Group 1 - The core viewpoint of the articles indicates that the People's Bank of China (PBOC) is expected to restart government bond trading operations, with conditions becoming suitable for such actions in the fourth quarter of the year [1][2][3] - The current market sentiment is low, with 10-year and 30-year government bond yields recently falling below 1.8% and 2.1% respectively, prompting speculation about the PBOC's intervention [1][2] - The PBOC has maintained a pause on government bond trading for eight consecutive months, during which the 10-year bond yield has risen to around 1.8%, indicating a significant shift in the bond market compared to earlier in the year [2][3] Group 2 - The PBOC's operations in the bond market are primarily aimed at liquidity management and injecting base currency, which inevitably influences government bond yield trends [3][4] - Analysts suggest that the PBOC's potential resumption of bond trading could stabilize bond prices and mitigate negative feedback loops caused by large-scale redemptions of wealth management products [5] - Despite the anticipation of the PBOC's actions, it is noted that the resumption of bond trading may not fundamentally determine the trend of bond yields, as the core factors are related to the relative value between stocks and bonds [5]

Report Industry Investment Rating - Not mentioned in the provided content Core Viewpoints - The central bank's bond - buying is mainly a long - term base money injection channel, and the restart of bond - buying may only be a matter of time [2][3] - The impact of the central bank's bond - buying on the bond market and liquidity is neutral [3][4] - The 2024 central bank's bond - buying had a significant impact on short - term treasury bonds, possibly due to the bond - buying method and market expectations [5][6] - The bond - buying method may change in 2025, and its positive impact on the bond market is relatively limited. If the economy does not decline significantly in the second half of the year, bond yields are expected to rise [7] Summary by Related Content Central Bank's Bond - Buying as a Long - term Base Money Injection Channel - In 2023, the Central Financial Work Conference proposed to gradually increase treasury bond trading in central bank open - market operations. In August 2024, the central bank officially carried out treasury bond trading operations [2] - The central bank's positioning for treasury bond trading is to enrich the base money injection channel and communicate with the market on long - term treasury bond yields. In practice, it mainly serves as a money injection channel [2] - Historically, the long - term base money injection channels of the central bank have evolved from foreign exchange reserves to reserve requirement ratio cuts and then to treasury bond trading. With limited room for further reserve requirement ratio cuts, treasury bond trading is a mature alternative [2] Impact of Central Bank's Bond - Buying on the Bond Market and Liquidity - Currently, the central bank's long - term base money injection channels are reserve requirement ratio cuts and treasury bond trading. The impact of reserve requirement ratio cuts on the bond market and liquidity is neutral as it both increases money supply and may be used to fill the money gap and followed by liquidity recycling [3] - The central bank's treasury bond trading is theoretically similar to reserve requirement ratio cuts, and its impact on the bond market and liquidity is also neutral. For example, the Bank of Japan's regular treasury bond purchases led to a significant increase in Japanese bond yields [3][4] Impact of the 2024 Central Bank's Bond - Buying - In 2024, the central bank's bond - buying significantly affected short - term treasury bonds. The 2 - year China Development Bank bond - 2 - year treasury bond spread rose to nearly 40BP during the bond - buying period from August to December 2024, indicating a significant decline in 2 - year treasury bond yields [5] - Possible reasons include the bond - buying method (banks buying in the secondary market and then the central bank buying from them, with banks not being price - sensitive) and market expectations of loose monetary policy [6] Changes in Bond - Buying Method in 2025 and Its Impact on the Bond Market - On May 12, 2025, banks started buying treasury bonds with a maturity of less than 3 years, possibly in preparation for the central bank to restart bond - buying. The current 2 - year China Development Bank bond - 2 - year treasury bond spread is within a reasonable range, which may be related to the change in banks' bond - buying method [7] - The central bank's announcement of bond - buying may be subject to policy guidance or significant increases in bond yields. The positive impact on the bond market is limited, and if the economy does not decline significantly in the second half of the year, bond yields are expected to rise [7]