Xin Hua Cai Jing·2025-08-12 08:19Core Viewpoint - The bond market is experiencing a weak consolidation phase, with government bond futures mostly declining and interbank bond yields rising slightly, indicating a potential shift in market dynamics driven by supply-side policies aimed at increasing corporate profits and subsequently boosting demand [1][2][7]. Market Performance - Government bond futures closed mostly lower, with the 30-year main contract down 0.31% and the 10-year main contract down 0.04% [2]. - Interbank bond yields generally increased, with the 30-year government bond yield rising by 0.7 basis points to 1.963% and the 10-year government bond yield increasing by 0.25 basis points to 1.72% [2]. - The China Convertible Bond Index fell by 0.25%, with significant declines in several convertible bonds, while others saw notable gains [2]. International Market Trends - In North America, U.S. Treasury yields collectively decreased, with the 10-year yield falling by 0.58 basis points to 4.281% [3]. - In Asia, Japanese bond yields rose, with the 10-year yield increasing by 1.4 basis points to 1.504% [4]. - In the Eurozone, yields on 10-year bonds from France, Germany, Italy, and Spain all increased, indicating a regional trend of rising yields [4]. Primary Market Activity - The China Development Bank issued financial bonds with yields of 1.5193%, 1.6562%, and 1.7942% for 2-year, 5-year, and 10-year maturities, respectively, with strong bid-to-cover ratios [5]. - Agricultural Development Bank also issued 2-year financial bonds with competitive yields and high bid-to-cover ratios, reflecting strong demand [5]. Liquidity Conditions - The central bank conducted a reverse repurchase operation of 1146 billion yuan at a rate of 1.40%, resulting in a net withdrawal of 461 billion yuan for the day [6]. - Short-term Shibor rates mostly increased, indicating tightening liquidity conditions in the market [6]. Institutional Insights - Dongwu Securities noted that the current low yield environment for 10-year government bonds is under pressure from commodity price rebounds, but a significant bearish trend is unlikely without demand-driven factors [7]. - CITIC Securities highlighted the need to monitor risks in the convertible bond market, suggesting a focus on equity strategies and convertible bonds with favorable conversion premiums [8]. - China International Capital Corporation indicated that credit demand remains stable, with a low risk of credit spreads widening significantly in the current environment [8].