Core Viewpoint - The article discusses the recent fluctuations in government bond yields, highlighting a rebound on June 18 after a significant decline, driven by macroeconomic fundamentals and expectations of a loose monetary policy [1][2]. Market Performance - On June 18, the bond market experienced volatility, with the 30-year main contract rising by 0.09% while the 10-year main contract fell by 0.01%. The 5-year contract decreased by 0.01%, and the 2-year contract increased by 0.01% [3]. - The yields of various government bonds showed a general upward trend, with the 30-year bond yield rising by 0.15 basis points to 1.844%, and the 10-year bond yield increasing by 0.4 basis points to 1.6375% [3]. Market Sentiment and Expectations - The decline in bond yields prior to June 18 was attributed to rumors regarding the inclusion of medium and short-term government bonds in reserve requirements, which affected market sentiment [4]. - Analysts suggest that the best time for the central bank to restart government bond trading is in the second half of the year, particularly in the third quarter, with appropriate announcement procedures expected [5]. Factors Influencing the Market - The anticipation of the central bank's bond trading resumption is influenced by the large scale of bank interbank certificates maturing at the end of June, with expectations of increased short-term bond purchases by major banks [7]. - Recent data indicates that major banks have significantly increased their purchases of short-term government bonds, which has contributed to a bullish sentiment in the bond market [7]. Monetary Policy and Market Dynamics - The central bank's proactive measures, including multiple reverse repos, have helped maintain a stable funding environment, with a net injection of liquidity expected for June [8]. - Despite the positive outlook, some analysts caution that the downward space for bond yields may be limited, particularly for the 10-year bond yield, which faces resistance in the 1.5% to 1.6% range [9].