CITIC Securities: Bond Market Strengthens Amid Eased Inflation Expectations

CITIC Securities reported on June 4 that the bond market maintained a state of consolidation and fluctuation in May, with a concentrated decline towards the end of the month. According to Jin10, the late-month strengthening was linked to the accelerated reconciliation process between the U.S. and Iran, reduced pressure from imported inflation expectations, and the opening of space for subsequent monetary policy. It was also related to adjustments in the equity market at the end of the month, with funds shifting to the bond market. CITIC Securities anticipates that the pace of bond market strengthening may slow down, with the 10-year government bond expected to consolidate and fluctuate around the 1.70% line in the short term. Further declines would require additional information to drive the market. The upcoming release of May's economic data could be crucial; if the data continues to weaken, the 10-year government bond may potentially fall to the 1.65%-1.70% range.