Core Viewpoint - The bond market has experienced an upward fluctuation in interest rates since July, with the current yield spread between long-term bonds and government bonds widening to levels seen before 2024, indicating a shift in investor sentiment towards a preference for absolute yields rather than duration [1][2][3] Group 1: Market Trends - The yield spread between 30-year government bonds and 10-year government bonds has widened to 32 basis points, while the spread between 10-year policy bank bonds and government bonds is at 16 basis points, reflecting a significant change in market dynamics [1] - The bond market is likely to maintain a weak oscillating pattern, with trading strategies shifting from duration-based bets on interest rate cuts to a focus on absolute returns and coupon logic [2] - The liquidity premium for long-duration, high-liquidity bonds may shrink, necessitating higher absolute yields to attract investors [2] Group 2: Monetary Policy Impact - The central bank's monetary policy is currently more supportive of short- to medium-term bonds, with limited impact on long-term bonds, as evidenced by recent operations in the open market [3] - The central bank's actions, including a net increase of 300 billion yuan in reverse repos in September, indicate a focus on maintaining stable liquidity in the banking system [3] - The widening of yield spreads for long-term bonds suggests a gradual clearing of pricing bubbles related to duration and elasticity, with potential structural opportunities emerging in shorter-term bonds [3]