Report Industry Investment Rating No relevant content provided. Core Viewpoints - In early April, Trump's tariff policy exceeded market expectations, causing bond yields to hit previous lows again. Despite signs of concessions, China still faces high external uncertainties, leading to low - level fluctuations in market interest rates [2][14]. - The Politburo meeting on April 25 emphasized implementing more proactive macro - policies, with potential future reserve requirement ratio and interest rate cuts to maintain liquidity and support the real economy. Monetary policy will remain loose [3][14]. - In April, the central bank significantly increased net MLF投放, indicating support for liquidity. Economic data shows that the economic recovery needs further observation, especially the price level has not improved significantly, suggesting limited demand recovery. External demand decline also adds pressure, requiring policy support [3][14]. - In early April, the 10 - year Treasury bond rate quickly dropped below 1.7% and then fluctuated around 1.65%. It is expected that long - term interest rates will continue to decline, and the 10 - year Treasury bond yield may fall below 1.6% [3][14]. - According to the model, the implied one - year interest rate cut in the interest rate swap curve in April increased by about 19.27bp compared to March. Market participants' expectations of interest rate cuts have risen significantly. The policy rate is expected to drop by 30 - 40bp this year, corresponding to a 10 - year Treasury bond yield around 1.6% [4][15]. Summary by Directory 1. Viewpoint Outlook - External uncertainty: Trump's tariff policy in early April shocked the market. Although there were signs of concessions later, external uncertainties remain high, resulting in low - level fluctuations in bond market interest rates [2][14]. - Policy orientation: The Politburo meeting emphasized proactive macro - policies, with potential future reserve requirement ratio and interest rate cuts to support the real economy. Monetary policy will remain loose [3][14]. - Capital situation: In April, the central bank's net MLF投放 reached the highest level since January 2024, indicating strong support for liquidity [3][14]. - Economic fundamentals: Economic data shows that the economic recovery needs further observation, especially the price level has not improved significantly, suggesting limited demand recovery. External demand decline also adds pressure, requiring policy support [3][14]. - Interest rate trend: The 10 - year Treasury bond rate dropped below 1.7% in early April and then fluctuated around 1.65%. It is expected to continue to decline and may fall below 1.6% [3][14]. - Interest rate cut expectation: The implied one - year interest rate cut in the interest rate swap curve in April increased by about 19.27bp compared to March. Market participants' expectations of interest rate cuts have risen significantly. The policy rate is expected to drop by 30 - 40bp this year, corresponding to a 10 - year Treasury bond yield around 1.6% [4][15]. 2. Capital Market - Open - market operations: In April, the central bank's open - market capital投放 was 392.27 billion yuan, with a net投放 of 32.08 billion yuan. There were no open - market Treasury bond purchases. The scale of repurchase agreements was 120 billion yuan (70 billion for 3 - month and 50 billion for 6 - month). Treasury cash deposits raised 10 billion yuan and 15 billion yuan matured. MLF投放 was 60 billion yuan, with 10 billion yuan maturing, resulting in a net MLF投放 of 50 billion yuan [5][16]. - Interest rates: As of April 30, DR007 was at 1.80%, down 39.02bp from the end of March; R007 was at 1.84%, down 46.34bp from the end of March [18]. - Inter - bank certificates of deposit: In April, 285.124 billion yuan of inter - bank certificates of deposit were issued, with 247.916 billion yuan maturing, resulting in a net financing of 37.208 billion yuan, a decrease of 71.993 billion yuan from the previous month [20]. 3. Interest Rate Market 3.1 Interest - Bearing Bond Primary Market - Overall situation: The overall issuance volume of interest - bearing bonds in the primary market decreased slightly compared to the previous month, and net financing decreased significantly. In April, Treasury bonds were issued at 146.83 billion yuan, with net financing of 26.575 billion yuan; local government bonds were issued at 69.3291 billion yuan, with net financing of 52.8089 billion yuan; policy bank bonds were issued at 60.825 billion yuan, with net financing of - 344 million yuan [24]. 3.2 Interest - Bearing Bond Secondary Market - Yield trend: In April, the yields of Treasury bonds and China Development Bank bonds generally declined [31]. 4. Credit Market 4.1 Credit Bond Primary Market - Overall situation: The issuance volume of new credit bonds increased significantly compared to the previous month, the repayment volume decreased, and the net financing scale increased significantly. The total issuance volume was 222.1512 billion yuan, the total repayment volume was 176.5422 billion yuan, and the net financing was 45.609 billion yuan [42]. - Urban investment bonds: Urban investment bonds were issued at 35.1555 billion yuan, with a net financing of - 9.1487 billion yuan. The average coupon rate was 2.53%, down 14bp from the previous month [43]. 4.2 Credit Bond Secondary Market - Overall situation: The secondary market of credit bonds fluctuated greatly, the broad - based market yield declined, and the yields of medium - and short - term notes of various credit ratings were at relatively low levels in the past two - year quantiles [47]. - Urban investment bonds: In April, the yields of urban investment bonds of various maturities generally declined. The yields of urban investment bonds of various credit ratings were still at historical lows in the past two - year quantiles. The term spreads showed differentiation, and the credit spreads widened except for the 1 - year maturity [51][52]. - Bank secondary bonds: In April, the yields of bank secondary bonds of various maturities declined synchronously, the term spreads widened, and the credit spreads showed differentiation. The yields of bank secondary bonds of various maturities were still at relatively low levels in the past two - year quantiles [55].