Guosheng Securities: The bond market is expected to strengthen again before the end of the quarter, with long-term bonds offering better value for money.

Guosheng Securities research report stated that the People's Bank of China's addition of overnight reverse repurchase operations is a rapid implementation of the related arrangements to improve the short-term interest rate control mechanism at the Lujiazui Forum. The addition of overnight reverse repurchase operations will further expand the tools for short-term interest rate control and improve the interest rate transmission mechanism. It is expected that the interest rate for the new overnight reverse repurchase operation will likely be slightly lower than the 7-day reverse repurchase rate, estimated to be around 1.35% or 1.30%. The addition of overnight reverse repurchase operations by the central bank is conducive to reducing fluctuations in interest rates, and the interest rate center and lower limit may also move lower. Overall, the bond market is still strengthening, and it is advisable to observe the fund situation around the end of the quarter and actively increase allocations. The fundamentals, loose liquidity, and broad-based interest rate declines determine the continued downward trend in interest rates. After the end-of-quarter fund impact, funds are expected to be seasonally loose again. Under the People's Bank of China's new liquidity framework, there is a possibility of a slight downward shift in interest rates compared to before, which is expected to further expand the overall downward space for interest rates. Therefore, the research report believes that the bond market is expected to strengthen again around the end of the quarter, considering the current steep yield curve, long bonds are more cost-effective. It is expected that interest rates will experience a new round of decline around the end of the quarter, with long bonds still favored. The low point of the 10-year government bond in the third quarter is expected to drop to around 1.6%, and the 30-year government bond is expected to drop below 2.1%. During this process, it is necessary to pay attention to institutional behavior to assess the overall market opportunities and risks.