Core Viewpoint - The bond market is experiencing strong fluctuations, with short-term impacts from tax adjustments, but the medium to long-term outlook remains supported by fundamentals, liquidity, and demand for allocation [1] Market Performance - On August 5, the bond market showed a strong upward trend, with government bond futures mostly rising. The 30-year main contract increased by 0.06% to 119.320, while the 10-year main contract rose by 0.05% to 108.540 [2] - The yield on the 30-year government bond decreased by 0.25 basis points to 1.914%, and the yields on the 10-year government bonds fell by approximately 0.5 basis points [2] Overseas Bond Market - In North America, U.S. Treasury yields collectively fell, with the 10-year yield down by 2.35 basis points to 4.196% [3] - In Asia, Japanese bond yields also declined, with the 10-year yield down by 3.9 basis points to 1.47% [3] - In the Eurozone, the 10-year French bond yield decreased by 6.3 basis points to 3.282% [3] Primary Market - The China Development Bank's three financial bonds had winning yields below the China Bond valuation, with yields for 2-year, 5-year, and 10-year bonds at 1.5255%, 1.6408%, and 1.7546% respectively [4] - Agricultural Development Bank's 2-year financial bonds had winning yields of 1.5550% and 1.7033% [4] Liquidity and Funding - The central bank conducted a 7-day reverse repurchase operation of 160.7 billion yuan at a rate of 1.40%, resulting in a net withdrawal of 288.5 billion yuan for the day [5] - The Shibor short-term rates mostly declined, with the overnight rate rising slightly by 0.1 basis points to 1.315% [5] Institutional Views - Longjiang Fixed Income expects liquidity to remain reasonably ample in August, with funding rates likely to stay low, but regulatory goals may prevent further declines [7] - CITIC Securities notes that the bond market is experiencing a significant bearish steepening trend, with expectations for stabilization in interest rates [7] - Huatai Fixed Income suggests a flexible approach to trading, with a focus on opportunities above a 10-year government bond yield of 1.7% [7]