Huatai Securities: The short-term bond market is still facing headwinds, but interest rates are likely to have a "ceiling"
Huatai Securities research report stated that the current bond market has weak interest protection, heavy strategic games, and strong emotion-driven investments, making the investment experience "diminished returns with doubled efforts." In the short term, the bond market is still facing headwinds, but the probability of interest rates reaching a top is high. In the short term, the upper limit for maintaining the ten-year government bond is around 1.8%, with the extreme position being 1.9%. Potential over-adjustment risks still come from institutional behavior. In terms of timing, look for opportunities for a "counterattack" after October. There is little risk of continued tightening of funds, and it is recommended to continue trading steep curve transactions. In terms of varieties, 30-year government bonds and perpetual bonds are prone to become amplifiers of emotions, so it is advisable to temporarily avoid them. 5-7 year and below interest rate bond varieties have defensive characteristics and it is advisable to stop leverage speculation. Credit bonds are mainly focused on the short and medium term, with 3-5 year regular credit bonds showing initial value after this round of decline. Convertible bonds maintain equity beta exposure.
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