Group 1 - The report emphasizes the importance of nominal growth, with expectations for a moderate increase in nominal GDP growth to around 5.3% in Q2, influenced by high oil prices and a stable inflation index [4][34][35] - Export performance is projected to show some short-term slowdown, but medium-term resilience is expected due to China's industrial chain advantages, which may help offset the impact of high oil prices on external demand [4][17][21] - The real estate market is characterized by a "small spring" effect, where volume increases are driven by price reductions, but the foundation for stabilization remains uncertain, particularly in April [4][22][27] Group 2 - Monetary conditions indicate limited probability for broad monetary easing, with banks potentially shifting their liability structures, leading to a stable funding environment [4][10][11] - The supply-demand dynamics in the bond market are improving, with manageable supply pressures and increased non-bank institutional participation, which is expected to enhance the overall market conditions [4][13][18] - The report suggests that Q2 typically presents a favorable environment for asset management products, indicating a good window for achieving higher portfolio returns [4][5][22] Group 3 - The bond market strategy focuses on maintaining a safety cushion in a "money-rich" environment, emphasizing small-scale trading opportunities and the exploration of excess yield spreads [4][6][7] - The report anticipates that the 10-year government bond yield will fluctuate between 1.75% and 1.85%, while the 30-year bond yield may see core fluctuations around 40-50 basis points [4][7][11] - Attention is drawn to the potential for yield compression and structural opportunities in the bond market, particularly with the expected increase in asset management product sizes in April [4][6][7]

1. Report Industry Investment Rating No information provided in the content. 2. Core Views of the Report - The market anticipates regulatory adjustments to the inter - bank certificate of deposit (CD) quota management method, potentially integrating it with other financial bond quotas. If implemented, the bank's liability - side financing structure may adjust, with a long - term trend of reduced CD supply and a short - term possibility of some banks increasing CD issuance [2]. - The bond market's trading theme may shift back to marginal changes in the domestic liquidity environment. With the central bank's continuous support for liquidity and the fading of cross - quarter factors, the bond market may enter a phased "buying window." The next potential disruptions are the April tax period and the issuance of ultra - long - term special treasury bonds [2][90]. - In terms of strategy, it is recommended to moderately increase the aggressiveness of the portfolio, maintain a portfolio duration of 3 - 5 years, and appropriately increase trading positions in long - term and ultra - long - term bonds. Specific bond varieties such as 250003 and 260003 are recommended, and trading opportunities for 250016, 250022, and 260005 can be noted [2][90]. 3. Summary by Relevant Catalogs 3.1 Important Matters - On March 25, 2026, the central bank conducted 500 billion yuan of 1 - year MLF operations, with a net injection of 5 billion yuan. As of March 2026, MLF has achieved net injections for 13 consecutive months [5]. - On March 27, 2026, the central bank held a financial stability work meeting, emphasizing the need to prevent and resolve systemic financial risks, dispose of key - area financial risks, and strengthen the financial stability guarantee system [9]. 3.2 Money Market 3.2.1 Open Market Operations and Fund Rate Trends - From March 23 to March 27, 2026, the central bank conducted 7 - day reverse repurchase operations, injecting a total of 474.2 billion yuan, with 242.3 billion yuan maturing, resulting in a net injection of 231.9 billion yuan. From March 30 to April 3, 2026, it is expected that 474.2 billion yuan of base currency will be matured and withdrawn [10][11]. - As the cross - quarter period approached last week, the funding situation tightened marginally, with R007 rising above 1.5%. As of March 27, 2026, R001, R007, DR001, and DR007 were 1.387%, 1.507%, 1.318%, and 1.440% respectively, with changes of - 0.90BP, 3.00BP, - 0.28BP, and 1.89BP compared to the close on March 23 [16]. 3.2.2 CD Rate Trends and Repurchase Transaction Situations - In the primary market, last week's inter - bank CD issuance volume was 772.02 billion yuan, with a net financing volume of 73.82 billion yuan. The CD issuance volume of city commercial banks was the largest, with a net financing volume of 47.6 billion yuan. The issuance rates of inter - bank CDs of various banks decreased compared to the previous week [21][23][25]. - In the secondary market, affected by the approaching quarter - end, the overall yield of inter - bank CDs increased. The yield of AAA - rated 1 - month inter - bank CDs decreased by 3.00BP to 1.43%, while the yields of 3 - month, 6 - month, 9 - month, and 1 - year inter - bank CDs increased [27]. 3.3 Bond Market 3.3.1 Primary Market - Last week, 97 interest - rate bonds were issued, with an actual issuance amount of 664.559 billion yuan, a maturity amount of 405.651 billion yuan, and a net financing amount of 258.907 billion yuan. In March 2026, the issuance pace of treasury bonds was slightly behind that of local bonds, but the issuance scales of both were higher than the average levels of the same period from 2022 - 2025 [30]. - As of March 27, 2026, the cumulative net financing scale of special refinancing bonds in 2026 reached 950 billion yuan, mainly in long - term and ultra - long - term tenors. Regions with relatively large issuance scales include Jiangsu, Henan, Sichuan, Inner Mongolia, and Zhejiang [40]. 3.3.2 Secondary Market - Last week, in a weak equity market, long - term bonds performed better overall, and the 10 - 1 - year treasury bond term spread narrowed. The turnover rate of the 10 - year treasury bond active bond increased, while that of the 10 - year CDB bond active bond (250220) decreased [30][44][47]. - The 10 - 1 - year treasury bond term spread reached 56.54BP, and the 30 - 1 - year treasury bond term spread widened to 109.79BP. The spreads between long - term local bonds and long - term treasury bonds and between ultra - long - term local bonds and ultra - long - term treasury bonds widened overall last week [57][59]. 3.4 Institutional Behavior Tracking - Last week, the overall scale of leveraged trading decreased as the quarter - end approached, with an average of about 794 billion yuan. In the cash bond market, large banks became net sellers, small and medium - sized banks adjusted their bond - holding structures, insurance companies' overall buying strength declined marginally, securities firms' selling scale decreased, and funds continued to prefer policy - based financial bonds [63][74]. - In February 2026, the leverage ratio of all institutions in the inter - bank market was about 118.41%, a decrease of about 0.89 percentage points compared to January 2026. The leverage ratios of commercial banks, securities firms, and other institutions in the inter - bank market were about 110.72%, 189.40%, and 130.57% respectively [63]. 3.5 High - Frequency Data Tracking - Last week, the settlement price of rebar futures decreased by 0.58% week - on - week, the settlement price of wire rod futures remained flat, the settlement price of cathode copper futures increased by 1.22% week - on - week, the cement price index increased by 0.91% week - on - week, and the Nanhua Glass Index decreased by 1.67% week - on - week [88]. - The CCFI index increased by 1.64% week - on - week, and the BDI index decreased by 1.22% week - on - week. The wholesale price of pork decreased by 1.56% week - on - week, and the wholesale price of vegetables decreased by 1.85% week - on - week. The settlement prices of Brent crude oil futures and WTI crude oil futures decreased by 3.73% and 3.91% respectively week - on - week. The central parity rate of the US dollar against the RMB was 6.91 [88][89]. 3.6 Market Outlook - Looking ahead, the inflation trading driven by geopolitical conflicts is gradually cooling down, and the bond market's trading theme may return to marginal changes in the domestic liquidity environment. With the central bank's continuous support for liquidity and the fading of cross - quarter factors, the bond market may enter a phased "buying window." Attention should be paid to the April tax period and the issuance pace of ultra - long - term special treasury bonds [2][90]. - In terms of strategy, it is recommended to moderately increase the aggressiveness of the portfolio, maintain a portfolio duration of 3 - 5 years, and appropriately increase trading positions in long - term and ultra - long - term bonds. Specific bond varieties such as 250003 and 260003 are recommended, and trading opportunities for 250016, 250022, and 260005 can be noted [2][90].

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].

Group 1: Report Industry Investment Rating - No information provided Group 2: Core View of the Report - The inflation pressure pushed up by the supply side has a relatively limited impact on the bond market. The current main factor negative to the bond market is the front - loaded and intensified use of fiscal and quasi - fiscal tools. The bank system's liquidity may be relatively abundant, and the cross - quarter fund pressure is expected to be limited. The interest rate is expected to remain in a range - bound pattern. Short - term inflation changes should be observed. There may be opportunities for medium - and long - term bond varieties, and attention should be paid to the narrowing of the term spread [4][20] Group 3: Summary by Directory 1. Funds Price - During the statistical period from March 20 to March 26, 2026, the central bank's net open - market fund injection exceeded 10 billion yuan, with an over - renewal of 5 billion yuan for MLF. The 3M and 6M repurchase operations had a net withdrawal of 30 billion yuan, showing a net withdrawal of medium - term liquidity. The funds price remained stable, with DR001 fluctuating narrowly around 1.32%, and DR007 rising slightly due to the cross - quarter factor. The yield of inter - bank certificates of deposit rebounded slightly from a low level [1][11] 2. Primary Market - During the statistical period, 45 interest - rate bonds were issued in the primary market, with a total actual issuance of 818.7 billion yuan. The issuance scale of treasury bonds increased, while that of local bonds decreased. The issuance term continued to shorten, and the proportion of issuance scale over 10 years dropped below 40% [2][13] 3. Secondary Market - During the statistical period, the yields of most - term treasury bonds declined, and the impact of energy inflation on the bond market weakened. The yield of ultra - long - term bonds, which were most affected before, declined significantly, with the yield of 30 - year treasury bonds dropping from the peak of 2.39% to 2.35% [3][14] 4. Market Outlook - Fundamentally, the inflation pressure pushed up by the supply side has a relatively limited impact on the bond market, and the adjustment range of the 10 - year treasury bond yield is generally 10 - 20bp. Policy - wise, the front - loaded and intensified use of fiscal and quasi - fiscal tools is negative to the bond market. In terms of funds, the bank system's liquidity may be relatively abundant, and the cross - quarter fund pressure is expected to be limited. The interest rate is expected to remain in a range - bound pattern. Short - term inflation changes should be observed. There may be opportunities for medium - and long - term bond varieties, and attention should be paid to the narrowing of the term spread [4][20]

Report Industry Investment Rating - No investment rating information provided in the report Core Viewpoints - Since March, the secondary market trading of local government bonds has recovered, and the spread with treasury bonds has significantly compressed compared to the beginning of the month. The market's exploration efforts are expected to further increase. Attention can be paid to provinces and cities with high or significantly increasing secondary trading activity [6][9]. - Last week, there was a divergence between short - and long - term interest rates in the bond market. Short - term interest rates continued to decline, while long - term interest rates rose mainly due to the inflation expectations brought by high oil prices and better - than - expected economic data [6][33]. - The production side shows a divergence in operating rates, the demand side has mixed performance, and prices show different trends in different sectors [6][43][45]. Summary by Directory 1. Bond Market Special Topic: Focus on the Increase in Local Government Bond Activity - Since March, the secondary trading of local government bonds has warmed up. As of March 22, the secondary turnover rate was 2.9%, up from 2.4% in February. With the stable issuance of local government bonds, a loose funding environment, and the upcoming season of increasing non - bank scale in the second and third quarters, the secondary trading of local government bonds is expected to heat up further. Provinces and cities such as Ningxia, Inner Mongolia, Tibet, Hunan, and Fujian have seen significant increases in turnover rates, reaching 7.9%, 6.4%, 6.1%, 5.8%, and 4.5% respectively since March [6][9]. 2. This Week's Focus in the Fixed - Income Market: Interest - Bearing Bond Supply Remains High Compared to the Same Period 2.1 This Week's Announced Data Concentrates Overseas - The US will announce the March Michigan Consumer Confidence Index, etc., and the Eurozone will announce the March Manufacturing PMI and other data [12][13]. 2.2 This Week's Interest - Bearing Bond Issuance is Expected to be Around 673.6 Billion - Treasury bonds: One 7 - year coupon - bearing general treasury bond with a scale of 175 billion and one 91 - day discount treasury bond are expected to be issued, with a total issuance scale of about 595 billion. - Local government bonds: 75 local government bonds are planned to be issued, with a total issuance scale of 308.6 billion, including new general bonds, new special bonds, refinancing general bonds, and refinancing special bonds. - Policy - financial bonds: The issuance scale is expected to be around 150 billion [13]. 3. Review and Outlook of Interest - Bearing Bonds: Divergence of Short - and Long - Term Yields Continues 3.1 Net Reverse Repurchase Injection Last Week was 6.58 Billion - Last week, the net injection through open - market operations was 24.58 billion. The reverse repurchase injection scale first increased slightly and then fell to a relatively low level. The total injection was 242.3 billion, with 176.5 billion due, resulting in a net injection of 6.58 billion. Coupled with the roll - over of treasury time deposits, the net injection through open - market operations was 24.58 billion. Tax - period funds were stable, and funding rates gradually declined. The repurchase trading volume first decreased and then recovered, with the weekly average at around 84 trillion. The overnight proportion remained at around 91%. The DR001 remained at 1.32%, and the DR007 fell from 1.46% to 1.42% [16][17]. - The net financing of certificates of deposit remained at a low level, and both primary and secondary prices declined. From March 16 to 22, the issuance scale was 759.8 billion (down 86.1 billion from the previous week), the maturity scale was 1162.9 billion (up 154.7 billion from the previous week), and the net financing was - 403.1 billion (down 240.8 billion from the previous week). The long - term proportion decreased to 55%, and secondary yields mostly declined [21]. 3.2 Short - Term Yields Declined while Long - Term Yields Rose - Last week, there was a divergence between short - and long - term interest rates. Short - term interest rates continued to decline, while long - term interest rates rose mainly due to inflation expectations brought by high oil prices and better - than - expected economic data. The 10 - year treasury bond and CDB active bonds changed by 1.6bp and - 0.8bp respectively to 1.83% and 1.93%. The 1 - year, 3 - year, 5 - year, 7 - year, and 10 - year ChinaBond treasury bond yields changed by - 2bp, - 2.5bp, 0.1bp, 0bp, and 1.6bp respectively to 1.26%, 1.35%, 1.56%, 1.7%, and 1.83%. The short - and long - term interest - bearing bonds diverged, with the 5 - year Exim Bank and Agricultural Development Bank bonds declining the most by 3.4bp, and the 10 - year treasury bond rising the most by 1.6bp [6][33][35]. 4. High - Frequency Data: Crude Oil Prices Continue to Rise - Production side: There is a divergence in operating rates. The blast furnace operating rate increased from 78.3% to 79.8%, and the semi - steel tire operating rate increased from 77.7% to 78.3%. The PTA operating rate decreased from 80.1% to 76.3%, and the asphalt operating rate decreased from 23% to 21.8%. The year - on - year decline in the average daily crude steel production in early March was still large, at - 8.5% [43]. - Demand side: Since March, the year - on - year growth of passenger car manufacturers' wholesale and retail sales has turned negative. In the week of March 15, the year - on - year change in manufacturers' wholesale was - 10%, and the year - on - year change in manufacturers' retail was - 19%. In the week of March 15, the land transaction area in 100 large - and medium - sized cities increased to 12.57 million square meters, with the year - on - year growth rate turning positive. The commercial housing sales area in 30 large - and medium - sized cities increased to around 1.7 million square meters, with the year - on - year decline narrowing to - 7.6%. The SCFI and CCFI composite indices changed by - 0.2% and 4.5% respectively [45]. - Price side: Brent oil prices continued to rise, copper and aluminum prices declined, and coal prices were divergent. The power coal active contract futures settlement price remained the same as last week, while the coking coal active contract futures settlement price changed by - 1.4%. In the mid - stream, the building materials composite price index was basically flat, the cement index changed by 1.6%, and the glass index changed by - 5.3%. The output of rebar increased, and the inventory was basically flat at 6.53 million tons, with the futures price changing by - 0.5%. In the downstream consumer sector, vegetable, fruit, and pork prices changed by - 1.6%, - 2%, and - 2.4% respectively [45].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The short - term trading of inflation expectations may have come to a temporary end. Before the next round of price data is released, the market's motivation for re - pricing inflation is limited, and the trading focus is expected to shift from fundamental expectations to the marginal changes in the capital and liquidity environment. The central bank is likely to continue to support liquidity and hedge through other monetary policy tools at key points, but there may still be a "frictional" liquidity shock due to the staggered rhythm of liquidity withdrawal and injection and the end - of - quarter factors. It is recommended to moderately reduce the allocation weight of highly crowded ultra - short - term assets and focus on 3 - 5 - year bonds [2][88]. Summary by Directory 1. Important Matters - In January - February 2026, the cumulative year - on - year growth rate of national fixed asset investment was 1.8%, showing a mild recovery. Manufacturing investment was resilient, and state - owned investment accelerated, while private investment was still in a cautious range [5]. - In March 2026, the 1 - year LPR was 3.00% and the 5 - year - plus LPR was 3.50%, remaining unchanged from the previous month. The reason may be that the comprehensive social financing cost has decreased, and the net interest margin of banks is still under pressure [9]. - On March 20, 2026, the draft of the Financial Law of the People's Republic of China was publicly solicited for opinions. The central bank focuses on the dual - pillar framework of monetary policy and macro - prudential policy, the National Financial Regulatory Administration focuses on micro - prudential and conduct supervision, and the China Securities Regulatory Commission focuses on capital market construction [10][11]. - In March 2026, the Fed maintained the policy interest rate, but the expectation of interest rate hikes increased. The market's pricing of the interest rate cut path in 2026 has converged, and the probability of not cutting interest rates is over 50% by December [12]. 2. Money Market 2.1 Open Market Operations and Fund Interest Rate Trends - From March 16 to 20, 2026, the central bank injected 2423 billion yuan through 7 - day reverse repurchase operations, with 1765 billion yuan due, resulting in a net injection of 658 billion yuan. From March 23 to 27, 2026, the expected maturity and withdrawal of base money is 6923 billion yuan [17]. - Last week, liquidity was still relatively loose, with DR001 fluctuating around 1.32%. As of March 20, 2026, R001, R007, DR001, and DR007 were 1.396%, 1.477%, 1.321%, and 1.421% respectively, with changes of 0.45BP, - 2.64BP, - 0.09BP, and - 4.07BP compared to March 16 [20]. 2.2 Certificate of Deposit Interest Rate Trends and Repurchase Transaction Conditions - Last week, the issuance scale of inter - bank certificates of deposit was 758.69 billion yuan, a decrease of 87.19 billion yuan from the previous week. The maturity scale was 1162.86 billion yuan, an increase of 154.66 billion yuan from the previous week, and the net financing scale was - 404.17 billion yuan [27]. - The issuance interest rates of inter - bank certificates of deposit decreased last week. The average issuance interest rates of 3 - month and 1 - year inter - bank certificates of deposit for state - owned banks were 1.48% and 1.53% respectively, with changes of - 2.00BP and - 2.83BP from the previous week [31]. - In the secondary market, the demand for liquid assets was still strong. The yields of inter - bank certificates of deposit decreased significantly, and the term spread widened to some extent [33]. 3. Bond Market - In the primary market, last week, 98 interest - rate bonds were issued, with an actual issuance amount of 1071.234 billion yuan, a maturity amount of 253.192 billion yuan, and a net financing amount of 818.042 billion yuan. The issuance rhythm of national bonds in 2026 was slightly behind that of local bonds [35]. - In the secondary market, long - term bonds were still weak, while medium - and short - term bonds continued to perform well. The yield curve became steeper. The active bonds of 10 - year national bonds and 10 - year policy financial bonds changed, and the average spread between the active and secondary - active bonds of 10 - year national bonds and 10 - year policy financial bonds widened [35][45]. 4. Institutional Behavior Tracking - In February 2026, the leverage ratio of inter - bank institutions decreased seasonally, and the leverage ratio of securities companies decreased from a high level. Last week, the scale of leveraged trading remained high due to the relatively loose liquidity environment [61]. - In the cash bond market, large banks bought a large amount of national bonds with a maturity of less than 5 years, small and medium - sized banks continued to increase their holdings of national bonds with a maturity of more than 10 years, insurance companies increased their buying efforts, securities companies continued to sell, and funds continued to prefer policy financial bonds [70]. 5. High - Frequency Data Tracking - Last week, the settlement price of rebar futures increased by 5.97% week - on - week, the settlement price of wire rod futures decreased by 5.71% week - on - week, the settlement price of cathode copper futures increased by 2.04% week - on - week, the cement price index decreased by 0.37% week - on - week, and the Nanhua Glass Index increased by 2.02% week - on - week [86]. - The CCFI index decreased by 4.00% week - on - week, and the BDI index increased by 4.75% week - on - week. The wholesale price of pork decreased by 2.53% week - on - week, and the wholesale price of vegetables decreased by 5.02% week - on - week. The settlement prices of Brent crude oil futures and WTI crude oil futures decreased by 1.41% and 1.78% respectively week - on - week. The central parity rate of the US dollar against the RMB was 6.92 [86]. 6. Market Outlook - In the short term, the trading of inflation expectations may have ended. The trading focus will shift to the capital and liquidity environment. The central bank is likely to maintain the overall stability of the capital market, but there may be a "frictional" liquidity shock. It is recommended to reduce the allocation of ultra - short - term assets and focus on 3 - 5 - year bonds [88].

1. Report Industry Investment Rating No information about the industry investment rating is provided in the content. 2. Core Viewpoints of the Report - This week (March 16 - March 20), the bond market's interest rate curve became steeper, with the medium - short end being stronger and the long end being weaker and volatile. The spread of short - duration and weak - quality bonds compressed, and the spread of Tier 2 capital bonds slightly converged. The 10Y - 1Y and 30Y - 10Y treasury bond spreads reached 57BP and 56BP respectively, at a high level in recent years [2][10]. - The central bank's downplaying of the interest rate cut expectation restricts the long - end trend market, while the short - end has advanced under the expectation of loose funds and inter - bank self - discipline, but there may be fluctuations later, and the probability of a significant increase is limited. The current state of long - short end segmentation will not last forever, and there are potential breaking points in the market [2][4]. 3. Summary According to the Directory 3.1 Central Bank's Downplaying of Interest Rate Cut Expectation Restricts the Long - End Trend Market - Since January, the long - end interest rate recovery was mainly driven by large - scale allocation funds. The central bank tilted towards stabilizing growth at the beginning of the year, but inflation risks have not been eliminated, and non - bank institutions are hesitant [10]. - After the recent sharp rise in oil prices, the market has started to price in future inflation paths in advance. In both optimistic and pessimistic scenarios, PPI is expected to return to around 0 or turn positive in March, with the high point around June. The high point of CPI year - on - year will appear in May - June, and in the pessimistic scenario, the high point may approach 2.5% [14]. - The central bank has downplayed the expectation of interest rate cuts since March. It emphasizes the balance between various goals and no longer mentions that the alleviation of bank interest margin pressure creates space for interest rate cuts. In the recent meeting, it only mentioned guiding and regulating the interest rate level according to economic and financial situations, which may be related to inflation uncertainty [15][19]. - The economic data from January to February exceeded market expectations, but the data improvement was affected by multiple factors. The overall high growth of the data in January - February relieved the pressure on GDP growth to maintain 4.5% in Q1, which may make the central bank tend to wait and see, resulting in a lack of a long - end trend market [21][23]. 3.2 Short - End Races Ahead under Loose Funds and Inter - bank Self - Discipline Expectations, with Limited Probability of a Significant Increase in the Future - Despite the central bank's downplaying of interest rate cut expectations, the liquidity remains abundant. The current state may be affected by cash return and fiscal fund replenishment. It is estimated that the excess reserve ratio in March is expected to reach 1.4% [25][28]. - The stable DR001 may be related to the central bank's maintenance of stability. Although the central bank has downplayed the interest rate cut expectation, it also maintains a loose liquidity environment to avoid short - term market impacts [29]. - The current short - end interest rate has largely priced in the expectation of loose funds after the quarter - end. The probability of the short - end interest rate center moving further down is relatively limited, and there may be disturbances if the funds do not become looser or fluctuate after the quarter - end [34][36]. 3.3 Potential Breaking Points of the Long - Short End Segmentation State - In the medium - term, the long - short end segmentation state will not last. There are several potential breaking points: fundamental improvement leading to the central bank tightening liquidity and flattening the curve bearishly, but the current risk is relatively limited; supply shocks affecting the domestic economy and overseas demand, with the impact possibly appearing in mid - April; the central bank advancing the reserve requirement ratio cut due to A - share adjustments, which may bring more opportunities for the long - end, with a higher probability of implementation in Q2 [37][40][46]. - In the short - term, the bond market may continue to fluctuate. Before the quarter - end, the state of uncertain inflation paths and loose funds may continue. Some investors may turn to the middle part of the curve. Recently, 5Y and 7Y interest - rate bonds have performed relatively strongly, and 4 - 5Y Tier 2 capital bonds may still benefit in the short - term [47].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - In mid-March, the two main logical lines in the bond market offset each other, causing interest rate pricing to become entangled. The escalation of the Middle East geopolitical conflict increased the volatility of domestic equity assets, but the decline in market risk appetite did not bring substantial benefits to the bond market due to rising oil prices and increased global inflationary pressure. The yields of 10-year and 30-year treasury bond active bonds remained stable at 1.83% and 2.30% respectively [2][20]. - For the bond market at the end of March, focus on three main lines: inflation, risk appetite, and capital flow. Inflation remains the top concern and the biggest resistance to the current decline in interest rates. Uncertainty in oil prices will keep the bond market worried about inflation. The adjustment of the stock market is a double-edged sword for the bond market, which may lead to both instability and stability. The capital flow will face short - and medium - term tests, and the MLF renewal on the 25th is crucial [3][20]. - The bearish tone set by inflationary pressure has not been broken, and the resistance to a significant decline in interest rates is still large. However, the resilience of the capital flow remains, and the upward space for interest rates is also limited. The range of 1.80 - 1.90% for the 10 - year treasury bond yield may remain stable. The focus of bond market trading may be the band opportunities brought by the fluctuation of risk appetite [5][27]. Summary According to the Directory 1. Multi - empty Confrontation, Entangled Bond Market Pricing - From March 16 - 20, the domestic market risk appetite declined, but the bond market still faced inflationary pressure. The long - end yields of 10 - year, 30 - year treasury bonds and 10 - year CDB bonds experienced a "up - down - up" trend, and the short - end yields of 1 - year and 3 - year treasury bonds decreased [10]. - Key events and factors this week include the release of strong economic data on the 16th, the attack on Iran's South Pars gas field on the 18th leading to rising oil prices, stable capital flow during the tax period from the 16th - 18th, the central bank's statement on the 19th not mentioning interest rate cuts, the Fed's decision to pause rate cuts on the 19th, and the strengthening of the market's expectation of a reserve requirement ratio cut on the 20th [13]. - In the third week of March, the capital flow was the key "stabilizer" of the bond market. Short - term interest - rate bonds and coupon products were popular, and the interest rate and credit curves both steepened. The yields of inter - bank certificates of deposit decreased, and the performance of treasury bonds and CDB bonds varied [14]. - In the credit bond market, short - term general credit bonds were preferred, and 3 - year secondary perpetual bonds performed better [15]. - Next week's bond market concerns include the renewal of 4500 billion yuan of MLF, the navigation situation of the Strait of Hormuz and oil price changes, the performance of the domestic stock market and the net subscription and redemption of various funds, and the release of February industrial enterprise profit data [19]. 2. Maintain Neutral Duration, Small - position Gamble on Band Opportunities - In mid - March, the two main logical lines in the bond market offset each other, and interest rate pricing was in a state of entanglement. The decline in market risk appetite did not bring substantial benefits to the bond market due to rising oil prices and increased inflationary pressure [20]. - For the bond market at the end of March, focus on inflation, risk appetite, and capital flow. Inflation is the top concern and the biggest resistance to interest rate decline. Uncertainty in oil prices will keep the bond market worried about inflation [20][21]. - The adjustment of the stock market is a double - edged sword for the bond market. The net redemption of active equity products and the liability loss of fixed - income + products may lead to bond market adjustments. However, if the stock market becomes more unstable, funds may flow into the bond market for risk - aversion, which is beneficial to the stability of the bond market [22][24]. - The capital flow will face short - and medium - term tests. On the 25th, the 7 - day repurchase supports cross - quarter, and the capital interest rate may rise. The renewal of 4500 billion yuan of MLF on the 25th is crucial. If the medium - and long - term investment continues to be in a net withdrawal state, the market's expectation of monetary easing may be shaken [27]. - The bearish tone set by inflationary pressure has not been broken, and the resistance to a significant decline in interest rates is still large. However, the resilience of the capital flow remains, and the upward space for interest rates is also limited. The range of 1.80 - 1.90% for the 10 - year treasury bond yield may remain stable. The focus of bond market trading may be the band opportunities brought by the fluctuation of risk appetite [5][27]. - For trading portfolios, the overall portfolio duration can be maintained at a neutral level, and the flexible position can participate in the game through 5 - 7 - year interest - rate bonds. For allocation portfolios, after the continuous adjustment since March, the window for gradual entry has reopened, and the 30 - year old treasury bond with a yield of 2.40% and the 30 - year local bond with a yield of 2.54% may have high allocation value [5][28]. 3. As the Quarter - end Approaches, the Scale of Wealth Management Products Declines 3.1 Weekly Scale: A Month - on - Month Decrease of 34.7 Billion Yuan - In the second week of March, the scale of wealth management products increased by 83.1 billion yuan month - on - month to 33.58 trillion yuan. This year's scale increased against the seasonal trend, possibly because the pressure on the liability side of the banking system is not large, and the end - of - quarter indicator assessment is relatively relaxed [30]. - As the end - of - quarter assessment approaches, the scale of wealth management products may still face pressure. From the 16th - 20th, the scale decreased by 34.7 billion yuan to 33.54 trillion yuan. It is expected that the scale will continue to shrink seasonally in the next two weeks, and the contraction amplitude will increase marginally [31]. 3.2 Wealth Management Risks: Significant Drawdown of Equity - Linked Products, Soaring Negative Yield of Products - The drawdown of equity - linked products was significant, and the negative yield of products increased. From March 16 - 20, the equity market declined, and the net value of partial - debt hybrid products declined significantly. The overall negative yield of wealth management products increased, but the negative yield in the past three months was still at a relatively low level [37]. - Affected by the significant drawdown of equity - linked wealth management products, the proportion of broken - net products and products with unmet performance targets increased. The broken - net rate of all products increased by 0.30 percentage points to 0.64%, and the proportion of products with unmet performance targets increased by 0.8 percentage points to 25.6% [46]. 4. Leverage Ratio: Both Inter - bank and Exchange Markets Declined - From March 16 - 20, during the tax period, the capital flow remained resilient. The inter - bank pledged repurchase trading volume decreased, and the average overnight ratio increased slightly. The inter - bank leverage ratio decreased from 107.44% to 107.30%, the exchange leverage ratio decreased from 121.74% to 121.64%, and the non - bank institution leverage ratio decreased from 112.79% to 112.47% [55][57]. 5. Medium - and Long - Term Bond Funds Continuously Compressed Duration - From March 16 - 20, the bond market still faced resistance to rising due to inflation expectations. The duration of medium - and long - term interest - rate and credit bond funds decreased. The weekly average duration of interest - rate bond funds decreased from 3.34 years to 3.27 years, and that of credit bond funds decreased from 2.20 years to 2.19 years. The duration of short - term and medium - short - term bond funds increased, but decreased during the week [64][65][69]. 6. The Issuance Scale of Government Bonds Declined - From March 23 - 27, the planned issuance of government bonds was 483.6 billion yuan, a decrease from the previous week. The actual issuance scale may be 523.6 billion yuan. The net payment scale of government bonds is expected to increase [71]. - As of March 26, the issuance scale of 2 - trillion debt - replacement special bonds was 940.4 billion yuan, with a progress of 47.02%. From January 1 to March 27, the cumulative net issuance of local bonds was 2.4844 trillion yuan, an increase of 61.8 billion yuan year - on - year. The cumulative net issuance of treasury bonds from January 1 to March 24 was 1.2069 trillion yuan, a decrease of 301.7 billion yuan year - on - year. The cumulative net issuance of policy - financial bonds from January 1 to March 23 was 80.7 billion yuan, a decrease of 302 billion yuan year - on - year [75][77][78].

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

1. Report Industry Investment Rating - No relevant information provided in the report. 2. Core Viewpoints of the Report - After the Spring Festival, the bond market showed a differentiated performance. Long - term interest rates rebounded significantly, while short - term interest rates mainly fluctuated downward. The situation where long - and short - term bonds "go their separate ways" is likely to continue [6][9]. - From the perspective of expectations, the market's expectations of price increases and loose funds are strengthening, making it difficult for long - term interest rates to decline and short - term interest rates to rise. The current situation is similar to the scenario where demand - side support is weak during PPI increases [6][9]. - When the carry - over factor and new price - increase factor of PPI deviate, and only the carry - over factor drives the improvement of PPI year - on - year, the bond market mostly fluctuates or declines. The end of the bond market disturbance caused by price - increase expectations is difficult to materialize in the short term [6][10]. - From the perspective of institutional behavior, self - operated institutions and allocation - type funds focus on interest rate levels, while asset management products and trading - type funds focus on spreads. Currently, the latter lacks sufficient funds in the bond market, making it difficult to compress the steep term spread. Institutional behavior may ensure a stable inter - bank liquidity in March, supporting short - term interest rates [6][13]. - In the short term, the pattern of long - and short - term bonds "going their separate ways" will continue. The steep term spread is difficult to compress, and the low short - term credit spread is difficult to widen. It is recommended to pay attention to the riding income of 3 - 4 - year varieties [6][21]. 3. Summary According to the Directory 3.1 Bond Market Weekly Viewpoint - After the Spring Festival, the bond market was differentiated. Long - term interest rates rebounded, and short - term interest rates fluctuated downward. This situation is expected to continue [6][9]. - From the expectation perspective, overseas oil price fluctuations affect PPI, and domestic inter - bank liquidity is expected to remain loose. The current situation is similar to the case of weak demand - side support during PPI increases [9]. - When the PPI carry - over and new price - increase factors deviate, the bond market mostly fluctuates or declines. The end of price - increase expectation disturbances is hard to achieve in the short term [10]. - From the institutional behavior perspective, insufficient funds from asset management and trading - type funds make it difficult to compress the term spread. Institutional behavior may support short - term interest rates in March [13][19]. - The short - term pattern of long - and short - term bonds "going their separate ways" will continue. It is recommended to focus on the riding income of 3 - 4 - year varieties [21]. 3.2 This Week's Focus in the Fixed - Income Market - This week, China will release the March LPR, and relevant economic data from China and the US will be announced. Central banks such as the Fed and the Bank of England will also release interest rate decisions and related information [22][23]. - The planned issuance of interest - rate bonds this week is expected to be around 1.0872 trillion yuan, including 595 billion yuan of treasury bonds, 342.2 billion yuan of local bonds, and about 150 billion yuan of policy - bank bonds [24][25]. 3.3 Review and Outlook of Interest - Rate Bonds - Last week, the open - market operations had a net withdrawal of 251.1 billion yuan. Repurchase trading volume decreased, and most fund interest rates rose. The issuance of certificates of deposit increased, with negative net financing. The secondary yields of most certificates of deposit declined [29][31][37]. - Last week, short - term yields declined, and long - term yields increased, with the spread widening. Short - term bonds benefited from a low deficit level and reduced bank liability pressure, while long - term bonds were affected by strong export data and high inflation expectations [47]. 3.4 High - Frequency Data - On the production side, most operating rates increased, but the daily average crude steel output in late February still had a large year - on - year decline [54]. - On the demand side, the year - on - year growth rates of passenger car wholesale and retail were high. The land transaction area in 100 large - and medium - sized cities and the commercial housing sales area in 30 large - and medium - sized cities were lower than the same period [54]. - In terms of export indices, the SCFI and CCFI composite indices changed by 14.9% and 1.7% respectively [54]. - In terms of prices, crude oil prices continued to rise, copper and aluminum prices diverged, coal prices were also differentiated, the building materials price index rose slightly, and the prices of downstream consumer goods such as vegetables, fruits, and pork declined [55].