Zheshang Securities: The overall trend of the bond market is expected to be “short, strong and weak”. Investors' focus is shifting to fiscal policy

The Zhitong Finance App learned that Zhishang Securities released a research report saying that looking ahead to January at the end of December, investors are more focused on bond market trends in the next stage: consistent expectations will maintain their preference for short- and medium-interest rate bonds, and the overall operational level is biased. The strength and pace of fiscal policy and pressure on the supply of government bonds have become the core focus of investors' attention.

The main views of Zheshang Securities are as follows:

According to the results of the bond market questionnaire released at the end of December, the bank summed up five mainstream expectations investors have for the December bond market:

(1) Investors' expectations of the upper and lower limits of long-term treasury bond yields are neutral, and long-term treasury bond yields still fluctuate in the “top and bottom” range;

(2) “Short strong strong weak” is the mainstream expectation of investors in judging the overall trend of the bond market;

(3) The practical level of the bond market is neutral, and holding coins and keeping positions basically stable are still the mainstream views;

(4) Fiscal strength and issuance of government bonds have become the core issues investors are most concerned about, and monetary policy and capital aspects are still key concerns of bond investors;

(5) Investors' preference for short- and medium-interest rate bonds is rising.

How will the January bond market be interpreted? The survey results showed that investors did not form a strong consensus on the January bond market in a single direction, and they are expected to present a “cautiously optimistic, structurally dominant” pattern. Short-term interest rates are relatively more favorable because they benefit more from a relaxed liquidity environment; long-term interest rates are relatively cautious because they may face fundamental restoration, supply pressure, or a game of policy expectations, leading to “short strong, strong, and weak” becoming the most mainstream market expectation.

How should the current bond market operate? In December, most investors were neutral on a practical level, holding coins on the sidelines, and waiting to return to the expected point before increasing their positions and keeping their positions basically stable is still the mainstream view; the share of those who can start adding positions declined slightly, from 14% to 11% in the November survey results. It shows that the market is leaning towards defense. There are also some investors who are cautious in their judgments. The share of investors who reduced risk over a longer period of time increased compared to the November survey results.

What is most likely the main logic of January bond market pricing? The focus of bond market investors is shifting to the core of “fiscal policy.” The strength and pace of fiscal strength, and the resulting pressure on the supply of government bonds, have taken over as the primary concern and potential source of volatility in the short term. Traditional monetary easing expectations, on the other hand, form the underlying support for the market. The trade-off and game between the two may dominate the direction and structure of the next stage of the bond market.

Which bond varieties are you most optimistic about in January? Looking ahead to January, investors are showing a clear shift in term structure in asset preferences. The market unanimously expects to increase the allocation of short- and medium-interest bonds, while the preference for interbank deposits continues to rise. Corresponding to this, the willingness to allocate long-term interest bonds has weakened, reflecting that investors at this stage are paying more attention to liquidity protection and short-term certainty rather than long-term exposure.

Risk warning: Investor sample coverage may be incomplete; investors' opinions and behavior may be biased; investors' opinions may change rapidly with the market; market research content is for informational reference only and does not represent the analysts' specific investment opinions.