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driven by the expectation of reserve requirement ratio cut, long-term treasury bond yields hit new lows this year. as of the close of september 12, china's 10-year treasury bond yield (gcny10) closed at 2.067%, hitting an intraday low of 2.063% this year; the 30-year treasury bond yield closed at 2.227%, hitting an intraday low of 2.274% this year.

mingming, chief economist of citic securities, said that investors' cautious attitude towards economic fundamentals and the "asset shortage" situation have not changed the fundamental factors that determine the bull market in the bond market, and the bond market does not have the basis for a major adjustment.

a private equity bond trader told the daily economic news reporter that at the beginning of this week, the central bank sold "24 special treasury bond 01" (10-year special treasury bond) through major banks. financial institutions once thought that the central bank entered the market to sell long-term treasury bonds in order to push up long-term treasury bond yields. however, through observing the market conditions in the past two days, they found that the central bank's move was more likely to prevent long-term treasury bond yields from falling rapidly due to the release of a reserve requirement ratio cut signal, and they have once again restarted the bond allocation strategy of extending the duration.

he pointed out that since this week, the main investment institutions that bought long-term government bonds include insurance and bond investment funds.first,ordinary insurance products with a guaranteed interest rate of 2.5% still have higher profit margins than cash products, attracting some capital inflows;second,after bond funds experienced a correction in net value in august, some funds entered the market at a bargain price, which also brought incremental funds to bond funds. these two factors have invisibly pushed up the demand for insurance and bond funds.

the china chengxin international research institute released a report pointing out that the current economic fundamentals, capital and other factors are relatively "friendly" to the bond market. in terms of economic fundamentals, against the background of weak domestic demand and a certain lack of counter-cyclical regulation, major economic indicators such as industrial added value, total retail sales of consumer goods, and fixed asset investment in july weakened marginally compared with the first half of the year, indicating that there are still multiple constraints on the current economic recovery, supporting the bond market's willingness to go long.

short-term treasury yields continued to fall, with the 10-year treasury yield falling to a year-low today.

a reporter from the daily economic news learned that the long-term treasury bond yields hit a new low for the year on september 12. there is a factor that cannot be ignored, namely, the 2-5 year treasury bond yields have fallen rapidly since this week, driving capital to reallocate to long-term treasury bonds with relatively higher yields.

since august, financial institutions such as small and medium-sized rural commercial banks and bank wealth management subsidiaries have adjusted their bond investment strategies due to factors such as the central bank's entry into the market to buy short and sell long, repeated warnings of long-term bond investment risks, and the brokerage association's investigation and punishment of illegal bond trading.by leveraging the strategy to buy 2- to 5-year government bonds, we can achieve the higher returns corresponding to the allocation of 10-year and 30-year government bonds.。

this has led to a continuous decline in the yields of 2- to 5-year treasury bonds. especially this week, after the frequent appearance of "24 special treasury bonds 01" in the bond trading market, which has caused the market to worry that the central bank will enter the market to sell long-term treasury bonds and "push up" the yields of long-term treasury bonds, more capital has flowed into 2-5 year treasury bonds, causing the latter's yields to fall rapidly.

as of the close of september 12, the 2-year treasury bond yield closed at 1.364%, falling to an intraday low of 1.354% for the year; the 3-year treasury bond yield closed at 1.441%, also falling to an intraday low of 1.437% for the year.

as short-term treasury yields fell more than long-term treasury yields this week, the long-term and short-term treasury yield curves suddenly steepened.

"although this is in line with the central bank's original intention of buying short and selling long - to make the long-term and short-term treasury bond yield curve steeper, the rapidly declining 2-5 year treasury bond yields are causing a lack of investment interest in the allocation plate," he told reporters. in particular, the current 2-year and 3-year treasury bond yields are both lower than the deposit rates of some large banks during the same period (1.45% and 1.75%), which makes bank wealth management products with heavy short-term treasury bonds worry that if their annualized yields are not as good as the deposit rates during the same period, it may trigger new fund redemption pressure, driving some funds to flow into deposit products.

the private equity fund bond trader revealed to reporters that although the trading activity of long-term treasury bonds has slowly recovered since this week, he noticed that allocation funds such as bank wealth management subsidiaries have also joined the insurance and bond fund camps, and the demand for allocation of long-term treasury bonds has increased. the reason is that bank wealth management subsidiaries need to increase long-term bond allocation to increase product returns and prevent the loss of new investment funds.

"the reason why these capitals have adopted the strategy of extending the duration again is that the market believes that the purpose of the central bank selling 10-year special treasury bonds through large banks is to prevent the long-term treasury bond yields from falling rapidly due to the release of the reserve requirement ratio cut signal. therefore, they also try to increase the purchase of long-term treasury bonds and adopt the allocation strategy of holding to maturity." he pointed out that, however, when the long-term treasury bond trading activity has not yet fully recovered,these purchases also caused the 10-year treasury yield to quickly fall below the 2.1% integer mark.。

in the view of this private equity bond trader, as the 10-year treasury yield is below 2.1%, the market will closely watch the central bank's new entry to sell long bonds to see whether it will push the 10-year treasury yield back above 2.1%. this has led to traders not daring to rush in to "push up" long-term treasury prices, fearing that they will be caught in greater investment risks.

industry: if the expectation of reserve requirement ratio cut continues to be high, various institutions will be more cautious about government bond transactions

it is worth noting that in the face of the 10-year treasury bond yields that have hit new lows this year, financial institutions' willingness to trade "24 sequel special treasury bond 01" has suddenly increased.

in the past two days, "24 sequel special treasury bond 01" has become a 10-year treasury bond with relatively high trading activity in the bond market. on september 10, the number of transactions for this special treasury bond reached 278, and on september 11, its transaction volume also reached 179.

"the reason behind this is that compared to another relatively actively traded treasury bond variety 240011, '24 continuation special treasury bond 01' not only has a relatively considerable coupon of 2.17%, but also has higher volatility. its intraday volatility exceeds 2 basis points, which is higher than 240011 (less than 1 basis point). therefore, some private bond funds and securities firms' proprietary institutions have noticed that compared with other 10-year treasury bond varieties, '24 continuation special treasury bond 01' has more than 2 basis points of trading arbitrage space." the above-mentioned private equity fund bond trader told reporters.

in his opinion, whether "24 continuation special treasury bond 01" can continue to be sought after by trading institutions will, firstly, be affected by the subsequent selling volume of the central bank in the market. if the "supply" of such bonds increases, the institutions' pursuit of it may decline, and its price volatility will fall accordingly, causing the investment interest of arbitrage trading funds to decline; secondly, if the expectation of reserve requirement ratio cut continues to be high, causing the 10-year treasury bond yield to continue to fall, the high price of "24 continuation special treasury bond 01" will also affect the investment willingness of some configuration plates.

the latest research report released by zheshang securities pointed out that the central bank has a strong ability to guide the long end of the interest rate curve, and it is expected that the 10-year treasury bond yield will be more significantly affected by the central bank's entry into the market to sell bonds. in this regard, the above-mentioned private equity fund bond trader pointed out that "as the 10-year treasury bond yield hit a low of 2.063% this year on september 12, various investment institutions have become more cautious in trading 10-year treasury bonds."

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