Report Industry Investment Rating No relevant content provided. Core View of the Report - The current active bond has successfully switched to "25 Ultra - long Special Treasury Bond 06" ("Te 6"), and the spread between it and the previous active bond "25 Ultra - long Special Treasury Bond 02" ("Te 2") has fluctuated between 8 - 16bp and is now around 8bp. The spread may decline further, but the compression process may be long and the space is relatively limited [7][10]. - The compression of the spread is restricted by two factors: the rapid increase in the trading activity of "25 Coupon - bearing Treasury Bond 02" and the impact of value - added tax [21][22]. Summary According to the Directory 1. Bond Market Weekly View: Limited Spread Compression Space after Bond Switching - From the perspective of liquidity premium, the spread between the new and old bonds after the bond switch may widen temporarily but will eventually decline. The subsequent issuance of the new bond under the original code has a weak impact on the spread compression. Attention should be paid to the trading activity of "25 Coupon - bearing Treasury Bond 02" [7][20]. - Due to the difference in the start date of issuance and the value - added tax policy, there should be a certain tax spread between Te 6 and Te 2. The actual tax spread may be lower than the theoretical one. The spread compression is restricted by the activity of "25 Coupon - bearing Treasury Bond 02" and value - added tax [21][22]. 2. This Week's Focus in the Fixed - Income Market: Accelerated Issuance of Local Bonds 2.1 Attention to Domestic Economic Data - This week, China will release data such as October's social retail sales and industrial added value, and the US will release data like October's seasonally adjusted CPI, PPI, and the EIA monthly short - term energy outlook report. The Bank of Japan will release the summary of opinions of the Monetary Policy Meeting in October [23][24]. 2.2 This Week's Expected Interest - Rate Bond Issuance is 708.1 billion - The issuance scale of interest - rate bonds this week is expected to be 708.1 billion, including 293 billion of treasury bonds, 285.1 billion of local bonds, and about 130 billion of policy - bank bonds [24][25]. 3. Review and Outlook of Interest - Rate Bonds: The Bond Market Gave Back Some Gains 3.1 Net Withdrawal of 1.57 trillion in Open - Market Operations - At the beginning of the month, there was a large - scale maturity of reverse repurchases, and the overall net withdrawal was 1.57 trillion. The repurchase volume increased seasonally, and the funds rate fluctuated after falling to a low level [29][31]. - The issuance scale of certificates of deposit decreased, and the issuance was mainly in medium - term tenors. The issuance rates of different tenors showed differentiation [37]. 3.2 Bond Market Interest Rates Rose on the Whole - Last week, the bond market gave back some gains. Although the export data declined more than expected, the bond market interest rates rose mainly due to factors such as fund fluctuations and the rise of the equity market. The yields of 10Y treasury bonds and 10Y CDB active bonds increased by 1.4bp each, and the 5Y CDB bond had the largest increase of 5bp [7][49]. 4. High - Frequency Data: Commodity Prices Declined - On the production side, the operating rates were divided. The daily average crude steel output in late October decreased year - on - year. On the demand side, the year - on - year growth rates of passenger car wholesale and retail improved, while the year - on - year growth rate of commercial housing transaction area was still weak. The export index showed differentiation [55]. - In terms of prices, crude oil, copper, and aluminum prices declined, and coal prices were divided. The building materials price index decreased, and the prices of downstream vegetables and pork increased [56].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - On August 22, 2025, key - term treasury bonds were newly issued after the levy of coupon VAT. The coupon rate of 10Y25 Treasury Bond 16 (2516) is 1.83%, and that of 30Y25 Ultra - long Special Treasury Bond 06 (25T6) is 2.15%. Whether 2516 and 25T6 can become active bonds is the key to the rationality of their issuance pricing [1][7]. - For 30Y treasury bonds, there are three possibilities for the next active bond: 25 Ultra - long Special Treasury Bond 02 may remain active throughout the year; the active bond may switch to 25T6; or it may switch to 25 Treasury Bond 02. If 25T6's actual issuance scale is close to the estimated scale, it is likely to become the next active bond and has investment value [2][10]. - For 10Y treasury bonds, 25 Treasury Bond 11 may remain active for some time due to market investment habits, but 2516 has the possibility of quickly switching to the active bond. If it switches successfully, it has certain cost - effectiveness with an implied tax rate of 3.77% when priced with reference to the active bond [3][16]. Summary by Relevant Catalog 1.1 Subsequent 30Y Treasury Bond Active Bond Possibility Analysis - **Estimated Scale of 25T6**: According to the issuance plan, 25T6 will have three more consecutive issuances in September and October. Assuming 20Y and 50Y consecutive issuances are based on the recent issuance scale of 35 billion yuan, 25T6's total scale may reach 317 billion yuan, higher than 25 Ultra - long Special Treasury Bond 05 but slightly lower than 25 Ultra - long Special Treasury Bond 02 [8]. - **Estimated Scale of 25 Treasury Bond 02**: In 2025, 25 Treasury Bond 02 will have two consecutive issuances in November and December. Assuming each issuance is 78 billion yuan, its final scale is expected to reach 273 billion yuan, less than the estimated scale of 25T6 [9]. - **Next 30Y Treasury Bond Active Bond Possibility**: Since 2020, most 30Y treasury bonds can remain active for over 150 days after becoming active bonds, and generally become active within 60 days after the first issuance. The average proportion of the issuance scale when becoming an active bond to the final scale is 54%. There are three possibilities for the next active bond: 25 Ultra - long Special Treasury Bond 02 may remain active, in which case 25T6 may have low value; the active bond may switch to 25T6, which has high cost - effectiveness; or it may switch to 25 Treasury Bond 02, but the probability is low. If 25T6's actual scale is close to the estimated one, it is likely to become the next active bond [2][10]. 1.2 Subsequent 10Y Treasury Bond Active Bond Possibility Analysis - **Historical 10Y Treasury Bond Active Bond Situation**: Since 2020, 10Y treasury bonds generally remain active for about three months after becoming active bonds and usually become active within one month after issuance. Since 2024, the issuance scale has become an important factor affecting whether a 10Y treasury bond can become an active bond [15]. - **Estimated Scale of 2516**: If 2516 is issued consecutively based on the current issuance scale, its final scale is expected to be 462.03 billion yuan, slightly lower than the current active bond 25 Treasury Bond 11, but still a large - scale 10Y treasury bond [15]. - **Possibility of 2516 Becoming Active Bond**: 25 Treasury Bond 11 may remain active for some time due to market investment habits, but 2516 has the possibility of quickly switching to the active bond. After the first consecutive issuance, if it switches successfully, it has certain cost - effectiveness with an implied tax rate of 3.77% when priced with reference to the active bond [3][16].