M1增速回升的意义

Report's Investment Rating for the Industry No investment rating for the industry is provided in the report. Core Views of the Report - The current rebound in M1 growth rate has different causes from previous cycles, with certain base effects. Both the corporate and household sectors contribute under the new caliber, and the core is the re - allocation effect under low interest rates. Its implications for capital market liquidity are more worthy of attention than economic activity [1]. - In the short - term, the bond market is still in the stage of improving expectations but lacks a clear main line. The trading range of the 10 - year Treasury bond remains between 1.6 - 1.8%. The loose funding situation clearly benefits the short - end, while the long - end and ultra - long - end are repeatedly disturbed by the stock market and domestic demand policies [1]. - The new VAT regulations are still an important observation point. Coupled with the loose funding situation, long - term interest rates should be regarded as band opportunities. It is recommended to moderately seize the coupon opportunities of ordinary credit bonds, Tier 2 capital bonds, and certificates of deposit, with the yield curve slightly steepening [1]. - In terms of operation, band + coupon > leverage > duration > credit risk exposure. From the perspective of asset allocation, equities are still stronger than bonds, but short - term fluctuations increase [1]. Summary by Related Catalogs 1. This Week's Strategy View: Significance of M1 Growth Rate Rebound - Last week, the funding situation was loose, and the impact of the new VAT regulations was the core concern. The stock market and commodities performed strongly, and bond yields continued to fluctuate. The yields of 10 - year Treasury bonds and active CDB bonds remained basically flat at 1.69% and 1.79% respectively compared with the previous week, the yield of 30 - year Treasury bonds rose 2BP to 1.92%, the 10 - 1 - year term spread remained basically flat, and credit spreads narrowed slightly [9]. - This week's financial data is about to be released. Bill rates indicate that credit may perform weakly, social financing is not weak, and M1 is the focus. In the first half of this year, the year - on - year growth rate of M1 rebounded rapidly, from 1.2% in December last year to 4.6% [10]. 2. M1's Leading Role in the Macroeconomy: Source and Evolution - Historically, M1 had a certain leading role in economic variables such as prices, nominal growth, and corporate profits, mainly because M1 changes were mainly affected by corporate demand deposits. Corporate demand deposits came from real economic activities such as export settlement, household consumption and housing purchases, government revenues and expenditures, and corporate expansion investments, so M1 could reflect the real capital activation degree of micro - entities [2][12]. - In the past decade, the economic cycle mainly relied on real estate, and M1's leading role was more significant. However, in recent years, M1's leading role in the economy has weakened significantly, mainly related to the transformation of the economic growth model and the reduced volatility of the data itself [2][12]. - Since January this year, the central bank has adopted a new revised M1 statistical caliber, which adds household demand deposits and balances of third - party payment platforms such as Alipay/WeChat. The overall trends of the old and new M1 are basically the same [2][13]. 3. Main Reasons for the Current Rebound: Base Effect and Re - allocation under Low Interest Rates - M0 and customer reserves of non - bank payment institutions changed little in the first half of the year and contributed little to M1. The increase in M1 growth rate can be largely explained by corporate demand deposits [3][14]. - Reasons for the increase in corporate demand deposits include: the base effect caused by manual interest compensation last year; the re - allocation of corporate time deposits under the low - interest environment; the acceleration of fiscal expenditures and debt resolution improving corporate cash flows; and the shortening of the accounts receivable cycle of small and medium - sized enterprises [3][18][21]. - Household demand deposits are also rising rapidly and have a higher absolute contribution to the year - on - year growth of M1. The increase in the activation degree of household deposits is also due to the re - allocation effect caused by the decline in deposit interest rates. In addition, policies have supported the improvement of household consumption activities compared with last year [3][26]. - The seasonality of the overall deposit term structure can explain the M1 rebound in June to some extent [27]. 4. Characteristics of the Current M1 Rebound Different from Previous Ones - This rebound is likely to be jointly driven by the household and corporate sectors, and the "quantitative change to qualitative change" caused by the continuous decline in deposit interest rates seems to be the core factor [4]. - Due to the extremely low base last year, the high - growth trend of M1 year - on - year may last until at least October. After that, the trend of M1 will depend more on the endogenous economic momentum [4][33]. - The rebound of M1 is more significant for capital market liquidity than for economic activity. It may be accompanied by capital re - allocation behavior, and the off - market opportunity cost in the capital market is low, bringing new funds [4][33]. 5. Implications for the Market - The rebound of M1 has triggered discussions about the recovery of economic vitality, but more evidence is needed. With anti - involution factors, the bottom of the stock market's performance is expected, but it is still difficult to be performance - driven [5]. - This rebound of M1 is partly due to the contribution of the household sector and the re - allocation of corporate funds under low interest rates. The stock market faces a good liquidity environment, with many hot - spot and thematic opportunities [5]. - The cause of the M1 growth rate rebound determines that the re - allocation effect under low interest rates exceeds the fundamental recovery effect, having little impact on the bond market. If it continues to exceed expectations after the base effect, it may be an early signal of economic recovery, which may trigger an adjustment in the bond market [5]. 6. This Week's Bond Market Strategy - Last week's export data exceeded expectations, and inflation remained low, indicating that the characteristics of the economic fundamentals, including overall resilience, structural differentiation, and wave - like operation, continue. The bond market is expected to continue to be in a volatile pattern with a ceiling and a floor, and the trading range of the 10 - year Treasury bond remains between 1.6 - 1.8% [39]. - Last week, the funding situation continued to be loose, and the overnight interest rate tested the previous low. The central bank's support is expected to continue. The loose funding situation clearly benefits the short - end, but the long - end and ultra - long - end are not fully priced, and the yield curve steepens slightly. It is recommended to actively explore interest - spread leverage opportunities at the short - end and increase holdings at the long - end and ultra - long - end on dips [39]. - The impact of the new VAT regulations on new bonds is controllable, and old bonds have relatively better cost - effectiveness. It is recommended to moderately seize the opportunities of ordinary credit bonds, Tier 2 capital bonds, certificates of deposit, and other core varieties of public funds and asset management products [40]. - In terms of operation ideas, band + coupon > leverage > duration > credit risk exposure. From the perspective of asset allocation, equities are still stronger than bonds, but short - term equity fluctuations increase, and convertible bond valuations are high [40].