Core Viewpoint - The central bank has signaled a commitment to maintaining liquidity stability by increasing the medium-term lending facility (MLF) by 900 billion yuan, marking the eighth consecutive month of such actions in 2023 [1] Group 1: Central Bank Actions - On October 27, the central bank conducted a substantial increase in MLF, totaling 900 billion yuan, indicating ongoing efforts to support liquidity [1] - The central bank's actions are seen as a balance between "risk prevention" and "stabilizing expectations," suggesting a cautious approach to monetary policy [1] - The announcement to resume open market operations for government bonds on the same day led to a significant decline in bond yields [1] Group 2: Market Implications - The coordinated use of multiple monetary tools is expected to ensure a smooth transition across the month-end period, contributing to a generally stable liquidity environment [1] - The overall liquidity condition is anticipated to remain "stable with a slight easing" as a result of these measures [1]

Core Viewpoint - The central bank has signaled a commitment to maintaining liquidity stability through increased medium-term lending facility (MLF) operations, with a focus on balancing risk prevention and expectation stabilization [1][2]. Group 1: Central Bank Operations - On October 27, the central bank conducted a 900 billion yuan MLF operation, marking the eighth consecutive month of increased MLF operations this year [1]. - The central bank also performed a 337.3 billion yuan reverse repurchase operation at a rate of 1.4%, resulting in a net liquidity injection of 348.3 billion yuan for the day [1]. - Analysts expect that the total net MLF injection for October will reach 200 billion yuan, aligning with market expectations and supporting government bond issuance [1][2]. Group 2: Market Impact and Expectations - The central bank's operations are seen as a coordinated effort between monetary and fiscal policies, with significant government bond issuance expected in October, potentially exceeding 1 trillion yuan [2]. - The overall liquidity environment is expected to remain stable, with short-term liquidity pressures anticipated due to tax payment deadlines, but these are expected to be manageable [3][4]. - Recent trends in the bill market indicate a decline in financing demand, which may alleviate some of the liquidity tension associated with tax periods [3]. Group 3: Future Outlook - Despite potential short-term disturbances, the overall liquidity situation is projected to remain stable across the quarter, with the central bank likely to continue using reverse repurchase operations to mitigate volatility [4][5]. - The resumption of government bond trading operations by the central bank is expected to enhance market confidence and provide additional tools for maintaining market stability [5].

Group 1 - The People's Bank of China (PBOC) conducted a 7-day reverse repurchase operation of 288.6 billion yuan at an interest rate of 1.40%, maintaining the previous rate, resulting in a net injection of 48.1 billion yuan after 240.5 billion yuan of reverse repos matured on the same day [1] - Last week, the PBOC's net injection in the open market was 640.6 billion yuan, with a net injection of 300 billion yuan through Medium-term Lending Facility (MLF) [1] - The liquidity situation shifted from loose to tight, with overnight funding rates rising from 1.46% to 1.52% and 7-day funding rates increasing significantly from 1.52% to 1.80% [1] Group 2 - The upcoming week will see a decrease in the scale of reverse repos maturing to 516.6 billion yuan, while government bond net payments will rise to 192.7 billion yuan, primarily concentrated on Monday [2] - Despite the approaching quarter-end, the current pace of institutions in crossing the quarter is relatively fast, and the limited scale of government bond payments and reverse repos maturing suggests that liquidity fluctuations will likely be limited [2] - Analysts expect that the funding environment will likely return to a loose state after the "Double Festival" holiday, supported by high fiscal spending levels typically seen at quarter-end [2] Group 3 - The PBOC's monetary policy committee recently shifted its focus from "implementing a moderately loose monetary policy" to "refining the implementation of a moderately loose monetary policy," emphasizing the execution of monetary policy measures [3] - The new policy direction includes support for small and micro enterprises and stabilizing foreign trade, while maintaining support for technology innovation and consumption [3] - Although there was no mention of interest rate cuts or reserve requirement ratio reductions, the monetary policy stance remains "moderately loose," with expectations for potential fiscal stimulus in the fourth quarter [3] Group 4 - Analysts predict that the PBOC will enhance liquidity in the interbank market through measures such as reserve requirement ratio cuts or increasing the volume of monetary policy tools [4] - Following the capital increase of four major state-owned banks, other types of banks are also expected to focus on capital replenishment [4]

Group 1: Report Industry Investment Rating - Not provided in the content Group 2: Core View of the Report - In August, the capital market experienced a "roller - coaster" with multiple factors causing an unexpected tightening of funds, but the central bank's timely intervention stabilized the situation. In September, seasonal disturbances will increase, and non - seasonal factors may also have an impact. However, the capital market is expected to maintain a reasonably abundant state with support from fiscal expenditures and the central bank [1][4] Group 3: Summary According to the Directory 1. August, the "Roller - Coaster" of Funds 1.1 Review: Characteristics of the August Capital Market - **Interest rate volatility**: Interest rates changed from "low - level and low - volatility" to a "roller - coaster" pattern. In the first half of August, rates were low and stable, while in the middle, they rose rapidly due to tax payments and bond fund redemptions. After the central bank's intervention, rates gradually declined [9] - **Deviation between expectation and reality**: Despite non - traditional tax - heavy months and more precise central bank operations, the capital market tightened unexpectedly in the middle of August, mainly due to the resonance of tax payments and bond fund redemptions [12] - **Central bank support**: The central bank increased short - and long - term liquidity injections. Short - term liquidity was promptly supplemented, and long - term net investment reached 60 billion yuan, second only to January [16] - **Change in lending entities**: The willingness of large banks to lend decreased, while money market funds and wealth management products took over as lending entities due to higher lending rates [20] 1.2 Focus: Reasons for the Unexpected Tightening of Funds - **Stock market impact**: The strength of the stock market led to capital occupation and diversion. North Exchange new - share subscriptions froze funds, and the rise of the stock market drove asset reallocation, causing some deposits to flow into the stock market, which affected large banks' lending willingness [23] - **Fund redemption pressure**: Bond market "negative feedback" concerns increased, leading to large - scale bond sales by funds, which raised liquidity premiums and further tightened the capital market [36] 2. Re - encountering the Quarter - End: Similarities and Differences - **Historical September pattern**: Historically, in September, capital interest rates generally trended upwards with increased volatility in the second half of the month. Seasonal factors such as banks' end - of - quarter liquidity needs and cash reserve requirements for holidays increased, while fiscal expenditures at the end of the month provided support [37] - **This year's September situation**: In addition to seasonal factors, non - seasonal factors such as the strength of the equity market, more prominent end - of - quarter credit impulse, large - scale government bond supply, and the maturity of medium - and long - term liquidity and certificates of deposit may also affect the capital market. However, the capital market in the first half of September is expected to be balanced and loose, and the disturbances in the second half are controllable [4][50]