1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The seasonal increase in cross - year funding demand is expected to drive up market interest rates in December [4][6][9][15][69] 3. Summary of Each Section Overseas Key Monetary Market Indicator Change Tracking - The Fed cut interest rates by 25BP as expected, and short - term US Treasury yields declined. The 3 - month US Treasury yield dropped to around 3.6%, and since November, the US federal funds rate and SOFR rate have remained stable [10] - The benchmark interest rates of Japan, the Eurozone, and the US are 0.5%, 2.15%, and 3.50 - 3.75% respectively [12] Domestic Key Monetary Market Indicator Change Tracking Price Indicator Overview - In November, the central bank maintained a balanced and slightly loose funding environment. The average repurchase rates in the inter - bank and exchange markets fluctuated slightly. R001, GC001, R007, and GC007 monthly averages changed by 4BP, 0BP, 0BP, and - 1BP respectively [4][20] - Most short - term bond yields declined. The 1 - year Treasury bond, 1 - year CDB bond, 1 - year AAA commercial paper, 1 - year AA commercial paper, 1 - year AA - commercial paper, 1 - year AAA inter - bank certificate of deposit, and 1 - year AA+ inter - bank certificate of deposit changed by - 2BP, - 1BP, - 2BP, - 7BP, - 5BP, - 3BP, and - 2BP respectively [20] - In November, the average DR001 and DR007 increased slightly, with the 1 - day and 7 - day spreads changing by 1BP and - 1BP compared to the previous month [26] - The average exchange repurchase rates mostly declined. The 1 - day and 7 - day spreads between inter - bank and exchange rates changed by - 4BP and - 1BP compared to the previous month [31] - The average inter - bank certificate of deposit rates declined slightly. The spread between the 1 - year high - grade inter - bank certificate of deposit rate and the 7 - day reverse repurchase rate widened slightly [37] - The balance of Yu'E Bao's 7 - day annualized return rate was 1.02%, and the average return of the top ten money funds continued to decline [47] Quantity Indicator Overview - In November, the overnight trading volume and proportion in the exchange market decreased compared to the previous month, while those in the inter - bank market increased. The average daily trading volume of R001 in the inter - bank market was 7.45 trillion, accounting for 88.5%, and that of GC001 in the exchange market was 2.00 trillion, accounting for 87.5% [51] - In November, M0 increased seasonally, and the excess deposit reserve ratio declined slightly. The central bank made a net investment through open - market operations, and the estimated excess deposit reserve ratio in November was 1.1% [55] - The year - on - year monthly average of the bond balance to be repurchased in the inter - bank and exchange markets increased. The year - on - year increase in the inter - bank bond balance to be repurchased was 0.4%, and that in the exchange market was 2% [59] - The volatility index of repurchase rates in the inter - bank and exchange markets increased compared to the previous month [64] Funding Outlook Five - Channel Forecast - M0: In November, M0 increased seasonally by 189.1 billion, and it is estimated to increase by 350 billion in December [71] - Required deposit reserves: In November, RMB deposits of financial institutions increased seasonally by 1.41 trillion, less than the same period last year. It is expected that deposits will decrease by 1 trillion in December, resulting in a decrease of 62 billion in required deposit reserves [75] - Fiscal deposits: In November, fiscal deposits decreased by 46.6 billion. It is expected that fiscal deposits will decrease by 600 billion in December [78] - Foreign exchange funds: The Fed cut interest rates by 25BP in December, and the RMB appreciated against the US dollar. It is expected that foreign exchange funds will decrease by 50 billion in December [83] - Open - market operations: The central bank is expected to continue net investment to maintain a stable funding environment. It is estimated that the excess deposit reserve ratio in December will be 1.6% [91] Main Conclusion - The seasonal demand for year - end funds is expected to drive up market interest rates in December. The central bank has carried out large - scale reverse repurchase operations, the economic work conference has confirmed a moderately loose monetary policy, and the large maturity volume of inter - bank certificates of deposit in December will cause seasonal pressure on the funding side [98]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Overseas currency market: The Fed cut interest rates by 25BP as expected, and short - term US Treasury yields declined [4][10]. - Domestic currency market in November: Repo rates in the inter - bank and exchange markets had small fluctuations, with R001, GC001, R007, and GC007 monthly averages changing by 4BP, 0BP, 0BP, and - 1BP respectively; most 1 - year short - bond yields declined; exchange overnight trading volume and proportion decreased, while inter - bank trading volume and proportion increased; the year - on - year monthly average of bond balances to be repurchased in both markets increased; estimated excess deposit reserve ratios for November and December were 1.1% and 1.6% respectively [4]. - Outlook for December: Seasonal increase in year - end fund demand is expected to drive up market interest rates [4][6][9][15][69]. Summary by Directory Overseas Key Currency Market Indicator Changes Tracking - The Fed cut interest rates by 25BP in December, and the 3 - month US Treasury yield dropped to around 3.6%. Since November, the US federal funds rate and SOFR rate have remained stable [10]. Domestic Key Currency Market Indicator Changes Tracking Price Indicators - The central bank maintained a balanced and loose fund environment in November. Repo rate averages in the inter - bank and exchange markets had small fluctuations. R001, GC001, R007, and GC007 monthly averages changed by 4BP, 0BP, 0BP, and - 1BP respectively, reaching 1.43%, 1.42%, 1.50%, and 1.50%. Most 1 - year short - bond yields declined [20]. - In the inter - bank market, the R001 monthly average rose, and the R007 fluctuation range narrowed. The money market weighted average rate fluctuated around the 7 - day reverse repo rate [21]. - DR001 and DR007 monthly averages rose slightly, with 1 - day and 7 - day spreads changing by 1BP and - 1BP respectively [26]. - Exchange repo rate averages mostly declined, and the 1 - day and 7 - day spreads between inter - bank and exchange rates changed by - 4BP and - 1BP respectively [31]. - The 1 - year high - grade inter - bank certificate of deposit (ICD) rate dropped by 3BP, and the low - grade ICD rate dropped by 2BP. The spread between the 1 - year high - grade ICD rate and the 7 - day reverse repo rate widened slightly [37]. - Most 1 - year short - bond interest rate monthly averages declined, and the spread between the 1 - year AAA short - term financing bill and Treasury bond interest rates remained unchanged [42]. - The Yu'E Bao yield was 1.02% in November, and the average return of the top ten money funds continued to decline. The 7 - day average annualized yields of Yu'E Bao and the top ten money funds changed by - 3BP and - 1BP respectively [47]. Quantity Indicators - In November, the exchange overnight trading volume and proportion decreased, while the inter - bank trading volume and proportion increased. The average daily trading volume of R001 in the inter - bank market was 7.45 trillion, accounting for 88.5%, and the trading volume and proportion of GC001 in the exchange market were 2.00 trillion and 87.5% respectively [51]. - M0 increased seasonally in November, and the excess deposit reserve ratio declined slightly. After comprehensive consideration of five channels, the estimated excess deposit reserve ratio for November was 1.1% [55]. - The year - on - year monthly average of bond balances to be repurchased in the inter - bank and exchange markets increased. The inter - bank and exchange repo rate volatility indices rose [59][64]. Fund Outlook Five - Channel Forecast - M0: It increased by 189.1 billion in November, and is expected to increase by 350 billion in December [71]. - Required deposit reserves: Financial institution RMB deposits increased seasonally by 1.41 trillion in November, less than the same period last year. With the Spring Festival in February next year, deposits are expected to decrease by 1 trillion in December, leading to a 62 - billion decrease in required deposit reserves [75]. - Fiscal deposits: Fiscal deposits decreased by 46.6 billion in November due to increased year - end government spending and large net government bond financing. They are expected to decrease by 60 billion in December [78]. - Foreign exchange funds: The Fed cut interest rates by 25BP in December, causing the RMB to appreciate against the US dollar. Foreign exchange funds are expected to decrease by 5 billion in December [83]. - Open market operations: The central bank maintained a balanced and loose fund environment in November through open market operations,买断式逆回购, and Treasury bond trading. As of now in December, it has conducted 1.6 trillion in买断式逆回购 operations, achieving a net injection of 200 billion, and is expected to have a net injection of 50 billion for the whole month. After comprehensive consideration of the five - channel changes, the estimated excess deposit reserve ratio for December is 1.6% [91]. Main Conclusion - Due to the seasonal increase in year - end fund demand, market interest rates are expected to rise in December. The central bank has continued to increase the volume of reverse repo operations. The economic work conference in December confirmed a moderately loose monetary policy for next year. With a large amount of ICDs maturing in December and seasonal behavior of institutions at the end of the year, there is seasonal pressure on the fund market [98].

Core Insights - The report indicates that the central bank's net injection maintains a balanced liquidity environment, with expectations for a seasonal rise in funding rates in September [3][4][11]. Group 1: Monetary Market Indicators - The overseas monetary market shows a consensus on the Federal Reserve's interest rate cut expectations for September, with short-term U.S. Treasury yields declining [6]. - Domestic monetary market indicators reveal that the average interbank and exchange repo rates mostly declined in August, with R001, GC001, R007, and GC007 changing by -5BP, -7BP, -5BP, and -5BP respectively [3][12]. - The overnight transaction volume in both interbank and exchange markets increased compared to the previous month, with the exchange's transaction volume share also rising [43]. Group 2: Funding Outlook - The report predicts a seasonal tightening of liquidity at the end of the quarter, with funding rates expected to rise in September [3][11]. - The central bank's net injection and seasonal reduction in fiscal deposits are anticipated to lead to a rebound in the excess reserve ratio in September [4][11]. - The central bank's net injection in August was 1,446 billion yuan, with a significant amount of reverse repos conducted, indicating a continued effort to maintain liquidity balance [47][81]. Group 3: Seasonal Trends - The seasonal increase in M0 was noted, with an increase of 557 billion yuan in August, and a forecast of a 2,100 billion yuan increase in September [62]. - The report highlights that fiscal deposits are expected to decrease seasonally by 2,500 billion yuan in September due to concentrated tax collections and increased government spending [68]. - The report also mentions that the foreign exchange reserves are expected to decrease by 700 billion yuan in September amid ongoing U.S.-China tariff negotiations [73]. Group 4: Interest Rate Trends - The average yield on short-term bonds generally increased in August, with 1-year government bonds and 1-year policy bank bonds rising by 1BP and 4BP respectively [34]. - The report notes that the central bank's operations are aimed at stabilizing the funding environment, with expectations for a seasonal rise in market rates in September [85]. - Historical data indicates that the average monthly change in R001 and R007 rates in September over the past three years has been 9BP and 12BP respectively, suggesting a pattern of rising rates [82].

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].

Report Industry Investment Rating - No relevant information provided Core Viewpoints of the Report - The market has a consistent expectation that the Fed will not cut interest rates in July, and the short - term US Treasury yields are stable. After the end of the quarter, the domestic money market will loosen, and the central bank's attitude to maintain a loose liquidity is clear. It is expected that the domestic money market interest rates will decline seasonally in July [2][3][10] Summary by Relevant Catalogs Overseas Key Money Market Indicator Changes Tracking - Since June, the 3 - month US Treasury yield has been stable, and the market has a consistent expectation that the Fed will not cut interest rates in July. The US federal funds rate and SOFR rate have been running smoothly [2][6] - As of 2025, the policy target rate (base money) in Japan is 0.5%, the eurozone's benchmark interest rate (main refinancing rate) is 2.15%, and the US federal funds target rate range is 4.25 - 4.50% [8] Domestic Key Money Market Indicator Changes Tracking Price Indicators - In June, as the quarter - end approached, the money price increased, and most of the average exchange repurchase rates rose. The monthly average values of R001, GC001, R007, and GC007 changed by - 6BP, 13BP, 2BP, and 4BP respectively [2][11][13] - The monthly average yields of 1 - year short - term bonds mostly declined. The monthly average yields of 1 - year Treasury bonds, 1 - year government - backed bonds, 1 - year AAA commercial paper, 1 - year AA commercial paper, 1 - year AA - commercial paper, 1 - year AAA negotiable certificates of deposit, and 1 - year AA+ negotiable certificates of deposit changed by - 6BP, - 1BP, 1BP, - 2BP, - 15BP, - 3BP, and - 3BP respectively [13][32] - The monthly average values of DR001 and DR007 in June both decreased slightly, with changes of - 11BP and - 2BP respectively compared to the previous month. The average 1 - day and 7 - day spreads between R and DR changed by 5BP and 4BP respectively compared to the previous month [18] - The average monthly interest rate of negotiable certificates of deposit decreased slightly in June. The interest rate of 1 - year high - grade and low - grade negotiable certificates of deposit both decreased by 3BP. The interest rate of negotiable certificates of deposit was higher than the 7 - day reverse repurchase rate, and the interest rate spread narrowed [27] - The 7 - day annualized yield of money funds decreased. The 7 - day average annualized yield of Yu'E Bao in June decreased slightly to 1.18%. The average 7 - day annualized yields of Yu'E Bao and the top ten money funds changed by - 8BP and - 4BP respectively compared to the previous month [33] Quantity Indicators - In June, the overnight trading volume and proportion in the inter - bank market both increased compared to the previous month, while those in the exchange market both decreased. The average daily trading volume of R001 in the inter - bank market in June was 6.82 trillion, accounting for 87.6%, and the trading volume and proportion of GC001 in the exchange market were 1.88 trillion and 86.6% respectively [38] - In June, the central bank actively injected liquidity, and the excess deposit reserve ratio increased compared to the previous month. The central bank injected 14,000 billion in outright reverse repurchases in two installments, with a net injection of 2000 billion. It also injected 5,539 billion in liquidity through open - market operations. Fiscal expenditures increased at the end of the quarter, and fiscal deposits decreased by 8,166 billion. The estimated excess deposit reserve ratio in June was 1.5% [42] - The year - on - year monthly average of the balance of bonds to be repurchased in the inter - bank and exchange markets increased compared to the previous month. The year - on - year balance of bonds to be repurchased in the inter - bank market in June increased by 10%, while that in the exchange market decreased by 3% [45] - The volatility index of the exchange overnight repurchase rate mostly increased slightly compared to the previous month. As of the end of June, V(R001) = 0.27, V(R007) = 0.28, V(GC001) = 0.34, and V(GC007) = 0.26 [49] Money Outlook Five - Channel Prediction - **M0**: In June, M0 increased seasonally by 569 billion. It is estimated that M0 will increase by 600 billion in July [56] - **Required Deposit Reserves**: In June, RMB loans increased significantly month - on - month, and financial institution deposits increased by 32,100 billion. It is expected that deposits will decrease by 4,000 billion in July, resulting in a decrease of 248 billion in required deposit reserves [57] - **Fiscal Deposits**: In June, the issuance of special Treasury bonds declined, and government expenditures at the half - year - end increased, resulting in a decrease of 8,166 billion in fiscal deposits. In July, the issuance of ultra - long - term special Treasury bonds will continue as planned, and the issuance of special refinancing bonds will slow down. It is expected that fiscal deposits will increase seasonally by 6,000 billion [60] - **Foreign Exchange Occupation**: Due to the suspension of Sino - US tariff negotiations and the impact on imports and exports, it is expected that foreign exchange occupation will decrease by 700 billion in July [65] - **Open Market Operations**: The central bank's attitude to maintain a stable and loose liquidity is clear. It is expected that the central bank will conduct net injections to maintain a loose money market. It is estimated that the central bank will conduct net injections of 4,000 billion through open - market operations and outright reverse repurchases in July. After comprehensively considering the five - channel changes, the estimated excess deposit reserve ratio in July is 1.3% [72] Main Conclusion - After the end of the quarter, the money market will loosen, and it is expected that the money market interest rates will decline seasonally in July. Historical data shows that in recent years, the volatility of the money market has decreased, and the inter - bank overnight repurchase rates mostly decline in July. The average monthly change of R001 in July in the past five years was - 9BP, and that of R007 was - 11BP [73][76]

Group 1 - The report indicates that the domestic monetary market continued to ease in May, with the average repo rates in the interbank and exchange markets mostly declining [2][3][13] - The average values for R001, GC001, R007, and GC007 decreased by 16 basis points, 9 basis points, 14 basis points, and 14 basis points respectively, reaching 1.54%, 1.57%, 1.63%, and 1.64% [14][16] - The report forecasts a seasonal increase in funding rates for June due to the quarter-end factors and the peak of maturing interbank certificates of deposit and reverse repos [6][12][55] Group 2 - The report highlights that the Federal Reserve's June meeting is expected to maintain the pause on interest rate cuts, with stable short-term U.S. Treasury rates observed since May [8] - The European Central Bank decided to lower the three key rates in the Eurozone by 25 basis points on June 5 [8][9] - The report notes that the excess reserve ratio is estimated to be 1.1% for May and 1.3% for June, indicating a slight increase in liquidity [2][46][74] Group 3 - The report mentions that the central bank is expected to actively inject liquidity in June, with a projected slight increase in the excess reserve ratio [6][12][55] - The report also states that the interbank and exchange overnight transaction volumes and proportions increased compared to the previous month, with the average daily transaction volume for R001 at 58.6 trillion and for GC001 at 19.1 trillion [38][40] - The report anticipates that the seasonal increase in funding rates will be influenced by the high financing scale of government bonds and the pressure from maturing financial instruments [79]

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]