Long-term bond interest rates have returned to normal after a long absence. Will China's bond market become a global safe haven?

After the recent statement by the central bank, the divergence in the bond market has further intensified. The latest disclosed LPR has remained unchanged for 8 consecutive months, bringing new changes to the market dynamics between bulls and bears. Since the beginning of this week, long-term bond rates, which have been at high levels for some time, have been on a continuous downward trend in the absence of any obvious positive stimuli. However, the "recovery" performance of the bond market is still unstable. On January 22nd, while the stock market sentiment was fluctuating, the bond market experienced another round of volatility to the downside, with a slight drop in treasury futures and an increase in rates for major interbank bonds. The overall yield of active long-term government bonds initially decreased and then rebounded before slightly falling again at the end of the day. In addition to the allocation by institutions such as banks at the beginning of the year, other key factors driving the rise in long-term bond rates include the positioning of foreign investors during the sell-off of Japanese and U.S. bonds. According to industry experts, short-term holdings of RMB bonds by foreign investors may face continued fluctuations, but in the medium to long term, the trend of bond market opening to foreign investment is expected to help steadily increase the holdings of Chinese bonds by foreign investors.