1. Report Industry Investment Rating No information about the report industry investment rating is provided in the given content. 2. Core Viewpoints of the Report - The long - end of secondary capital bonds and perpetual bonds showed significant strength last week, with the long - end yield decline more prominent than the short - end. The short - end yield of secondary and perpetual (二永) bonds has been at a historical low, making further decline difficult. Institutions started to bet on medium - and long - duration bonds, with the 7 - year bond being the most favored. The 7 - year spread quantile is still relatively high, indicating potential for further betting [2][9][10]. - The curves of general credit bonds and urban investment bonds have flattened. The general credit bond curve shows characteristics of "flattened short - end, steepened middle - section, and declined long - end", while the urban investment bond curve shows "flattened short - end, locally steepened middle - section, and differentiated long - end" [3][11][13]. - In terms of trading volume, short - end trading volume increased, while the trading volume of general credit bonds decreased slightly. High - yield urban investment bond trading was mainly concentrated in regions such as Beijing, Shandong, Hunan, and Guangdong [15][17][22]. - In primary issuance, the net financing of urban investment bonds in general credit bonds recovered significantly, while the net financing of financial bonds showed a significant outflow, and the net financing of science and technology innovation bonds was negative [23][26][29]. 3. Summary According to the Directory 3.1 Secondary Market: The Short - and Medium - end Remains Steep, and the Trading Volume is Generally Stable 3.1.1 Market Trends: The Long - end of Secondary and Perpetual Bonds Strengthened Significantly, and the General Credit Bond Curve Flattened - **Secondary Capital Bonds**: Yields across all tenors declined, with the long - end performing better. The 7 - year and 10 - year quantiles dropped significantly. Credit spreads across all tenors narrowed, with the long - end compression more significant. The short - and medium - end of the term spread flattened, while the long - end (10Y - 7Y) became steeper, and the curve's long - end structural bulge still exists [2][9]. - **Perpetual Bonds**: The yield trend was similar to that of secondary capital bonds. The 4 - 7 - year yield decline was greater, and the 7 - year spread decreased by 7.3bp. The 4Y - 3Y term spread decreased by over 3bp, and its quantile dropped by nearly 15 percentage points [10]. - **General Credit Bonds**: Yields across all tenors declined, with the long - end decline being the largest. Spreads generally compressed, with the short - end showing small fluctuations and the long - end quantiles dropping significantly. The curve showed differentiation, with the short - end flattening, the middle - section steepening slightly, and the long - end declining [11][12]. - **Urban Investment Bonds**: Yields across all tenors generally declined, with the long - end decline more prominent. Spreads mainly compressed, with the long - end compression more significant. The curve structure was differentiated, with the short - end flattening, the middle - section locally steepening, and the long - end slightly rising [13]. 3.1.2 Trading Volume: Short - end Trading Volume Increased, and General Credit Bond Trading Volume Declined Slightly - **Secondary and Perpetual Bonds**: The total trading volume of secondary and perpetual bonds decreased. For secondary capital bonds, the trading volume of the short - end (within 1 year) increased significantly, while that of some medium - and long - term tenors decreased. For perpetual bonds, the trading volume also decreased, with the short - end trading volume increasing [15][16]. - **General Credit Bonds**: The total trading volume of general credit bonds decreased slightly. Among them, the trading volume of industrial bonds increased, while that of urban investment bonds and quasi - urban investment bonds decreased. The trading volume of different tenors within each category showed different trends [17][18]. - **High - Yield Urban Investment Bonds**: Trading was mainly concentrated in regions such as Beijing, Shandong, Hunan, and Guangdong, with cities like Beijing, Zhangjiajie, Qingdao, Xiamen, Jinan, and Weifang having relatively high trading volumes [22]. 3.2 Primary Issuance: The Net Financing of Urban Investment Bonds Recovered Significantly, and the Net Outflow of Financial Bonds was Obvious - **General Credit Bonds**: The total issuance last week was about 441.9 billion yuan, a year - on - year increase of about 150 billion yuan. The net financing was about 120.7 billion yuan, a year - on - year increase of about 167.7 billion yuan. The net financing of urban investment bonds recovered significantly, while that of industrial bonds decreased significantly [23]. - **Financial Bonds**: The total issuance last week was about 20.3 billion yuan, a year - on - year decrease of about 131.3 billion yuan. The net financing was about - 101.7 billion yuan, a year - on - year decrease of about 202.4 billion yuan. The issuance of securities company bonds, perpetual bonds, and commercial financial bonds declined significantly [26]. - **Science and Technology Innovation Bonds**: The issuance last week was about 41.1 billion yuan, a year - on - year increase of about 27.4 billion yuan. The net financing was about - 19.3 billion yuan, a year - on - year decrease of about 27.3 billion yuan [29].

1. Report Industry Investment Rating No relevant information provided. 2. Core Viewpoints of the Report - The mid - long - end of Tier 2 capital bonds and perpetual bonds of banks has recovered, and the curve of ordinary and perpetual bonds continues to steepen. The 2 - 3 - year ordinary and perpetual bonds are more favored by institutions. Considering the unclear geopolitical conflict pattern and inflation concerns, the 3Y - 2Y interval can be used as a key allocation area in the future [2][3][17]. - The trading volume of mid - long - term Tier 2 capital bonds and perpetual bonds has decreased, while the trading volume of urban investment bonds has increased significantly, driving the overall increase in the trading volume of ordinary and perpetual bonds [18][21]. - In primary issuance, the issuance of industrial bonds has increased, while the issuance of Tier 2 capital bonds and perpetual bonds remains at a low level. The issuance of science and innovation bonds has decreased compared with the previous period but still shows a significant year - on - year increase [26][29][30]. 3. Summary According to the Directory 3.1 Secondary Market: Divergent Trends of Tier 2 Capital Bonds and Perpetual Bonds, and an Increase in the Trading Volume of Urban Investment Bonds 3.1.1 Market Trends - **Tier 2 Capital Bonds**: The yields of all maturities have generally declined, with the mid - long - end declining more than the short - end. The spreads have been comprehensively compressed, and the curve shows a co - existence of local steepening in the middle and flattening at the long - end [9]. - **Perpetual Bonds**: The yield and spread trends are similar to those of Tier 2 capital bonds. The 2 - 3 - year maturity has relatively high cost - effectiveness, while the long - term bonds are more volatile [10]. - **Ordinary and Perpetual Bonds**: The curve steepening is further strengthened. The yields of 1 - 5 - year maturities generally decline, and the long - end steepening is more significant [13][14]. - **Urban Investment Bonds**: The yields of all maturities generally decline, and the curve steepening trend continues. The 2 - 3 - year maturity has a relatively large decline in yield [16]. 3.1.2 Trading Volume - **Tier 2 Capital Bonds and Perpetual Bonds**: The trading volume of mid - long - term bonds has decreased. The total trading volume of Tier 2 capital bonds has decreased by about 279 billion yuan, and that of perpetual bonds has decreased by about 252 billion yuan [18]. - **Ordinary and Perpetual Bonds**: The total trading volume has increased significantly, with an increase of more than 260 billion yuan. The trading volume of industrial bonds, urban investment bonds, and quasi - urban investment bonds has all increased to varying degrees [21]. - **High - Yield Urban Investment Bonds**: The high - yield trading last week was mainly concentrated in Shandong, Beijing, Sichuan, Fujian, Guizhou, Jiangxi and other places [25]. 3.2 Primary Issuance: Increased Issuance of Industrial Bonds, and Low - level Issuance of Tier 2 Capital Bonds and Perpetual Bonds - **Ordinary and Perpetual Bonds**: The total issuance last week was about 397 billion yuan, with a net financing of about 117 billion yuan. The issuance of industrial bonds has increased significantly, and the issuance of urban investment bonds has increased slightly [26]. - **Financial Bonds**: The total issuance last week was about 50.2 billion yuan, with a net financing of about 2.4 billion yuan. The issuance of securities company bonds is still the main force, and the issuance of Tier 2 capital bonds, commercial financial bonds, and TLAC non - capital bonds remains at a low level [29]. - **Science and Innovation Bonds**: The issuance last week was about 58.4 billion yuan, with a net financing of about 42.1 billion yuan. Although the issuance and net financing scale have declined compared with the previous period, they still show a significant year - on - year increase [30].

1. Report Industry Investment Rating - No information provided 2. Core Viewpoints - The central value of the trading duration of general credit bonds is stable around 2.2 years. As of March 20, the weighted trading durations of urban investment bonds and industrial bonds were 2.16 years and 2.29 years respectively, at the 90% and 74% historical quantiles since 2021. Among commercial bank bonds, the weighted average trading durations of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds were 4.15 years, 3.41 years, and 1.73 years respectively. The duration quantile of secondary capital bonds was relatively high, while that of general commercial financial bonds remained at a relatively low historical level. For other financial bonds, the durations of securities company bonds, securities subordinated bonds, insurance company bonds, and leasing company bonds were 1.96 years, 2.87 years, 3.52 years, and 1.23 years respectively, all of which were longer than last week and at relatively high historical quantiles [2][9]. - The coupon duration congestion index has declined. After reaching its peak in March 2024, the index has fallen and is currently at the 48% level since March 2021 [12]. 3. Summary by Directory 3.1 Full - Variety Term Overview - The central value of the trading duration of general credit bonds is stable around 2.2 years. As of March 20, the weighted trading durations of urban investment bonds and industrial bonds were 2.16 years and 2.29 years respectively, at the 90% and 74% historical quantiles since 2021. Among commercial bank bonds, the weighted average trading durations of secondary capital bonds, bank perpetual bonds, and general commercial financial bonds were 4.15 years, 3.41 years, and 1.73 years respectively. For other financial bonds, the durations of securities company bonds, securities subordinated bonds, insurance company bonds, and leasing company bonds were 1.96 years, 2.87 years, 3.52 years, and 1.23 years respectively, all longer than last week and at relatively high historical quantiles [2][9]. - The coupon duration congestion index has declined. After reaching its peak in March 2024, the index has fallen and is currently at the 48% level since March 2021 [12]. 3.2 Variety Microscope 3.2.1 Urban Investment Bonds - The weighted average trading duration of urban investment bonds hovers around 2.37 years. The duration of Sichuan provincial urban investment bonds has extended to 4.05 years, while that of Henan provincial urban investment bonds has shortened to around 1.65 years. The historical quantiles of the durations of Jiangsu and Beijing district - level urban investment bonds have exceeded 90%, and the duration of Jiangsu prefecture - level urban investment bonds is approaching the highest level since 2021 [3][16]. 3.2.2 Industrial Bonds - The weighted average trading duration of industrial bonds has shortened compared to last week, generally around 1.94 years. The trading duration of the real estate industry has extended to 1.84 years, while that of the public utilities industry has shortened to 2.58 years. The trading duration of the building materials industry is at a relatively high historical quantile, while those of the transportation and coal industries are at relatively low historical quantiles [3][23]. 3.2.3 Commercial Bank Bonds - The duration of general commercial financial bonds has shortened to 1.73 years, at the 13.8% historical quantile, lower than the level of the same period last year. The duration of secondary capital bonds has shortened to 4.15 years, at the 86.4% historical quantile, higher than the level of the same period last year. The duration of bank perpetual bonds has extended to 3.41 years, at the 49% historical quantile, lower than the level of the same period last year [3][25]. 3.2.4 Other Financial Bonds - In terms of the weighted average trading duration, insurance company bonds > securities subordinated bonds > securities company bonds > leasing company bonds, at the 77.3%, 88.4%, 83.3%, and 66% historical quantiles respectively, all slightly higher than last week [3][28].

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - In the short - term, due to low volatility and high returns, institutions still favor 3 - 4 - year general credit bonds. With the compression of the 4Y - 3Y spread and the expansion of the 3Y - 2Y spread, the 3Y - 2Y interval can be the key focus area in the future [4][15]. - Under the influence of risk - aversion sentiment and inflation concerns, institutions may remain cautious about long - term bonds in the short term, while short - term bonds have greater certainty. The short - term yield is at a historical low, with limited room for further significant decline. The medium - short - term term spread is at about 40% - 60% quantile, and the 3 - year credit spread quantile is relatively high, so there may still be room for further compression in the 2 - 3 - year period [3][12]. 3. Summary According to the Directory 3.1 Secondary Market: Curve Steepening and a Significant Decline in Urban Investment Bond Transaction Volume 3.1.1 Market Trends: Divergent Movements of Short - and Long - Term and Curve Steepening - **Secondary Capital Bonds**: Last week (from March 9 to March 13, 2026), the short - term yield of bank secondary capital bonds decreased, while the long - term yield increased slightly. The 1 - 3 - year yields decreased by 3 - 4bp, and the 10 - year yield increased by nearly 4bp. The short - term spread compressed, and the long - term spread widened. The curve showed obvious steepening in the medium - long term, with the 4Y - 3Y, 5Y - 4Y, and 10Y - 7Y term spreads increasing by 2.67bp, 2.08bp, and 2.82bp respectively [10]. - **Perpetual Bonds**: The 1 - 3 - year yields decreased by 2 - 3bp, the 4 - 7 - year yields were basically flat, and the 10 - year yield increased by 3.2bp. The short - term spread of perpetual bonds decreased slightly, and the medium - long - term credit spread widened. The overall change was similar to that of secondary capital bonds, but the local steepening was more obvious, especially the 4Y - 3Y spread, which increased by 3.04bp, and the historical quantile increased by 16.63bp [12]. - **General Credit Bonds**: The short - term yield decreased slightly, and the long - term yield increased slightly. The 1 - 4 - year yields decreased by 0.5 - 1.8bp, the 5 - year yield was flat, and the 7 - and 10 - year yields increased by about 0.4bp and 1.3bp respectively. The credit spreads of all terms increased, and the curve showed obvious local steepening [13]. - **Urban Investment Bonds**: The short - and medium - term yields decreased, and the long - term yield increased slightly. The 1 - year yield decreased by 2.73bp, the 3 - 4 - year yields decreased by about 1.6bp, and the 10 - year yield increased by 1.5bp. The credit spreads of all terms except the 1 - year increased, and the curve showed a local steepening trend [14][15]. 3.1.2 Transaction Situation: Slight Increase in the Transaction Volume of Tier 2 and Perpetual Bonds and a Significant Decrease in the Transaction Volume of Urban Investment Bonds - **Tier 2 and Perpetual Bonds**: The transaction volume of tier 2 and perpetual bonds increased slightly by 1.5 billion yuan last week. For secondary capital bonds, the transaction volume of 4 - 5 - year and 7 - 10 - year bonds increased significantly, while that of 1 - 2 - year, 3 - 4 - year, and 5 - 7 - year bonds decreased. For perpetual bonds, the transaction volume of bonds with a term of less than 1 year, 1 - 2 years, and 2 - 3 years increased [16]. - **Urban Investment Bonds**: The transaction volume of general credit bonds last week was 504.7 billion yuan, a decrease of more than 230 billion yuan compared with the previous week. The transaction volume of industrial bonds changed little, while that of urban investment bonds decreased significantly, and the transaction volume of quasi - urban investment bonds changed little overall [18]. 3.2 Primary Issuance: Continued Increase in the Issuance of Science and Technology Innovation Bonds and a Year - on - Year Decrease in Urban Investment Bonds - **General Credit Bonds**: The total issuance last week exceeded 330 billion yuan, increasing both month - on - month and year - on - year. The issuance of industrial bonds and quasi - urban investment bonds increased significantly month - on - month, while the issuance scale of urban investment bonds changed little. Year - on - year, the issuance of industrial bonds increased by 57 billion yuan, with an increase of more than 70%, contributing most of the increase, while the issuance of urban investment bonds decreased by 26 billion yuan [23]. - **Financial Bonds**: The total issuance of financial bonds last week was 72.35 billion yuan, most of which were securities company bonds. Since 2026, the issuance of tier 2 and perpetual bonds has been very limited [26][28]. - **Science and Technology Innovation Bonds**: The issuance this week was about 52 billion yuan, an increase of 19.2 billion yuan month - on - month and 41.7 billion yuan year - on - year, maintaining a good momentum [29].

Group 1 - The report indicates a steepening of the yield curve with a slight increase in credit spreads. The 1Y and 3Y national development bond yields decreased by 2BP and 1BP respectively, while the 10Y yield increased by 1BP. The overall credit spreads have slightly widened, particularly for higher-rated bonds [3][10]. - For city investment bonds, the credit spreads mostly increased by 1BP. AAA, AA+, and AA-rated platforms saw an overall rise in spreads, with specific regions like Ningxia experiencing a 3BP increase [4][15]. - The report highlights that the mixed-ownership real estate bonds experienced a decline in spreads by 20BP, while state-owned enterprise real estate bonds saw a slight widening of 0-1BP [26][32]. Group 2 - The report notes that the secondary capital bonds showed a strong short-end and weak long-end characteristic, with 3Y and longer spreads widening. The 1Y yields for various grades decreased by 2-3BP, while the 10Y yields increased by 7BP [5][32]. - The 3Y industrial perpetual bonds' excess spread increased by 0.34BP to 9.97BP, while the city investment AAA-rated 3Y perpetual bonds' excess spread narrowed by 1.40BP to 6.06BP [35][36].

Group 1 - The report indicates that the secondary market for perpetual bonds is experiencing a notable increase in trading activity, particularly in the mid-term maturities, with significant demand for liquidity-driven bonds [13][11] - The yield curve for secondary capital bonds has shown a slight steepening, with short-term yields declining and long-term yields increasing, reflecting cautious pricing of long-term credit risk by institutions [11][9] - The trading volume for 4-5 year bonds has surged to approximately 805 billion, nearly doubling from the previous week, indicating a strong preference for mid-term bonds [13][12] Group 2 - The issuance of credit bonds has returned to normal levels, with a total of 333.52 billion issued, marking a significant increase compared to the previous week, although it is slightly down year-on-year [17][18] - The issuance of corporate bonds exceeded 100 billion, contributing the largest increment to the overall issuance, while financial bonds saw a notable decline [17][18] - The report highlights a substantial recovery in the issuance of sci-tech bonds, with a total of 202 billion issued this week, reflecting a year-on-year increase of nearly 70% [19]

1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - The new regulations on science - innovation bonds are beneficial for scale expansion and structural improvement. With the optimization of rules in the inter - bank and exchange markets, along with support from the central bank's risk - sharing tools and local incentives, the scale of science - innovation bonds is expected to continue to expand this year, and the structure of issuers and maturities is likely to improve further [1][23]. - Last week, credit bond yields generally declined, and most credit spreads widened passively. The net financing of general credit bonds started to increase, while financial bonds maintained net repayment. In the secondary market, medium - and short - duration bonds were actively traded, and the trading of long - duration bonds increased slightly [1][42][68]. 3. Summary by Directory Credit Hotspots: New Regulations on Science - Innovation Bonds Benefit Scale Expansion and Structural Improvement - On March 2, 2026, the National Association of Financial Market Institutional Investors optimized the inter - bank science - innovation bond mechanism, broadening the scope of technology - based enterprises, strengthening patent requirements, and implementing hierarchical and classified management of the use of raised funds [1]. - Since the launch of the "technology board" in the bond market, the issuance of science - innovation bonds as a proportion of credit bonds has significantly increased. As of March 6, 2026, the outstanding amount of science - innovation bonds has exceeded 3.6 trillion yuan [1][22]. - With the optimization of rules and the improvement of supporting mechanisms, along with policy support, the scale of science - innovation bonds is expected to continue to expand this year, and the issuer and maturity structures are expected to improve [23]. Market Review: Credit Bond Yields Generally Declined, and Most Spreads Widened Passively - From February 27 to March 6, 2026, due to the end of the Two Sessions and the fermentation of the Iran situation, interest - rate bonds declined overall, credit bond yields generally decreased, and most credit spreads widened passively. The spreads of 5 - 10Y general credit bonds declined [42]. - The yields of secondary perpetual bonds also generally declined, with the yields of medium - and short - term varieties decreasing by about 4BP, and the spreads widening slightly by about 2BP [42]. - Last week, wealth management products had a net purchase of 7.7 billion yuan, and funds had a net purchase of 61.2 billion yuan. The scale of credit bond ETFs was 524.5 billion yuan, an increase of 1.8 billion yuan from the previous week [42]. Primary Issuance: Net Financing of General Credit Bonds Started to Increase, and Financial Bonds Maintained Net Repayment - From March 2 to March 6, 2026, the total issuance of corporate - type credit bonds was 100.2 billion yuan, a 220% increase from the previous week; the total issuance of financial - type credit bonds was 22.1 billion yuan, a more than 1000% increase from the previous week [2][68]. - The total net financing of corporate - type credit bonds was 40.3 billion yuan, a 134% increase from the previous week. Among them, the net financing of urban investment bonds was 4.4 billion yuan, and that of industrial bonds was 34.3 billion yuan [2][68]. - In terms of financial - type credit bonds, commercial bank bonds had a net repayment of 10.3 billion yuan, commercial bank sub - bonds had no net financing, and insurance and securities company bonds had a net financing of 3.5 billion yuan [2][68]. Secondary Trading: Medium - and Short - Duration Bonds Were Actively Traded, and the Trading of Long - Duration Bonds Increased Slightly - Active trading entities were mainly medium - and high - grade, medium - and short - term, and central and state - owned enterprises [77]. - For urban investment bonds, active trading entities were mainly divided into two types: mainstream high - grade platforms in economically strong provinces and core platforms in regions with relatively high spreads in large economic provinces [77]. - For real - estate bonds and private - enterprise bonds, active trading entities were mainly AAA - rated, with trading maturities mostly in the medium - and short - term [77]. - Among actively traded urban investment bonds, the proportion of bonds with a maturity of more than 5 years increased slightly from 2% to 3% compared with the previous week [77].

1. Report Industry Investment Rating No information provided in the report. 2. Core Viewpoints of the Report - In the first ten days of March, the bond market was mainly priced by two logics: the rising risk - aversion sentiment caused by the Middle - East geopolitical conflict and whether there were new statements or incremental policies in the government work report of the Two Sessions. With the long - end interest rates in a sideways shock state and short - end performance being more dominant, the interest - rate bond curve steepened as a whole. Meanwhile, the general credit bonds and Tier 2 capital bonds continued their strong performance [1]. - Starting from mid - March, three logics are worthy of attention: the price - rising logic, the marginal changes at the institutional level, and the central bank's possible "slow withdrawal" of medium - and long - term redundant funds. Without incremental positive factors, long - end interest rates may be in a "unable to decline" state, and the key variable to break the lower bound of interest rates may be the implementation of interest - rate cuts, with April being a critical window [2][3]. - For bond - market strategies, the box - thinking may still work. When the yield of 10 - year Treasury bonds enters the range of 1.83 - 1.85%, it may be in a state where long - end interest rates "cannot rise", and high - elasticity varieties can be added to increase the duration; when the yield of 10 - year Treasury bonds drops to the range of 1.75 - 1.77%, a catalyst is needed for further decline, and one can consider taking profits on long - term bonds and waiting, using the leverage + coupon strategy as a transition. In mid - March, one should play the game of rising inflation while taking into account the possibility of interest - rate cuts, with the portfolio duration placed at a neutral level and a more extreme dumbbell strategy adopted [3]. 3. Summary According to the Directory 3.1. Multi - factor Intertwining, Cautious Pricing in the Bond Market - From March 2 - 6, affected by domestic important meetings and overseas geopolitical conflicts, the bond market priced cautiously. The long - end interest rates of 10 - year Treasury bonds, 30 - year Treasury bonds, and 10 - year CDB bonds had slight fluctuations, while the short - end interest rates of 1 - year and 3 - year Treasury bonds also changed [8]. - In the first week of March, the central bank routinely withdrew the cross - month funds, and the weekly average of R001 and R007 were 1.36% and 1.51% respectively. In a loose environment, the short - end performed better, and the interest - rate bond curve steepened. The yields of general credit bonds showed a parallel downward trend, and the issuance rates of inter - bank certificates of deposit declined counter - seasonally [10][13]. 3.2. Three Logics Worthy of Attention from Mid - March - **Price - rising logic**: Since the beginning of March, the full blockade of the Strait of Hormuz by Iran has led to a sharp rise in crude - oil prices. If the average price of Brent crude oil in March reaches $90, $100, and $120 per barrel respectively, the impact on the year - on - year growth rate of China's PPI in March will be + 0.5pct, + 0.7pct, and 1.2pct respectively, and the delayed impact on April data may reach + 0.6pct, + 0.8pct, and 1.4pct. The market may pre - price the potential accelerated recovery of inflation [19]. - **Institutional - level marginal changes**: From January to March 2026, the medium - and long - term bond allocation behavior of large banks in the secondary market went through three stages: over - buying in January, slow - buying in February, and no - buying in March, indicating that the early - year asset - grabbing is coming to an end. As the primary - market supply accelerates, large banks are gradually returning to the role of sellers of long - term bonds in the secondary market. Near the end - of - quarter revenue settlement, banks may turn to taking profits and have a higher demand to reduce medium - and long - term bonds [21]. - **The central bank's possible "slow withdrawal" of medium - and long - term redundant funds**: Recently, the central bank has started to implement a "slow withdrawal" operation for medium - and long - term funds. For example, the bond - buying scale in February decreased from 100 billion yuan to 50 billion yuan, and the net withdrawal of 3 - month repurchase in March was 200 billion yuan. It is crucial to observe the stability of the money market after the Two Sessions [24]. 3.3. The Seasonal Recovery of Wealth - Management Scale in the First Week of the Month - **Weekly scale**: The wealth - management scale decreased at the end of February due to the impact of balance - sheet return pressure. In the first week of March, it recovered as expected, with a week - on - week increase of 33.5 billion yuan to 33.37 trillion yuan. As the end of the quarter approaches, the balance - sheet return pressure will gradually emerge [35]. - **Wealth - management risks**: The retracement of equity - containing products has increased, and the negative - return ratio of wealth - management products has risen. The overall negative - return ratio of wealth - management products has increased by 7.73pct to 9.65% this week. The net - breaking rate of all products has increased by 0.02pct to 0.31%, and the performance non - compliance rate has increased by 0.3pct to 25.1% [41][49]. 3.4. The Leverage Ratio in the Inter - bank and Exchange Markets Has Both Increased - From March 2 - 6, the money market loosened spontaneously under the influence of fiscal expenditure. The average daily trading volume of inter - bank pledged repurchase increased significantly, and the proportion of overnight trading also increased. The inter - bank leverage ratio, exchange - market leverage ratio, and the leverage ratio of non - bank institutions all increased [55][59]. 3.5. Both Interest - type and Credit - type Medium - and Long - term Bond Funds Have Extended Their Durations - From March 2 - 6, the durations of interest - type and credit - type medium - and long - term bond funds have both increased. The weekly average duration of interest - type medium - and long - term bond funds has increased from 3.26 years to 3.43 years, and that of credit - type medium - and long - term bond funds has increased from 1.96 years to 2.05 years. The durations of short - term and medium - short - term bond funds have slightly decreased [66][75]. 3.6. The Net Issuance Scale of Government Bonds Has Decreased - From March 9 - 13, the planned issuance of government bonds is 49.75 billion yuan, slightly higher than the previous week. However, the net payment of government bonds on a payment - date basis will turn negative, estimated to be about - 162.1 billion yuan. The net payment of Treasury bonds has decreased significantly, and the net payment of local bonds has also decreased [77][80].

1. Report Industry Investment Rating - Not provided in the content 2. Core Viewpoints of the Report - Since the beginning of the year, long - term and ultra - long - term credit bonds have performed well. The participation of trading desks, along with the entry of allocation desks and the concentrated opening of amortizing debt funds, has been a key factor in the rapid narrowing of credit spreads [1][14]. - In March, the credit bond market is likely to maintain a volatile pattern due to factors such as the intertwined bull - bear factors in the bond market, insufficient spread protection, and the "strong supply and weak demand" pressure [22]. - It is recommended to control duration, use leverage strategies to increase returns, and buy high - grade long - term bonds on dips. There are also opportunities for short - term credit bond carry trades [23]. 3. Summary of Each Section 2.1 2 - month Credit Bond Market Review and March Outlook 2.1.1 2 - month Credit Spread Review - In February 2026, the credit bond market bid farewell to the comprehensive spread compression in January, showing an "N" - shaped spread trend. The spreads of 10 - year ultra - long credit bonds narrowed significantly, outperforming other tenors [10]. - In the first week (2.2 - 2.6), credit spreads generally widened passively; in the second week (2.9 - 2.13), spreads narrowed overall with long - term bonds having an edge; in the post - holiday week (2.24 - 2.27), spreads showed a differentiated performance [10]. 2.1.2 Observation of Institutional Behavior Since the Beginning of the Year - Other asset management institutions are the largest buyers of 7 - 10Y credit bonds, followed by insurance and funds. Insurance's net buying of 7 - 10Y credit bonds is significantly stronger than last year, related to the "开门红" of dividend - paying insurance [14][17]. - Funds turned to net buying of 7 - 10Y credit bonds in February, possibly due to limited downward compression space for spreads within 5Y and the high cost - performance of ultra - long credit bonds [14]. - Since the beginning of the year, public funds have strongly bought credit bonds within 5Y, far exceeding the seasonal level. 3 - 5Y credit bonds are the main allocation targets, and the concentrated opening of amortizing fixed - term debt funds has brought incremental demand [19]. 2.1.3 March Credit Bond Market Outlook - In March, the credit bond market is likely to be volatile. The market is affected by factors like the calendar effect, insufficient spread protection, and the "strong supply and weak demand" situation [22]. - Strategies include controlling duration, using leverage to enhance returns, and buying high - grade long - term bonds on dips. There are carry trade opportunities for short - term credit bonds [23]. 2.2 Credit Bond Yield Overview - In February, credit bond yields mainly declined, with medium - and long - term credit bonds performing better. Among general credit bonds, most bond types declined, with some medium - and long - term bonds performing best [28]. - Financial bond yields also declined, with medium - and long - term bonds performing better. 5 - year brokerage subordinated bonds and some 10 - year bonds had the largest yield declines [28]. - As of the end of February, the overall wealth management scale increased, the one - year average annualized return slightly declined, and the net - breaking rates of all bank wealth management and wealth management subsidiaries decreased [30]. 2.3 Primary Market 2.3.1 Issuance Volume - In February, the credit bond issuance volume and net financing volume decreased both year - on - year and month - on - month. The net financing volumes of urban investment bonds, industrial bonds, and financial bonds all declined compared to the same period last year [35]. 2.3.2 Issuance Term - The average issuance term of credit bonds slightly decreased. The average issuance term of urban investment bonds remained flat, industrial bonds decreased, and financial bonds increased [43]. 2.3.3 Issuance Cost - The average issuance cost of credit bonds decreased. The average issuance rates of industrial and urban investment bonds decreased, while that of financial bonds increased slightly [46]. 2.3.4 Cancellation of Issuance - The number and scale of credit bond issuance cancellations decreased in February compared to the previous month [51]. 2.4 Secondary Market 2.4.1 Trading Volume - Affected by holidays, the trading volumes of all types of credit bonds decreased in February. The trading terms of urban investment and industrial bonds extended, and the trading of different ratings also changed [55]. 2.4.2 Trading Liquidity - The turnover rates of urban investment bonds, industrial bonds, and financial bonds decreased in February. The turnover rates of short - term urban investment and industrial bonds and long - term financial bonds decreased significantly [58]. 2.4.3 Spread Tracking - In February, the spreads of urban investment bonds showed different trends. The spreads of medium - and low - grade bonds within 5Y and all ratings of 10Y bonds narrowed, with the 10Y AAA - rated urban investment bonds having the largest narrowing [64]. - Most provincial spreads narrowed. Among AAA - rated and AA - rated industrial bonds, most industry spreads narrowed, with the banking industry having the largest narrowing [67]. - The spreads of bank secondary and perpetual bonds mostly narrowed, mainly in 1Y, 5Y, and 10Y. Insurance subordinated bond spreads mostly narrowed, while brokerage subordinated bond spreads mostly widened [70][72]. 2.5 February's Hottest Bonds - Based on qeubee's bond liquidity scores, the top 20 most liquid urban investment bonds, industrial bonds, and financial bonds are selected for investors' reference [74]. 2.6 Credit Rating Adjustment Review - In February 2026, 3 bonds had their debt ratings upgraded, and there were no downgrades [80].

1. Industry Investment Rating - No relevant information provided in the report. 2. Core Viewpoints - After a continuous decline, the bond market adjusted this week, with interest - rate bond yields rising overall, driving up credit - bond yields. Credit investors may need to control duration and be more cautious. It is recommended to look for coupon - bearing assets in bonds with a maturity of about 2 years or less. For Tier - 2 and perpetual bonds and ultra - long bonds, appropriate waiting is needed [1][3][4]. 3. Summary by Directory 3.1 How to Understand This Week's Trend? - The bond market adjusted this week after a continuous decline. Interest - rate bond yields rose overall, driving up credit - bond yields. In terms of varieties, the increase of Tier - 2 and perpetual bonds was higher than that of general credit bonds, and the yields of some low - grade coupon credit bonds even declined further. In terms of maturity, the increase of ultra - long credit bonds over 5 years was higher than that of medium - and short - term credit bonds. In terms of credit spreads, the spreads of Tier - 2 and perpetual bonds widened, while those of general credit bonds were mostly compressed passively [1][10]. - From an institutional perspective, funds, wealth management products, money - market funds, insurance companies, and other institutions are still net buyers of credit bonds in the secondary market, mainly focusing on general credit bonds with a maturity of 3 years or less. Other institutions have taken over some ultra - long credit bonds, but the overall volume is limited. Funds sold long - term interest - rate bonds and bought short - term credit bonds for risk - avoidance [13][14]. 3.2 How to Understand the Recent Trend of Tier - 2 and Perpetual Bonds? - Since the second half of 2025, Tier - 2 and perpetual bonds have experienced a process of continuous weakness - equivalence - continuous strength compared with general credit bonds. The reasons for the weakness in the second half of 2025 are: the increase in value - added tax on financial bonds, concerns caused by new regulations on public - fund redemptions, the fact that amortized - cost bond funds can only invest in general credit bonds, and the portfolio adjustment needs of insurance companies due to the implementation of new accounting standards [2][16]. - In 2026, most of the unfavorable factors have become history, but the impact of amortized - cost bond funds is still difficult to fade. Benefiting from the strong performance of the stock market, the subscription volume of fixed - income + funds has increased significantly, bringing additional buying power for Tier - 2 and perpetual bonds. Also, with the decline of the bond market, market sentiment has been good, and Tier - 2 and perpetual bonds have relatively benefited [2][24]. 3.3 How to Look Forward When Credit Spreads Are at a Low Level? - Recently, as the bond market has continued to decline, credit - bond yield spreads have also declined. Currently, both credit - bond yields and credit spreads have dropped to relatively low levels. The yields and spreads of credit bonds with a maturity of less than 2 years have dropped to extremely low historical levels, and there is little room for further decline in credit spreads [3][26]. - Looking back at history, when credit spreads are at a low level, the positive effects of interest - rate cuts on credit bonds are not strong, as seen in February 2020. After credit spreads decline to an absolute low level, there are more unfavorable factors than favorable ones. Historically, when spreads widen, credit - bond yields are likely to rise as well. For credit investments, it may be necessary to control duration and be more cautious [3][30][33]. 3.4 How to Participate? - Short - term bonds with a maturity of about 2 years are a high - probability choice in the current environment. It is recommended to look for coupon - bearing assets in bonds with a maturity of about 2 years or less [4][36]. - For Tier - 2 and perpetual bonds, appropriate waiting is needed. As the stock market enters a volatile period, the inflow of fixed - income + funds may slow down, and the price - performance ratio of Tier - 2 and perpetual bonds has significantly decreased [4][36]. - Ultra - long bonds also require appropriate waiting. Currently, the relative value of ultra - long bonds is low, and market sentiment is poor. The trading volume has increased significantly, banks' net sales before the Spring Festival have increased substantially, and credit spreads have dropped to the lowest level since 2025 [4][38].