Group 1 - The article discusses the recent significant decline in bond prices, particularly highlighting the 30-year government bond yield rising from around 2.06% to over 2.11% in a single day [1][11] - The article attributes the bond market's volatility to new public fund regulations regarding redemption fees and rumors about tax exemptions, which have created a sensitive environment for bonds in a low-interest-rate context [12][11] - It emphasizes the importance of strategic asset allocation, suggesting that investors should adopt a diversified approach rather than focusing solely on the performance of individual assets like bonds [17][16] Group 2 - The article notes that A-shares have seen a decrease in trading volume, dropping from 3 trillion to 2 trillion, leading to a "pants-snatching" situation where liquidity is concentrated in a few hot sectors [21][22] - It highlights the performance of specific stocks, particularly in the AI and battery sectors, which have shown significant trading activity and volatility [25] - The article mentions the strong performance of Alibaba in the Hong Kong market, with substantial net buying from mainland investors, indicating a positive sentiment towards the stock [26][27]

Core Viewpoint - The bond market experienced a rapid adjustment last week, alleviating concerns about prolonged high yields, but short-term volatility remains inevitable [1] Group 1: Market Performance - The yield on the 10-year government bond rose to 2.20%, an increase of 8 basis points (BP), while the 30-year bond yield rose to 2.38%, up 4 BP [2] - The yields had previously reached historical lows of 2.08% and 2.29% for the 10-year and 30-year bonds, respectively, marking the lowest levels since 2003 and 2005 [2] - The average yield of medium to long-term pure bond funds was -0.0868%, with a median of -0.0867%, indicating a general decline in bond prices [4] Group 2: Fund Management Strategies - Fund managers have indicated a high duration allocation, reflecting a conservative strategy amidst the bond market's high yields [2] - Recommendations suggest that proprietary trading desks should gradually enter the market at higher levels, while asset management institutions should align their duration closely with market peers [3] - The analysis suggests maintaining existing positions in the bond market, as the adjustment space for long bond yields is expected to be limited [5] Group 3: Investor Sentiment - The bond market's cautious sentiment is evident, with nearly 80% of medium to long-term bond funds reporting negative weekly returns [4] - The overall investment environment is characterized by a strong aversion to excessive speculation in interest rate bonds, emphasizing the need for disciplined investment practices [5]

Report Investment Rating - No information provided on the industry investment rating Core View - Due to the escalation of tariff games and heightened expectations of monetary easing, as well as the influence of risk aversion, the bond market has risen significantly. Short - term risk aversion still favors the bond market, and the Treasury bond futures market may be strong. However, as bond yields approach the previous low of the year and the downward trend of capital interest rates has stalled, it may restrict the decline of long - term bond yields. Attention should be paid to the central bank's capital injection and subsequent pro - consumption and loose fiscal policies, which may bring fluctuations to the bond market [1][6][13] Summary by Directory 1. Tariff Game Escalation, Rising Expectations of Monetary Easing - The US announced a "reciprocal tariff" plan, increasing tariffs on China by 34%, with cumulative tariffs potentially exceeding 60%. China imposed a 34% tariff on all US imports in response. The tariff game and trade friction may enter a deeper stage [1] - In the previous round of trade frictions in 2018, China's exports to the US declined rapidly. This time, with higher tariff increases, short - term net exports are likely to fall. In Q1 2025, the contribution rate of net exports to China's GDP reached 45.8%. Under the pressure of external demand, the market's expectation of looser monetary policy has increased. Short - term reserve requirement ratio cuts may be relatively mature, while interest rate cuts still need fundamental signals [2] 2. Risk Aversion Drives the Stock - Bond Seesaw to Favor the Bond Market - The current trade game has entered a deeper stage, and there is great uncertainty about the actual implementation of tariffs, negotiation conditions, and time, which may suppress risk appetite in the short term. The stock market declined significantly today, which is favorable for the bond market from the perspective of the stock - bond seesaw. In the medium term, domestic policies are sufficient, and the domestic economy has resilience, but the short - term decline in global risk appetite will continue to support the bond market [6] 3. Capital Interest Rates Have Not Declined Further, Need to Pay Attention to the Impact of Subsequent Growth - Stabilizing Policies on the Bond Market Rhythm - Since early April, capital interest rates and certificate of deposit rates have declined, which has boosted the bond market. However, the decline of capital interest rates has stalled. On April 7, the central bank conducted a net withdrawal of 301.7 billion yuan in the open market, and the 7 - day capital interest rate of depository institutions was around 1.75%, and the non - bank capital interest rate was around 1.8%, not lower than before the Tomb - Sweeping Festival [7] - As of April 7, the yield of the 10 - year Treasury bond has dropped to around 1.64%, only 4BP away from the January low. Currently, the decline in bond yields is mainly due to risk aversion and easing expectations. Considering the short - term pressure of RMB depreciation, it is uncertain whether capital interest rates can decline further. As bond yields approach the previous low, a 35 - 40BP interest rate cut is gradually being priced in, but the policy rhythm is still uncertain. Fiscal policies are likely to be strengthened in Q2, and subsequent capital interest rate trends and growth - stabilizing policies will determine the bond market rhythm [8] 4. Outlook for Treasury Bond Futures - Affected by expectations of monetary easing, risk aversion, and the stock - bond seesaw effect, Treasury bond futures opened higher and closed up today. Short - term risk aversion still favors the bond market, but the lack of further decline in capital interest rates may restrict the decline of long - term bond yields. Attention should be paid to the central bank's capital injection and bank - to - bank capital. Subsequent pro - consumption and loose fiscal policies may bring fluctuations to the bond market. It is recommended that investors hold long positions in the short term and stop profits in a timely manner if capital interest rates rise marginally [13]