Core Viewpoint - The article discusses the current financial market conditions, highlighting the balanced and slightly loose liquidity environment, the unexpected rise in PMI, and the short-term nature of the bond market adjustments, leading to mixed performance in the stock and bond markets [2][4]. Group 1: Market Conditions - The central bank conducted a 7-day reverse repurchase operation of 528.8 billion yuan, with a net injection of 502.8 billion yuan after 26 billion yuan of reverse repos matured [2]. - The liquidity environment is described as balanced and slightly loose, with the DR001 rate around 1.33% and DR007 at approximately 1.98% [2]. - The stock market experienced slight gains, with the December PMI exceeding expectations, while bond market sentiment was initially positive before fluctuating [4]. Group 2: Bond Market Insights - The 10-year government bond yield opened at 1.86%, dipping to a low of 1.8475% before rebounding to 1.85% later in the day [4]. - The article notes that the bond market's adjustment is viewed as a short-term phenomenon by most industry insiders, as reported by the Financial Times [4]. - The 10-year government bond futures recorded their first annual decline since 2017, indicating significant market shifts [4]. Group 3: Year-End Performance - The US dollar index recorded its largest annual decline in eight years, paving the way for a strong performance in global commodities and stock markets, with gold and silver achieving historic gains [4]. - The Shanghai Composite Index rose by 18.4%, marking its largest annual increase in six years, while the bond market faced challenges [4]. - The article humorously attributes the bond market's predictions to a deputy governor, who forecasted a significant drop in bond prices with a yield increase of 30 basis points [4].