Report Industry Investment Rating - Not provided in the given content Core Viewpoints - Excluding the factors of the US-Iran conflict and soaring oil prices, the bond market trend after the Spring Festival would not change in essence, only with slight differences in amplitude and rhythm. The bond market is expected to fluctuate in March, with the 10-year Treasury yield ranging from 1.78% to 1.85% and the 30-year Treasury yield ranging from 2.22% to 2.3% [3]. - In the short term, interest rates usually adjust first in response to imported inflation, with a rebound period of half a month to three months and a 10-year Treasury adjustment range of 6 - 26bp. In the long term, it depends on the monetary policy attitude. The central bank will not overreact to oil price fluctuations unless they are demand-driven and affect inflation expectations and core inflation [3]. - An oil supply shock generally leads to rising domestic Treasury yields and falling stock markets, rising gold prices, rising US Treasury yields, and a differentiated performance of the US dollar and US stocks [3]. - In the optimistic scenario, PPI turns positive year-on-year in April, with a peak of around 1.2% in August or September; in the baseline scenario, it turns positive in April, with a peak of around 1.8% in September; in the pessimistic scenario, it turns positive in March, with a peak of around 2.15% in August. Additionally, a 10% increase in the two-month moving average oil price corresponds to a 0.2 percentage point increase in the monthly PPI month-on-month [3]. - Rising oil prices benefit the mining and upstream material industries, while having an uncertain impact on the oil processing, chemical raw material, and chemical fiber manufacturing industries. In the early stage of rising oil prices, the profit margins of small and medium-sized enterprises may be further compressed [3]. Summary by Directory 1. Is the Bond Market Worried about "Oil Inflation"? - After the Spring Festival, the bond market was affected by various factors such as the Shanghai property market policy, the US-Iran conflict, and changes in the central bank's operations. The core factor driving the bond market is not "oil inflation," which only amplifies trading fluctuations. The bond market is expected to fluctuate in March, with the 10-year Treasury yield ranging from 1.78% to 1.85% and the 30-year Treasury yield ranging from 2.22% to 2.3%. It is recommended to start deploying for the second-quarter trend opportunities in late March [6][8][16]. 2. How Much Impact Does "Oil Inflation" Have on the Bond Market? 2.1 Four Dimensions of the Impact of Imported Inflation on the Bond Market - In the short term, interest rates usually adjust first, with a rebound period of half a month to three months and a 10-year Treasury adjustment range of 6 - 26bp. The uncertainties lie in the duration of the rise in underlying commodity prices and the emergence of incremental positive factors. In the long term, it depends on the central bank's attitude towards oil price fluctuations. The short - end of the bond market is likely to remain stable, while the long - end has an upper limit on interest rates [20][21][23]. 2.2 Impact of Oil Supply Shocks on Various Assets - Four major oil supply shocks (Iraq War, Arab Spring, Russia-Ukraine conflict, and US-Iran conflict) generally led to rising domestic Treasury yields, falling stock markets, rising gold prices, rising US Treasury yields, and a differentiated performance of the US dollar and US stocks [27]. 3. How Much Impact Does the Rising Oil Price Have on China's PPI? - Based on different scenarios of the situation in the Strait of Hormuz and oil price trends, in the optimistic scenario, PPI turns positive year - on - year in April, with a peak of around 1.2% in August or September; in the baseline scenario, it turns positive in April, with a peak of around 1.8% in September; in the pessimistic scenario, it turns positive in March, with a peak of around 2.15% in August. A 10% increase in the two - month moving average oil price corresponds to a 0.2 percentage point increase in the monthly PPI month - on - month [31][32]. 4. Pay Attention to the Impact of Rising Oil Prices on the Middle and Lower Reaches and Small and Medium - Sized Enterprises - Rising oil prices benefit upstream industries such as oil and gas exploration and oilfield services. For the mid - stream, the profit of the refining industry depends on the price increase speed of crude oil and refined oil, and the petrochemical industry faces cost pressure. For the downstream, industries such as aviation, shipping, and agriculture face rising costs. Historically, rising oil prices mainly benefit the mining and upstream material industries, with an uncertain impact on the oil processing, chemical raw material, and chemical fiber manufacturing industries. In the early stage of rising oil prices, the profit margins of small and medium - sized enterprises may be further compressed [36][37][45].