Market Overview - The bond market continued to consolidate with slight differentiation in interbank bond prices, with fluctuations generally within 1 basis point [1] - The central bank conducted a net withdrawal of 255.9 billion yuan in the open market, with most funding rates declining [1][5] Bond Futures - Government bond futures mostly rose, with the 30-year main contract up 0.07% to 120.160, and the 10-year main contract up 0.01% to 108.995 [2] - The 10-year China Development Bank bond yield rose by 0.2 basis points to 1.702%, while the 10-year government bond yield fell by 0.2 basis points to 1.654% [2] International Bond Markets - In North America, U.S. Treasury yields fell across the board, with the 2-year yield down 4.15 basis points to 3.993% [3] - In Asia, Japanese bond yields mostly rose, with the 10-year yield increasing by 0.4 basis points to 1.477% [3] - In the Eurozone, yields on 10-year bonds in France, Germany, Italy, and Spain all decreased [3] Primary Market - The China Development Bank's financial bonds had a successful auction with 2-year, 5-year, and 10-year yields at 1.4772%, 1.5210%, and 1.6601% respectively, with bid-to-cover ratios of 5.52, 3.54, and 2.78 [4] Funding Conditions - The central bank conducted a 7-day reverse repurchase operation with a fixed rate of 1.40%, resulting in a net withdrawal of 255.9 billion yuan [5] - Short-term Shibor rates mostly declined, with the overnight rate dropping to 1.362%, the lowest since December 2024 [5] Institutional Insights - Huatai Fixed Income suggests that interest rates may continue to fluctuate, with credit bonds benefiting from slightly better supply-demand dynamics [6] - China International Capital Corporation (CICC) indicates that GDP growth may be slightly lower in the second half of the year compared to the first half, with stable internal demand [7] - Guosheng Fixed Income anticipates that interest rates may reach new lows, potentially starting a new downward trend from mid-June [7]

Core Viewpoint - The bond market showed slight recovery on May 8, with government bond futures generally rising and interbank bond yields mostly falling by around 1 basis point, indicating a response to recent monetary policy support measures [1][2]. Monetary Policy - The People's Bank of China (PBOC) announced a 0.5 percentage point reduction in the reserve requirement ratio, expected to provide approximately 1 trillion yuan in long-term liquidity [7]. - The PBOC also lowered the policy interest rate by 0.1 percentage points, reducing the 7-day reverse repurchase rate from 1.5% to 1.4%, which is anticipated to lead to a similar decrease in the Loan Prime Rate (LPR) [7]. Market Performance - On May 8, government bond futures closed higher across the board, with the 30-year main contract rising by 0.26% to 120.430, and the 10-year main contract increasing by 0.17% to 109.060 [2]. - The interbank bond yields saw a general decline, with the 10-year government bond yield dropping by 0.5 basis points to 1.63% [2]. International Market Trends - In North America, U.S. Treasury yields fell across the board, with the 10-year yield decreasing by 2.32 basis points to 4.2694% [3]. - In the Eurozone, yields on 10-year government bonds also declined, with France's yield down by 6.4 basis points to 3.192% [3]. Institutional Insights - Institutions like CICC and Guosen Securities view the recent rate cuts as beneficial for the bond market, suggesting that short-term interest rates have more room to decline, which will also pull down long-term rates [8]. - The overall sentiment indicates that the recent monetary policy adjustments are seen as the beginning of a broader easing cycle rather than an end, with expectations for further declines in interest rates [8].