1. Report Industry Investment Rating No information about the industry investment rating is provided in the report. 2. Core Viewpoints of the Report - In Q3, the economic growth slowed marginally, and there was still pressure on the price front. The actual GDP in Q3 increased by 4.8% year - on - year, and the cumulative growth from Q1 to Q3 was 5.2%. Achieving the annual 5% target is not difficult. However, the nominal GDP increased by only 3.7% year - on - year, hitting a new low since Q4 2022, and the GDP deflator was about - 1.02% year - on - year in the current quarter, indicating continuous price pressure [7]. - Industrial production showed resilience, and high - end manufacturing remained prosperous. In September, the industrial added value increased to 6.4% year - on - year, and the seasonally adjusted month - on - month growth accelerated to 0.64%. The export of technology - intensive products was an important increment, and the export delivery value turned positive to 3.8% year - on - year. The production of high - tech products such as automobiles (14%) and industrial robots (28%) maintained high growth year - on - year [7]. - The investment side continued to weaken, and the monthly declines in real estate, infrastructure, and manufacturing all widened. In September, the monthly fixed - asset investment decreased to - 6.9% year - on - year, and the cumulative year - on - year growth turned negative to - 0.5%, the weakest since August 2020 [7]. - The growth rate of residents' income and expenditure slowed down, and the effect of consumption subsidies may have weakened marginally. In September, the year - on - year growth rate of social retail sales decreased to 3.0%, slowing down for the fourth consecutive month [7]. - The economy in Q4 faces a high base, weak domestic demand, and external uncertainties. It is expected that the actual GDP year - on - year growth may slow down to about 4.5%, but the annual economic growth rate of 5% can still be achieved. Strong pro - growth policies may still need to wait. If external changes bring new pressure to the capital market, monetary policy may be intensified. It is expected that the bond market will continue to fluctuate and recover in Q4, and it is recommended to allocate the active bonds of 10 - year treasury bonds when the yield is above 1.75% [1][7]. 3. Summary by Relevant Catalogs 3.1 Event Description - In Q3, the economy slowed down marginally, and the economic data in September was generally weak due to the drag on the demand side. The actual GDP in Q3 increased by 4.8% year - on - year, basically in line with expectations, and the cumulative year - on - year growth in the first three quarters was 5.2%. In September, the year - on - year growth rate of the added value of industrial enterprises above the designated size rebounded by 1.3 pct to 6.5%, higher than the expected 5.2%. The year - on - year growth rate of social retail sales decreased by 0.4 pct to 3.0% compared with the previous month, lower than the expected 3.1%. From January to September, the cumulative year - on - year growth rate of fixed - asset investment decreased by 1.0 pct and turned negative to - 0.5%, lower than the expected 0.03% [4]. 3.2 Event Comment - **Economic Growth**: In Q3, the economic growth slowed down marginally, and price pressure persisted. The actual GDP in Q3 increased by 4.8% year - on - year, 0.4 pct lower than Q2, the lowest single - quarter growth since Q3 2023, and the quarter - on - quarter growth rate remained flat at 1.1%. The cumulative growth from Q1 to Q3 was 5.2%, and achieving the annual 5% target is not difficult. The nominal GDP increased by only 3.7% year - on - year, a new low since Q4 2022, and the GDP deflator was about - 1.02% year - on - year in the current quarter, showing continuous price pressure [7]. - **Industrial Production**: Industrial production showed resilience, and high - end manufacturing remained prosperous. In September, the industrial added value increased to 6.4% year - on - year, and the seasonally adjusted month - on - month growth accelerated to 0.64%. The export of technology - intensive products was an important increment, and the export delivery value turned positive to 3.8% year - on - year. The production of high - tech products such as automobiles (14%) and industrial robots (28%) maintained high growth year - on - year. In Q3, the industrial capacity utilization rate rose to 74.6%, a 0.6 pct increase quarter - on - quarter. The capacity utilization rates of industries such as automobiles, electrical machinery, and electronic communications increased, but some traditional industries such as the mining industry still faced over - capacity pressure. The year - on - year growth rate of the service industry production index remained flat at 5.6%, while construction activities were weak, and the year - on - year decline in cement production widened to - 8.6%, indicating a drag on the investment side [7]. - **Investment**: The investment side continued to weaken, and the monthly declines in real estate, infrastructure, and manufacturing all widened. In September, the monthly fixed - asset investment decreased to - 6.9% year - on - year, and the cumulative year - on - year growth turned negative to - 0.5%, the weakest since August 2020, and the decline in private investment reached 8.9%. All three investment sub - items deteriorated: 1) The year - on - year decline in real estate investment in the current month widened to - 21.3%, the year - on - year decline in sales area was - 11.9%, and the year - on - year decline in sales volume was - 12.4%. Although the new construction and completion areas improved marginally, the funds in place were weak, and real - estate enterprises lacked confidence. 2) The full - caliber infrastructure investment decreased by 8.0% year - on - year in the current month, affected by the limited fiscal space, and the investment in areas such as water conservancy and public facilities management declined. 3) Manufacturing investment decreased by 1.9% year - on - year in the current month. Weak terminal demand and the "anti - involution" phenomenon disturbed enterprises' willingness to make capital expenditures. The drag from construction and installation projects increased, and the implementation of physical work volume was slow. Weak investment became the core of weak domestic demand [7]. - **Consumption**: The growth rate of residents' income and expenditure slowed down, and the effect of consumption subsidies may have weakened marginally. In September, the year - on - year growth rate of social retail sales decreased to 3.0%, slowing down for the fourth consecutive month. Both commodity retail (3.3%) and catering (0.9%) weakened, especially the year - on - year growth rate of catering above the designated size turned negative to - 1.6%. The effect of the "trade - in" measure declined: the year - on - year growth rate of home appliance retail decreased from 14.3% to 3.3%, and the growth rate of cultural office supplies declined. Structurally, rural consumption (4.0%) continued to be stronger than urban consumption (2.9%), which may be because the decline in housing prices had a deeper impact on the wealth effect of urban families. In Q3, the growth rates of residents' income and expenditure slowed down simultaneously: the actual cumulative year - on - year growth rate of per - capita disposable income decreased by 0.2 pct to 5.2%, and the year - on - year growth rate of consumption expenditure decreased by 0.6 pct to 4.7%. The low - inflation environment affected consumer confidence. The urban surveyed unemployment rate slightly decreased to 5.2% in September, but as of August, the surveyed unemployment rates of the 16 - 24 - year - old and 25 - 29 - year - old labor forces were still high [7]. - **Outlook**: The bond market may have priced in the marginal slowdown of the Q3 economy. The economy in Q4 faces a high base, weak domestic demand, and external uncertainties. It is expected that the actual GDP year - on - year growth may slow down to about 4.5%, but the annual economic growth rate of 5% can still be achieved. Strong pro - growth policies may still need to wait. If external changes bring new pressure to the capital market, monetary policy may be intensified. It is expected that the bond market will continue to fluctuate and recover in Q4, and it is recommended to allocate the active bonds of 10 - year treasury bonds when the yield is above 1.75% [1][7].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The sharp adjustment of the bond market this week is still a short - term emotional shock, and the pricing logic of assets has not changed much. The upward momentum of the 10 - year Treasury bond rate breaking through 1.75% will weaken marginally, but the downward space for interest rates is also limited. In the face of fluctuations, investors should choose trading strategies carefully according to their liability - side stability and safety cushion [2][17][32]. 3. Summary by Relevant Catalogs 3.1 This Week's Bond Market Review: Risk Assets Continuously Suppress, Curve Bear - Steepens - The Shanghai Composite Index strongly broke through the key points of 3674 and 3700, boosting market risk appetite and leading to a significant adjustment in the bond market. Economic data in July, single - month negative credit growth, and the central bank's outright reverse repurchase operations failed to drive the bullish power of the bond market. By Friday, the yields of 10Y and 30Y Treasury active bonds reached 1.7490% and 1.9980% respectively, approaching key levels [1][8]. - From Monday to Friday, influenced by factors such as the performance of risk assets, policy expectations, and economic data, the yields of 10Y and 30Y Treasury active bonds fluctuated. Compared with August 8th, by August 15th, the yields of 1Y, 5Y, 10Y, and 30Y Treasury bonds increased by 1.6BP, 4.9BP, 5.7BP, and 8.7BP respectively [8][9][10]. 3.2 Before the Key Resistance Level, the "Catalysts" and "Risk Points" of the Bond Market Catalysts - The limited bullish power in the bond market after the release of social financing and economic data this week may be due to the significant decline in bill rates at the end of June, which has already been expected by the market, rather than the unimportance of fundamental factors [2][17]. - The central bank closely monitors and precisely regulates the money market. Although there was a continuous net withdrawal from Monday to Thursday, the money market rate remained stable. On Friday, a 5000 - billion - yuan outright reverse repurchase was implemented in time, and the central bank's open - market operations turned to net injection [17]. - The allocation demand is gradually increasing. Since August is the "sales rush" period before the reduction of insurance's预定 interest rate, the subsequent insurance purchase strength is expected to further increase [17]. Risk Points - There is a risk of negative feedback from bond - fund redemptions. As of August 17th, the scale of stock - funds and bond - funds in August increased by 145.7 billion yuan and 50.3 billion yuan respectively compared with the previous month, and it is the second consecutive month that the growth rate of stock - fund scale is greater than that of bond - funds [3][19]. - The central bank's monetary policy focuses on multiple goals and may tolerate fluctuations in the money market and the bond market caused by the temporary amplification of supply - demand frictions at individual times [4][28]. - Compared with the stock - bond seesaw effect after the "924" package of policies last year, the upward range of interest rates in this round is not large. Since the "anti - involution" market in early July, the yields of 10Y and 30Y Treasury active bonds have increased by 11BP and 15BP respectively [4][28]. 3.3 Strategy Thinking: Ultra - Long Bonds Will See Intensive Issuance, Focus on the Switch of Individual Bond Relative Values - In the unstable bond - market situation, investors are advised to focus on bonds with both liquidity and relative value and conduct refined bond selection. They can seize the trading opportunities brought by the intensive issuance of ultra - long bonds from August to September [5][33]. - Usually, in the early stage of the issuance and subsequent re - issuance of new bonds, the spread between new and old bonds will widen. Next Friday, the 30 - year "25 Ultra - Long Special Treasury Bond 06" will be issued for the first time [5][33]. - Based on the issuance of 11 30 - year Treasury bonds since 2021, the spread between new and old bonds will reach its peak 2 - 9 trading days after the listing of the first - issued bond (except for 250002), with the spread widening by 2.1 - 9.5BP compared with the issuance start date and 1.6 - 15.8BP compared with the listing date (except for 2500005 which is narrowing). For the first issuance and the first two re - issuances, the spreads of active bonds, sub - active bonds, and new bonds compared with the 10 - year Treasury bond rate usually compress within the listing day and the following three trading days [5][34]. - For trading desks that can short, they can short old bonds before issuance, buy new bonds in the primary market, and then sell new bonds and buy back old bonds after the spread between new and old bonds widens. For allocation desks that cannot short, they can sell old bonds in their current holdings before issuance, buy new bonds in the primary market, and decide whether to sell and buy back old bonds after the new bonds are listed. In addition, lending bonds can further increase returns [38].

Core Viewpoint - The news highlights an upward movement in government bond futures, indicating a potential shift in market sentiment towards safer assets [1] Group 1: Market Performance - Government bond futures rose in the afternoon, with the TL contract increasing by 0.12% to 119.39 and the T contract rising by 0.10% to 108.59 [1] - The yield on the 10-year government bond active coupon decreased by 1.1 basis points to 1.6970% [1]

Group 1 - The core viewpoint of the article indicates that government bond futures experienced an upward trend in the afternoon session, with the TL contract rising by 0.12% to 119.39 and the T contract increasing by 0.10% to 108.59 [1] - The yield on the 10-year government bond active coupon decreased by 1.1 basis points to 1.6970% [1]