Analysis Of The Influencing Factors Of Bond Yield Curve And Its Practical Significance

Since the reform and opening up,China's bond market has developed rapidly,and the scale of bond issuance has continued to grow.In 2016,the bond market issued a total of 22.34 trillion Yuan.The bond market is second only to the United States and Japan,ranking third in the world in terms of the size of custody.Bond market is the second largest financing channel in China after bank financing,and is an indispensable part of the entire financial system.Bond investment has also become an important asset allocation and investment channel for institutional investors.With the increase in the size of the bond market,China's bond market has become increasingly rich in product types,and the variety and maturity structure of various types of bonds have become more comprehensive,gradually establishing a relatively complete pricing system.The various types of market trading entities,mainly institutional participants,have formed reasonable prices for various bond products through market-oriented transactions.The bond yield curve forms an index system that can reflect the level of bond market interest rates well.Through the analysis of the bond yield curve and the study of the impact of macroeconomics on the bond market will help us to correctly get the bond market yield trend,and then adopt corresponding investment strategies,which is very important to investors of all parties in the market.This paper analyzes the factors affecting the bond yield curve,and then put forward some guiding suggestions for the investment business of Company A.This paper reviews the research on the interaction between bond yield curve and macroeconomic factors at home and abroad,including the influence mechanism of macro-economy on bond yield curve,and the prediction effect of relevant economic indexes on yield curve,and the influence of bond yield curve on monetary policy regulation.On this basis,this paper analyzes the significance of bond yield curve from the Theory of Term Structure of Interest Rates.Then,the paper analyzes the mechanism of interest rate transmission between bond yield curve and money market through monetary policy.Then this paper briefly introduces the development and present situation of bond market,in terms of the scale of transactions,have become an important part of financial market.Institutional investors have become the main participants in the primary and secondary markets of bonds.Bond market investment is one of the important investment directions of conservative institutional investors.Based on the theoretical analysis,the principal component analysis(PCA)is used to study the bond yield curve,and the monthly average yield of 11 kinds of treasury bonds with different maturities from December 2006 to December 2016 is analyzed by principal component method.The results show that the bond yield curve can be explained by three principal component factors:horizontal,slope and curvature.Based on the multiple linear regression model,The influence of consumer's price index and industrial added value and macroeconomic boom index on principal component factors of the bond yield curve is studied.Finally,this paper analyzes the present situation of A company's investment business,points out that A company's investment business has the problems of single investment direction and short investment duration,and analyzes that A company can invest in bonds to increase the investment varieties and adopt positive investment strategy to improve investment yield according to the analysis of bond yield curve.