Core Points - The People's Bank of China (PBOC) conducted a reverse repurchase operation of 525.9 billion yuan for a 7-day term, resulting in a net injection of 36.47 billion yuan for the day [1] - For the week, the PBOC executed a total of 2,027.5 billion yuan in reverse repurchase operations and 300 billion yuan in Medium-term Lending Facility (MLF) operations, leading to a full-scale net injection of 136.72 billion yuan [1] - The total reverse repurchase operations for the week amounted to 9,603 billion yuan maturing [1]

Group 1 - The People's Bank of China conducted a reverse repurchase operation of 197.3 billion yuan with a 7-day maturity, resulting in a net withdrawal of 183.3 billion yuan on the same day [1][4] - On the same day, 198.6 billion yuan of 7-day reverse repos and 182.0 billion yuan of 1-year Medium-term Lending Facility (MLF) were due [1][4] - The interest rate for the 7-day reverse repurchase operation was set at 1.4% [4]

Core Viewpoint - The People's Bank of China (PBOC) is maintaining a moderately loose monetary policy despite a net withdrawal of liquidity through reverse repos in May, indicating a stable approach to managing market liquidity [1][4]. Group 1: Reverse Repo Operations - In May, the PBOC conducted a total of 700 billion yuan in reverse repo operations, with 400 billion yuan for 3-month (91 days) and 300 billion yuan for 6-month (182 days) maturities [3]. - The net withdrawal of 200 billion yuan in reverse repos does not imply a tightening of market liquidity, as the PBOC has various channels for injecting liquidity, including Medium-term Lending Facility (MLF) and structural tools [1][4]. Group 2: MLF and Liquidity Management - The MLF has seen a net injection of 375 billion yuan in May, reflecting the PBOC's commitment to maintaining medium-term liquidity [1][4]. - The PBOC's reliance on MLF has increased since the introduction of fixed quantity, interest rate bidding, and multiple price auctions for MLF operations, which helps stabilize expectations for financial institutions [4]. Group 3: Government Bond Transactions - The PBOC has not conducted any government bond transactions since January, with expectations to resume operations in July or August, depending on market conditions [5][6]. - The resumption of government bond transactions is seen as urgent to enhance the PBOC's holdings of government debt and to support the establishment of a sovereign credit model for currency issuance [6].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - Treasury bond futures mostly rose, with the 30 - year main contract up 0.24%, and yields of major inter - bank interest rate bonds rebounded. The overall capital environment remained warm, and the follow - up situation of this month's Medium - term Lending Facility (MLF) roll - over should be noted. The liquidity remained stable after the reserve requirement ratio cut rather than becoming more relaxed. The futures bonds are expected to remain volatile in the future [3][5] Group 3: Summary by Related Catalogs 1. Periodic Bond Market Review - **Fundamentals**: Treasury bond futures mostly rose, with the 30 - year main contract up 0.24%, and yields of major inter - bank interest rate bonds rebounded. The overall capital environment remained warm, and the follow - up situation of this month's MLF roll - over should be noted [3] - **Funding**: On May 15, the People's Bank of China conducted 645 billion yuan of 7 - day reverse repurchase operations at a fixed interest rate. That day, 1586 billion yuan of reverse repurchases and 1250 billion yuan of MLF matured, resulting in a net withdrawal of 2191 billion yuan on a full - caliber basis [3] - **Basis**: The basis of TS main contract is - 0.0297, with the spot discounting the futures, indicating a bearish signal. The basis of TF main contract is 0.0471, with the spot premium to the futures, indicating a bullish signal. The basis of T main contract is 0.1410, with the spot premium to the futures, indicating a bullish signal. The basis of TL main contract is 0.3601, with the spot premium to the futures, indicating a bullish signal [3] - **Inventory**: The deliverable bond balances of TS, TF, and T main contracts are 1359.4 billion yuan, 1493.5 billion yuan, and 2356.6 billion yuan respectively, showing a neutral situation [4] - **Market**: The TS, TF, and T main contracts are all running above the 20 - day line, and the 20 - day line is upward, indicating a bullish signal [4] - **Main Positions**: The TS main contract has a net long position, and the long position is increasing. The TF main contract has a net long position, and the long position is increasing. The T main contract has a net long position, and the long position is decreasing [5] - **Expectation**: The April PMI fell into the contraction range. The LPR has remained unchanged for 6 consecutive months. The central bank adjusted the MLF operation mode, and its policy attribute has completely faded. The central bank mentioned again the possibility of reserve requirement ratio cuts and interest rate cuts to promote a decline in the comprehensive social financing cost. After the tariff war suspension shock was quickly released and the reserve requirement ratio cuts and interest rate cuts were implemented, the capital supply remained loose, and the continuous adjustment momentum of the bond market was still limited. The futures bonds are expected to remain volatile [5] 2. Market Review - The table shows the market elements of the 30 - year, 10 - year, 5 - year, and 2 - year main contracts, including the current price, increase or decrease, trading volume, open interest, daily position increase, and CTD bonds [7][8] 3. Spot Bond Analysis - There are data on DR interest rates and inter - bank treasury bond yields and treasury bond term spreads, but no specific analysis conclusions are provided [9][13] 4. Basis Analysis - There are data on the basis of CTD bonds of T2506, TF2506, and TS2506 contracts, but no specific analysis conclusions are provided [15][17][18]

Group 1 - The central government has emphasized the need for more proactive fiscal policies and moderately loose monetary policies, with the People's Bank of China (PBOC) announcing a series of measures including interest rate cuts and reserve requirement ratio (RRR) reductions [2][5] - The PBOC's recent report indicates that monetary policy will continue to support the economy, focusing on implementation and effectiveness evaluation [2][5] - The report highlights the need for increased counter-cyclical adjustments due to external uncertainties affecting exports, particularly from U.S. tariff policies [3][4] Group 2 - The government is accelerating the issuance of special bonds and long-term treasury bonds to support fiscal policy, with a planned issuance of 1.3 trillion yuan in special bonds [4] - The PBOC aims to ensure sufficient liquidity in the market to support these fiscal measures, indicating a continued loose monetary environment [6][7] - The report outlines specific policy tools to support sectors such as technology finance, green finance, and small and micro enterprises, with a total of 1.1 trillion yuan in new funding [7] Group 3 - The PBOC is maintaining a focus on the stability of the financial markets, particularly in the context of recent fluctuations in the international financial markets due to U.S. trade policies [4][8] - The report emphasizes the importance of a balanced approach between supporting the real economy and maintaining the health of the banking system, reflecting concerns over banks' net interest margins [5][9] - The PBOC's assessment of government debt sustainability indicates that China's fiscal policy still has room for expansion, supporting the notion of continued monetary easing [10] Group 4 - The report expands its focus to include various economic indicators, such as the evolution of medium-term lending facilities (MLF) and the sustainability of government debt, reflecting a comprehensive approach to monetary policy [9][10] - The PBOC acknowledges the current low inflation environment and the need for policies that stimulate effective demand while managing supply-side constraints [10][11] - The overall strategy involves deepening structural reforms and coordinating various policy measures to achieve a balance between supply and demand, while fostering a conducive environment for reasonable price recovery [11]

Core Viewpoint - In April, the People's Bank of China (PBOC) conducted a total of 1.2 trillion yuan in reverse repurchase operations, marking the first reduction in the scale of this policy tool since its inception, which is interpreted as a potential precursor to future reserve requirement ratio (RRR) cuts aimed at supporting economic growth [3][5][6]. Group 1: Reverse Repo Operations - The PBOC announced a fixed quantity, interest rate bidding, and multiple price level bidding for 1.2 trillion yuan in reverse repos, with 700 billion yuan for 3-month terms and 500 billion yuan for 6-month terms [3][5]. - The April operations saw a reduction of 500 billion yuan compared to previous months, coinciding with the maturity of similar amounts in reverse repos [3][5]. - The reduction in reverse repo operations does not indicate a tightening of liquidity but may pave the way for future RRR cuts to enhance monetary policy effectiveness [3][6]. Group 2: Monetary Policy Tools - The PBOC has a diverse set of monetary policy tools, including short-term reverse repos and medium-term lending facilities (MLF), with reverse repos serving as a medium to short-term liquidity injection tool [5]. - Since October 2024, the PBOC has conducted seven reverse repo operations with varying scales, indicating a strategic approach to liquidity management [5][6]. Group 3: Future Expectations - Analysts suggest that the reduction in reverse repo operations and the increase in MLF operations may signal an upcoming RRR cut, which could inject significant long-term liquidity into the market [6][10]. - The PBOC has indicated a willingness to adjust monetary policy based on domestic and international economic conditions, with expectations for RRR cuts and interest rate reductions to support the real economy [8][9]. - Forecasts suggest a potential RRR cut of 0.5 percentage points and a reduction in interest rates by 0.3 percentage points in May, which would enhance credit demand and support economic stability [10].

央行4月开展1.2万亿元买断式逆回购。 为保持银行体系流动性充裕，中国人民银行（下称"央行"）4月30日发布公告称，4月央行以固定数量、利率招标、多重价位中标方式开展了1.2万亿元买断式 逆回购操作，分别为3个月（91天）7000亿元、6个月（182天）5000亿元。当天，央行还发布公告称，在4月未开展公开市场国债买卖操作。 | 期限 | 操作量 | | --- | --- | | 3个月(91天) | 7000亿元 | | 6个月(182天) | 5000亿元 | 鉴于4月分别有1.2万亿元3个月期和5000亿元6个月期买断式逆回购到期，当月3个月期买断式逆回购净回笼5000亿元。结合4月央行中期借贷便利（MLF）净 投放5000亿元，当月结束了去年10月以来央行持续释放中长期流动性的操作过程。 4月买断式逆回购缩量续作，并不意味着央行正在收紧市场流动性。"回顾历史可以看到，降准和央行中期流动管理工具之间存在替代关系。"东方金诚首席宏 观分析师王青向证券时报记者指出，央行将通过多种政策工具组合，引导市场流动性稳中向宽。 公开市场买断式逆回购操作、公开市场国债买卖操作以及MLF操作是在央行每日根据一级交易商需 ...

Group 1 - The central bank continues to inject liquidity into the market, with a significant increase in reverse repos, indicating a proactive approach to maintain market liquidity and support economic growth [1][2] - The central bank's recent operations, including a net injection of 645.8 billion yuan through reverse repos over three days, reflect a response to tightening liquidity conditions due to month-end bank assessments and increased cash withdrawal demands ahead of the holiday [1][2] - The issuance of long-term special government bonds is expected to increase liquidity demand, with 1.3 trillion yuan in special bonds planned for this year, highlighting the need for the central bank's liquidity support [2][3] Group 2 - Market interest rates, such as Shibor, show mixed movements, with some rates declining, indicating the impact of the central bank's liquidity measures [3] - The outlook for post-holiday liquidity is expected to remain loose, with the central bank likely to implement net withdrawals after large reverse repos mature, maintaining stable market rates [3][4] - There is a potential for further reductions in policy and deposit rates, with expectations for a possible 0.5 percentage point reserve requirement ratio cut in the second quarter, which would enhance liquidity and lower financing costs [4]