高盛：中国外汇：货币政策的悖论

Investment Rating - The report maintains a neutral outlook on the near-term Chinese government bonds (CGB) but holds a constructive medium-term view [6]. Core Insights - The report highlights a paradox in monetary policy, where measured easing occurs amid significant uncertainty, particularly regarding US-China trade relations and domestic economic conditions [4][5]. - The Chinese yuan (CNY) has shown resilience despite increased US tariffs, with the USD/CNY exchange rate stabilizing around 7.24, influenced by a weaker USD and improved sentiment in China's asset markets [4][5]. - The report anticipates that the People's Bank of China (PBoC) will prioritize FX stability over aggressive monetary easing, with expectations of two 20 basis point rate cuts in Q2 and Q4, and two 50 basis point reserve requirement ratio (RRR) cuts in Q1 and Q3 [6]. Valuations and Policy Stance - The CNY depreciated against the CFETS basket in February but remained range-bound against the USD, indicating a cautious approach by policymakers [9]. - The PBoC's recent actions suggest a shift towards using the CNY fixing as a policy signal rather than a market instrument, maintaining stability despite external pressures [5][6]. Technicals - The report notes that interbank repo rates have remained above the policy rate, raising concerns about effective monetary tightening despite the PBoC's easing rhetoric [6]. - The carry-to-volatility ratio for USD/CNH and EUR/CNH rose in February, indicating a potential shift in investor sentiment towards these currencies [17]. Fundamentals - China's trade balance showed a slight decline in January due to a wider trade deficit in travel services, with travel exports at 123% and imports at 114% of 2019 levels [30][32]. - The consensus forecast for China's CPI inflation remains subdued, reflecting ongoing economic challenges [51]. Liquidity and Leverage - The report indicates that liquidity in the interbank market remains tight, with the PBoC withdrawing liquidity amid rising demand from government bond issuance [6][62]. - Financial leveraging in the bond market is relatively low due to elevated interbank repo rates, suggesting cautious investor behavior [64]. Bond Supply and Demand - Net issuance of central government bonds was approximately RMB 419 billion in February 2025, reflecting increased government borrowing to support economic stability [70]. - Local government special bonds issuance was around RMB 392 billion in February 2025, indicating ongoing fiscal support measures [73].