BOCIC(SH:601696) Bank of China Securities·2025-10-28 07:48Report Industry Investment Rating - The report does not provide an industry investment rating [1][3] Core Viewpoints - The central bank's suspension and resumption of treasury bond trading may reflect its policy intention to maintain yield stability, and the bond market's long - term yield may fluctuate within a range in the next stage [1][3] - The price discovery significance of treasury bond trading operations is stronger than the liquidity adjustment significance, and the current interest rate and spread levels may be within the central bank's desirable range [3] - If the base money injection scale formed by treasury bond trading is close to or higher than the same period last year, it may replace reserve requirement ratio cuts [3] Summary by Related Content Reasons for the Central Bank's Actions - At the beginning of this year, considering the large imbalance pressure in the bond market supply - demand and accumulated market risks, the central bank suspended treasury bond trading. Now, with the change in supply - demand contradictions, the central bank will resume the operation. On the supply side, the proportion of government bonds in social financing has been increasing; on the demand side, due to the blocked decline in interest rates and higher expected returns in the stock market, the bond market has lost its previous strong position among major asset classes [3] Impact on M2 Growth - As of September this year, the year - on - year growth rate of China's base money injection was 1.86%. Assuming the year - end base money year - on - year growth rate remains at 1.86% and the money multiplier reaches 8.9 (the highest in August this year), the corresponding M2 year - on - year growth rate is only 6.4% (Scenario 1) [3] - If an additional 50 billion yuan of base money is injected on the basis of Scenario 1, the year - end M2 year - on - year growth rate will reach 7.8% (Scenario 2), lower than the 9 - month growth rate (8.4%) but higher than the 2024 M2 growth rate (7.3%) [3] - To keep the year - end M2 year - on - year growth rate at 8.4% (the same as in September) without reserve requirement ratio cuts, an additional 70 billion yuan of base money needs to be injected on the basis of Scenario 1 (Scenario 3) [3]