Core Viewpoint - The article discusses the impact of recent U.S. tariff policies on the bond market, highlighting increased uncertainty and its effects on investment decisions and bond yields [3][7][10]. Group 1: U.S. Tariff Policy and Market Impact - On March 4, the U.S. announced tariffs on Canada and Mexico, which were quickly reversed for most goods two days later, leading to heightened uncertainty in trade policy [3]. - A new Bloomberg Economic Research Index, the Daily Trade Policy Uncertainty Index (TPU), was developed to track this uncertainty, which surged to levels not seen during the peak of trade tensions in Trump's first term [3]. - The uncertainty surrounding tariffs is expected to suppress investment and affect economic output, contributing to a decline in long-term U.S. Treasury yields [7]. Group 2: U.S. Treasury Yields - From November 2023 to early March 2024, the yield on 10-year U.S. Treasuries fell by 16 basis points, with approximately 7 basis points attributed directly to tariff uncertainty [7]. - The Federal Open Market Committee decided to maintain interest rates during its March meeting, with core PCE inflation rising to an annualized rate of 4.5% and income growth accelerating by 0.8% month-on-month, reducing the urgency for rate cuts [7]. Group 3: Chinese Bond Market Trends - In March, the yield on China's 10-year government bonds rose to 1.93%, the highest since December of the previous year, before retreating to 1.8% later in the month [10]. - The U.S. 10-year Treasury yield rebounded to 4.36% due to better-than-expected non-farm payroll data and inflation concerns, impacting related sectors in the A-share market [10]. Group 4: Dim Sum Bond Market - The Dim Sum bond market has expanded significantly, with outstanding issuance surpassing 1.9 trillion yuan as of March 2025, and 2024 issuance reaching 896 billion yuan, a 120% increase from 2023 [11]. - High-rated bonds now account for 75% of the market, with issuers from the renewable energy and digital economy sectors emerging, such as BYD and SenseTime [11]. - The Bloomberg Offshore RMB Index has seen its market value more than double since the end of 2021, currently standing at 467 billion yuan [11]. Group 5: Investment Opportunities in Dim Sum Bonds - The yield spread between Chinese and U.S. 10-year government bonds has narrowed to -237 basis points, reducing the incentive to chase dollar-denominated assets and alleviating depreciation pressure on the yuan [13]. - The credit spread of Dim Sum bonds is 78 basis points higher than that of domestic high-liquidity credit bonds, with a low default rate of 0.15% [13].