VAT arbitrage "flash rush" ends, bond market investment returns to fundamentals.

Regarding the restoration of value-added tax on government bond interest, the market generally believes that existing bonds still enjoy VAT benefits, giving them a certain advantage relative to newly issued bonds. Last Friday, there was a significant fluctuation in the bond market. On the morning of August 4th, bond yields were still collectively trending downwards, with the 10-year government bond yield falling to around 1.68% at one point. In the afternoon, long-term bond yields quickly rose, with the 10-year government bond yield eventually returning to above 1.7%. Institutions believe that the restoration of value-added tax will lead to short-term demand for existing bonds, but this impact will be short-term and will not affect the medium to long-term trends of the bond market. The long-term direction of the bond market is still determined by fundamentals.