Core Viewpoint - During the Spring Festival holiday, overseas markets were dominated by risk-averse trading due to Middle East geopolitical risks and uncertainties surrounding FOMC monetary policy. Major asset prices showed varied performances, with most global stock indices rising, while major currencies like the yen and pound experienced significant declines [2][4]. Group 1: Overseas Asset Performance - Global stock indices mostly rose, with the Korean Composite Index, French CAC40, and FTSE 100 leading the gains, increasing by 5.5%, 2.5%, and 2.3% respectively from February 16 to 20. The Hang Seng Index and Nikkei 225 fell by 0.6% and 0.2% respectively [4][14]. - Global 10-year government bond yields mostly declined, with Japanese, French, British, and Italian bonds decreasing by 6.1bps, 3.8bps, 2.7bps, and 2.3bps respectively, while the 10-year US Treasury yield rose by 4.0bps [4][14]. - Most major commodities saw price increases, with Brent crude oil and WTI crude oil rising by 5.9% and 5.7% respectively during the same period [4][14]. - Among major currencies, the yen and pound experienced significant declines, falling by 1.5% and 1.3% respectively, while the US dollar index rose by 0.9% [4][14]. Group 2: Key News Events - The US-Iran crisis escalated, with indirect negotiations taking place in Geneva. The US is increasing military presence in the region, leading to a rise in oil prices, with WTI crude increasing from approximately $62.33 to $66.39, marking a 6.5% increase [5][25]. - The FOMC meeting minutes indicated a neutral but hawkish stance, with most members agreeing that current rates are appropriate. The market expects a potential rate cut of about 60 basis points later this year, reflecting a slight easing compared to previous expectations [6][30]. - The US Supreme Court ruled against Trump's large-scale tariffs, stating that the International Emergency Economic Powers Act did not authorize such actions. This decision led to a decrease in supply chain costs and a rise in the Nasdaq index by 0.90% [7][36]. - Japanese Prime Minister Kishi Sanae was re-elected, promoting a fiscal policy focused on significant tax cuts and public investment, which is expected to boost Japan's GDP growth forecast for 2026 [9][39].

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].

Core Viewpoint - The bond market is experiencing a strong consolidation, with government bond futures rising across the board and interbank bond yields mostly declining, indicating a potential trend towards looser liquidity conditions [1][5] Market Performance - Government bond futures closed higher, with the 30-year main contract up 0.24% at 120.820, the 10-year main contract up 0.14% at 109.160, the 5-year main contract up 0.15% at 106.300, and the 2-year main contract up 0.08% at 102.540 [2] - Major interbank rates mostly fell, with the 10-year policy bank bond yield down 1 basis point to 1.7055% and the 10-year government bond yield down 0.25 basis points to 1.6375% [2] International Market Trends - In North America, U.S. Treasury yields rose across the board, with the 10-year yield increasing by 4.16 basis points to 4.446% [3] - In Asia, Japanese bond yields continued to rise, with the 10-year yield up 2.8 basis points to 1.479% [3] - In the Eurozone, yields on 10-year bonds generally fell, with French yields down 1.9 basis points to 3.232% [3] Primary Market Activity - The China Development Bank's 10-year fixed-rate bond "25国开15" had a winning bid rate of 1.65%, with a total bid-to-cover ratio of 3.94 [4] - The 10-year "25甘肃债23" had a winning bid rate of 1.78% and a total bid-to-cover ratio of 25.05, indicating strong demand [4] Liquidity Conditions - The central bank conducted a 7-day reverse repurchase operation of 1973 billion yuan at an interest rate of 1.40%, with a net withdrawal of 1833 billion yuan on the day [5] - Short-term Shibor rates mostly declined, with the overnight rate down 1.9 basis points to 1.369% [5] Institutional Insights - Huayuan Securities suggests that interest rate bonds may experience narrow fluctuations, recommending attention to credit bonds with yields above 2% [6] - CITIC Fixed Income notes that since March, funding rates have been in a downward trend, indicating a need for a reasonable liquidity environment to support economic growth [7]