Core Viewpoint - The bond market showed signs of recovery on August 25, with government bond futures rising across the board and interbank bond yields gradually decreasing, indicating a cautious but optimistic outlook for bond investments during a slow bull market in equities [1][2][7]. Market Performance - Government bond futures closed significantly higher, with the 30-year main contract up by 0.78%, the 10-year main contract up by 0.27%, the 5-year main contract up by 0.15%, and the 2-year main contract up by 0.10% [2]. - The interbank bond yields saw a downward trend, with the 30-year government bond yield decreasing by 3.5 basis points to 2.0025%, and the 10-year government bond yield down by 2 basis points to 1.765% [2]. Fund Flow - The People's Bank of China conducted a 288.4 billion yuan reverse repurchase operation at a fixed rate of 1.40%, resulting in a net injection of 21.9 billion yuan for the day [5]. - The central bank also announced a 600 billion yuan Medium-term Lending Facility (MLF) operation, indicating a net injection of 300 billion yuan for August, marking the sixth consecutive month of increased MLF operations [5]. Institutional Insights - Huatai Securities maintains a view that investors should prioritize equities over convertible bonds, while also suggesting that the current market conditions allow for strategic bond investments to enhance portfolio returns [7]. - CITIC Securities emphasizes that the bond market can still provide positive returns even during equity market uptrends, suggesting a strategy of capitalizing on bond rebounds during equity market corrections [7]. - Shenwan Hongyuan highlights that while leverage has decreased, risks remain, and the crowded trading environment in the bond market necessitates a cautious approach [7].

Core Insights - The report suggests that a long-term bullish asset breaking below the annual line typically indicates a good entry point, recommending investors adopt a persistent mindset and defensive counterattack strategy in response to the current insufficient Calmar ratio in the bond market [1][3][21] Group 1: Asset Price and Annual Line - The annual line (MA250) serves as a medium to long-term trend anchor, representing the average cost over the past year and is viewed as the market's long-term equilibrium price. A price drop below this line often signals a weakening market sentiment and a potential trend reversal [11][12] - A downward breach of the annual line is interpreted as a bearish signal, indicating that the market may be entering a medium to long-term bear phase, which could trigger stop-loss or reduction actions among investors [11][12] Group 2: Review of Mainstream Assets - The 10-year government bond futures exhibit a clear long-term momentum trend, with strong support expected near the annual line. Historical analysis shows that the T contract has often rebounded after touching the annual line, indicating potential for recovery [13][14] - The Shanghai Composite Index has experienced multiple breaches of the annual line in recent years, with significant volatility and no clear support at the annual line, leading to substantial annual drawdowns [17][18] - The Nasdaq Index has shown a similar pattern, with significant movements around the annual line, reflecting the impact of macroeconomic factors and investor sentiment on its performance [20][22] Group 3: Market Sentiment and Strategy - The report emphasizes that unless a long-term bull market is confirmed to have ended, the current situation presents a favorable entry point for investors. The historical performance of the T contract supports this view, as most years have proven effective for entry after a breach of the annual line [3][21] - Short-term downward momentum may persist due to concentrated stop-loss releases following the breach, but as long as the bull market trend continues, the report suggests that opportunities outweigh risks [3][21]

Market Overview - A-shares major indices collectively rose in early trading on June 9, 2025, with the Shanghai Composite Index up 0.23%, the Shenzhen Component Index up 0.62%, and the ChiNext Index up 1.22% [1] - The total market turnover reached 838.6 billion yuan, an increase of 75.5 billion yuan compared to the previous day, with nearly 3,700 stocks rising [1] Bond Market Dynamics - Most government bond futures rose at midday, with the 30-year main contract up 0.32%, the 10-year main contract up 0.09%, and the 5-year main contract up 0.02% [1] - The 30-year government bond ETF from Bosera (511130) saw significant trading activity, with a rise of 43 basis points and a turnover exceeding 1.3 billion yuan, indicating strong market interest [1] Central Bank Actions - On June 5, the central bank unexpectedly adjusted the format of its reverse repurchase announcements, shifting to a bidding format and conducting a 1 trillion yuan, 3-month reverse repo operation [2] - This change aims to enhance transparency in open market operations and alleviate market concerns regarding cross-quarter liquidity pressures [2] Institutional Behavior - Major banks have been actively purchasing short-term bonds in the secondary market, which may signal a potential restart of bond buying by the central bank [3] - April insurance premium data showed significant improvement in long-term insurance income, which could lead to increased allocation in long-duration bonds [3] Future Market Expectations - The upcoming week may see market fluctuations based on the results of new US-China negotiations, with two potential outcomes: a positive result leading to a reduction in tariffs, or a neutral outcome with limited new information [3] - Short-term interest rates are expected to rise, while long-term rates may break out of their narrow trading range, suggesting opportunities for excess returns in long-duration bonds [4] ETF Specifics - The Bosera 30-year government bond ETF, established in March 2024, is one of only two on-market ultra-long duration bond ETFs, tracking the "Shanghai Stock Exchange 30-Year Government Bond Index" [4] - The index reflects the overall performance of 30-year government bonds listed on the Shanghai Stock Exchange, with a duration of approximately 21 years, making it highly sensitive to interest rate changes [4]