Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core View of the Report The report predicts a 385.3 billion yuan liquidity gap in May 2025, mainly due to a significant month - on - month increase in government debt net financing. Despite the large gap, considering the central bank's positive attitude towards maintaining the money market, the money market interest rate is expected to remain loose in May. The DR007 central rate is expected to decline, driving down short - term bond yields [6][21][26]. 3. Summary by Relevant Catalogs 5 - Month Liquidity Gap Prediction Analysis - **Factor 1: Government Debt Issuance and Fund Allocation** - In May, the net financing scale of government debt is expected to increase significantly compared to April, with a potential impact on the money market. The estimated net financing scale of national debt in May is 609.3 billion yuan, a 343.6 - billion - yuan increase from April, and the proportion of ultra - long national debt issuance may rise. The estimated new local debt in May is 516.7 billion yuan, a 263.3 - billion - yuan increase from April. The total government debt supply scale in May may reach 1.13 trillion yuan, a 606.9 - billion - yuan increase from April [8][10]. - **Factor 2: Regular Fiscal Revenue and Expenditure** - Historically, May is usually a month of fiscal net expenditure, but the scale is small. Excluding the impact of "tax refund for excess input VAT" in 2022, the average net fiscal expenditure from 2020 - 2021 and 2023 - 2024 was 11.57 billion yuan, which is used to estimate the fiscal net income in May 2025 and will supplement the money market [14]. - **Factor 3: Credit Delivery** - May is not a peak month for credit delivery, so the impact on liquidity consumption is small. Given the improvement in credit delivery indicated by the increase in the six - month national and joint - stock bank bill transfer discount rate in late April and the high year - on - year growth rate of "deposits subject to reserve requirements" in March 2025, it is assumed that the growth rate will drop to 6.5% in May, and the required reserve for deposits will increase by 7.22 billion yuan, supplementing the corresponding liquidity [17][18]. - **Factor 4: Changes in M0 and Foreign Exchange Holdings** - After the May Day holiday, residents' cash flows back to the banking system, and historically, the M0 scale in May usually decreases month - on - month, supplementing 9.76 billion yuan of liquidity. The change in foreign exchange holdings in May is assumed to be the average of the previous three months, with a potential consumption of 6.39 billion yuan of liquidity [20]. - **Summary** - After comprehensive calculation of the above four factors, there is expected to be a 385.3 - billion - yuan liquidity gap in May 2025, mainly due to the significant month - on - month increase in government debt net financing [21]. Outlook on Short - Term Bonds - The central bank's positive attitude towards maintaining the money market can be observed from two aspects: the decline in the money market interest rate near the end of April, indicating low cross - month pressure; and the 50 - billion - yuan net MLF injection in April, a significant increase from before. - The Politburo meeting on April 25 proposed "timely reserve requirement ratio cuts and interest rate cuts" and other measures. It is expected that monetary policy will cooperate, the money market will remain loose, the DR007 central rate will decline, and short - term bond yields will follow suit [22][24][26].