Core Viewpoint - The article discusses the need for enhancing the liquidity and diversity of participants in China's bond market, particularly in light of the proposed changes to the regulations regarding the freezing of pledged bonds in repurchase agreements [1][2]. Group 1: Market Dynamics - China's bond market, being the second largest globally, requires continuous improvement in trading activity and participant diversity [1]. - The People's Bank of China has proposed to eliminate the requirement to freeze pledged bonds in repurchase agreements, which has garnered significant attention in the bond market [1]. - The current practice of freezing pledged bonds limits their circulation in the secondary market, thereby reducing overall market liquidity and trading activity [1]. Group 2: Impact of Proposed Changes - The monthly transaction volume of pledged repurchase agreements in the interbank bond market has been around 100 trillion yuan this year, and unfreezing a large number of short-term interest rate bonds will increase supply and enhance market depth [2]. - Increased market depth is expected to reduce volatility and facilitate better liability management for financial institutions, as well as smoother monetary policy operations by the central bank [2]. - The proposed changes align domestic practices with international standards, as overseas markets primarily use buyout-style repurchase agreements, which could attract more foreign investment into the domestic bond market [2][3]. Group 3: Broader Implications - The removal of the freezing requirement for pledged bonds may have significant ripple effects, including the unification of trading rules between onshore and offshore RMB bond markets [3]. - This unification could promote a virtuous cycle between the two markets and enhance the integration of the RMB bond market with international standards [3].

Core Insights - The bond market's focus has shifted from inflation concerns to issues surrounding fiscal stability and foreign demand for U.S. Treasuries, indicating a change in investor sentiment and market dynamics [1]. Group 1: Market Dynamics - The decline in perception of stability in the U.S. is closely linked to the volatility in fiscal stability and foreign Treasury demand, suggesting that these factors are interrelated and critical for market performance [1]. Group 2: Analyst Background - The analyst, Harrison, has over a decade of experience in financial analysis, particularly in private equity, real estate, and economic research, which provides a strong foundation for insights into market trends [1].

Market Overview - The bond market returned to a weak state on July 18, with most government bond futures closing lower and interbank bond yields generally rising by 0.5-1 basis points [1][2] - The central bank conducted a net injection of 102.8 billion yuan in the open market, while short-term funding rates continued to decline [1][6] Bond Futures and Yields - The 30-year main contract fell by 0.22% to 120.460, the 10-year main contract decreased by 0.08% to 108.790, and the 5-year main contract dropped by 0.05% to 105.990 [2] - The yield on the 10-year "25附息国债11" rose by 0.5 basis points to 1.666%, while the 30-year "25超长特别国债02" increased by 0.75 basis points to 1.875% [2] International Bond Markets - In North America, U.S. Treasury yields were mixed, with the 2-year yield rising by 1.06 basis points to 3.896% and the 10-year yield falling by 0.80 basis points to 4.449% [3] - In Asia, Japanese bond yields fell across the board, with the 10-year yield down by 2.8 basis points to 1.53% [4] Market Sentiment and Predictions - Institutions believe that the low-volatility bond market trend continues, with expectations of policy adjustments increasing towards the end of July [1][8] - According to Zhongjin Company, if the Federal Reserve Chair leaves office early, it would negatively impact the dollar and positively affect gold, while Southwest Securities noted that convertible bond valuations are at a relatively low level [7][8] Fund Flows and Liquidity - The central bank announced a 1.875 trillion yuan reverse repurchase operation at a rate of 1.4%, with a net injection of 102.8 billion yuan for the day [6] - Short-term Shibor rates mostly declined, with the overnight rate down by 0.1 basis points to 1.462% [6]

Group 1 - Liaoning issued a 20-year special local bond with a scale of 62.3171 billion [1] - The issuance interest rate is set at 2.0500% [1] - The marginal multiple of the bond issuance is 2.16 times, with an expected multiple of 2.04 [1]

Group 1 - The core viewpoint highlights a surge in bearish sentiment as the 30-year U.S. Treasury yield rises again, indicating a potential sell-off in the bond market [1] - The article discusses the ongoing turmoil in the Japanese bond market, which is contributing to the sell-off in U.S. long-term bonds, suggesting that U.S. equities may be the next liquidity "victim" [1] - There is a mention of election anxiety and fiscal concerns adding pressure to the Japanese yen, with capital shifting towards bullish positions on the USD/JPY exchange rate, particularly focusing on whether the key level of 150 can be maintained [1] Group 2 - The article outlines the interconnectedness of the bond market sell-off and market trends, emphasizing the need for strategies to respond to these developments [1]

Group 1 - Shandong issued 15-year special local bonds with a scale of 36.03 billion, an issuance rate of 1.94%, and a marginal multiple of 3.70 times, exceeding the expected multiple of 1.92 [1] - Shandong issued 7-year land reserve special local bonds with a scale of 42.88 billion, an issuance rate of 1.68%, and a marginal multiple of 3.29 times, exceeding the expected multiple of 1.70 [1] - Shandong issued 10-year ordinary special local bonds with a scale of 47.2891 billion, an issuance rate of 1.74%, and a marginal multiple of 1.11 times, below the expected multiple of 1.73 [1]

Core Viewpoint - The article reports on the performance of various government bond futures, indicating slight increases in longer-term contracts while the 2-year contract remained stable [1] Group 1: Bond Futures Performance - The 2-year government bond futures (TS) main contract remained unchanged [1] - The 5-year government bond futures (TF) main contract increased by 0.02% [1] - The 10-year government bond futures (T) main contract rose by 0.03% [1] - The 30-year government bond futures (TL) main contract saw an increase of 0.07% [1]

Market Trends - Japan's super-long bonds experienced a price increase on Wednesday, reversing a decline from earlier in the week [1] - Concern that an upper house election this weekend will result in higher government spending is influencing bond market activity [1]

Senegal raised 364 billion CFA francs in a government bond sale in the regional market, the finance ministry says https://t.co/StzKKvyMu0 ...

Core Viewpoint - The credit bond market remains in a favorable environment for investment despite short-term fluctuations, with a focus on maintaining duration in credit bond allocations, particularly in urban investment bonds [1][2][4] Credit Bond Market Performance - As of July 14, the yield on credit bonds in the interbank market has increased, with specific examples showing a rise in yields across various maturities, such as a 3-month AAA yield jumping 3 basis points to 1.60% and a 5-year yield rising 2 basis points to 1.92% [2][3] - The overall sentiment in the credit bond market has been affected by the positive performance of the equity market, leading to some profit-taking among institutions, yet credit bonds exhibit greater resilience compared to interest rate bonds, especially in lower-rated categories [2][3] Demand and Investment Trends - There has been a notable increase in demand for credit bonds from funds, insurance, and other products, with net purchases by funds reaching 88.5 billion yuan from July 1 to 11, a year-on-year increase of 39.1 billion yuan [2][3] - The configuration of credit bonds is showing a trend where lower-rated bonds are outperforming higher-rated ones, indicating strong demand for credit bonds [3][4] Investment Recommendations - Urban investment bonds are highlighted as a preferred investment option, with recommendations to focus on 3-year maturities and to consider regions with thicker yield spreads [5][6] - Analysts suggest that institutions should maintain a portion of their portfolio in shorter-duration credit bonds while also exploring opportunities in longer-duration bonds, particularly in high-grade credit bonds [6][7] Market Outlook - The credit bond market is expected to experience a strong but volatile pattern in July, with factors such as the recovery of financial management scale and the expansion of ETFs likely to enhance demand for credit bonds [7]