CSC(SH:601066)2025-03-07 07:47Summary of the Conference Call on the Bond Market Analysis Industry Overview - The analysis focuses on the Chinese bond market, specifically the ten-year government bond yield predictions for 2025 [2][4]. Key Points and Arguments - Yield Prediction Model: The model decomposes the ten-year government bond yield into trend and cycle components, achieving a fitting goodness of 0.98. The predicted yields for June and December 2025 are approximately 1.91% and 1.61%, respectively [2][6]. - Market Behavior: The market has shown hesitation around the 1.6% yield level, influenced by macroeconomic data improvements and tightening funds. The model aims to analyze these factors to better understand current yield levels and forecast future trends [4][11]. - CPI and PMI Correlation: The relationship between CPI and bond market cycles has changed over time. Before 2013, CPI growth was positively correlated with bond cycles. From 2013 to 2019, PMI data became the key indicator, while post-2020, CPI showed a negative correlation with bond cycles due to monetary policy effects [8][10]. - Interest Rate Predictions: The model forecasts other maturities based on the ten-year yield, predicting one-year, three-year, five-year, and seven-year yields to be approximately 0.99%, 1.26%, 1.42%, and 1.59% by December 2025 [10][12]. - Market Sentiment: The model serves as a neutral anchor, with actual market values expected to fluctuate around this anchor. Expectations of interest rate cuts may lower yields, while rate hikes could increase them [10][11]. - Model Reliability: Backtesting shows the model's fitting deviation is within 10%, indicating its reliability. This deviation can help identify overly optimistic market conditions, aiding investors in adjusting strategies [3][13][15]. Additional Important Insights - Market Dynamics: The early 2025 market behavior has led to a pessimistic outlook, with the neutral space being consumed early in the year. A breakthrough below 1.6% will require unexpected market stimuli [11][12]. - Investment Decision Making: The model provides a reliable benchmark for assessing market sentiment and potential overvaluation. When market deviations exceed 10%, it signals a need for strategy adjustments [14][16]. - Future Adjustments: The model is a tool for judgment and should be used alongside market assessments, especially in the face of unexpected events [7][9]. This comprehensive analysis highlights the dynamics of the Chinese bond market and the predictive capabilities of the model developed by the research team.