Dongfang Jincheng Expects Bond Market to Stay Firm in a Range-Bound Pattern This Week

China's bond market is expected to remain relatively firm while fluctuating within a range this week, Dongfang Jincheng said in a research report. According to Jin10, Dongfang Jincheng said a series of June financial, trade, and macroeconomic data would be released in the near term. It expects second-quarter GDP growth to be around 4.4%, describing the broader economy as showing a K-shaped divergence, with external demand stronger than domestic demand and new drivers stronger than old ones, while the core issue of weak domestic-demand recovery has not been fundamentally resolved. The report said liquidity conditions remain stable and accommodative, institutional under-allocation pressure persists, and demand for bond allocations has shown resilience. As a result, weak fundamentals and rigid allocation demand are expected to jointly support the bond market. Dongfang Jincheng added that market attention in July may gradually shift toward the late-month Politburo meeting, and changes in expectations for the direction of fiscal and monetary policy could trigger periodic volatility in the bond market. Overall, it said the market is still unlikely to break into a clear trend before policy direction becomes clearer.