1. Report Industry Investment Rating - No industry investment rating is provided in the report. 2. Core View of the Report - The central bank's attitude towards protecting the liquidity is clear, and the capital interest rate is expected to decline in August [2][4][5]. 3. Summary by Relevant Catalogs Overseas Key Monetary Market Indicator Change Tracking - The Fed did not cut interest rates in July, and the short - term interest rate of US Treasury bonds remained stable. Since July, the 3 - month US Treasury bond rate has been stable, and the market expects the Fed to cut interest rates in September. The US federal funds rate and SOFR rate have been operating stably [2][6]. - The benchmark interest rates of Japan, the eurozone, and the US as of specific dates are 0.5% (Japan: policy target rate of base money on 2025 - 01 - 24), 2.15% (eurozone: benchmark interest rate of main refinancing operations on 2025 - 6 - 5), and 4.25 - 4.50% (US: federal funds target rate range on 2024 - 12 - 18) [8]. Domestic Key Monetary Market Indicator Change Tracking Price Indicators - After crossing the end of the half - year, in July, the average values of repurchase rates in the inter - bank and exchange markets mostly declined. R001, GC001, R007, and GC007 monthly average values changed by - 3BP, - 25BP, - 10BP, and - 14BP respectively [2][10][15]. - The monthly average values of short - term bond yields mostly declined. For 1 - year short - term bonds such as 1 - year Treasury bonds, 1 - year China Development Bank bonds, and 1 - year AAA commercial paper, their yields decreased to different degrees [15][36]. - In July, the average value of DR007 decreased slightly. The average values of DR001 and DR007 were 1.39% and 1.52%, changing by 0BP and - 6BP respectively compared with the previous month. The 1 - day and 7 - day spread averages of R and DR changed by - 4BP [22]. - The average value of exchange repurchase rates mostly declined in July. The average values of GC001 and GC007 were 1.45% and 1.54%, down 25BP and 14BP respectively from the previous month [26]. - The average monthly interest rate of inter - bank certificates of deposit (CDs) decreased slightly in July. The interest rates of 1 - year high - grade and low - grade CDs both decreased by 3BP [31]. - The 7 - day annualized yield of money funds declined. The 7 - day average annualized yield of Yu'E Bao decreased to 1.09% in July, and the average 7 - day annualized yields of Yu'E Bao and the top ten money funds decreased by - 9BP and - 7BP respectively compared with the previous month [39]. Quantity Indicators - In July, the overnight trading volumes in the inter - bank and exchange markets decreased compared with the previous month, while their proportions increased. The average daily trading volume of R001 in the inter - bank market was 6.70 trillion, accounting for 88.3%, and that of GC001 in the exchange market was 1.86 trillion, accounting for 87.0% [44]. - The average monthly year - on - year balance of bonds to be repurchased in the inter - bank and exchange markets decreased compared with the previous month. The year - on - year balance of bonds to be repurchased in the inter - bank market decreased by 3% in July, and that in the exchange market decreased by 2% [51]. - The excess deposit reserve ratio decreased compared with the previous month. It is estimated that the excess deposit reserve ratios in July and August are 1.3% and 1.2% respectively. In July, fiscal deposits increased seasonally by 770 billion yuan due to tax payment periods and high government bond issuance [48][50]. Capital Outlook Five - Channel Prediction - **M0**: In July, M0 increased seasonally by 9.73 billion yuan, and it is estimated to increase by 5.5 billion yuan in August [63]. - **Legal Deposit Reserves**: In July, RMB loans declined for the first time in nearly 20 years, and financial institutions' RMB deposits increased by 500 billion yuan. It is expected that deposits will increase by 2500 billion yuan in August, resulting in an increase of 155 billion yuan in legal deposit reserves [64]. - **Fiscal Deposits**: Fiscal deposits increased by 770 billion yuan in July due to tax payment periods and high - volume government bond issuance. It is expected to increase by 600 billion yuan in August [67]. - **Foreign Exchange Holdings**: Due to the suspension of China - US tariff negotiations for 90 days, the increase of the average global tariff rate by the US, and the new 40% transit tariff, foreign exchange holdings are expected to decrease by 70 billion yuan in August [72]. - **Open Market Operations**: The central bank is expected to conduct net injections to maintain a loose capital market. In July, the central bank conducted net injections through open - market operations and买断式repurchase operations. It is expected to conduct net injections of 400 billion yuan in August through these two methods, and the excess deposit reserve ratio is estimated to be 1.2% in August after comprehensive consideration of the five - channel changes [80]. Main Conclusion - Historically, in August, most of the inter - bank overnight repurchase rates declined. The median monthly average change of R001 in the past three years was - 4BP, and that of R007 was - 2BP [81]. - The central bank's operation on the first - round local bond issuance day after the restoration of VAT on government bonds and financial bonds shows a clear attitude of maintaining a stable and loose liquidity. The probability of the Fed cutting interest rates in September is high, which provides space for China's monetary policy. It is expected that the market interest rate will decline seasonally in August [84][85].

Group 1 - The report indicates that the external environment is severe, leading to a balanced and slightly loose funding situation, with expectations of a slight decline in market interest rates in April [3][5][87] - In March, the central bank increased liquidity, resulting in a slight easing of the funding environment, with average interbank and exchange repo rates mostly declining [3][12][55] - The average overnight transaction volume in the interbank market increased compared to the previous month, while the exchange's overnight transaction volume decreased [42][49] Group 2 - Key indicators in the overseas currency market show that the Federal Reserve paused interest rate cuts in March, and short-term U.S. Treasury rates remained stable [7][9] - Domestic monetary market indicators reveal a slight easing in March, with average repo rates declining, while fiscal deposits increased significantly [5][11] - The report predicts that fiscal deposits will continue to rise in April, with a slight decrease in the excess reserve ratio expected [56][66][81] Group 3 - The report highlights that the average yield on short-term bonds increased in March, with specific changes in yields for various types of bonds [13][32] - The average annualized yield of money market funds decreased slightly in March, indicating a trend of declining yields [37][41] - The report notes that the central bank may use monetary policy tools such as reserve requirement ratio cuts to counter external pressures [76][87]

Group 1 - The core viewpoint of the article is that social financing (社融) has significantly exceeded expectations, with the loan balance year-on-year growth rate rebounding after two years, primarily supported by fiscal demand [2][11] - In March, new social financing reached 5.89 trillion yuan, an increase of 1.06 trillion yuan year-on-year, with the year-on-year growth rate rising from 8.2% to 8.4%, surpassing market expectations [2][4] - The net financing of government bonds in March reached 1.48 trillion yuan, an increase of approximately 1 trillion yuan year-on-year, indicating that rapid government bond issuance may lead to quicker commencement of key investment projects this year [2][4] Group 2 - M2 growth rate remained stable at 7.0%, while M1 growth rate increased from 0.1% in February to 1.6% in March, indicating relatively ample liquidity [7][11] - In March, short-term loans for enterprises increased by 460 billion yuan year-on-year, totaling 1.44 trillion yuan, while corporate loan rates remained unchanged at 3.30% [7][8] - The actual financing scale for enterprises in March remained roughly the same as last year, with net financing for the enterprise sector at 3.1 trillion yuan, indicating stability in overall financing demand [7][8] Group 3 - Fiscal deposits remain high, with a year-on-year growth rate of 16.9% in March, suggesting significant potential for fiscal support in the near term [11][13] - The central bank's decision to release favorable data on a Sunday is seen as a strategy to stabilize market confidence ahead of the Monday opening [13][14] - The central bank's balance sheet relative to GDP is at a historically low level, providing potential for expansion, which could help lower risk premiums in uncertain economic conditions [13][14]