Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Asia ex-Japan rates market**, particularly analyzing the **Chinese financial market** and the liquidity conditions in September 2023. Core Insights and Arguments - The **7-day repo fixing** has gradually increased to **1.50%**, aligning with historical patterns from July and August but remaining lower than the rates observed in September 2023 and 2024 [5][5][5]. - Despite the maturity of **RMB 1.25 trillion** in Negotiable Certificates of Deposit (NCDs) this week, liquidity is not perceived as tight [5][5][5]. - The **7-day repo fixing** typically rises in the latter half of the month due to factors such as tax payments, increased Local Government Bond (LGB) supply, and month-end funding requirements [5][5][5]. - Expectations are set for the **7-day repo fixing** to rise to a range of **1.55% to 1.70%** in the upcoming weeks, with the spread to the **7-day OMO rate** widening to **15-20 basis points** in September, compared to **11 basis points** in August [5][5][5]. - The **People's Bank of China (PBoC)** is anticipated to ensure adequate funding, especially considering potential bond fund redemption flows, and may conduct **14-day OMOs** leading into the "Golden Week" holiday [5][5][5]. - The market is questioning whether the PBoC will allow liquidity to tighten further if stock market sentiment remains strong [5][5][5]. Strategic Recommendations - The analysts maintain a **Dec-IMM 1s3s flattener trade** with a conviction level of **3/5** and recommend paying in **5-year swaps** with a conviction level of **4/5** [5][5][5]. - Long-end rates are influenced not only by liquidity but also by equity market performance, macroeconomic data, and the ongoing anti-deflation narrative [5][5][5]. Additional Important Information - The report is produced by **Nomura International (Hong Kong) Ltd.**, and the analysts involved are Clair Gao and Albert Leung [6][7][6]. - The document includes disclaimers regarding the accuracy and reliability of the information provided, emphasizing that it should not be construed as investment advice [17][18][19]. This summary encapsulates the critical insights and strategic recommendations from the conference call, focusing on the current state and expectations of the Asian rates market, particularly in China.