Core Viewpoint - The sudden rise in U.S. Treasury yields has sparked speculation regarding its underlying causes, with some attributing it to a technical error and others to a hedging operation related to a corporate bond issuance [1] Group 1 - U.S. Treasury yields across the board surged sharply during the early trading session on Wednesday [1] - Some traders suggest that the yield spike may be due to a "fat finger" error, indicating an accidental input in the futures market [1] - Analysts noted that yields for U.S. Treasury securities ranging from two to thirty years experienced significant increases, likely due to a large-scale sell-off in the futures market [1] Group 2 - Tom di Galoma, Managing Director of Rates and Trading at Mischler Financial, mentioned that market speculation indicates a trader intended to sell 8,000 contracts of 10-year Treasury futures but mistakenly sold 80,000 contracts, which is 20 times the normal trading size [1] - This erroneous transaction appears to have been subsequently canceled, contributing to the volatility in yields [1]

Group 1 - The bond market is experiencing significant fluctuations due to changes in VAT policy, leading to increased demand for "fixed income plus" investment opportunities among institutional investors such as banks, insurance companies, and brokerages [1] - Institutional investors are adjusting their bond investment strategies to seek higher returns in a low-interest-rate environment, potentially including dividend assets [1] - Public asset management products are benefiting from a "50% reduction" in tax, which may encourage more bank and insurance funds to choose external public asset management for bond investments [1] Group 2 - The Ministry of Transport, Ministry of Finance, and Ministry of Natural Resources have jointly released a new action plan for rural road improvement, allowing local governments to use government bonds for eligible rural road projects [3] - The central government will support the development of "Four Good Rural Roads" through existing funding channels, while local governments are responsible for the management and operation of rural roads [3] - There is a strong emphasis on financial supervision to prevent illegal debt borrowing and the accumulation of hidden government debt [3] Group 3 - The central bank conducted a reverse repurchase operation of 1,385 billion yuan with a fixed interest rate of 1.40%, resulting in a net withdrawal of 1,705 billion yuan on that day [4] - The operation was in response to 3,090 billion yuan of reverse repos maturing, indicating active liquidity management by the central bank [4] Group 4 - Jiangsu Province has been allocated a new local government debt limit of 280.1 billion yuan for 2025, with 31.6 billion yuan for general debt and 248.5 billion yuan for special debt [8] - The majority of the new debt limits will be transferred to cities and counties for local projects [8] - Zhejiang Province has issued guidelines prohibiting local governments from incurring land reserve debts outside of government bonds to prevent hidden debt [8] Group 5 - Nanyang Transportation Industry Investment Holding Co., Ltd. has received approval to issue 1 billion yuan in corporate bonds [9] - Kaifeng Cultural Tourism Co., Ltd. plans to issue 300 million yuan in technology innovation corporate bonds [11] - Zhengzhou Public Transport Group is set to issue 1 billion yuan in medium-term notes, with a subscription range of 2.0% to 3.5% [11] Group 6 - Zhoukou City’s government has completed the issuance of 700 million yuan in bonds aimed at supporting small and micro enterprises [14] - The Ministry of Finance plans to issue 30 billion yuan in discount treasury bonds with a maturity of 91 days [14] Group 7 - The Shanghai Stock Exchange has publicly reprimanded three bond issuers for failing to disclose their annual reports on time [21] - The issuers were found to have violated regulations regarding the use of raised funds and information disclosure [21] Group 8 - The Eastern Fixed Income Research Team maintains a bullish outlook for the bond market in the second half of the year, expecting a "dual bull market" for stocks and bonds, with stocks outperforming bonds [22] - The team suggests that the bond market is entering a configuration window after a brief adjustment, with liquidity remaining relatively loose [22] - The strategy for city investment bonds includes focusing on short-term positions and exploring yield curve "convex points" [22]

Group 1 - Ningbo issued 10-year general local bonds with a scale of 4.29333 billion, an issuance rate of 1.7700%, and a marginal multiple of 2.69, exceeding the expected multiple of 1.86 [1] - Ningbo issued 7-year ordinary special local bonds with a scale of 412 million, an issuance rate of 1.7400%, and a marginal multiple of 7.99, significantly higher than the expected multiple of 2.04 [1]

德国两年期国债收益率延续跌势，日内下跌7个基点至1.88%，创下4月初以来最大单日跌幅。 ...

Core Points - The Ministry of Finance and the State Taxation Administration announced a new policy regarding the value-added tax (VAT) on interest income from government bonds, local government bonds, and financial bonds [1] Group 1 - Starting from August 8, 2025, VAT will be reinstated on interest income from newly issued government bonds, local government bonds, and financial bonds [1] - Interest income from bonds issued before August 8, 2025, will continue to be exempt from VAT until the bonds mature [1] - Financial bonds refer to securities issued by legally established financial institutions in China, which are held by these institutions and pay principal and interest as agreed [1]

Core Viewpoint - The bond market is experiencing a return to range consolidation with noticeable pullbacks in gains, while the monetary policy remains in a "comfortable zone" with balanced growth, exchange rates, prices, and financial risks [1][7]. Market Performance - The closing performance of government bond futures showed divergence, with the 30-year main contract down 0.07% at 119.040, and the 10-year main contract down 0.02% at 108.435 [2]. - The interbank major interest rate bonds exhibited mixed performance, with the 30-year government bond yield rising by 0.25 basis points, while the 10-year policy bank bond yield fell by 0.15 basis points [2]. International Bond Market - In North America, U.S. Treasury yields showed mixed results, with the 2-year yield rising by 1.24 basis points to 3.953% and the 10-year yield falling by 0.20 basis points to 4.366% [3]. - In Asia, Japanese bond yields declined across the board, with the 10-year yield down by 0.6 basis points to 1.549% [3]. - In the Eurozone, 10-year bond yields for France, Germany, Italy, and Spain all decreased, with the Spanish yield down by 1.7 basis points to 3.270% [3]. Primary Market - The Ministry of Finance reported weighted average winning yields for 2-year and 50-year government bonds at 1.3844% and 2.0187%, respectively, with bid-to-cover ratios of 3.26 and 5.42 [4]. - The Export-Import Bank's 2-year fixed-rate bond had a winning rate of 1.3746% with a bid-to-cover ratio of 3.24 [5]. Liquidity Conditions - The central bank conducted a 1260 billion yuan 7-day reverse repo operation at a rate of 1.40%, resulting in a net withdrawal of 663.3 billion yuan for the day [6]. - The Shibor short-term rates mostly declined, with the overnight rate down by 7.7 basis points to 1.315% [6]. Institutional Perspectives - According to China International Capital Corporation, the recent economic meeting downplayed real estate concerns and emphasized the prohibition of new hidden debts, indicating a potential weakening of fiscal support for economic growth in the second half of the year [7]. - Huatai Securities noted the importance of maintaining ample liquidity and promoting a reduction in comprehensive financing costs, with no strong expectations for rate cuts or reserve requirement ratio reductions [8].

US bond traders will be scouring inflation data for signs of persistent price pressures https://t.co/93NUn4E0yT ...

Market Overview - The bond market continued its warm trend on July 31, with the release of the July official PMI data not exerting pressure on the performance of bonds, leading to an overall increase in government bond futures and a general decline in interbank bond yields by approximately 2 basis points [1][2] - The People's Bank of China conducted a net withdrawal of 47.8 billion yuan in the open market, while the overall funding situation remained stable, with a slight increase in overnight repurchase rates at the month-end [1][5] Bond Futures and Yields - Government bond futures closed higher across the board, with the 30-year main contract rising by 0.57% to 119.120, the 10-year main contract up by 0.17% to 108.485, and the 5-year main contract increasing by 0.08% to 105.725 [2] - The yields on major interbank bonds saw a slight decrease, with the 10-year government bond yield down nearly 2 basis points, reported at 1.786% for "25国开10" and 1.703% for "25附息国债11" [2] International Bond Market - In North America, U.S. Treasury yields collectively rose on July 30, with the 2-year yield increasing by 7.38 basis points to 3.941% and the 10-year yield rising by 4.57 basis points to 4.368% [3] - In the Eurozone, the 10-year French bond yield fell by 0.5 basis points to 3.357%, while the 10-year German bond yield decreased by 0.3 basis points to 2.703% [3] Primary Market - The China Development Bank's financial bonds for 1-year, 5-year, and 10-year terms had winning yields of 1.3677%, 1.6187%, and 1.7341%, respectively, with bid-to-cover ratios of 4.15, 4.49, and 3.52 [4] Funding Conditions - The People's Bank of China announced a fixed-rate reverse repurchase operation of 283.2 billion yuan at an interest rate of 1.40%, with the same amount being the winning bid [5] - The Shibor rates for short-term products mostly declined, with the overnight rate increasing by 7.5 basis points to 1.392% [5] Economic Indicators - The official non-manufacturing PMI for July was reported at 50.1, a decrease of 0.4 percentage points, while the manufacturing PMI fell to 49.3, also down by 0.4 percentage points, indicating a slight contraction in manufacturing activity [6] - The comprehensive PMI output index was at 50.2, down 0.5 percentage points, but still above the critical point, suggesting overall expansion in business activities [6] Institutional Insights - Huatai Securities noted that the political bureau meeting's cautious stance on real estate and anti-involution reflects a long-term planning focus rather than short-term stimulus [7] - China Galaxy Securities indicated limited incremental changes from the political bureau meeting, suggesting a downward trend in bond yields, while monitoring risk preferences and government bond supply [7] - CICC highlighted the potential for fiscal policy adjustments in the fourth quarter, with a positive outlook for the bond market in the second half of the year [7]

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Group 1 - Shanxi issued 30-year special local bonds with a scale of 1.94 billion and an issuance rate of 2.13% [1] - Shanxi issued 10-year special local bonds with a scale of 866 million and an issuance rate of 1.85% [1] - Shanxi issued another set of 10-year special local bonds with a scale of 1.63885 billion and an issuance rate of 1.82% [1] - Shanxi issued 7-year general special local bonds with a scale of 1.41727 billion and an issuance rate of 1.74% [1] Group 2 - The marginal multiple for the 30-year bonds was 2.45, with an expected multiple of 2.11 [1] - The marginal multiple for the first 10-year bonds was 2.41, with an expected multiple of 1.82 [1] - The marginal multiple for the second set of 10-year bonds was 2.32, with an expected multiple of 1.82 [1] - The marginal multiple for the 7-year bonds was 2.48, with an expected multiple of 1.76 [1]