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the treasury bond futures market was all in the green today.

recently, the central bank has repeatedly "spoken" to the market, warning of the risks of long-term treasury bond yields, and bond market volatility has also increased significantly.

on august 30, the central bank issued a "notice on treasury bond trading business" stating that in august, it bought short and sold long, with a total net purchase of 100 billion yuan in treasury bonds. the central bank's net purchase of 100 billion yuan in treasury bonds in august reflects the central bank's care for liquidity.

after opening on september 2, the treasury bond futures market continued to fluctuate and rise. as of the close, the main contract of 30-year treasury bonds rose by 0.58%, the main contract of 10-year treasury bonds rose by 0.29%, the main contract of 5-year treasury bonds rose by 0.23%, and the main contract of 2-year treasury bonds rose by 0.11%.

analysts pointed out that the central bank's opening of open market bond trading business is conducive to maintaining a steeper yield curve and maintaining stable liquidity. in addition, as the possibility of the federal reserve starting to cut interest rates in september continues to increase, it also means that the external pressure on my country's monetary policy will be alleviated, which is conducive to the performance of the bond market.

bond market bullish sentiment is restored

recently, the rapid decline of long-term interest rates has aroused the attention of regulators to the risks of the bond market. since the beginning of august, due to the sale of bonds by large state-owned banks, the investigation of small and medium-sized financial institutions by the securities and futures association, and the precautionary redemption of bank wealth management funds, the regulatory authorities have continuously stepped up their control over the bond market, and the bullish sentiment in the bond market has been suppressed, and the overall treasury bond futures have shown a "bumpy" and volatile market.

on september 2, as the central bank's purchase and sale of treasury bonds was implemented and 100 billion yuan of funds were released, the previously suppressed bullish sentiment in the bond market rebounded. as of the close, the main contract of 30-year treasury bonds rose by 0.58%, the main contract of 10-year treasury bonds rose by 0.29%, the main contract of 5-year treasury bonds rose by 0.23%, and the main contract of 2-year treasury bonds rose by 0.11%.

the reporter noticed that compared with the past, the performance of short-term treasury bond futures such as the 5-year treasury bond main contract and the 2-year treasury bond main contract has been significantly stronger recently. the 5-year treasury bond main contract rose to a high of 104.73 yuan today, and the 2-year treasury bond main contract rose to a high of 102.268 yuan today, just one step away from the previous high.

the strong performance of short-term treasury bond futures is related to the central bank's "buy short and sell long". on august 30, the central bank issued its first treasury bond trading business announcement, showing that in august, the central bank bought short-term treasury bonds from primary dealers and sold long-term treasury bonds, with a net purchase of 100 billion yuan for the whole month.

the china merchants fixed income team believes that the central bank's purchase of short-term government bonds and sale of long-term government bonds reflects the central bank's desire to maintain an upward-sloping interest rate curve. an upward interest rate curve can guide investment expectations and promote bank credit. at the same time, the central bank net bought 100 billion government bonds in august, which means that the central bank has injected 100 billion base currency, reflecting the central bank's care for liquidity.

guosen macro fixed income team also said that the first round of treasury bond trading by the people's bank of my country is essentially a "reverse distortion operation" that combines traditional liquidity adjustment with interest rate effectiveness. in this operation, the people's bank of my country not only realized 100 billion yuan of long-term liquidity injection, but also avoided exacerbating the unilateral downward trend of long-term interest rates by "buying short and selling long". in the short term, the purchase and sale of treasury bonds will partially replace the (increase) and reduction of reserve requirements. as a new "anchor" for liquidity throughput, mlf will gradually fade out, and future reserve ratio adjustments will focus more on signaling.

bond market disturbance factors still deserve attention

after the central bank's purchase and sale of treasury bonds was implemented, the market's concerns about the bond market have eased. coupled with the recent continued downturn and volatility in the a-share market and the upcoming interest rate cut by the federal reserve, the bond market has once again risen strongly. however, many institutions believe that factors that disturb the bond market still need to be paid attention to.

from a fundamental perspective, economic fundamentals are still friendly to the bond market. the national bureau of statistics service industry survey center and the china federation of logistics and purchasing released the china purchasing managers index (pmi) on august 31. in august, the manufacturing purchasing managers index was 49.1%, down 0.3 percentage points from the previous month; the non-manufacturing business activity index was 50.3%, up 0.1 percentage points from the previous month; and the composite pmi output index was 50.1%, down slightly by 0.1 percentage points from the previous month.

at present, the pmi index has been below the boom-bust line for four consecutive months. in order to achieve the annual economic growth target, some institutions believe that september may open a window period for incremental policies to actively expand domestic demand and promote consumption. huachuang securities' research point of view said that the current marginal decline in various economic data indicates that it is not easy to achieve the annual "5%" growth target, and the "steady growth" policy combination needs to continue to increase its efforts. in the future, attention will be paid to the possible disturbances that the accelerated implementation of the reserve policy may bring to the bond market.

in addition, based on past experience, after september, real estate will usher in the traditional peak season of "golden september and silver october". if real estate policies are strengthened, including continued fiscal support for local "storage", increasing the extent of reduction in existing mortgage interest rates, and further relaxing purchase restrictions in first-tier cities, it will also cause disturbances to the bond market.

it is worth mentioning that the federal reserve is likely to cut interest rates in september, and external constraints such as exchange rates will be eased, opening up policy space for the implementation of quantitative easing, reserve requirement ratio cuts, and interest rate cuts. huachuang securities believes that considering the current weakening of the mlf policy interest rate positioning and the fact that the certificate of deposit pricing is still significantly lower than the mlf, from the perspective of reducing bank liability costs, there is still the possibility of interest rate cuts this year, and even a larger interest rate cut for the mlf. however, after the july interest rate cut, the "loose credit" policy has not been increased, and there is uncertainty about when a new round of "loose monetary" policy will be launched. at present, it is still difficult to clearly judge the timing of the policy interest rate cut, which is mainly based on omo.

from the regulatory perspective, the central bank announced on august 30 that the people's bank of china conducted open market treasury bond trading operations in august 2024, buying short-term treasury bonds and selling long-term treasury bonds from some primary dealers in open market operations, with a net purchase of bonds worth 100 billion yuan for the whole month. in addition, after the renewal of the 400 billion yuan special treasury bonds, the central bank's long-term regulatory bullet reserves increased.

cicc's fixed income team believes that the bond market in september still needs to pay attention to the impact of financial supervision and subsequent interpretation of institutional behavior. for credit bonds, attention needs to be paid to changes in the funding side, public statements by regulators, and the scale of wealth management and funds and investor behavior. considering the many unfavorable factors in mid-to-late september, such as the funding side, the return of wealth management to the balance sheet, and the issuance of local government bonds, coupled with the fact that the current absolute yield and credit spread are still low, the overall market sentiment after the market adjustment in august is more cautious than in the previous period, so the possibility of a sharp decline is low. on the other hand, factors such as fundamentals and monetary policy have not brought pressure for a reversal in the bond market. since the possibility of risks caused by supervision is very low, and the trend of a small increase in the scale of wealth management has not changed in the context of residents' lack of other investment opportunities, the risk of an unexpected adjustment is also low.

however, cicc's fixed income team also reminded investors that long-term credit bonds are still the type of bonds with greater pressure in the credit bond market. the main pressure points are liquidity concerns, poor resistance to declines, and negative feedback caused by discounted transactions.