Core Viewpoint - The People's Bank of China (PBOC) is set to conduct a 700 billion yuan reverse repurchase operation on November 5, aimed at maintaining ample liquidity in the banking system, with a focus on medium-term liquidity support [1][2]. Group 1: Reverse Repo Operations - On November 5, the PBOC will conduct a 700 billion yuan buyout reverse repo operation with a term of 3 months (91 days) [1]. - In November, there will be 700 billion yuan of 3-month reverse repos maturing, indicating a continuation of the same amount of operations [1]. - An additional 300 billion yuan of 6-month reverse repos is expected to mature in November, with a high likelihood of another 6-month reverse repo operation being conducted [1][2]. Group 2: Liquidity Management - The PBOC's actions are in response to potential liquidity tightening due to various factors, including the issuance of 500 billion yuan in local government bonds and the expiration of 500 billion yuan in new policy financial instruments [2]. - The central bank aims to stabilize the funding environment and support government bond issuance while encouraging financial institutions to increase credit supply [2][3]. - The PBOC may also consider rolling over or slightly increasing the 900 billion yuan Medium-term Lending Facility (MLF) due in November [2]. Group 3: Bond Market and Economic Stability - The PBOC resumed net purchases of government bonds in October, indicating improved conditions in the bond market, with the 10-year government bond yield around 1.8% [3]. - The resumption of government bond trading is expected to enhance long-term liquidity support for the banking system and signal a commitment to stabilizing economic growth [3]. - The central bank has sufficient operational space to implement various monetary policy tools to support economic stability in the upcoming quarters [3].