, and the net financing scale turned positive. The issuance interest rate increased, and the issuance spread narrowed. The issuance term was mainly 5 - year, and the issuer's main body level was mainly AAA. This week, 3 overseas urban investment bonds were issued with a total scale of 3.266 billion yuan [20]. 3. Trading of Local Government Bonds and Urban Investment Enterprise Bonds - **Fund situation**: The central bank conducted 277.6 billion yuan of reverse repurchase operations this week, with a net withdrawal of 1.4474 trillion yuan. Short - term capital interest rates mostly declined [25]. - **Local government bonds**: The spot trading scale of local government bonds was 647.56 billion yuan, an increase of 26.24% compared to the previous period, and the maturity yields fluctuated [25]. - **Urban investment bonds**: The trading scale of urban investment bonds was 436.937 billion yuan, an increase of 36.12% compared to the previous period. The maturity yields decreased by an average of 2.76BP, and the credit spreads of 1 - year, 3 - year, and 5 - year AA+ urban investment bonds narrowed [25]. - **Abnormal trading of urban investment bonds**: There were 7 abnormal trades of 7 bonds from 6 urban investment entities, with a decrease in the number of entities, bonds, and abnormal trades compared to the previous period [26]. 4. Important Announcements of Urban Investment Enterprises - This week, 30 urban investment enterprises issued announcements regarding changes in senior management, legal representatives, directors, supervisors, etc., changes in controlling shareholders and actual controllers, equity/asset transfers, and name changes [30][31][32]

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - In 2026, China will continue to implement a more proactive fiscal policy and a moderately loose monetary policy, aiming to enhance macro - economic governance efficiency. The proactive fiscal policy has five highlights: maintaining a high fiscal deficit, expanding expenditure, optimizing the expenditure structure, resolving local government debt risks, and promoting fiscal and tax system reform [6][7][9]. - Xinjiang has fully resolved its stock of implicit debts, and Siping and Tonghua in Jilin have declared zero implicit debts. This indicates significant progress in debt resolution in these regions [6][17][18]. - During the statistical period, 15 urban investment enterprises declared themselves as market - oriented operating entities or exited the financing platform list, and 18 urban investment enterprises prepaid bond principal and interest [6][19][22]. - The issuance scale of local government bonds decreased, while the issuance scale of urban investment bonds increased, but the net financing scale decreased. The trading volume of both local government bonds and urban investment bonds increased [6][23][29]. 3. Summary by Relevant Catalogs 3.1 News Reviews 3.1.1 Five Highlights of the Proactive Fiscal Policy in the Government Work Report - Fiscal deficit remains high: The budget deficit rate in 2026 is planned to be around 4%, with a deficit scale of 5.89 trillion yuan. The central government's deficit ratio reaches a new high, and the special treasury bond scale decreases. The general deficit scale is 13.89 trillion yuan, with a slightly lower deficit rate. The central and local government leverage ratios increase, and the debt structure is optimized [9]. - Expand expenditure and improve transfer payments: The general public budget expenditure in 2026 will reach 30 trillion yuan. The central budget - inner investment increases, and the central transfer payments to local governments exceed 10 trillion yuan. A pilot project on integrating and coordinating the use of transfer payment funds is proposed [11]. - Optimize the expenditure structure: Focus on boosting consumption, investing in people, and improving people's livelihoods. Allocate 100 billion yuan for fiscal - financial coordinated special funds to expand domestic demand. Explore the preparation of a full - scale government investment plan, and guide private investment to new tracks [12][13]. - Resolve local government debt risks: Continue to resolve local government debt risks in an orderly manner, optimize the replacement rhythm, and build a long - term debt management mechanism. The implicit debt scale may drop to 3.5 trillion yuan by the end of 2026 [14]. - Promote fiscal and tax system reform: Increase the proportion of state - owned capital income collection, expand the scope of zero - based budget reform pilots, and improve the local tax system, including promoting consumption tax reform [16]. 3.1.2 Xinjiang and Some Cities in Jilin Resolve Implicit Debts - Xinjiang announced the full resolution of its stock of implicit debts, becoming the fourth province to achieve full - scale zero implicit debts. Siping and Tonghua in Jilin also declared zero implicit debts [17][18]. 3.1.3 Urban Investment Enterprises "Exit the Platform" - During the statistical period, 15 urban investment enterprises declared themselves as market - oriented operating entities or exited the financing platform list. Most of them are from eastern provinces, with AA + ratings and district - county administrative levels [19]. 3.1.4 Pre - payment of Bonds by Urban Investment Enterprises - 18 urban investment enterprises prepaid bond principal and interest, involving 19 bonds with a total scale of 2.885 billion yuan. Most of the enterprises have AA ratings [22]. 3.2 Issuance of Local Government Bonds and Urban Investment Enterprise Bonds 3.2.1 Local Government Bonds - The issuance scale and net financing of local government bonds decreased. A total of 76 local bonds were issued, with a scale of 578.556 billion yuan. The weighted average issuance term was 18.27 years, and the issuance cost increased [23]. 3.2.2 Urban Investment Bonds - The issuance scale of urban investment bonds increased, but the net financing decreased. A total of 197 urban investment bonds were issued, with a scale of 135.796 billion yuan. The overall issuance interest rate decreased, and the issuance spread narrowed. Four overseas urban investment bonds were issued, with a scale of 3.617 billion yuan [29]. 3.3 Trading of Local Government Bonds and Urban Investment Enterprise Bonds - The central bank had a net capital injection of 935.5 billion yuan. The short - term capital interest rates showed mixed trends. There were no adjustments to urban investment ratings or credit risk events during the statistical period [33]. - The trading volume of local government bonds increased by 90.66% to 877.793 billion yuan, and the maturity yields mostly increased. The trading volume of urban investment bonds increased by 59.86% to 436.937 billion yuan, and the maturity yields mostly decreased. The spreads of 1 - year, 3 - year, and 5 - year AA + urban investment bonds narrowed [35]. - There were 9 abnormal transactions of 9 bonds of 8 urban investment entities, with a decrease in the number of entities, bonds, and transactions compared to the previous period [35]. 3.4 Important Announcements of Urban Investment Enterprises - 86 urban investment enterprises announced changes in senior management, legal representatives, directors, supervisors, controlling shareholders, actual controllers, and equity/asset transfers [39].

Report Industry Investment Rating - Not provided in the report Core Viewpoint - From March 16 - 20, 2026, the central bank's short - term reverse repurchase had a net injection of 658 billion yuan, and the treasury cash fixed - term deposit had an injection of 180 billion yuan. During March 16 - 22, 2026, the net payment scale of government bonds increased, the yield to maturity of inter - bank certificates of deposit (CDs) declined, the net financing of inter - bank CDs was negative, and the average leverage ratio of the inter - bank bond market decreased slightly. From March 23 - 29, 2026, the expected net payment scale of government bonds is 566.4 billion yuan, and the maturity scale of inter - bank CDs is about 698.2 billion yuan. On March 20, 2026, the median durations of medium - long - term and short - term interest - rate style pure bond funds decreased by 0.23 years and 0.13 years respectively on a weekly basis [2]. Summary by Directory Fundamentals - During the tax - payment period, the central bank's 7 - day reverse repurchase had a small net injection. From March 16 - 20, 2026, the central bank's 7 - day reverse repurchase had an injection of 242.3 billion yuan and a withdrawal of 176.5 billion yuan, achieving a net injection of 65.8 billion yuan; the treasury cash fixed - term deposit had an injection of 180 billion yuan. The maturity scale of the Medium - term Lending Facility (MLF) in March is 450 billion yuan [6]. - The average fund interest rates decreased slightly on a weekly basis. From March 16 - 20, 2026, the average values of DR001 and R001 were 1.32% and 1.40% respectively, down 1.2 basis points and 0.2 basis points compared with March 9 - 13; the average values of DR007 and R007 were 1.43% and 1.49% respectively, down 2.3 basis points and 1.4 basis points compared with March 9 - 13 [6]. - The net financing scale of government bonds increased. From March 16 - 22, 2026, the net financing of government bonds was about 306.3 billion yuan, an increase of about 468.5 billion yuan compared with March 9 - 15, 2026. Among them, the net financing of treasury bonds was about 140.9 billion yuan, and the net financing of local government bonds was about 165.4 billion yuan. From March 23 - 29, 2026, the expected net financing of government bonds is about 566.4 billion yuan, including about 414.8 billion yuan of net financing of treasury bonds and about 151.6 billion yuan of net financing of local government bonds [7]. - The pressure on the cross - quarter fund situation is expected to be limited, but the frictional disturbances on the fund situation increased on a weekly basis. In March, with the net withdrawal of the central bank's outright reverse repurchase and the relatively small scale of 7 - day reverse repurchase injection, the fund interest rates still remained relatively stable, which may reflect that the liquidity of the current banking system is still relatively abundant. Also, from March 18, the 14 - day funds entered the cross - quarter range, but from the trend of the R014 fund interest rate, it only increased marginally by 6BP to 1.59% on March 18 and then declined steadily, which may also indicate that the pressure on the cross - quarter fund situation in March is limited. However, at the end of the quarter, attention should be paid to the possible phased increase in the volatility of fund interest rates. Specifically, first, the fund lending behavior of banks at the end of the quarter may be affected by the end - of - quarter assessment; second, the payment scale of government bonds from March 23 - 29 increased marginally, increasing the frictions on the fund situation; third, attention should be paid to the emotional disturbances on the fund situation caused by the MLF operation scale in March [8]. Inter - bank Certificates of Deposit - The yield to maturity of inter - bank CDs continued to decline. As of March 20, 2026, the yield to maturity of 1M and 3M inter - bank CDs were 1.4550% and 1.4650% respectively, down 4.5 basis points and 3.5 basis points compared with March 13, 2026; the yield to maturity of 1Y inter - bank CDs was 1.5150%, down 1.8 basis points compared with March 13, 2026 [9]. - The net financing of inter - bank CDs was negative. From March 16 - 22, 2026, the net financing of inter - bank CDs was about - 403.1 billion yuan. The expected maturity repayment amount of inter - bank CDs from March 23 - 29, 2026 is 698.2 billion yuan, and the maturity repayment amount of the previous week was 1162.9 billion yuan, with the pressure of maturity renewal decreasing [9]. Institutional Behavior - The average leverage ratio of the inter - bank bond market decreased slightly. From March 16 - 20, 2026, the average leverage ratio of the inter - bank bond market was 107.26%, and the average value calculated from March 9 - 13, 2026 was 107.42%. Among them, the calculated leverage ratios of the inter - bank bond market on March 20 and March 13, 2026 were about 107.30% and 107.40% respectively [10]. - Based on the calculation results, the durations of medium - long - term interest - rate pure bond funds and short - term interest - rate pure bond funds both decreased marginally. On March 20, 2026, the median duration (MA5) of medium - long - term interest - rate style pure bond funds was 4.30 years, down 0.23 years on a weekly basis, at the 73.8% quantile since the beginning of 2022; the median duration (MA5) of short - term interest - rate style pure bond funds was 1.94 years, down 0.13 years on a weekly basis, at the 70.2% quantile since the beginning of 2022 [10].

1. Report Industry Investment Rating There is no information about the industry investment rating in the provided content. 2. Core Viewpoints of the Report - The intensity of selling long - term and ultra - long - term bonds by trading desks did not increase this week, which limited the rapid rise of ultra - long - term bond yields to some extent. The willingness of allocation desks to buy long - term and ultra - long - term bonds is still relatively limited, and the 10Y Treasury bond yield may remain volatile at a high level in the short term. It is recommended to moderately participate in long - term bonds during adjustments, and pay attention to the opportunities of spread compression [1][2][10][16]. - This week, affected by the economic start - up, inflation recovery expectations, and external market fluctuations, the bond market was in a tug - of - war between bulls and bears, with intensified fluctuations. The yields of 10Y and 30Y Treasury bonds both rose by 2bp [9]. - The economic data from January to February generally improved, with obvious upward industrial growth and moderate consumption recovery. Since March, automobile consumption has been sluggish, while port throughput has been strong [62][63]. - The Federal Reserve maintained the interest rate range of 3.5% to 3.75%, and the dot - plot implied a hawkish tendency. Overseas bond markets, including US and European bonds, declined, and most emerging market bond markets also fell [71][72]. - The prices of live pigs and Shanghai gold fell this week. The performance of major asset classes was: crude oil > Chinese - funded US dollar bonds > Chinese bonds > rebar > US dollar > CSI 300 > convertible bonds > Shanghai copper > CSI 1000 > Shanghai gold > live pigs [77]. 3. Summary by Relevant Catalogs 3.1 Review and Outlook of the Bond Market - This week, the bond market fluctuated sharply due to the economic start - up, inflation recovery expectations, and external market fluctuations. The yields of 10Y and 30Y Treasury bonds rose by 2bp. The market showed different trends on different days, affected by various factors such as economic data, oil prices, and equity market performance [9]. - From the perspective of trading desks, the selling intensity of long - term and ultra - long - term bonds did not increase. From the perspective of allocation desks, large - scale banks increased their allocation of short - term bonds, and insurance institutions began to increase their allocation of ultra - long - term Treasury bonds in the past two weeks. The 10Y Treasury bond yield may remain volatile at a high level in the short term. It is recommended to moderately participate in long - term bonds during adjustments and pay attention to spread compression opportunities [1][10][14][16]. 3.2 Bond Market Review 3.2.1 Funding Situation - The central bank made a net injection of funds this week, and the funding sentiment was balanced. From March 16th to March 20th, the central bank's open - market net injection was 2458 billion yuan. The R001 and DR001 rates changed by +0.4bp and - 0.09bp respectively compared with March 13th, reaching 1.40% and 1.32%. The 3M certificate of deposit issuance rate first decreased, then increased, and then decreased again. The FR007 - 1Y swap rate first increased, then decreased, and then rebounded. As of March 20th, the 3M national - share bank acceptance bill transfer discount price was 1.43%, down 5bp from March 13th [20][23]. 3.2.2 Secondary Market Trends - This week, bond yields fluctuated sharply, and short - term bonds performed better. The yields of 3m, 1y, 3y, and 20y Treasury bonds declined, while those of 5y, 10y, and 30y Treasury bonds rose. Except for the 7Y - 5Y and 3Y - 1Y, the term spreads of other key - term Treasury bonds widened. As of March 20th, the yields of 10Y and 30Y Treasury bonds rose by 2bp compared with March 13th, reaching 1.83% and 2.39% respectively, and the term spread between them rose by 1bp to 56bp [25]. 3.2.3 Bond Market Sentiment - As of March 20th, the weekly turnover rate of 30Y Treasury bonds fell to 31%. The spread between 50Y - 30Y Treasury bonds widened by 2bp compared with March 13th, and the spread between 30Y - 10Y Treasury bonds widened significantly by 0.6bp to 56bp. The inter - bank leverage ratio dropped to 107.4%, and the exchange leverage ratio dropped to 121.7%. The median duration of medium - and long - term pure - bond funds increased by 0.02 years to 2.57 years compared with March 13th, while the median duration of interest - rate bond funds decreased by 0.03 years this week. The implied tax rate of 10 - year China Development Bank bonds narrowed [38]. 3.2.4 Bond Supply - This week, the net financing of interest - rate bonds increased significantly. From March 16th to March 20th, the net financing of interest - rate bonds was 818 billion yuan, a significant increase of 562.8 billion yuan compared with last week. The net financing of Treasury bonds and local government bonds increased, while that of policy - financial bonds decreased. The net financing of Treasury bonds was 525 billion yuan, an increase of 521.9 billion yuan; the net financing of local government bonds was 255.4 billion yuan, an increase of 147.3 billion yuan; the net financing of policy - financial bonds was 3.77 billion yuan, a decrease of 10.63 billion yuan. The net repayment of inter - bank certificates of deposit increased, and the average issuance rate continued to decline, dropping 1.7bp to 1.53%. Next week, a 7Y coupon - bearing Treasury bond 260007.IB will be newly issued [52][55][59]. 3.3 Economic Data - The economic data from January to February generally improved, with the year - on - year increase of industrial added value of above - scale industries at +6.3%, the year - on - year increase of social consumer goods retail at +2.8% (forecast +2.6%), and the year - on - year increase of fixed - asset investment (excluding rural households) at +1.8% (expected - 5.0%). The LPR quotation has remained unchanged for 10 consecutive months. Since March, automobile consumption has been relatively sluggish, while port throughput has been stronger than the Spring Festival seasonality. Industrial production has continued to improve marginally [62][63]. 3.4 Overseas Bond Market - The Federal Reserve maintained the federal funds rate target range at 3.5% to 3.75%. The dot - plot implied a hawkish tendency. Overseas bond markets, including US and European bonds, declined, and most emerging market bond markets also fell. The 2Y US Treasury bond rate rose 15bp to 3.88%, the 10Y US Treasury bond rate rose 11bp to 4.39%, and the 10Y - 2Y US Treasury bond spread narrowed 4bp to 51bp [71][72]. 3.5 Major Asset Classes - The CSI 300 index adjusted this week, closing at 4567.0 points as of March 20, 2026, a decrease of 2.19% compared with March 13th. This week, the Nanhua Crude Oil Index continued to rise, while the Nanhua Live Pig Index, Shanghai Gold, and Shanghai Copper all declined. The performance of major asset classes was: crude oil > Chinese - funded US dollar bonds > Chinese bonds > rebar > US dollar > CSI 300 > convertible bonds > Shanghai copper > CSI 1000 > Shanghai gold > live pigs [77]. 3.6 Bond Market Calendar - From March 23rd to March 27th, there will be liquidity injections and expirations, government bond supplies, and the release of fundamental data. There are also important domestic and international events, such as the Boao Forum for Asia Annual Conference 2026 and the 14th WTO Ministerial Conference [82].

Core Insights - The report emphasizes the impact of self-discipline in interbank deposits, the steepening of the yield curve, and the absence of a turning point in monetary policy, suggesting that adjustments in the long end are manageable. This creates opportunities to capitalize on the certainty of the short end and to speculate on the narrowing of term spreads [6][11][12]. Weekly Core Views and Bond Market Strategy - The main trading logic for the week revolves around three key themes: escalating geopolitical conflicts driving up oil prices, strong economic data from January and February reinforcing recovery expectations, and the ongoing impact of self-discipline in interbank demand supporting short-end performance [11][12]. - The self-discipline in interbank deposits is expected to lead to lower issuance rates for interbank certificates of deposit, as banks anticipate a decline in funding costs. This trend is further supported by a decrease in the yield on demand deposits, enhancing the demand for liquid alternative assets like interbank certificates [11][12]. - Geopolitical tensions have led to rising oil prices, creating temporary disturbances in the bond market. However, the report suggests that the actual impact of external inflation on domestic fundamentals and monetary policy remains limited, with the central bank likely to maintain a moderately accommodative stance [12][13]. - Economic data from January and February shows structural recovery, particularly in infrastructure investment, which supports investment stability. However, consumer recovery remains weak, and the real estate sector is still in a bottoming phase, indicating that domestic demand is insufficient [12][13]. Future Market Strategy - The report suggests maintaining a steep yield curve, with support for the short end and manageable risks for the long end. It recommends extending duration to speculate on opportunities for curve flattening. The strategy includes continuing to allocate to 1-year AA- certificates of deposit to capture short-end certainty [13]. - In terms of credit strategy, it is advised to continue investing in 3-5 year perpetual bonds, with a tilt towards 5-year products as the 3-year options approach their profit-taking points. High-yield real estate bonds are also recommended for defensive positioning against market volatility [13]. - The overall bond market is characterized by differentiation, with the short to medium end performing strongly while the long end experiences adjustments. The report notes a slight decline in funding rates during the week [13][16].

1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The report tracks the supply and trading of local government bonds, including the rhythm of primary supply and characteristics of secondary trading, to provide an overview of the local government bond market [3][4] 3. Summary by Relevant Catalogs 3.1 Primary Supply Rhythm - Last week (March 9 - 13, 2026), local government bonds issued a total of 135.544 billion yuan, including 17.734 billion yuan in new special bonds and 43.159 billion yuan in refinancing special bonds. "Repaying local bonds" and "special new special bonds" are the main investment areas for special bond funds [3][10] - As of now, about 238.582 billion yuan of special refinancing special bonds have been issued in March, accounting for 25.75% of the local bond issuance scale for the month [3][10] - In terms of issuance pricing, the issuance interest rates of 10 - year, 20 - year, and 30 - year local bonds increased by 2.2BP, 1.2BP, and 1.6BP respectively. The spread between new bonds over 20 years and the same - term treasury bonds significantly compressed, with a decline of over 3BP, especially for the 30 - year variety, where the spread dropped to 16.9BP, similar to the level in late January [3][15] - In March, Guangdong and Inner Mongolia were the main regions for local bond issuance. Among regions with large issuance scales, newly issued bonds in Fujian are basically over 10 years, and the issuance scale of 20 - 30 - year varieties in Guangdong and Fujian exceeded 20 billion yuan. Notably, the local bond issuance interest rates in Inner Mongolia and Fujian reached 2.32% and 2.39% respectively [3][17] 3.2 Secondary Trading Characteristics - 7 - 10 - year local bonds are relatively resistant to decline. Last week, the 7 - 10 - year and over 10 - year local bond indexes fell by 0.07% and 0.28% respectively. The decline of 7 - 10 - year varieties was slightly less than that of the same - term treasury bonds and credit bonds. The inflation expectation increase led to a significant rise in ultra - long - term interest rates, and the decline of over 10 - year treasury bonds reached 1.32%, far exceeding other bond types and terms. In addition, high - grade ultra - long - term credit bonds still showed positive cumulative returns in the past four weeks [4][21] - The trading activity of local bonds increased. In terms of provinces, the trading volume of government bonds in Guangdong, Hunan and other places was relatively high. Moreover, the trading term of local bonds significantly lengthened. The average trading term in Hunan, Hebei and other provinces was over 25 years, and the trading yield exceeded 2.4% [4][21]