Core Viewpoint - The recent "double reduction" in interest rates has led to a stable performance in the bond market, with discussions focusing on whether there is still room for further rate cuts in the second quarter [1][4]. Group 1: Market Performance - As of May 12, the interbank bond market saw an overall rise in yields, with the 3-month government bond yield increasing by 1 basis point to 1.41%, the 2-year yield rising by 1 basis point to 1.44%, and the 10-year yield jumping by 5 basis points to 1.69% [2]. - Following the "double reduction," long-term bond yields have shown weak performance, indicating challenges in the downward pricing logic for long-term bonds [3][4]. Group 2: Future Outlook - There is a prevailing optimistic sentiment among institutions regarding the bond market, with expectations that if short-term rates can maintain low volatility, a "bull market" in bonds may continue, potentially pushing the 10-year government bond yield down to a range of 1.5% to 1.6% [4][5]. - The supply-demand relationship in the bond market is expected to improve in the second quarter, as the net increase in interest rate bonds will decrease, alleviating supply pressure [5]. Group 3: Monetary Policy Impact - The easing of monetary policy through rate cuts and potential resumption of government bond purchases is anticipated to support the bond market, especially in light of economic pressures from trade disputes [5][6]. - Analysts suggest that the current environment necessitates a focus on left-side opportunities, where investors can identify value during market volatility [6][7].

Core Viewpoint - The bond market experienced significant volatility on the 25th, characterized by a "roller coaster" trading pattern, indicating a divergence in future expectations among market participants [1][2][3]. Group 1: Market Performance - On the 25th, all maturities of government bond futures opened significantly higher, peaked, then fell to a new low before recovering to near the opening price by midday [2][4]. - The trading volume of major contracts surged, with the 30-year contract rising by 0.69% to a volume of 99,500 contracts, the 10-year contract up by 0.25% to 156,000 contracts, and the 5-year contract increasing by 0.16% to 125,000 contracts [4]. - The 10-year government bond yield reached a new high of 1.779% during the day but later retraced all gains, reflecting market instability [4]. Group 2: Market Expectations - The significant increase in trading volume indicates a stark division in expectations regarding future interest rates and macroeconomic conditions, with both bullish and bearish positions being taken [4][6]. - The DR007 (7-day repo rate) rose to 2.21%, while the 10-year government bond yield hovered around 1.76%, indicating a notable inversion that complicates leveraged strategies for bond bulls [6]. - A report from CITIC Securities suggests that if the 10-year yield exceeds the resistance level of 1.65%, it could trigger increased selling pressure as many funds may enter a loss position [6]. Group 3: Market Sentiment and Analysis - Nearly 40% of fixed-income sell-side analysts have shifted their outlook to bearish, citing that current economic conditions do not support further monetary easing by the central bank [7]. - Analysts believe that the prolonged tightness in funding conditions may lead to a reassessment of the bond market's attractiveness, especially as stock markets show potential for higher returns [9][10]. - Despite the current tightening, some analysts maintain that long-term monetary easing remains a likely scenario, suggesting that the pressure on the bond market may be limited in the near term [10].