Guosheng Securities: The pressure on bonds to continue to adjust may be limited

Jinshi Data News on February 25th, Guosheng Securities pointed out that the recent tightening of Liquidity in the interbank market has triggered adjustments in the bond market, with a flattening yield curve and even some term spreads inverting. From an intuitive perspective, the fundamental reason is the tightening of Central Bank Liquidity injection, and the triggering factor behind it should be the lack of bank liabilities and improvement in credit extension after the deposit self-discipline agreement; fundamentally speaking, the main reason still reflects the Central Bank’s concern about the rapid decline in Intrerest Rates in this round, hoping to ‘walk ahead of the curve’ to avoid ‘stampede-style’ adjustments, while also considering preventing empty turns and stabilizing the exchange rate. Looking ahead, it is inclined to believe that monetary easing is still the general direction, and RRR cuts and interest rate cuts should only be late but not absent, with a higher probability of RRR cuts than interest rate cuts in the short term. For the bond market, the risk of further tightening of Liquidity is relatively controllable. In addition, this year, stable rise, issuance of bonds, and debt restructuring objectively require a low Intrerest Rate environment. The pressure for further bond adjustments may be limited. If bond Intrerest Rates further adjust significantly in the future, it is recommended to follow possible investment opportunities.