Group 1 - The bond market experienced fluctuations with yields initially rising and then falling, leading to a flattening of the yield curve. As of August 1, the yields for 30Y, 10Y, and 1Y government bonds changed by -1.87BP, -0.87BP, and +1BP, respectively, closing at 1.95%, 1.71%, and 1.37% [1][7] - The yield spread between 30Y-10Y and 10Y-1Y changed by 0.3BP and -1.64BP, reaching 24BP and 33BP, respectively [1][7] - Key factors influencing the bond market included the stock-bond relationship, the outcome of US-China tariff negotiations, limited incremental statements from the Political Bureau meeting, and fluctuations in the funding environment [1][7] Group 2 - The bond issuance scale decreased during the week of July 28 to August 3, with government bonds issued totaling 180.26 billion yuan, local government bonds at 337.135 billion yuan, and interbank certificates of deposit at 386.73 billion yuan, a total decrease of 393.33 billion yuan from the previous week [2][55] - The issuance progress of local government bonds reached 64.7%, with new special bonds and general bonds at 64% and 68.2%, respectively, indicating a steady issuance pace compared to historical averages [2][55] Group 3 - The central bank maintained liquidity by net injecting 6.9 billion yuan through 7-day reverse repos during the week of July 28 to August 1, with funding rates showing a marginal tightening before the month-end and gradually returning to a more relaxed state afterward [3][57] - The DR001 and DR007 rates changed by -20BP and -21BP, settling at 1.31% and 1.49%, respectively [3][57] Group 4 - The bond market strategy suggests a gradual balance between stocks and bonds, with attention to the short-term impact of tax adjustments on bond yields. The market is expected to experience wide fluctuations as it re-prices previous negative factors while observing new positive elements [4][67] - The government bond supply is anticipated to remain high in August, potentially reaching around 1.4 trillion yuan, marking a peak for the second half of the year [4][67] - The announcement of the resumption of VAT on newly issued government bonds starting August 8 is expected to create short-term volatility in the bond market, with older bonds potentially benefiting from tax advantages [4][67]
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