Shortly after the start of 2024, the yield on 10-year Treasury bonds continued to fall. The 10-year Treasury bond is active, 23 interest-paying Treasury bonds are 26 (230026), and the yield is 257% to the lower 25%。
The last time the yield on 10-year active Treasuries fell below 25%, still during the epidemic in the first half of 2020, when the international epidemic superimposed the US stock market crash, was an extraordinary value at an extraordinary moment.
Since 2013, the upper limit of the interest rate on 10-year Treasury bonds has fallen by more than 150bp, but 25%-2.The 6 percent rate has almost become the "lowest scale" in history, and there has been no substantial breakthrough so far. Why is there a breakthrough now?
First of all, the short-term long-term interest rate has reached the lower limit, which is the market has already priced in more interest rate cuts and RRR expectations, and investors are rushing ahead before the good news arrives.
Secondly, at the beginning of the year, the allocation of the market ** to build a position, to a certain extent, exacerbated the shortage of institutional assets, but also the driving force for the long-end interest rate to decline.
Finally, the equity market has not performed well, with funds flowing out of the pessimistic ** to the stable bond market, although the regulator has compressed the declaration of the bond base.
Once this trend is cashed in, the front-running institutions are likely to take profit on the same day, and they need to beware of the arrival of phased adjustments. The interest rate cut may be less positive for the bond market than expected, because it is now fully expectedThe expectation of interest rate cut is traded before the actual operation, and it is difficult to constitute a positive landing.
In the absence of a reversal of fundamentals and a lack of institutional assets, the market consensus is that long-term interest rates are difficult to reverse;However, trading "difficult to reverse" is not without risk, and consensus expectations are easy to break in the end.
Our perception of the market is that "it's hard to buy in this position." "Especially the urban investment bonds with the yield on the downward line, under the continuation of the debt policy, the low-grade urban investment bonds are hot;In the past, those who bought urban investment bonds made a lot of money, but now the expected yield of chasing urban investment bonds has decreased a lot.
Perhaps, it is now approaching the take-profit point of the bond market. Of course, this profit-taking statement is based on the "equity-bond-balance" strategy and does not include other investors.