The Ministry of Finance's repurchase has expanded to 6 billion yuan, but the yield on long-term bonds has actually increased. One cannot help but ask why? From a personal perspective, it is more like an expectation gap and macro re pricing. Let's discuss in detail: 1. Yesterday, we also discussed that before the announcement of the repurchase scale, the market generally expected a scale of 5-6 billion US dollars, and even investment banks such as Morgan Stanley and Jefferis had given repurchase scale expectations of 10 billion US dollars. This has led to: 1) The general expectation of 5-6 billion US dollars has not been exceeded; But compared to the higher expectations of 7-8 billion or even 10 billion in the market, this is a small amount. 2) The market is still concerned about how much duration can be continuously moved away in the next few months. This time, the repurchase expansion, but the subsequent rhythm in the announcement is still "at least 4 billion", Equivalent to last night's announcement from the Ministry of Finance, there was no mention of a "bigger, more sustainable plan" that has already begun. So the high yield of long-term bonds in Guilin is due to these two reasons. This repurchase did not exceed the general expectation and was lower than the optimistic expectation; The market has not seen any signal of further expansion of repurchase scale in the future; 2. But in fact, the data from last night's long-term bond auction is still valid Last night, the auction of the 39 billion 10-year term was very strong: the winning bid was 4.834%, the bid multiple was 2.71, and the primary trader only took about 4.3%. After the auction, the yield fell from the high point to about 4.835%. This indicates that there are still buyers for US Treasury bonds, but they demand higher returns. So the high yield and the disorder of the treasury bond market are two things 3. Oil prices are also a key booster Don't ignore that oil prices have already risen to 100 last night, and as oil prices rise, inflation expectations naturally also rise, leading to an increase in short-term interest rates. The Ministry of Finance can change the supply and demand of some bonds, but it cannot change oil prices, nor can it set a policy interest rate path for the Federal Reserve. 
 4. Returning to last week's speech by Besent at the G20 Finance Ministers and Central Bank Governors Annual Meeting What is actually more noteworthy is last week's speech by Besson: the Ministry of Finance is unable to change the equilibrium price, and what can be done is to ease the disorder, improve the liquidity of old bonds, and allow traders to free up their balance sheets to take on new bonds. It is equivalent to saying that last night, limited scale still couldn't withstand the fundamentals of oil prices, supply, and opportunity costs of funds. Of course, continuous changes in supply terms and transaction costs may have a marginal impact on prices; After all, there will be 7 repurchases in the next two months. 5. The market is forcing the Federal Reserve to do YCC I personally think the possibility is small now, and it is not very likely that Walsh is still interested in reducing the Federal Reserve's large-scale balance sheet and expanding it on a large scale in the near future. Of course, if there are really problems in the future, it is more likely to use financing/trading tools first (similar to the reserve management purchase RMP at the beginning of the year), but jumping directly to the long end YCC may have a slightly larger span. 6. What time will we see next? 1) The PPI data for August tonight and CPI data for August tomorrow night, if not weak, may push up yields in the short term. 2) Looking at the trend of oil prices again, the core is the progress of the US Iran game. Yesterday, I tweeted that Trump needs to make more concessions to really ease up in a short time; 3) Also, the trend of the Japanese yen needs to be monitored, as we discussed a few days ago about the rapid decline of the yen. overall Ten year US Treasury bonds have already stabilized at over 4.8%, and there will still be significant market pressure in the short term as they continue to rise; In the first few days of this week, the US Dow Jones Industrial Average and the S&P saw a lot of gains. The Nasdaq strengthened due to strong expectations brought by the GPT6 Aatra, but after short-term expectations were fulfilled, further macroeconomic deterioration will still affect the semiconductor market trend; Perhaps we will return to the situation of macro suppression of industrial fundamentals Yesterday, we talked about that Trump needs more concessions to ease in a short time, otherwise it will take time to grind (but time is not on Trump's side now): https://(x.com)/qinbafrank/status/2097309757992501308? s=46&t=k6rimWsEbo2D2tXolYcM-A This article is sponsored by @ bitget_zh, titled 'Bitget Buying US Stocks: Instant Entry, Smooth Trading'