Core Viewpoint - The bond market is experiencing weak fluctuations, with the central bank's operations aimed at stabilizing liquidity and market expectations while avoiding rapid declines in interest rates [1][6][7]. Market Performance - The majority of government bond futures closed lower, with the 30-year main contract down 0.08% at 116.43, and the 10-year main contract down 0.01% at 108.62 [2]. - The interbank major interest rate bonds saw slight declines, with the 10-year government bond yield down 0.1 basis points to 1.789% [2]. - The China Convertible Bond Index rose 0.74% to 486.21 points, with notable increases in several convertible bonds [2]. International Market Trends - In the Eurozone, 10-year government bond yields fell slightly, with French yields at 3.436% and German yields at 2.652% [3]. - Asian markets saw a decline in Japanese bond yields, with the 10-year yield down to 1.677% [4]. - In North America, U.S. Treasury yields collectively decreased, with the 10-year yield at 4.083% [4]. Primary Market Activity - The Ministry of Finance reported weighted average yields for various government bonds, with the 50-year bond at 2.28% and a bid-to-cover ratio of 5.08 [5]. - Agricultural Development Bank's financial bonds had yields of 1.9015% for the 10-year term, with a bid-to-cover ratio of 2.49 [5]. Liquidity Conditions - The central bank conducted a 655 billion yuan reverse repurchase operation at a rate of 1.40%, resulting in a net withdrawal of 4922 billion yuan for the day [6]. - The Shibor rates showed mixed movements, with the overnight rate stable at 1.315% [6]. - The resumption of government bond trading operations in October signals the central bank's intent to support liquidity and stabilize market expectations [6][7]. Institutional Perspectives - Long-term stability in liabilities is expected to influence the scale and pace of bond investments, with forecasts suggesting a potential decline in yields for 10-year government bonds [8]. - The liquidity environment is anticipated to tighten slightly in November, but the central bank's recent actions indicate a commitment to maintaining low interest rates [8]. - The current bond-buying operations are seen as a substitute for reserve requirement ratio cuts, aimed at easing pressure on banks while providing targeted liquidity [8].

Core Viewpoint - The People's Bank of China (PBOC) is set to conduct a 700 billion yuan reverse repurchase operation on November 5, indicating a continuation of liquidity support in the market through medium-term funding tools [1][4]. Group 1: Reverse Repo Operations - The PBOC will carry out a 700 billion yuan reverse repo operation with a term of three months, which is equivalent to rolling over the same amount of maturing reverse repos [1]. - Despite a total of 1 trillion yuan in reverse repos maturing this month, the PBOC has consistently conducted two different term reverse repo operations each month since June [4]. - Market institutions expect an additional six-month reverse repo operation in November, indicating a continued net injection of liquidity [4]. Group 2: Bond Market Operations - The PBOC resumed its bond buying operations in October, injecting 20 billion yuan, which is seen as a significant signal for the bond market despite the small amount [4][7]. - The bond market's supply-demand relationship has improved, with the 10-year government bond yield stabilizing around 1.8%, showing a notable improvement since the beginning of the year [7][8]. - The resumption of bond operations is expected to positively influence market sentiment and lead to a decline in long-term interest rates, as evidenced by the drop in the 10-year bond yield from 1.8423% to 1.7984% [8]. Group 3: Liquidity Management - The PBOC has been actively using reverse repos to address medium-term funding gaps since October of last year, aiming to maintain a stable and ample liquidity environment [5]. - The central bank's actions, including reverse repos and bond operations, are part of a broader strategy to manage liquidity and support the economy [6]. - Analysts suggest that the PBOC will continue to utilize a combination of reverse repos and medium-term lending facilities (MLF) to inject liquidity into the market [6].