Shouchuang Futures: Recommend shorting government bond futures on rallies

Recently, the government bond futures market has continued to strengthen, with the core driving forces coming from liquidity conditions, economic fundamentals, supply and demand for long-term bonds, and external situations. Among these, ample liquidity has been the most critical factor for the recent rise in government bond futures. Looking at the interbank market’s core funding rate DR007, since April, DR007 has remained below the policy rate, with the central tendency operating within the 1.32%-1.37% range, showing low-level fluctuations. However, the upward trend in government bond futures may be nearing its end, mainly due to valuation factors, as government bond yields are gradually approaching the policy rate. It is recommended to consider short positions at high levels on the T2606 contract. (First Capital Futures)