Core Insights - The central bank's policy operations may lead to an increase in expectations for loose monetary policy, with the recent weak performance of long-term government bonds providing more room for subsequent rebounds as the 10-year government bond yield approaches the lower limit of 1.80% [1] Group 1: Central Bank Policy and Bond Market Trends - The bond market's performance is significantly influenced by monetary policy, with the market's trajectory divided into three phases since 2024, reflecting the central bank's verbal and operational guidance [2][15] - In the first phase, the bond market experienced a bull run, with the central bank emphasizing the need to align long-term bond yields with growth expectations, leading to a market adjustment [2][17] - The second phase saw a stronger policy intervention from the central bank, which effectively cooled the previously enthusiastic bullish sentiment in the bond market [3][18] - The third phase indicated a self-adjustment in the bond market, with the 10-year government bond yield stabilizing within a narrow range of 1.80% to 1.90%, suggesting that the current yield levels may be acceptable to the central bank [4][19] Group 2: Expectations for Loose Monetary Policy - Signals of monetary policy easing have gradually emerged, with the central bank indicating that there is still room for rate cuts and reserve requirement ratio reductions [5][20] - The government has accelerated the issuance of bonds, with cumulative issuance of 12,170 billion for 2026, the highest since 2021, indicating a proactive fiscal policy approach [5][24] - The liquidity needs of financial institutions are expected to rise, potentially leading to increased liquidity pressure on banks as government bond issuance continues at a rapid pace [5][24] Group 3: Long-term Yield Spread and Investment Opportunities - The performance of long-term government bonds has been significantly weaker than that of short-term bonds, creating a favorable environment for potential rebounds in long-term yields [8][26] - The spread between 30-year and 10-year government bonds reached approximately 50 basis points, the widest since 2023, suggesting that there may be opportunities for investors to capitalize on this spread as expectations for loose monetary policy grow [8][26]