Market Overview - Financial markets continued to show volatility on the first trading day of February, with London gold prices dropping below $4500 per ounce, experiencing a daily decline of over 9% [1] - The A-share market saw all three major indices fall by more than 2%, with over a hundred stocks hitting the daily limit down [1] Bond Market Performance - As of February 2, major government bond yields showed mixed performance, with the 10-year government bond yield rising by 0.50 basis points to 1.8150% [3] - The 30-year government bond futures contract increased by 0.18% to 112.060, while the 10-year and 5-year contracts fell by 0.03% and 0.02%, respectively [3] - In January, the bond market experienced significant fluctuations, with the 10-year government bond yield peaking at 1.8985% on January 8, marking the highest level since September 2025 [3][4] Monetary Policy and Market Liquidity - The People's Bank of China (PBOC) is expected to continue lowering interest rates and reserve requirements, which will further drive down short-term bond yields [1][10] - On February 2, the PBOC conducted a 750 billion yuan reverse repo operation at a fixed rate of 1.40%, with the same amount for both bidding and winning [5] - The market is anticipated to experience tightening liquidity as the Chinese New Year approaches, although the PBOC's willingness to maintain liquidity support is strong [9] Future Outlook - Analysts predict that the bond market will remain in a state of fluctuation, with the 10-year government bond yield expected to oscillate between 1.6% and 2.0% throughout 2026 [10] - The overall sentiment in the bond market is expected to be weak leading up to the holiday, with small fluctuations in yields anticipated [9] - The bond market is characterized by low interest rates, high volatility, and structural differentiation, influenced by both monetary and fiscal policies [7][8]