In the domestic market, the yield of ten-year government bonds is the basis of RMB asset pricing. Because the yield of 10-year treasury bonds is guaranteed by the national credit, long-term bonds are usually regarded as risk-free rate of return, and the asset prices in the stock market, futures market and real estate market all depend on the risk-free rate of return in the market (10-year treasury bonds yield). The price, interest rate, maturity and credit of bonds determine the price trajectory of assets in the whole financial market.
For the A-share market, if the yield of 10-year treasury bonds rises rapidly, it can provide high returns. Then, a large amount of market funds may enter the bond market, resulting in the lack of funds in the A-share market, increasing the pressure on market funds and possibly causing the market to fall. Moreover, if the yield of 10-year treasury bonds rises rapidly, market consumption and corporate lending will face higher costs, thus inhibiting market consumption and corporate development. However, these are only the side effects of the interest rate of government bonds on the A-share market, and there is no necessary relationship between the two trends.