Core Viewpoint - The anticipated interest rate cuts in China have not materialized, with the Loan Prime Rate (LPR) remaining stable for four consecutive months, while the Federal Reserve has initiated a new easing cycle with a 25 basis point cut [1][2][5] Group 1: Monetary Policy Context - The People's Bank of China (PBOC) has maintained the 1-year and 5-year LPR at 3.0% and 3.5% respectively, reflecting a cautious approach amid various economic pressures [1][5] - The Fed's recent rate cut to a range of 4.00%-4.25% marks the beginning of a new easing cycle, with expectations of further cuts in the fourth quarter [1][2] Group 2: Economic Conditions - Domestic economic conditions, including weak inflation and pressures in the real estate market, have led to expectations for a follow-up rate cut in China to stabilize the RMB and stimulate economic recovery [2][5] - The banking sector is facing significant pressure on net interest margins, which have dropped to approximately 1.45%, limiting the scope for further rate reductions [5] Group 3: Real Estate Market Challenges - The stability of the real estate market is under threat, with 69 out of 70 major cities reporting a decline in second-hand housing prices, particularly in first-tier cities [6][9] - The core issues in the real estate market extend beyond financing costs, highlighting structural problems in supply and demand [7][9] Group 4: Policy Recommendations - To address the real estate market's challenges, a combination of fiscal policy and structural adjustments is recommended, including optimizing market supply and enhancing demand through employment and income stability [9][11] - The government is encouraged to pause new land auctions and repurchase undeveloped land to alleviate supply pressures, aligning with recent policy directions [9][11] Group 5: Future Outlook - The potential for new monetary policy actions, including further rate cuts, is anticipated as the Fed's easing opens up more operational space for the PBOC [9][11] - The overall expectation is that with the gradual release of policy effects and ongoing economic recovery, the real estate market may stabilize over time [11]

Summary of Key Points Core Viewpoint - The People's Bank of China (PBOC) has maintained the Loan Prime Rate (LPR) for both the 1-year and 5-year terms at 3.0% and 3.5% respectively as of September 22, 2025, indicating a stable monetary policy environment [2]. Historical LPR Changes - The 1-year LPR has seen a gradual decline from 3.70% in January 2022 to 3.00% in September 2025, reflecting a total decrease of 70 basis points over this period [2][3]. - The 5-year LPR has also decreased from 4.60% in January 2022 to 3.50% in September 2025, marking a reduction of 110 basis points [2][3]. Recent Adjustments - The only adjustment to the LPR in 2025 occurred on May 20, when the 1-year LPR was lowered by 10 basis points from 3.10% to 3.00% [3]. Market Expectations - Following the recent interest rate cuts by the Federal Reserve, industry experts anticipate that China may follow suit with potential reductions in reserve requirements or interest rates, suggesting a forthcoming wave of economic benefits [4].

Core Viewpoint - The People's Bank of China (PBOC) announced a 600 billion MLF operation to maintain liquidity in the banking system, indicating a continued net injection of liquidity for the seventh consecutive month, aligning with market expectations [1][2]. Group 1: MLF Operations and Liquidity - The PBOC will conduct a 600 billion MLF operation on September 25, 2025, with a one-year term, using a fixed quantity and multi-price bidding method [1]. - In September, 300 billion MLF is maturing, resulting in a net injection of 300 billion MLF, maintaining a high level of net liquidity injection totaling 600 billion, consistent with the previous month [1][2]. - The continuous net injection of medium-term liquidity reflects the coordination between monetary and fiscal policies, supporting government bond issuance and meeting credit demand from enterprises and households [1][2]. Group 2: Market Conditions and Future Expectations - Recent market conditions, including rising mid-to-long-term interest rates and tightening liquidity, prompted the PBOC to increase fund injections through MLF to stabilize market expectations [2]. - The PBOC's ongoing net liquidity injection signals a supportive monetary policy stance, especially in light of declining macroeconomic indicators due to various factors [2]. - Looking ahead, there is an expectation for further monetary policy easing in the fourth quarter, including potential reserve requirement ratio cuts and the resumption of government bond trading, to ensure stable liquidity in the market [2].

Report Industry Investment Rating No information provided in the given content. Core Viewpoints of the Report - The bond market showed a volatile trend last week. The long - term yield fluctuated under the influence of multiple factors and finally returned to around 1.80%. The Fed restarted rate cuts in September, and there is a probability of further cuts in Q4. The domestic 9 - month LPR did not cut rates in September, and the total policy tools may not be introduced in the short term. However, the probability of bond trading and reserve requirement cuts is relatively high [1][3] - The 8 - month economic data released at the beginning of the week was weak, but the bond market's reaction was limited. News of Sino - US economic and trade talks and important articles affected market expectations. The restart of bond trading operations and the Fed's rate cut expectation drove the 10 - year Treasury yield down, while the Fed's statement and the adjustment of the central bank's reverse - repurchase operation mode also influenced the bond market [2] Summary by Directory 1. Interest - rate Bond Data Review for Last Week - **Funding Rates**: DR001 fluctuated between September 15 - 19, closing at 1.46% on September 19. R001 rose and then fell, closing at 1.50%. DR007 and FR007 also showed upward - then - downward trends [8] - **Open - market Operations**: The central bank's reverse - repurchase投放量 was 1.83 trillion yuan, with a total maturity of 1.26 trillion yuan, resulting in a net capital injection of 5623 billion yuan [8] - **Sino - US Market Interest Rate Comparison**: The interest - rate spread between Sino - US bonds inverted, and the inversion amplitude of long - and short - term spreads widened. The term spread of Chinese bonds slightly decreased, while that of US bonds slightly increased. The yield curve of Chinese bonds changed little, and that of US bonds shifted to the right [15][16] 2. High - frequency Real - estate Data Tracking - **First - tier Cities**: The average daily transaction area was 7.31 million square meters, and the average daily transaction volume was 680 units, showing a low - level volatile trend [24] - **Top Ten Cities**: The transaction data rebounded compared to last week, with an average daily transaction area of about 11.07 million square meters, an increase of 1.43 million square meters per day [25] - **30 Large and Medium - sized Cities**: The transaction volume remained at a historical low. The average daily transaction area was about 21.38 million square meters, and the average daily transaction volume was about 1914 units [26]

Core Viewpoint - The People's Bank of China (PBOC) is expected to maintain a moderately loose monetary policy, potentially implementing reserve requirement ratio (RRR) cuts and interest rate reductions, but large-scale rate cuts are deemed unrealistic [1][5][6]. Monetary Policy Outlook - PBOC will utilize various monetary policy tools to ensure ample liquidity and lower overall financing costs, supporting economic recovery [1]. - The current Loan Prime Rate (LPR) has remained unchanged at 3.0% for one-year and 3.5% for five-year loans for four consecutive months, indicating a cautious approach to rate adjustments [1][4]. - The recent U.S. Federal Reserve rate cuts provide a more favorable external environment for China's monetary policy, potentially easing pressure on interest rates and the RMB exchange rate [3][5]. Interest Rate Dynamics - The average interest rate for new corporate loans in August was approximately 3.1%, down about 40 basis points year-on-year, while the average for new personal housing loans was also around 3.1%, down 25 basis points [4]. - The necessity for LPR reductions is questioned, as current rates are already at historical lows and the recent market operations have not indicated a need for immediate changes [4][5]. Constraints on LPR Changes - Factors limiting LPR adjustments include bank interest margins, which have decreased to 1.42%, and the already low deposit rates, which may restrict further reductions [3][5]. - The PBOC's focus will be on balancing internal and external factors while maintaining a stable economic environment, with RRR cuts prioritized over interest rate cuts [5][6]. Future Expectations - A potential RRR cut of 0.25 to 0.5 percentage points is anticipated in the fourth quarter, aimed at enhancing market liquidity [6]. - If policy and deposit rates continue to decline, there remains a possibility for LPR to decrease by 5 to 10 basis points later this year, although expectations should be tempered [6]. Structural Support Measures - Beyond lowering LPR, reducing non-interest costs and providing more policy support for key sectors will be essential for lowering overall financing costs [7]. - The collaboration between monetary policy and fiscal measures, such as interest subsidies and risk compensation, will be crucial in enhancing financial support for consumption and domestic demand [7].

北京时间9月18日，美联储宣布降息25个基点，时隔9个月后重启降息。市场预期，国内也存在进一步降 息、降准的空间，这也将使得银行未来息差承压。 近期，也有多家银行股东、董监高宣布出手增持自家银行股票。多家银行在公告中表示，增持计划是基 于对银行长期投资价值的认可，支持银行长期发展。 7月11日以来，银行板块整体呈阶段性下行趋势。以涨势最具代表性的农行为例，该银行股价创下7.55 元的历史新高后，目前已回落至6.7元附近。 每年7月，银行股迎来集中分红期，一些套利资金"分红即走"使得股价短线承压。从信贷需求来看，7-8 月社融、信贷数据低于预期，实体经济融资意愿偏弱，银行资产端扩张动力不足。 增持计划对股价有所提振。截至19日午盘收盘，刚刚完成高管增持的齐鲁银行（601665.AH）领涨，涨 幅超2.5%。 责任编辑：王馨茹 ...

Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - Focus on the central bank's attitude. The bond market was less affected by the strong performance of the A-share index. The better-than-expected issuance of 20-year new bonds in the primary market drove the bond futures up in the afternoon. The market has low expectations for interest rate cuts. If the Fed cuts interest rates by more than 25bp tonight, it may drive the domestic bond market. The trading strategy is to buy on dips and not chase the rise. If the market continues to rise tomorrow, take profit on previous long positions [2][4] 3. Summary by Relevant Catalogs 3.1. Market Review - On Wednesday, bond futures opened lower and closed higher across the board, and spot bond yields declined. The open market conducted 418.5 billion yuan of reverse repurchases, with a net injection of 114.5 billion yuan. There was also a 150 billion yuan treasury cash fixed deposit. The funding situation remained tight, and DR001 rose to 1.49% [2] 3.2. Intraday News - The weighted winning bid rate of the 20-year treasury bond issued by the Ministry of Finance was 2.1616%, with an overall multiple of 5.71 and a marginal multiple of 2.16. Former central bank official Sheng Songcheng said that in the current economic situation, reserve requirement ratio cuts are better than interest rate cuts in China, but there is still room for interest rate cuts [3] 3.3. Market Analysis - The A-share index hit a new high today, but the bond market was less affected. The issuance of 20-year new bonds in the primary market was better than expected, and the winning bid rate was lower than the secondary market, driving the bond futures up in the afternoon. The market has low expectations for interest rate cuts. If the Fed cuts interest rates by more than 25bp tonight, it may drive the domestic bond market. The market sentiment is okay. The trading strategy is to buy on dips and not chase the rise. If the market continues to rise tomorrow, take profit on previous long positions [4] 3.4. Daily Data of Treasury Bond Futures | Contract | 2025-09-17 | 2025-09-16 | Today's Change | | --- | --- | --- | --- | | TS2512 | 102.45 | 102.41 | 0.04 | | TF2512 | 105.87 | 105.78 | 0.09 | | T2512 | 108.135 | 108.01 | 0.125 | | TL2512 | 115.82 | 115.52 | 0.3 | | TS Basis (CTD) | -0.0395 | -0.0241 | -0.0154 | | TF Basis (CTD) | -0.0011 | 0.0072 | -0.0083 | | T Basis (CTD) | 0.2948 | 0.3299 | -0.0351 | | TL Basis (CTD) | 0.5555 | 0.3712 | 0.1843 | | TS Contract Position (Lots) | 79034 | 77964 | 1070 | | TF Contract Position (Lots) | 147322 | 144812 | 2510 | | T Contract Position (Lots) | 246189 | 240621 | 5568 | | TL Contract Position (Lots) | 166472 | 168706 | -2234 | | TS Main Contract Trading Volume (Lots) | 38558 | 43740 | -5182 | | TF Main Contract Trading Volume (Lots) | 70704 | 89826 | -19122 | | T Main Contract Trading Volume (Lots) | 101611 | 138741 | -37130 | | TL Main Contract Trading Volume (Lots) | 132135 | 177470 | -45335 | [5]

Core Viewpoint - China's monetary policy is shifting towards using reserve requirement ratio (RRR) cuts instead of aggressive interest rate cuts to protect bank interest margins and maintain indirect financing channels, while also allowing for gradual interest rate reductions and innovative structural tools to stabilize finance and promote transformation [1][2]. Group 1: Monetary Policy Adjustments - Since 2016, China has adjusted the RRR 23 times, all downward, reducing the RRR for major deposit-taking financial institutions from 17.5% to 9.0%, a total decrease of 8.5 percentage points [3]. - In contrast, the policy interest rates have only been adjusted 14 times since 2016, indicating a preference for RRR cuts over significant interest rate reductions [3][4]. - The current average RRR for Chinese financial institutions is approximately 6.2%, suggesting substantial room for further RRR cuts compared to major economies where RRR tools are less utilized [5]. Group 2: Impact on Banking Sector - The net interest margin for commercial banks in China has decreased to 1.42%, the lowest on record, which raises concerns about the sustainability of the banking sector if interest rates are cut too aggressively [3][4]. - The banking sector is crucial for supporting the real economy, as it accounts for 89.7% of financing in China, compared to only 42% in the U.S., where direct financing plays a larger role [4]. Group 3: Fiscal and Monetary Policy Coordination - RRR cuts will increase the funds available for commercial banks, enabling them to better support proactive fiscal policies, as approximately 68% of national debt and 75% of local government debt is held by commercial banks [6]. - The effectiveness of monetary policy is contingent on the cooperation of commercial banks and the financial system, especially given the low excess reserve ratio in China [6]. Group 4: Interest Rate Dynamics - There is limited elasticity of consumption and investment to interest rate changes in China, which diminishes the effectiveness of interest rate cuts in stimulating economic activity [8]. - The decline in interest rates has led to a reduction in household deposits, with a decrease of 1.11 trillion yuan in July, indicating a relationship between lower interest rates and reduced savings [8]. - Despite the current low inflation and a slight appreciation of the yuan against the dollar, there remains room for further interest rate cuts, especially as external conditions improve with potential U.S. rate cuts [8][9]. Group 5: Structural Monetary Policy Tools - China has been innovating structural monetary policy tools, which have become increasingly important in supporting weak economic sectors and key areas such as technology innovation and green development [9]. - As of the end of 2024, structural monetary policy tools are expected to account for approximately 14.2% of total bank assets in China, highlighting their growing significance [9].

Group 1 - The forum held by Ant Group and Caixin Media focused on the relationship between capital markets and technological innovation, with an emphasis on the current economic situation in China [1] - Professor Sheng Songcheng highlighted that in the current economic climate, adjusting the reserve requirement ratio (RRR) is preferred over interest rate cuts [2][3] - Since 2016, the RRR has been adjusted downwards 23 times, decreasing from 17.5% to 9.0% for major deposit-taking financial institutions, while policy interest rates have only been adjusted 14 times [2] Group 2 - The average weighted reserve requirement ratio for Chinese financial institutions is approximately 6.2%, indicating significant room for further RRR cuts compared to major economies [3] - A 0.5 percentage point reduction in the RRR could release around 1 trillion yuan into the economy, enhancing liquidity [3] - Lowering the RRR can facilitate better coordination between fiscal and monetary policies, as commercial banks hold a significant portion of government bonds [4] Group 3 - Interest rate cuts in China have limited effectiveness in stimulating consumption and investment due to low interest elasticity [5] - The decline in interest rates has led to a reduction in household deposits, with a decrease of 1.11 trillion yuan in July, indicating a relationship between lower interest rates and reduced savings [5][6] - Structural monetary policy tools have been increasingly important, with innovations aimed at supporting weak economic sectors and promoting high-quality economic development [6]

Group 1 - The essence of the reserve requirement cut is to increase liquidity in the market, allowing banks to lend more, but merely saving money may lead to losses due to inflation [1][3] - Current deposit interest rates are at historical lows, making savings less effective as inflation may erode purchasing power [3] - The influx of liquidity may drive up asset prices in stock and real estate markets, presenting opportunities for investment rather than passive saving [3] Group 2 - Individuals should focus on restructuring asset allocation to ensure money is actively working for them, seeking investments that can outpace inflation [1][5] - Emphasis on investing in "anti-inflation" assets such as quality stocks, index funds, and gold, which have historically provided better returns than savings [3][4] - The importance of balancing risk and return by diversifying investments across high-risk and low-risk assets to optimize potential returns in a low-interest environment [3][7] Group 3 - The reserve requirement cut signals a shift from a defensive to an offensive investment strategy, encouraging individuals to seize opportunities rather than merely protect their savings [5][6] - Personal development and skill enhancement are crucial for individuals to adapt to economic changes and seize high-income opportunities [4][7] - Building a strong network and understanding market trends can lead to better investment and career opportunities, emphasizing the need for proactive engagement [7][8]