Core Viewpoint - The chief economist of China Minsheng Bank, Wen Bin, indicates that recent data shows signs of setbacks in the recovery of the real economy since July, necessitating continued macro policy support [1] Group 1: Economic Indicators - Multiple indicators since July show a decline in retail sales growth, ongoing pressure on real estate investment, and a need for increased credit demand [1] - External demand faces uncertainties that have not been fully resolved, suggesting the need for sustained macroeconomic policy support [1] Group 2: Policy Recommendations - The second half of the year will focus on stabilizing credit, promoting domestic demand, and enhancing coordination, with a commitment to maintaining consistent and stable policies [1] - Monetary policy is expected to remain supportive, with structural policies aimed at reducing financing costs for the real economy [1] Group 3: Future Monetary Policy - The effectiveness of personal consumption loans and subsidies for service industry loans is expected to lower financing costs, allowing for more targeted structural policies [1] - The timeline for potential further reductions in reserve requirement ratios (RRR) and interest rates may be delayed, along with adjustments to the Loan Prime Rate (LPR) [1]

Core Viewpoint - The chief economist and director of the research institute, Wen Bin, indicates that recent data shows a certain setback in the recovery of the real economy since July, necessitating continued macro policy support [1] Economic Indicators - Several indicators since July have shown a decline in retail sales growth, ongoing pressure on real estate investment, and a need for increased credit demand [1] - External demand faces uncertainties that have not yet been fully resolved, suggesting the need for further macroeconomic policy adjustments [1] Policy Recommendations - The necessity for maintaining a stable and continuous policy approach is emphasized, with monetary policy expected to remain supportive [1] - Wen Bin suggests that structural policies can more effectively target issues, avoid fund misallocation, and enhance the activation of deposits [1] Interest Rate Outlook - The timing for potential further reductions in reserve requirement ratios (RRR) and interest rates may be postponed, along with the timing for adjustments to the Loan Prime Rate (LPR) [1]

Group 1: Market Performance - As of June 23, 2025, most government bond futures closed lower, with the 2-year, 5-year, and 10-year contracts down by 0.02%, 0.04%, and 0.05% respectively, while the 30-year contract rose by 0.02% [1] - The 30-year government bond ETF from Bosera (511130) saw a slight increase of 0.01%, marking its 12th consecutive rise, with the latest price at 113.01 yuan [1] - The trading volume for the 30-year government bond ETF was active, with a turnover of 17.19% and a transaction value of 1.339 billion yuan [1] Group 2: LPR and Economic Outlook - The People's Bank of China announced the latest LPR rates on June 20, 2025, with the 1-year rate at 3.0% and the 5-year and above rate at 3.5%, unchanged from the previous month [1] - Looking ahead, there is potential for LPR to be lowered further in the second half of the year due to uncertainties in the external environment and efforts to stabilize the real estate market [2] - The anticipated reduction in LPR is expected to lower financing costs for enterprises and households, stimulating internal financing demand and supporting investment and consumption [2] Group 3: Fund Performance and Metrics - The latest scale of the 30-year government bond ETF from Bosera reached 7.778 billion yuan, with a net inflow of 274 million yuan over the past three days [3] - The fund has shown strong performance, with a 14.27% increase in net value over the past year, ranking 4th out of 406 index bond funds [3] - Historical data indicates a maximum monthly return of 5.35% and a 100% probability of profit over a one-year holding period [3] Group 4: Risk and Fees - The maximum drawdown since the inception of the 30-year government bond ETF is 6.89%, with a relative benchmark drawdown of 1.28% [4] - The management fee for the 30-year government bond ETF is 0.15%, and the custody fee is 0.05% [5] Group 5: Tracking Accuracy - As of June 20, 2025, the tracking error for the 30-year government bond ETF over the past month was 0.048% [6] - The ETF closely tracks the Shanghai Stock Exchange 30-year government bond index, which reflects the overall performance of the corresponding maturity government bonds [6]

Group 1: LPR Pricing Stability - The LPR rates for June remain unchanged at 3.0% for the 1-year term and 3.5% for the 5-year term, consistent with market expectations[1] - The stability in LPR pricing is attributed to the lack of significant changes in factors affecting LPR adjustments following the May policy rate cut[2] - A policy observation period is anticipated in the short term, with LPR rates likely to remain stable[2] Group 2: Future Outlook and Economic Impact - There is potential for LPR rate cuts in the second half of the year due to uncertainties in the external environment and efforts to boost domestic demand[2] - The central bank is expected to continue lowering interest rates, which will lead to further reductions in LPR rates, thereby decreasing financing costs for the real economy[2] - The recent reduction of 0.25 percentage points in public housing loan rates opens up space for further cuts in commercial mortgage rates[3] - Regulatory measures may be implemented to guide the 5-year LPR rates downward, significantly impacting residential mortgage rates and stimulating housing demand[3]

Report Summary 1) Report Industry Investment Rating - No information provided 2) Core Viewpoints - The reduction of the 5 - month LPR by 10bp and domestic banks' cuts in deposit rates may lead to a shift of deposits, potentially lowering yields of other currency and fixed - income products and increasing the activity of equity investment [2] - The IPO rhythm of technology companies is expected to significantly increase, and the increased supply of new stocks may siphon off funds from small - cap stocks, constraining their gains. Meanwhile, long - term investment reform pilots and the arrival of insurance funds' off - balance - sheet private equity funds may support the performance of large - cap blue - chip stocks, with the market style likely to continue favoring large - cap over small - cap stocks [2] - The trading volume of the entire A - share market has not improved, and the index is still in a volatile trend. The basis of IH and IF remains flat compared to last week, while the discounts of IC and IM have further widened due to the stock game in small - cap stocks, but the discounts are expected to converge [2] - The model predicts that the basis of IH, IF, and IM will strengthen next week, while the basis of IC will weaken [3] 3) Summary by Related Content Market Policy Impact - The 5 - month LPR was cut by 10bp, and domestic banks reduced deposit rates, with the one - year fixed - deposit rate falling below 1%. This may cause a shift of deposits, affecting the yields of other products and increasing equity investment activity [2] - The press conference mentioned deepening the IPO system reform for innovation and entrepreneurship and supporting the listing of technology companies, which will increase the supply of new stocks and may impact small - cap stocks. Long - term investment reform pilots and the arrival of insurance funds' off - balance - sheet private equity funds may support large - cap blue - chip stocks [2] Market Performance - The daily trading volume of the entire A - share market was slightly over one trillion, and the index was in a volatile trend. On Friday, there were large sell - offs in index ETFs, causing a rapid decline in broad - based indices. The weekly lines of the Shanghai 50 and CSI 300 turned down, and the CSI 500 and 1000 fell by over 1% [2] Basis Situation - The basis of IH and IF remained at the same level as last week, while the discounts of IC and IM widened due to the small - cap stock game. The widening of single - day discounts for a long time may be due to speculative hedging. With the increasing congestion in small - cap stocks, the discounts are expected to converge [2] Basis Forecast - The model predicts that the basis of IH, IF, and IM will strengthen next week, while the basis of IC will weaken [3]

Group 1: LPR Adjustment - The LPR for 1-year and 5-year terms was lowered by 0.1 percentage points to 3.0% and 3.50% respectively[1] - This marks the first reduction after six months of stability, driven by a recent package of financial policies from the central bank[2] - The adjustment reflects a change in the pricing basis for LPR, indicating a transmission of policy rate adjustments to loan market rates[2] Group 2: Economic Context - The reduction in LPR is a response to the escalation of the US-China tariff conflict, necessitating stronger counter-cyclical adjustments in macro policy[2] - Lowering policy rates aims to stimulate domestic demand to offset external demand slowdown, thereby stabilizing economic operations[2] - The central bank is expected to continue implementing interest rate cuts in the second half of the year due to ongoing uncertainties in the external environment[3] Group 3: Impact on Deposits and Banks - The 1-year LPR reduction is anticipated to lead to a comprehensive decrease in deposit rates, averaging a decline of 0.1 percentage points[4] - Short-term deposit rates will see smaller reductions, while longer-term deposit rates may experience more significant declines[4] - The latest data shows that the net interest margin for commercial banks fell to 1.43% in Q1 2025, down by 0.09 percentage points, marking a historical low[4]