Market Overview - The bond market continued to show weakness, with government bond futures experiencing a significant decline, particularly in the long-term contracts [1][2] - The central bank conducted a net withdrawal of 127.7 billion yuan in the open market, indicating a gradual return to a balanced but slightly loose liquidity environment [1][5] Bond Yield Trends - The yields on various government bonds showed a mixed trend, with long-term bonds weakening while short-term bonds remained stable [2] - The 30-year government bond yield rose by 1 basis point to 1.899%, while the 10-year government bond yield increased by 1.3 basis points to 1.69% [2] International Bond Market - In North America, U.S. Treasury yields fell across the board, with the 10-year yield dropping by 3.38 basis points to 4.3757% [3] - In Asia, Japanese bond yields saw a notable increase, particularly in the long-term segment [3] - European bond yields also decreased, with the 10-year French bond yield falling by 10.4 basis points to 3.292% [3] Primary Market Activity - The China Development Bank issued financial bonds with yields of 1.4933%, 1.5673%, and 1.6939% for 2-year, 5-year, and 10-year maturities, respectively, indicating strong demand with bid-to-cover ratios above 3 [4] Liquidity and Funding Conditions - The central bank's reverse repos on July 22 totaled 214.8 billion yuan at a fixed rate of 1.40%, contributing to a net withdrawal of 127.7 billion yuan for the day [5] - Short-term Shibor rates declined, with the overnight rate falling to 1.317%, the lowest since September 2022 [5] Institutional Insights - Institutions suggest that the bond market is likely to remain in a volatile state due to strong production but weak demand, with significant factors including stock market performance and major investment projects [6][7] - The convertible bond market is viewed as having high valuations, with recommendations to focus on stocks with a conversion premium within 20% [7]