CSC Financial: Changes in market sentiment are the main cause of recent volatility in the bond market.

CSC Financial released a research report noting that the bond market, represented by long-term bonds, has recently experienced a certain degree of volatility, but no significant changes have been observed in the fundamental landscape or macroeconomic policy, and no incremental structural factors driving down bond market yields have yet been identified. Therefore, it is judged that changes in market sentiment are the main cause of this volatility. The fermentation of risk-aversion sentiment and capital migration brought about by the short-term weakness in the equity market are the core driving forces behind this round of strength, while the easing expectations brought about by the central bank's phased increase in liquidity injection have formed a slight resonance with this main cause, amplifying market volatility. Looking forward, the current low level lacks long-term support. After the equity market stabilizes and sentiment is digested, long-term bond levels will still move toward the next higher equilibrium range, and the 1.65% level on the 10Y Chinese government bond yield remains worth watching.