Core Viewpoint - The People's Bank of China (PBOC) has announced the resumption of government bond trading operations, indicating a continuation of a loose monetary policy and coordination with fiscal debt issuance [1][2][3] Group 1: Event Overview - On October 27, 2025, PBOC Governor Pan Gongsheng stated that the bond market is currently operating well, leading to the decision to resume open market operations for government bonds [2] - The timing of the resumption slightly exceeded market expectations, resulting in a rapid decline in bond yields following the announcement [2] Group 2: Event Analysis - The resumption of government bond trading is aligned with a proactive fiscal policy and a continuation of a moderately loose monetary policy, as discussed in a recent meeting between the Ministry of Finance and the PBOC [3] - The necessity for resuming bond trading has increased due to the maturity of the previous round of bond purchases, which totaled 1 trillion yuan from August to December 2024, with approximately 700 billion yuan maturing by the end of September [3][6] Group 3: Market Conditions - The bond market has undergone sufficient adjustments, with interest rates returning to a relatively reasonable range after a significant upward shift in the yield curve since the beginning of the year [6] - The current market conditions provide a favorable environment for the resumption of government bond trading, as the short-end interest rates have shown significant recovery [12] Group 4: Trading Strategy - The resumption of government bond trading is expected to have a positive impact on the bond market, reducing adjustment risks in the short term [10] - It is recommended to lower the hedging ratio for those who previously used government bond futures for short hedging, while maintaining long positions in the TS2512 contract and exploring opportunities in the TF contract [10]