Summary of Key Points from the Conference Call Industry Overview - **Global Macro Outlook**: The conference call discusses the macroeconomic outlook, focusing on US rates, international rates, commodities, currencies, and emerging markets [3][4][5][6][7]. Core Insights and Arguments US Rates - **Investment Strategy**: Maintain 5s20s steepeners due to diverse views across the FOMC, which keeps volatility and term premium elevated. Tactical shorts in 3-year Treasuries are recommended as near-term risks skew towards mean reversion [3][12][15]. - **Interest Rate Forecast**: The first Fed cut is projected for September 2025, with 2-year and 10-year Treasury yields expected to reach 3.50% and 4.20% by year-end 2025 [11]. International Rates - **Market Reactions**: Following a dovish surprise from the US labor market report, developed market (DM) rates have sold off broadly, with curves steepening amid low August liquidity [4][38]. Commodities - **Oil and Natural Gas**: The Trump administration has limited leverage over Russia without risking a spike in oil prices. The enactment of the OBBA is expected to decrease overall renewable energy capacity additions, but may expedite wind and solar projects that are advanced enough [8][92]. - **Copper Prices**: A bearish outlook for copper prices is anticipated, with expectations of prices dropping towards $9,000/mt due to unwinding Chinese demand and front-loading in US imports [95]. Currencies - **USD Outlook**: A bearish stance on the USD is maintained, with expectations that US data needs to slow further or Fed independence concerns need to intensify for significant USD weakness to occur. A potential Russia/Ukraine ceasefire could also act as a catalyst for USD weakness [57][59][64]. - **CNY Forecast**: The USD/CNY forecast has been revised to 7.10 for Q4 and 7.05 for 2Q'26, reflecting lower US rates and better-than-expected local equity returns [81]. Emerging Markets - **Investment Positioning**: The strategy has shifted to overweight (OW) emerging market (EM) FX and local rates, while remaining underweight (UW) EM sovereign credit. The expectation is for renewed USD weakness to provide opportunities for EM currencies to appreciate [108][109]. Additional Important Insights - **Treasury Funding**: The US Treasury is well-funded through FY25, but a significant funding gap is expected to emerge in FY26, leading to anticipated coupon size increases starting in May 2026 [21][24]. - **Investor Positioning in Agriculture**: Aggregate investor positioning in agriculture markets is rising from seasonal lows but remains vulnerable to short covering [96][100]. - **Foreign Demand for Treasuries**: Demand from foreign investors remains weak, with expectations of a shift towards more price-sensitive investors, which may keep long-term yields anchored at higher levels [31][33]. This summary encapsulates the key points discussed in the conference call, providing insights into the macroeconomic landscape, investment strategies, and market forecasts across various sectors.

Core Viewpoint - The market often does not replicate previous fluctuations simply, especially on the third occurrence, leading to unexpected outcomes contrary to common expectations [1] Group 1: Market Conditions - The funding environment is balanced and slightly loose, with long-term bond yields rising significantly [3][5] - The central bank conducted a 112 billion yuan reverse repurchase operation, with 544.8 billion yuan of reverse repos maturing today, resulting in a net withdrawal of 432.8 billion yuan [3] - The overnight anonymous quote returned to 1.3%, indicating a volatile upward trend in interest rates [5][6] Group 2: Economic Indicators - July's Consumer Price Index (CPI) was slightly above expectations, while the Producer Price Index (PPI) was slightly below expectations, contributing to strong performances in both the stock and commodity markets [5][6] - The "stock-bond seesaw" effect is evident, with the stock market showing resilience while the bond market faces pressure [6] Group 3: Trading Performance - The 10-year government bond yield opened at 1.6875% and fluctuated, closing at 1.7175%, reflecting a 2.65 basis point increase [6] - The trading volume for R001 was 74,543.21 million yuan, with a slight decrease of 135.63 million yuan, while R007 saw a volume of 6,707.92 million yuan, increasing by 160.03 million yuan [4]

Investment Rating - The report maintains an overall positive outlook on emerging market currencies while being underweight on emerging market sovereign credit and maintaining a market weight on local rates and corporates [7]. Core Insights - The report projects a first Fed cut in December 2025, with expectations for 2-year Treasury yields to reach 3.50% and 10-year yields to reach 4.35% by year-end 2025 [11][13]. - Global oil demand is tracking year-over-year growth of 410 thousand barrels per day (kbd), but is 130 kbd lower than the forecasted expansion for June [7]. - The dollar smile phenomenon persists, indicating that the dollar's strength is contingent on the nature of events driving defensive behavior [7]. US Rates - Front-end yields have declined to 2-month lows, influenced by administration criticism of the Fed, with a healthy labor market indicated by June employment data [3][16]. - Tactical positions include entering 2-year shorts and adding steepeners in the 5s/7s sector while hedging with flatteners in the 10s/30s sector [19][21]. International Rates - Yield curves have bull steepened across most developed markets, with US rates outperforming due to a sharp drop in oil prices and dovish Fed commentary [4][47]. - Euro rates have bear steepened, driven by updated German fiscal numbers and NATO defense spending agreements [4][47]. Commodities - Jewelry demand weakness is not expected to significantly impact gold prices, although vigilance is advised for potential shifts to other metals [7]. Currencies - The report maintains a bearish stance on the USD, projecting key targets for various currency pairs, including EUR/USD at 1.20-1.22 and GBP/USD at 1.42 [66][85]. - The dollar's weakening is anticipated due to moderation in US growth and supportive fiscal and monetary policies outside the US [66][71]. Emerging Markets - The report suggests staying overweight on emerging market currencies while being underweight on emerging market sovereigns, with a market weight on local rates and corporates [7]. - US policies are expected to dominate the emerging market outlook in the second half of the year, with a slower growth, no-recession base case [7].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints - No explicit core viewpoints are presented in the given content. The report mainly offers a comprehensive overview of the performance of various global asset markets. 3. Summary by Relevant Catalogs Global Asset Market Performance 10 - Year Treasury Yields of Major Economies - On June 26, 2025, yields varied widely across countries, with Brazil at 6.580% and Switzerland at 0.377%. Yields have changed over different time - frames, e.g., the US 10 - year yield decreased by 0.050 in the latest change, 0.150 in a week, 0.237 in a month, and increased by 0.019 in a year [3]. 2 - Year Treasury Yields of Major Economies - As of June 26, 2025, the US 2 - year yield was 3.750. Yields have also changed over time, such as the US 2 - year yield decreasing by 0.090 in the latest change, 0.190 in a week, 0.260 in a month, and 0.920 in a year [3]. Dollar Exchange Rates Against Major Emerging - Market Currencies - On June 26, 2025, the dollar - to - Brazilian real rate was 5.489. Exchange rates have had different percentage changes over time, e.g., the dollar - to - Brazilian real rate decreased by 1.34% in the latest change and 3.53% in a month [3]. Main Economies' Stock Indices - On June 26, 2025, the S&P 500 closed at 6141.020. Indices have shown different percentage changes in the latest, weekly, monthly, and yearly periods, like the S&P 500 rising 0.80% in the latest change, 4.29% in a month, and 11.92% in a year [3]. Credit Bond Indices - Credit bond indices of different regions and types (investment - grade and high - yield) have had positive changes over different time - frames. For example, the US investment - grade credit bond index increased by 0.24% in the latest change, 0.91% in a week, 2.14% in a month, and 5.59% in a year [3][4] Stock Index Futures Trading Data - **Index Performance**: On June 26, 2025, the A - share index closed at 3448.45 with a - 0.22% change. Other indices like the CSI 300, SSE 50, ChiNext, and CSI 500 also had their respective closing prices and percentage changes [5]. - **Valuation**: PE (TTM) values for indices such as the CSI 300, SSE 50, CSI 500, S&P 500, and German DAX were reported, along with their环比 changes. For example, the PE (TTM) of the CSI 300 was 13.17 with a 0.00% 环比 change [5]. - **Risk Premium**: Risk premium data for some indices were provided, e.g., the risk premium of the S&P 500 was - 0.41 with a 0.02% 环比 change [5]. - **Fund Flows**: The latest values and 5 - day averages of fund flows for different segments of the A - share market were given. For example, the latest A - share fund flow was - 716.56 [5]. - **Trading Volume**: The latest trading volumes and 环比 changes of different indices were reported. For example, the latest trading volume of the Shanghai and Shenzhen stock markets was 15831.51 with a - 195.89 环比 change [5]. - **Main Contract Basis and Spread**: The basis and spread data for index futures contracts (IF, IH, IC) were presented. For example, the basis of the IF contract was - 41.82 with a - 1.06% spread [5] Treasury Futures Trading Data - **Closing Prices and Changes**: Treasury futures (T00, TF00, T01, TF01) had their closing prices and percentage changes. For example, the T00 closed at 108.950 with a - 0.03% change [6]. - **Funding Rates**: R001, R007, and SHIBOR - 3M funding rates and their daily changes were reported. For example, R001 was 1.4399% with a - 42.00 BP daily change [6]

Group 1: Open Market Operations - The central bank announced a 7-day reverse repurchase operation on June 23, with a fixed rate and quantity tendering of 220.5 billion yuan at an interest rate of 1.40%, with the bid and awarded amount both at 220.5 billion yuan [1] - On the same day, 242 billion yuan in reverse repos and 100 billion yuan in treasury cash deposits matured [1] Group 2: Funding Conditions - The overall funding environment is relatively loose, with overnight pledged repo rates slightly declining but remaining around 1.37%, while the 7-day pledged repo rate increased by over 1 basis point [3] - The latest overnight financing guarantee rate in the U.S. is 4.28% [5] - The latest transaction for one-year interbank certificates of deposit among major banks is around 1.64%, showing little change from the previous day [6] Group 3: Interbank Major Rate Bond Yields - The yields for various government bonds are as follows: - 1Y: 1.3550% - 2Y: 1.3725% - 3Y: 1.4000% - 5Y: 1.4820% - 7Y: 1.5700% - 10Y: 1.6400% [9] Group 4: Recent City Investment Bonds (AAA) Yield Spread Trends - Recent trends and data on yield spreads for city investment bonds (AAA) were analyzed, indicating market conditions [10] Group 5: National Bond Futures Closing - The closing prices for national bond futures are as follows: - 30-year main contract down 0.04% - 10-year main contract down 0.01% - 5-year main contract unchanged - 2-year main contract down 0.01% [11] Group 6: Key News - The Ministry of Foreign Affairs announced that Premier Li Qiang will attend the 16th Summer Davos Forum in Tianjin from June 24 to 25, where he will deliver a special speech at the opening ceremony [11] - Iran plans to close the Strait of Hormuz, with the Ministry of Foreign Affairs responding that the safety and stability of the region are in the common interest of the international community [11] Group 7: Bond Market Developments - The first low-altitude economy ABS was successfully established on the Shenzhen Stock Exchange [15] - The Financial Supervision Administration has allowed currency brokerage companies to facilitate transactions between financial institutions in currency, bonds, foreign exchange, and gold markets [15] - The Japanese government plans to more actively reduce the scale of long-term government bond auctions [15]

Summary of Conference Call Records Industry Overview - The records discuss the fixed income market in China, highlighting the impact of economic slowdown on global markets, with an estimated 1.5%-2% impact on global economic growth due to China's economic deceleration [1][2]. Key Points and Arguments - **Economic Slowdown**: High-frequency data from April indicates a significant slowdown in economic activity, with the Business Condition Index (BCI) dropping by 4.6 percentage points and new home sales down by 20-30% year-on-year, reflecting weak domestic demand [1][2]. - **Monetary Policy Constraints**: The monetary policy has not been timely or aggressive enough to stimulate demand, leading to a constrained downward movement in interest rates. The central bank has primarily played a passive role in liquidity management [1][2]. - **Market Outlook**: The political bureau meeting suggests limited government special bond supply and credit expansion pressure in Q2, with no large-scale stimulus policies expected. This indicates a higher likelihood of downward market movement and a lower probability of interest rates rising [1][3]. - **Investment Opportunities**: In the current market environment, there are opportunities arising from the narrowing yield spread between short-term and long-term government bonds. It is recommended to increase allocations in short-term government bonds and monitor credit bond investment opportunities closely [1][5]. - **Government Bond Issuance**: The issuance plan for special government bonds and supplementary bank capital bonds in Q2 is expected to have limited impact on market supply pressure, with net financing for special government bonds estimated at approximately 4.4 trillion yuan, slightly higher than Q1 [1][6]. - **Price Trends and Inflation**: The escalation of the US-China trade conflict and domestic economic slowdown have led to a significant drop in the industrial product price index, with expectations of a notable increase in PPI declines in April, potentially reaching a year-on-year drop of 2.8%-2.9% [1][7]. - **Trade Conflict Impact**: The ongoing US-China trade conflict is expected to have a delayed impact on economic indicators, with more pronounced effects anticipated by May 2025, which may lead to further downward pressure on interest rates [1][8]. Additional Important Insights - **Investment Strategy**: A "barbell" investment strategy is recommended, focusing on one-year term deposits and credit bonds, as well as long-term government bonds (10 years and above). This strategy is expected to provide better value given the current market conditions [1][9]. - **Interest Rate Projections**: The yield on 10-year government bonds is projected to potentially drop to around 1.4% this year, reflecting the limited upward movement in long-term bond yields due to substantial fundamental pressures and limited government bond supply [1][10].

Market Overview - The central bank conducted a 7-day reverse repo operation on April 8, with a total amount of 167.4 billion yuan and a fixed interest rate of 1.50%, resulting in a net injection of 102.5 billion yuan after accounting for maturing repos [1][2]. Funding Conditions - Overnight and 7-day pledged repo rates for deposit-taking institutions have both increased, with the weighted average rate for overnight repos rising by approximately 1 basis point [3]. Interbank Certificates of Deposit - The latest transaction for one-year interbank certificates of deposit among major banks is around 1.79%, showing a significant increase compared to the previous day [6]. Government Bonds - The yields for various government bonds are as follows: - 1-year: 1.5325% - 2-year: 1.4700% - 5-year: 1.5395% - 10-year: 1.6650% - 30-year: 1.8590% [9]. Recent City Investment Bonds - The yield spreads for AAA-rated city investment bonds across different maturities have shown notable trends, indicating market sentiment and risk perception [10][11]. Treasury Futures - The main contracts for treasury futures have experienced declines, with the 30-year contract down by 0.54%, the 10-year down by 0.17%, and shorter maturities also showing slight decreases [12]. Key News - The central bank expressed strong support for the Central Huijin Investment Company to stabilize the capital market by increasing its holdings in stock market index funds and providing necessary refinancing support [13]. - The Ministry of Finance and the Ministry of Housing and Urban-Rural Development announced a competitive evaluation process for cities to receive central financial support for urban renewal actions in 2025 [14]. - The financial regulatory authority optimized the investment ratios for insurance funds, potentially bringing an estimated 1.66 trillion yuan of new funds into the market by fully utilizing the upper limit of equity asset ratios [14]. Global Macro - Singapore's Prime Minister stated that the country is carefully assessing the impact of U.S. tariffs and will not impose retaliatory tariffs [16]. - Malaysia's Prime Minister announced that the country will take necessary measures to protect its economic interests in response to the U.S. "reciprocal tariff" policy [17]. Bond Market Events - The Ministry of Finance plans to issue 80 billion yuan of three-phase discount treasury bonds on April 9 [19]. - Various cities are exploring policies to stabilize the real estate market [19]. - Jiangsu Province is encouraging enterprises to issue technology innovation bonds in the interbank market [19]. - Japan's 30-year government bond auction saw the weakest demand since December 2023 [19].