Hua Chuang Securities: The constraint at the 1.7% level for 10-year bond yields may soften, and the confidence of bulls is expected to strengthen.

The commentary sent by Huachuang Securities' Investment Trading Department stated that the downward break of bond market rates reflects a marginal opening of expectations for overall easing. After the July Purchasing Managers' Index showed that the improvement in fundamentals could not be sustained, going long has become a direction with less resistance in the bond market. The current attitude of the People's Bank of China may suggest that the 10-year government bond yield has slightly broken below 1.7%, which is still within the central bank's tolerance range. Before the central bank uses liquidity to impact the bond market, the constraint of the 10-year government bond yield at the 1.70% level may gradually soften, and long positions may continue to attempt to break lower. In contrast, ultra-long bonds still have room for narrowing spreads, and the rhythm requires attention to periodic profit-taking disturbances in trading.