Core Viewpoint - The article discusses the performance of the 30-year government bond, highlighting its unique position in the market characterized by high elasticity and liquidity, which has led to a "negative premium" situation [1][2]. Group 1: Market Dynamics - Since December 2025, the yield on the 10-year government bond has fluctuated, returning to 1.83%, while the 10-year policy bank bond increased from 1.90% to 1.96%, and the 30-year government bond surged from 2.19% to 2.30% [1]. - The high elasticity and liquidity of the 30-year and 10-year bonds make them preferred for flexible trading strategies, allowing for easier execution of hedging strategies [1][2]. Group 2: Strategic Insights - In a rising interest rate environment, the 30-year government bond faces directional trading challenges, but it is also a key instrument for various hedging strategies, including credit bonds and local government bonds [2]. - The borrowing and selling volume of the 30-year government bond has seen significant growth, with borrowing rates reaching 140-150 basis points [2]. Group 3: Future Outlook - The potential for the 30-year government bond yield spread to recover depends on three scenarios: a sharp rebound, stable interest rate expectations, and central bank interventions [3]. - The upcoming market conditions may favor strategies that involve holding high coupon, low elasticity, and low liquidity bonds, particularly around the Spring Festival [3].

Group 1 - The report highlights the expectation of rising interest rates and how low premiums on elasticity and liquidity, as well as "negative" premiums, can be addressed [1] - The 30-year government bond has shown weakness compared to the 10-year government bond, with the yield rising from 2.19% to 2.30% since early December 2025, while the 10-year government bond yield fluctuated around 1.83% [7][11] - The report suggests that high elasticity and liquidity characteristics of the 30-year bond may lead to greater potential losses during rising interest rate periods, making it less favorable in the current market environment [8][14] Group 2 - The report discusses the factors contributing to the "negative premium" of the 30-year government bond, emphasizing that high liquidity and elasticity can lead to a lower or negative premium, contrary to traditional pricing logic [12][14] - It notes that the supply of long-term bonds is increasing, with expectations of continued high issuance of super long-term bonds, which may not alleviate market concerns [21][24] - Demand for super long-term government bonds remains weak, particularly among large banks, which may limit their purchasing power in the secondary market [26][31] Group 3 - The report outlines three scenarios for the future performance of the 30-year government bond, including potential rapid rebounds or adjustments based on market conditions and central bank actions [39][43] - It indicates that the 30-year bond may experience a quick downward adjustment in yields, with a potential narrowing of the 30-10Y spread to around 40 basis points [45] - The report suggests that strategies involving the 30-year bond may be more suitable for hedging purposes, especially if market conditions remain uncertain leading up to the Spring Festival [46]