Every reporter: Ren Fei Every editor: Peng Shuiping
Last week, as geopolitical conflicts eased, the prices of long-term bonds and futures rebounded, leading to a significant increase in the average performance of medium- and long-term bond funds. However, on the other hand, the uncertainty of external events and inflationary pressures continue to restrain the sustainability of bond market investments. Therefore, the decline in long-term interest rates is supported by safe-haven demand and allocation forces, while the attractiveness of short-term coupon rates is highlighted. The bond market is still expected to continue attracting capital inflows, especially from long-term funds of institutions such as banks and insurance companies.
<h2>30-Year Treasury Futures Strongly Rise, Top Funds Perform Well</h2>
Last week (April 6 to April 12), the treasury futures market showed a significant differentiation pattern. The main contract for 30-year treasury futures rose strongly, with Wind statistics showing that contract TL2606 increased by 0.91 yuan over the week, with a weekly increase of 0.82%. Such an increase is rare in weekly statistics for treasury futures.
Industry insiders believe that signs of easing geopolitical tensions are key factors in alleviating pressure on the bond market, which has led to a noticeable decline in the yields of medium- and long-term bonds, resulting in price increases that further benefit funds related to investments. Last week, the average performance of domestic medium- and long-term bond funds led among pure bond funds, with top-performing products showing strong results.
Wind statistics show that the average performance of medium- and long-term pure bond funds reached 0.08% last week, while short-term bond funds only achieved 0.05%. The advantages of top-performing products are even more pronounced, with Huatai Bosheng Anyue A, Jinyuan Shun'an Hongze, and Huatai Bosheng Zunyi Interest Rate Bond Six-Month A all exceeding 1% in weekly performance, with a total of 113 medium- and long-term bond funds achieving weekly performance above 0.2%.
In contrast, the best-performing short-term bond fund, Fengchao Tianmi Medium and Short Bond A, recorded 0.19%, which is significantly different from the overall situation of medium- and long-term bond funds. However, short-term bond funds had previously outperformed medium- and long-term pure bond funds, and the easing of external events is a key factor in improving this situation.
A research report from Green Dahuah Futures analyzes that the ceasefire between the U.S. and Iran has driven down the yields of ultra-long-term treasury bonds, with cash bonds and futures rebounding simultaneously, but in the short term, it may remain volatile. The monetary policy maintains an accommodative tone, and the ample liquidity restricts the upward space for yields. A report from Guomao Futures also points out that the easing of geopolitical tensions alleviates concerns about imported inflation, providing a repair window for the bond market.
Noah Fund's analysis indicates that looking ahead for the bond market, the yields of short-term bonds have limited downward space as the central bank continues to net withdraw, while the yields of long-term bonds are slightly stronger due to ample liquidity and decreased risk appetite. However, with the subsequent increase in supply and the repair of risk appetite, the downward space is also limited. Overall, the bond market still maintains a volatile outlook, and in a low-interest-rate environment, it may be possible to flexibly control duration and positions.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OueNbQwbqzpiP70HL7BRASAJaK5WeCHZrsUe8dsnt_ecQAA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OueNbQwbqzpiP70HL7BRASAJaK5WeCHZrsUe8dsnt_ecQAA/641"/>
Last week's statistics on the performance of leading public bond funds (Source: Wind)
<h2>Institutional Allocation Demand Begins to Increase</h2>
From the aforementioned analysis, it is not difficult to see that the decline in long-term interest rates is supported by safe-haven demand and allocation forces. From the perspective of institutional allocation demand, the bond market still has strong attractiveness.
In the second quarter of 2026, several banks have once again initiated adjustments to the listed interest rates for RMB deposits, with short-term deposit products becoming the core focus of this round of adjustments. As the &#34;New Year Opening&#34; activities officially come to an end, banks no longer need to attract deposits through temporary interest rate discounts, and the industry is gradually returning to a normalized interest rate management model, with the pace of deposit rate adjustments also returning to normal levels.
In this regard, a research report from Hualian Futures points out that the continued liquidity easing and the steady implementation of monetary policy have also brought positive signals to the bond market, which is expected to continue attracting capital inflows. The central bank has also adjusted its operational rhythm accordingly, reducing reverse repurchase operations to increase net capital absorption, regulating market liquidity through market-oriented methods to avoid market imbalances caused by excessive liquidity.
Overall, the current continued liquidity easing is driving a significant decline in long-term government bond yields, with the 30-year yield experiencing the largest drop; R007 has fallen below the OMO policy rate, creating an inversion that reflects excess liquidity; the central bank is guiding rates back to equilibrium through net absorption, but the policy tone remains moderately accommodative.
An analysis from Nuoan Fund indicates that from a fundamental perspective, the geopolitical conflicts in the Middle East and the resulting high oil prices will mainly impact the global economy in the second quarter, while the domestic economic impact will primarily manifest in imported inflation and changes in external demand. The trajectory of subsequent conflicts is highly uncertain; if the current path continues, as the conflicts de-escalate and the Strait of Hormuz gradually resumes passage, oil prices are expected to decline, and the global economy may see recovery.
Regarding monetary policy, the recent positive PPI is mainly due to supply-side reasons rather than demand-side factors. With CPI being weak and domestic demand not strong, the central bank will not tighten liquidity as a result, maintaining the approach of &#34;demand-based allocation, smoothing peaks and filling valleys,&#34; and keeping a moderately accommodative monetary policy tone.
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Last week, the easing of geopolitical conflicts led to a rebound in long-term bonds, with the main contract for 30-year Treasury futures rising by 0.82%. The average performance of medium- and long-term bond funds reached 0.08%, with top funds such as Huatai-PB Aoyue A achieving weekly returns exceeding 1%. Despite ongoing external uncertainties and inflationary pressures, the bond market is still expected to attract capital inflows, particularly from long-term funds of institutions such as banks and insurance companies. Short-term bond funds performed relatively weakly, with the highest weekly performance only reaching 0.19%

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The easing of geopolitical conflicts catalyzes a rebound in long-term bonds, with leading bond funds achieving weekly returns exceeding 1%