Core Viewpoint - The bond market experienced a "rise then fall" pattern, with government bond futures declining in the afternoon and long-term bonds showing weakness, while short to medium-term bonds performed relatively well. The market is expected to remain in a range-bound fluctuation due to limited improvement in bank interest margins from the recent interest rate cuts, with the next rate cut window anticipated to be at least in the third quarter [1][6][7]. Market Performance - Government bond futures closed mixed, with the 30-year main contract down 0.08% at 119.61, the 10-year main contract unchanged at 108.83, the 5-year main contract up 0.03% at 106, and the 2-year main contract up 0.02% at 102.38 [2]. - The interbank major interest rate bond yields showed slight differentiation, with long bonds stable and medium to short bonds performing better. The 10-year government bond yield rose by 0.5 basis points to 1.671%, while the 7-year government bond yield fell by 0.5 basis points to 1.61% [2]. Overseas Market Trends - In North America, U.S. Treasury yields rose across the board, with the 10-year yield increasing by 3.96 basis points to 4.489% and the 30-year yield rising by 6.98 basis points to 4.974% [3]. - In Asia, Japanese bond yields mostly fell slightly, with the 10-year yield down by 0.1 basis points [3]. - In the Eurozone, yields on 10-year bonds also increased, with French bonds up by 0.3 basis points to 3.259% and German bonds up by 1.8 basis points to 2.603% [3]. Primary Market - The Ministry of Finance's three types of government bonds had weighted average winning yields mostly below the China Bond valuation, with the 30-year bond yield at 1.8808% and a bid-to-cover ratio of 3.16 [4]. Funding Conditions - The central bank conducted a 7-day reverse repurchase operation of 1570 billion yuan at a fixed rate of 1.40%, resulting in a net injection of 650 billion yuan for the day [5]. - The Shibor short-term rates mostly declined, with the overnight rate unchanged at 1.509% and the 7-day rate down by 0.7 basis points to 1.549% [5]. Institutional Perspectives - Huatai Fixed Income noted that the recent LPR and deposit rate cuts are a continuation of the May rate cut policy, with the adjustments slightly exceeding expectations due to significant pressure on banks' net interest margins [6]. - Zhongjin Fixed Income highlighted that the asymmetric rate cuts are beneficial for the bond market and reflect the central bank's support for banks' net interest margins and overall health [7]. - Guosheng Fixed Income emphasized that the recent adjustments in LPR and deposit rates are a follow-up to previous policy rate reductions, which will help alleviate banks' funding costs and enhance bond market demand [7].