1. The market interest rate is inversely proportional to the expected yield of national debt, that is, when the market interest rate drops, the expected yield of national debt rises, and when the market interest rate rises, the expected yield of national debt falls. Therefore, the decline in national debt means that the market interest rate rises.
2. The relationship between supply and demand also affects the rise and fall of national debt. When the domestic economy improves, investors think that the income from buying stocks and funds will be much higher than the income from buying government bonds, which leads to the supply of government bonds in the market exceeding the demand of investors, thus the government bonds will fall.
3. If a country's economic prospect is not optimistic, the possibility of default will rise, the country's credit sovereignty will decline, and foreign capital will sell its national debt and withdraw, which will lead to its decline.
According to experts' prediction, if the Fed raises interest rates by 100 basis points (four times) in 2022, the yield of 10-year US bonds may reach about 2.3%. Securities analysts also believe that the upward pressure on the yield of US bonds has not been fully released, and the high point in the first half of the year may be around 2.2%-2.3%.
The industry believes that with the tightening of monetary policy in overseas economies, the upward trend of US bond yields will affect investor sentiment in the domestic bond market, but this impact is short-term.
In addition, some securities analysts pointed out that American countries have entered the cycle of raising interest rates and shrinking the table, the global dollar liquidity supply has decreased, and emerging markets are facing the pressure of foreign capital outflow. At present, the spread of 10-year US debt is about 84 basis points, which is narrower than the previous period, but it is still in the normal range of 80 basis points to 100 basis points. The impact of the short-term US bond interest rate increase on the domestic bond market is controllable. However, it should be noted that China's economic cycle and monetary policy cycle are different from those of overseas economies, and the fundamental factor that determines the trend of China's bond market lies in domestic fundamentals.
Securities analysts pointed out that under the goal of steady growth, a large number of pre-issued government bonds in the first quarter and the credit supply stimulated by the central bank all need the support of excess liquidity. It is expected that February and March will still be the window of monetary easing, and the bond market will not immediately enter a bear market.