Group 1 - The bond market continues to show volatility, with pure bond funds underperforming amid a backdrop of cautious sentiment and declining leverage in the interbank bond market [1][2][3] - The average net value growth rate for medium to long-term pure bond funds was 0.07%, while short-term bond funds recorded 0.05% during the week of July 14 to July 20 [2] - The central bank's net injection in the open market was 1.2011 trillion yuan, with a total injection of 1.7268 trillion yuan and a withdrawal of 525.7 billion yuan [2] Group 2 - The duration of pure bond funds has increased, indicating a growing expectation among institutions for interest rate declines, with the median duration for medium to long-term funds reaching 3.93 years, a three-year high [3] - Short-term pure bond funds also saw an increase in duration, with the median duration for short-term rate funds reaching 1.32 years, close to historical extremes [3] - The trading volume of credit bonds has decreased while that of interest rate bonds has increased, reflecting a concentration of funds towards interest rate products [3] Group 3 - Many public bond funds experienced significant growth in scale during the second quarter, with some funds showing increases in share size exceeding 192% [4] - The Southern Runyuan Pure Bond Fund reported a net value growth rate of 1.87%, outperforming its benchmark by 0.81 percentage points [4] - The demand for asset allocation to address stock-bond volatility is increasing, with "fixed income plus" strategies becoming more relevant in the current market [4] Group 4 - The bond market is expected to continue providing allocation opportunities, with potential for interest rate cuts and reserve requirement ratio reductions in the second half of the year [5] - Strategies involving a combination of leverage and flexible adjustments in trading positions are being recommended to balance risk and reward [5]

Core Viewpoint - The recent interest rate cuts have positively impacted short and medium-term bonds, leading to a notable decline in rates, while long-term bonds are experiencing a "buying expectation, selling reality" scenario [1][2]. Group 1: Market Reactions - Following the "double cut" (interest rate and reserve requirement ratio), the 1-year government bond yield fell to 1.40%, while long-term bonds showed mixed performance due to market dynamics [2]. - The average yield of long-term bond funds slightly outperformed that of short-term bond funds, with yields at 0.13% and 0.10% respectively, indicating a growing interest in short-term assets [4]. Group 2: Key Players in the Market - Major buyers of short-term bonds include rural commercial banks and foreign investors, with net purchases exceeding 10 billion yuan for bonds with maturities of one year or less [2]. - Non-bank institutions have also been active in the secondary market, significantly increasing their purchases of certificates of deposit, with eight out of twelve types of institutions net buying [2][3]. Group 3: Fund Performance - The performance of various bond funds showed minimal yield differences, with top-performing long-term funds yielding around 0.299% and short-term funds yielding around 0.253% [6][7]. - The overall leverage ratio in the bond market has remained low, with a slight increase to 106.70%, while fund leverage has seen a rebound, indicating a shift in investment strategies [3]. Group 4: Future Outlook - The bond market is expected to remain in a volatile state, with the potential for further rate declines, although the pace may not be smooth [5]. - The market is currently in a phase where the effects of previous policy stimuli are diminishing, and economic fundamentals are showing signs of weakening, suggesting a cautious approach moving forward [4][5].