Core Insights - The article discusses recent bond auction results, highlighting the issuance of two types of government bonds with specific details on their terms and yields [2]. Group 1: Bond Issuance Details - The first bond issued is a 2025 book-entry interest-bearing government bond (sixth issue) with a term of 2 years, an issuance amount of 2.8 billion yuan, a winning price of 100.18, and a yield of 1.49% [2]. - The second bond is a 2025 book-entry interest-bearing government bond (fifth issue) with a term of 3 years, an issuance amount of 2.6 billion yuan, a winning price of 99.84, and a yield of 1.51% [2].

Core Viewpoint - The Ministry of Finance has announced a bond market support operation to enhance liquidity in the secondary market for government bonds, which is expected to stabilize the yield curve and improve market dynamics [1][2]. Group 1: Government Bond Market Operations - The operation involves selling 2.8 billion yuan of the 2025 six-year government bond and 2.6 billion yuan of the 2025 five-year government bond, with competitive bidding scheduled for May 20 [1][2]. - The operation aims to address the current supply-demand imbalance in the bond market, as institutional investors are seeking to preserve asset value amid external economic shocks [2][3]. - The bond market support mechanism was established in 2016 and has become a regular practice, with the Ministry of Finance conducting monthly operations to support market liquidity [2][3]. Group 2: Market Liquidity and Demand - The current liquidity level in the government bond market is relatively ample, but the overall impact of the support operations on market liquidity is limited due to the small scale of the operations compared to the total bond stock [3][4]. - As of December 2024, the scale of the secondary government bond market reached 34.29 trillion yuan, but liquidity remains insufficient as most institutional investors hold bonds for interest income [3][4]. - The market is characterized as a buyer's market, with a supply-demand imbalance exacerbated by the central bank's suspension of bond purchases since last year [3][4]. Group 3: Impact on Bond Futures - The bond market support operations are unlikely to significantly affect the basis of government bond futures, as the scale of operations is small relative to bond stock and trading volume [3][4]. - However, there may be a convergence in the basis between cash bonds and bond futures, leading to a narrower range of basis fluctuations, which could enhance the correlation between cash and futures prices [4][5]. - A more market-oriented and liquid cash market will allow bond futures to better reflect supply-demand fundamentals and macroeconomic expectations [5].