The Sino-Canadian Fund believes that, according to the latest monetary policy implementation report, the "moderately loose" monetary policy tone does not necessarily mean that monetary policy will be loose in the first quarter. The central bank's policy is still constrained by the interim objectives of stabilizing the exchange rate and preventing risks. In the short term, the barbell strategy is more advantageous, and it is recommended to seize the opportunity to allocate assets at the upper level during the box-body oscillation period, focusing on interest-bearing assets that still have a positive interest rate differential. In the convertible bond market, there has been a slight compression in the premium rates for conversion into equity in various parity intervals, reflecting some profit-taking pressure in the market. The breakthrough in intelligent driving and AI applications, record-high box office sales in the film industry, and the continuous emergence of industry themes indicate that the market may have entered the second phase dominated by resonance of the underlying stocks. In the short term, there are increasing opportunities for underlying stocks such as the technology sector, and it may be appropriate to slightly weaken the requirements for premium rates for conversion into equity and actively participate in opportunities reflecting A-share themes. Primary Market Review Last week, the issuance scale of primary market treasury bonds, local government bonds, and policy financial bonds was 353.6 billion, 161.5 billion, and 170.9 billion respectively, with net financing amounts of 228.6 billion, 146.5 billion, and 170.9 billion. Financial bonds (excluding policy financial bonds) had a total issuance scale of 62.2 billion and a net financing amount of 26.4 billion. Non-financial credit bonds had a total issuance scale of 40.1 billion and a net financing amount of -34.9 billion. Secondary Market Review Last week, bond yields rose, while the curve overall remained flat. The main factors influencing this include: liquidity, stock-bond seesaw effect, and the central bank's monetary policy implementation report. Liquidity Tracking Last week, the central bank continued to withdraw liquidity, leading to a tightening of the liquidity environment throughout the week. Ultimately, both R001 and R007 increased by 20.5 basis points and 24.7 basis points respectively compared to the previous week. Policy and Fundamentals Credit data in January started off well, with policy bolstering being the main driving force. According to high-frequency data: high-frequency production indicators showed seasonal recovery after the Spring Festival, weak resumption of infrastructure construction, declining external demand sentiment, and internal differentiation of food and industrial commodity prices. Overseas Markets US inflation performed better than expected, and Trump announced reciprocal tariffs, reducing concerns about the implementation of a universal 10-20% tariff on the US. The 10-year US Treasury yield closed at 4.47%, down by 2 basis points from the previous week. Equity Market Affected by DeepSeek, Chinese technology-listed companies performed well, with the Hang Seng Tech Index leading global gains year-to-date. Last week, the entire A-share market rose by 1.67%, with all major broad-based indexes rising, including the CSI 50 and CSI 1000, which increased by 3.84% and 1.87% respectively. A-share trading volume increased significantly, with an average daily turnover of 1.75 trillion throughout the week, an increase of 1339.78 billion compared to the previous week. The market sentiment continued to improve slightly, and the market risk of overheating in the short term for the technology growth sector was a concern. Bond Market Strategy Outlook According to the latest monetary policy implementation report, the "moderately loose" monetary policy tone does not necessarily mean that monetary policy will be loose in the first quarter. The central bank's policy is still constrained by the interim objectives of stabilizing the exchange rate and preventing risks. The central bank removed the phrase "maintaining the stable operation of monetary market interest rates" in the liquidity section of the report, which may also indirectly indicate its attitude towards the recent high prices of funds. In the deep state of negative interest rate differentials, the bond market's micro fragility has become slightly evident, with more adjustments in short-term bonds recently. Considering that in the second half of February, the stock market's heat is likely to remain high due to the support of foreign capital and expectations for the annual legislative sessions, the pressure on the bond market may not have been fully released.