Core Viewpoint - The People's Bank of China (PBOC) announced a 1 trillion yuan buyout reverse repurchase operation to maintain liquidity in the banking system, marking the first time it has announced such an operation in advance at the beginning of the month [2][3] Group 1: Monetary Policy and Liquidity Management - The PBOC's announcement indicates a clear intention to release short-term liquidity, especially as the bond market shows a decline in speculative demand [2] - The liquidity pressure in June is compounded by significant maturities, including 1.2 trillion yuan in reverse repos and 4.2 trillion yuan in interbank certificates, creating a substantial cash withdrawal pressure [3] - The announcement has led to a decrease in the 7-day repo rate to around 1.5%, aligning closely with the current policy rate of 1.4% [3] Group 2: Market Expectations and Economic Indicators - The PBOC's proactive communication enhances the transparency of monetary policy operations, which helps stabilize market expectations [3] - The current economic environment shows signs of weak recovery, with improved resilience in exports and a slowdown in the decline of the real estate sector [2] - The PBOC's management of market expectations is evolving, potentially providing solid support for stock market valuations and boosting risk appetite in capital markets [3]

1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core Viewpoints - The main tone of "moderately loose monetary policy" remains unchanged, and stabilizing growth is still the central bank's primary short - term goal. If economic growth shows no improvement and faces more pressure, a new round of broad monetary policy may be launched [1]. - In July, the large - scale supply of government bonds and tax - payment factors will significantly interfere with the capital market. However, the central bank's support for the capital market is expected to continue, with overnight and 7 - day capital interest rates likely to remain stable [1]. - The supply - demand structure of inter - bank certificates of deposit (CDs) will further improve in July, with the maturity scale of CDs decreasing and the interest rate having room to decline [1]. 3. Summary by Directory 3.1 Current Situation and Future Concerns - From June 23 to June 27, the central bank made substantial net injections to support cross - quarter liquidity, leading to a divergence in capital prices. Overnight capital interest rates were stable, while 7 - day rates rose significantly, and the liquidity stratification phenomenon was obvious [5]. - The second - quarter monetary policy committee meeting changed the wording, but it doesn't rule out the possibility of broad monetary policy in the third quarter. If the economy doesn't improve, new policies may be introduced [5]. - In July, large government bond supply and tax - payment factors will affect the capital market, but the central bank's support is expected to continue. The overnight capital interest rate may fluctuate around the policy rate, and the 7 - day rate may return to around 1.5% [6]. - It is estimated that in July 2025, government bond issuance will be 2.61 - 2.86 trillion yuan, with net financing of 1.45 - 1.70 trillion yuan, slightly higher than in June. The supply of ultra - long - term special treasury bonds may increase, and new local government special bonds are expected to be the main type in the third quarter [6]. - In July, MLF and buy - out repurchase maturities total 1.5 trillion yuan, more than in June. The central bank's operation method has enhanced its control over medium - and long - term liquidity [10]. - Thanks to the central bank's support, in June, CDs maintained high - volume issuance with stable or decreasing prices. In July, the supply - demand structure of CDs will improve, and the interest rate has room to decline [10]. 3.2 Money Market Interest Rate Tracking - From June 23 to June 27, overnight capital interest rates were stable (DR001 around 1.37%, R001 between 1.44% - 1.46%), while 7 - day rates rose (DR007 from 1.51% to 1.70%, R007 from 1.56% to 1.92%), and the liquidity stratification was obvious [13]. - During this period, the bank's capital lending scale increased, the money fund's lending scale decreased, and the bond market leverage ratio continued to rise [17]. - From June 23 to June 27, bill interest rates first decreased and then increased, with the 3M national - share discount rate and half - year national - share transfer discount rate showing corresponding changes [22]. 3.3 Open Market Operation Tracking - As of June 27, the central bank's total balance of open - market operations was 1168.85 billion yuan, including 202.75 billion yuan in pledged repurchase, 480 billion yuan in buy - out repurchase, and 515 billion yuan in MLF [23]. - From June 23 to June 27, the central bank's net injection in open - market operations was 126.72 billion yuan, with 106.72 billion yuan in pledged repurchase. In June, buy - out repurchase and MLF maturities and net injections were as expected. From June 30 to July 4, pledged repurchase maturities reached 202.75 billion yuan [27]. 3.4 Government Bond Tracking 3.4.1 Government Bond Issuance - From June 23 to June 27, treasury bond issuance was 11.1 billion yuan, and net financing was 11.1 billion yuan; local bond issuance was 64.164 billion yuan, with net financing of 56.0393 billion yuan [33]. - It is estimated that from June 30 to July 4, treasury bond issuance will be 0 yuan, with net financing of - 8.015 billion yuan; local bond issuance will be 7.2139 billion yuan, with net financing of 2.1676 billion yuan [33]. 3.4.2 Government Bond Payment - From June 23 to June 27, government bond net payment was 78.981 billion yuan, including 33.1 billion yuan for treasury bonds and 45.881 billion yuan for local bonds. It is estimated that from June 30 to July 4, the net payment will be - 0.594 billion yuan [39]. 3.5 Inter - bank Certificate of Deposit Tracking 3.5.1 Primary Market of Inter - bank CDs - From June 23 to June 27, inter - bank CD issuance was 72.64 billion yuan, with net financing of - 41.15 billion yuan. The maturity scale from June 30 to July 4 was 27.67 billion yuan. By bank type, city commercial banks had the highest issuance; by term type, 3M CDs had the highest issuance [42]. - The overall issuance success rate was 94%. State - owned banks and other banks had a 100% success rate, and 3M CDs had a 95% success rate. The issuance interest rates of all types of banks and terms decreased [42][43]. 3.5.2 Secondary Market of Inter - bank CDs - From June 23 to June 27, despite the tightened cross - quarter liquidity, the yields of secondary - market CDs of all terms increased slightly, and the yield curve was partially inverted [60]. 3.6 Excess Reserve Ratio Tracking - The estimated excess reserve ratio at the end of May 2025 was 0.52%. From June 23 to June 27, the central bank's net injection in open - market operations was 126.72 billion yuan, and government bond net payment was 78.981 billion yuan, increasing the excess reserve scale by 47.739 billion yuan [64].

Group 1 - The overall liquidity in the market is balanced and loose, with DR001 falling below the 1.4% policy rate, and state-owned banks' net financing reaching a year-high of 4.55 trillion yuan [1][11][27] - Historical trends indicate that at the end of June, funding rates typically rise, but the central bank often increases liquidity support, especially during a month with significant fiscal spending [21][27] - Concerns for the upcoming cross-quarter period include a high maturity of interbank certificates of deposit exceeding 4 trillion yuan, and a recent reduction in deposit rates by major banks, which may lead to deposit outflows [26][27] Group 2 - Next week, the market will see over 10 trillion yuan in reverse repos maturing, along with the continuation of MLF operations, indicating ongoing liquidity support from the central bank [2][33] - Government bond net payments are expected to increase significantly, with a net payment of 7.498 trillion yuan, indicating a substantial fiscal activity [4][31] - The interbank certificate of deposit maturity will be 11.092 trillion yuan, which remains substantial, and attention will be paid to the pressure of renewing these deposits as the quarter-end approaches [6][31] Group 3 - The average daily net financing from state-owned banks has been rising, with a significant increase noted this week, indicating a robust liquidity position [5][27] - The issuance of interbank certificates of deposit remains stable, with no significant upward pressure on rates, suggesting a controlled liquidity environment [6][27] - The second quarter has seen an acceleration in fiscal bond issuance, which is expected to provide additional liquidity support as the quarter-end approaches [27][39]

Group 1: Open Market Operations - The central bank announced a 7-day reverse repurchase operation on June 9, with a fixed rate and quantity tendering of 173.8 billion yuan at an interest rate of 1.40%, with the same amount being the bid and awarded [1] - On the same day, there were no reverse repos maturing, resulting in a net injection of 173.8 billion yuan [1] Group 2: Funding Conditions - Following a trillion-yuan reverse repurchase operation that boosted confidence, the central bank continued to inject liquidity, leading to a more relaxed interbank funding environment, with overnight pledged repo rates falling over 3 basis points, dropping below 1.4% [3] - The latest overnight financing rate in the U.S. stands at 4.29% [4] Group 3: Interbank Certificates of Deposit - The latest transaction for one-year interbank certificates of deposit among major banks is around 1.67%, showing a slight decline from the previous day [6] Group 4: Bond Yield Rates - The yields for various government bonds are as follows: 1Y at 1.4100%, 2Y at 1.4250%, 3Y at 1.4350%, 5Y at 1.4976%, 7Y at 1.5865%, and 10Y at 1.6550% [8] - The yields for policy bank bonds and local government bonds also show slight variations, with some yields decreasing [8] Group 5: Recent Economic Indicators - In May, China's CPI decreased by 0.1% year-on-year, slightly better than the expected decline of 0.2%, while PPI fell by 3.3%, worse than the expected drop of 3.2% [12] Group 6: International Economic Dialogue - During a visit to the UK, China's Vice Premier He Lifeng discussed economic and financial cooperation with UK Chancellor of the Exchequer, emphasizing the need for mutual efforts to implement agreements and deepen economic relations [14]

Core Viewpoint - The People's Bank of China (PBOC) conducted a 1,350 billion yuan reverse repurchase operation with a rate of 1.40%, maintaining the previous level, resulting in a net withdrawal of 1,561 billion yuan from the market due to 2,911 billion yuan of reverse repos maturing on the same day [1] Group 1: Market Operations - The PBOC performed a total of 9,309 billion yuan in 7-day reverse repos this week, with 16,026 billion yuan maturing, leading to a net withdrawal of 6,717 billion yuan [1] - On the same day, the PBOC also conducted a 10,000 billion yuan buyout reverse repurchase operation [1] Group 2: Interbank Rates - The overnight Shanghai Interbank Offered Rate (Shibor) increased by 0.30 basis points to 1.4110%, while the 7-day and 14-day Shibor rates decreased by 3.40 basis points to 1.5000% and 0.30 basis points to 1.5880%, respectively [1][2] - The weighted average rates for various repo products showed a slight decline, with DR001 and R001 down by 0.0 and 0.9 basis points, respectively, and DR007 and R007 down by 1.9 and 1.6 basis points [5] Group 3: Market Liquidity - The funding environment remained loose throughout the day, with overnight rates stabilizing around 1.48% and 7-day rates around 1.50% [9] - A total of 205 interbank certificates of deposit were issued, with an actual issuance volume of 4,599.6 billion yuan by the end of the day [9][10]

核 心 观 点 年初以来，资金面维持紧平衡状态，尤其是短端利率明显抬升。那么，一季度政府债供给还剩多少？3月流动 性缺口有多大？资金面后续会改善么？ 政府债供给多少？ 国债方面， 参考1-2月同类型国债单只发行规模，我们预计3月国债或将发行1.4万亿元，考 虑7122亿元的到期量，国债净融资规模或近6500亿元。 地方债方面， 我们预计3月地方政府新增债和普通再融 资债规模分别为4100亿元和4200亿元；今年特殊再融资债发行进度已近半，3月特殊再融资债发行规模或约 4500亿元，则地方债发行总规模近1.3万亿元，净融资规模约1.2万亿元。 总的来看，我们预计3月国债和地方 债发行分别约1.4万亿元和1.3万亿元，政府债净融资规模合计超1.8万亿元。 资金面会改善么？ 从资金供需的角度看，3月政府债净供给规模较高，缴准规模增长也对流动性构成扰动，而 提现回流对流动性有一定补充，在排除逆回购和MLF到期因素的情况下， 我们预计3月流动性缺口约2600亿 元，资金面存在一定的压力。 往后看，"两会"后资金利率有望和往年类似趋于转松，央行净投放也将边际增 加，随着后续国债发行规模提升，政府债供需失衡或边际缓解。在政 ...

Group 1: Liquidity and Market Conditions - The liquidity pressure has eased slightly this week, but it cannot be termed as relaxed, with overnight funding rates decreasing and 7-day funding rates slightly increasing[3] - The average net supply in the banking system from February 24 to February 28 was 1.52 trillion yuan, an increase of 335.7 billion yuan compared to the previous week[4] - The central bank's recent open market operations indicate a supportive stance, with a net injection of 433.1 billion yuan during the week[26] Group 2: Money Market Trends - As of February 28, the average rates for DR001 and DR007 decreased by 9.5 basis points and 8.9 basis points to 1.86% and 2.13%, respectively[4] - The average daily transaction volume for interbank pledged repos was 49,981 billion yuan, an increase of 38.2 billion yuan compared to the previous week[4] - The issuance of interbank certificates of deposit (CDs) from February 24 to February 28 totaled 715.2 billion yuan, with a net financing amount of -382.8 billion yuan, indicating increased issuance but reduced net financing[5] Group 3: Government Debt and Fiscal Policy - The net payment for government bonds next week is projected to be 248.6 billion yuan, a decrease compared to the previous week, which may have a limited impact on liquidity[32] - The upcoming government bond issuance includes 2.63 billion yuan in national bonds and 2.175 billion yuan in local bonds, with a total issuance of 4.805 billion yuan[32] Group 4: Risk Factors - Key risk factors include policy uncertainty, unexpected changes in the economic fundamentals, and geopolitical risks from overseas[7]