Report Key Points 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - On October 27, 2025, the People's Bank of China announced the resumption of open - market treasury bond trading operations. The restart is a policy choice to address market adjustments and liquidity needs and an important signal to promote the marketization of monetary policy. In the short - term, it benefits the bond market, while in the medium - term, it strengthens the coordination between fiscal and monetary policies. The bond market in the fourth quarter is still mainly affected by fundamentals, the implementation time of the fund fee rate new rules, and institutional allocation forces [1][2][5] 3. Summary by Relevant Catalogs I. Main Reasons for Restarting Treasury Bond Trading - **Improved bond market environment and reasonable yield regression**: Since the third quarter, the 10 - year treasury bond yield has risen from 1.61% at the beginning of the year to 1.84% at the end of October. The yield curve has become more stable, creating a better interest - rate environment for the central bank's operations [6] - **Real - world need for coordinated fiscal and monetary policies**: In 2025, with the approval of an additional 500 billion yuan in government bond quotas, the forward - shifted fiscal expenditure rhythm has put pressure on liquidity. Treasury bond trading can smooth liquidity and reduce the market crowding - out effect of government bond issuance [7] - **Operation need to hedge the fourth - quarter liquidity gap**: The total maturity of MLF and repurchase agreements in the fourth quarter is about 3.6 trillion yuan. Buying treasury bonds can provide a flexible and accurate way to inject base - money, and also help stabilize the bank's liability - side [8] - **Preventing unilateral market fluctuations and risk accumulation**: Since July, the "stock - bond seesaw" effect has led to a rapid rise in long - term interest rates. The central bank's restart of treasury bond trading aims to stabilize expectations and prevent one - sided market fluctuations [10] II. Operation Mechanism and Expected Path - The central bank's treasury bond trading mainly focuses on buying short - term bonds, with a small - scale allocation of medium - and long - term bonds. Considering the concentrated maturity of government bonds and medium - and long - term liquidity at the end of the year, if the renewal scale of MLF and reverse repurchase is limited, the central bank may increase the intensity of treasury bond purchases [11] III. Impact of Restarting Treasury Bond Trading on the Bond Market - **Short - term**: It signals a continued loose monetary policy, directly benefiting the bond market. On the day of the announcement, the 10 - year treasury bond yield dropped by about 4BP, and short - term bonds benefited more from improved liquidity [12] - **Medium - term**: It stabilizes market expectations and the yield center, helps the smooth issuance of treasury bonds, and improves the transmission efficiency of macro - policies. The bond market in the fourth quarter is still mainly affected by fundamentals, the implementation time of the fund fee rate new rules, and institutional allocation forces [12]