1. Report Industry Investment Rating No information provided in the content. 2. Core View of the Report - This week (March 23 - March 27), the fund slightly reduced leverage, and the large - scale banks decreased their average daily lending. The maturity of certificates of deposit decreased, and the yield curve of certificates of deposit steepened. In the spot bond trading, the main buyers were funds, with funds increasing their holdings of 7 - 10Y interest - rate bonds and short - term credit bonds. Large - scale banks increased their holdings of certificates of deposit, money market funds were the main sellers and net - sold certificates of deposit, securities firms and small and medium - sized banks mainly sold bonds, and insurance companies increased their holdings of interest - rate bonds [4]. 3. Summary by Directory 3.1 Monetary Fundamentals - **Liquidity Injection**: From March 23 - 27, there were 17.65 billion yuan of reverse repurchase maturities. The central bank respectively injected 0.8 billion, 1.75 billion, 7.85 billion, 22.4 billion, and 14.62 billion yuan of reverse repurchase from Monday to Friday, with a total injection of 47.42 billion yuan. On Wednesday, there were 50 billion yuan of MLF injection and 45 billion yuan of MLF maturity. The net liquidity injection for the whole week was 28.19 billion yuan [4][7]. - **Funding Rates**: As of March 27, R001, R007, DR001, and DR007 were 1.39%, 1.51%, 1.32%, and 1.44% respectively, changing by - 0.9BP, 3BP, - 0.28BP, and 1.89BP compared to March 13, and were at the 18%, 9%, 14%, and 3% historical quantiles respectively [4][9]. - **Large - scale Bank Lending**: From March 23 - 27, the total lending scale of large - scale banks was 24.99 trillion yuan, with a maximum daily lending scale of 5.4 trillion yuan and an average daily lending scale of 5.0 trillion yuan, a decrease of 0.57 trillion yuan compared to the previous week's daily average [4][14]. - **Pledged Repurchase**: The average daily trading volume of pledged repurchase was 7.94 trillion yuan, with a maximum daily volume of 8.29 trillion yuan, a 5.21% decrease compared to the previous week's daily average. The average daily proportion of overnight repurchase transactions was 88.4%, with a maximum daily proportion of 91.7%, a decrease of 2.83 percentage points compared to the previous week's daily average, and as of March 27, it was at the 78.5% quantile [4][15]. 3.2 Certificates of Deposit and Bills - **Issuance and Maturity of Certificates of Deposit**: The issuance scale of inter - bank certificates of deposit increased week - on - week, with a total issuance of 77.052 billion yuan, an increase of 1.183 billion yuan compared to the previous week. The maturity volume was 69.82 billion yuan, a decrease of 46.466 billion yuan compared to the previous week. The net financing was 7.23 billion yuan, an increase of 47.649 billion yuan compared to the previous week. In the next week (March 30 - April 5), the maturity of certificates of deposit was 54.687 billion yuan [4][19][23]. - **Issuance by Bank Type**: The issuance scale of joint - stock banks was the highest. The issuance scales of state - owned banks, joint - stock banks, city commercial banks, and rural commercial banks were 22.982 billion yuan, 26.255 billion yuan, 25.077 billion yuan, and 1.987 billion yuan respectively, changing by 10.525 billion yuan, 2.651 billion yuan, - 8.782 billion yuan, and - 1.29 billion yuan compared to the previous week [19]. - **Issuance by Maturity Type**: The 9M issuance scale was the highest. The issuance scales of 1M, 3M, 6M, 9M, and 1Y inter - bank certificates of deposit were 7.975 billion yuan, 8.77 billion yuan, 13.193 billion yuan, 24.299 billion yuan, and 22.815 billion yuan respectively, changing by 2.543 billion yuan, 0.071 billion yuan, - 7.044 billion yuan, 9.114 billion yuan, and - 3.501 billion yuan compared to the previous week. The 9M certificates of deposit accounted for the highest proportion (31.54%) of the total issuance of certificates of deposit by different types of banks, mainly issued by state - owned banks; the 1Y maturity accounted for 29.61%, mainly issued by joint - stock banks [19]. - **Issuance and Yield Rates**: Most of the issuance rates of certificates of deposit of each bank increased, and the issuance rates of certificates of deposit of each maturity showed differentiation. As of March 27, the one - year issuance rates of joint - stock banks, state - owned banks, city commercial banks, and rural commercial banks changed by 0.49BP, - 0.5BP, 4.37BP, and 7.12BP respectively compared to March 20, and were at the 0%, 1%, 0%, and 1% historical quantiles. The issuance rates of 1M, 3M, and 6M certificates of deposit changed by 1.59BP, - 0.5BP, and - 0.65BP respectively compared to March 20, and were at the 3%, 0%, and 0% historical quantiles. The yield curve of certificates of deposit steepened. As of March 27, the 1M, 3M, 6M, 9M, and 1Y maturity yields of AAA - rated inter - bank certificates of deposit of commercial banks were 1.42%, 1.46%, 1.48%, 1.51%, and 1.53% respectively, changing by - 4BP, - 1BP, 0.75BP, 1BP, and 1BP compared to March 20 [25][29]. - **Shibor Rates**: Most of the Shibor rates decreased. As of March 27, the overnight, 1 - week, 2 - week, 1M, and 3M Shibor rates changed by - 0.2BP, 1.1BP, - 2.1BP, - 1.55BP, and - 1.3BP respectively compared to March 20, reaching 1.32%, 1.43%, 1.5%, 1.5%, and 1.51% [27]. - **Bill Rates**: The bill rates decreased. As of March 27, the 3M direct discount rate of national - share bills, 3M transfer discount rate of national - share bills, 6M direct discount rate of national - share bills, and 6M transfer discount rate of national - share bills were 1.5%, 1.35%, 1.17%, and 1.11% respectively, changing by - 4BP, - 5BP, - 6BP, and - 6BP compared to March 20 [33]. 3.3 Institutional Behavior Tracking - **Leverage Ratio**: The inter - bank leverage ratio decreased slightly week - on - week. As of March 27, the total inter - bank leverage ratio in the bond market decreased by 0.08 percentage points to 105.15% compared to March 20, and was at the 15.90% historical quantile since 2021. The leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 103.6%, 200.1%, 130.4%, and 104% respectively, changing by - 0.33BP, - 1.17BP, 1.1BP, and - 0.05BP compared to March 20, and were at the 15%, 11%, 82%, and 1% historical quantiles as of March 27 [35][37]. - **Net Buying Duration**: The net - buying weighted average duration of funds increased compared to the previous week, while that of insurance companies decreased. As of March 27, the net - buying weighted average duration (MA = 10) of funds was 1.36 years, recovering from - 1.13 years on March 20, and was at the 40% historical quantile. The net - buying weighted average duration (MA = 10) of wealth management products was 0.70 years, showing an increase compared to March 20, and was at the 49% historical quantile. The net - buying weighted average duration (MA = 10) of securities firms was - 1.35 years, showing an increase compared to March 20, and was at the 55% historical quantile. The net - buying weighted average duration (MA = 10) of insurance companies was 10.08 years, showing a decrease compared to March 20, and was at the 64% historical quantile [39]. - **Duration of Bond Funds**: The duration of medium - and long - term pure - bond funds recovered. As of March 27, the duration of medium - and long - term pure - bond funds recovered by 0.07 years to 3.10 years compared to March 20, and was at the 13% historical quantile since 2025. The duration of short - term pure - bond funds recovered by 0.10 years to 1.57 years compared to March 20, and was at the 56% historical quantile since 2025 [43].

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - The funds remained loose this week despite some disturbances such as government bond supply and OMO net - withdrawals in the first half of the week. The MLF over - renewal and OMO net - injection on Wednesday limited the impact of the quarter - end factor. Short - term interest rates remained low, and the yields of medium - and short - term policy financial bonds continued to decline [3][15]. - The cross - quarter progress of funds slowed down further this week, with the cross - quarter progress of the whole market at 35.2%, 9.3 percentage points lower than the average from 2020 - 2025. However, the disturbance to funds at the quarter - end was limited, and the actual financing cost of non - banks was at a relatively low level compared with previous quarter - ends [4][29]. - Although the scale of money market funds rebounded rapidly in February, their demand for certificates of deposit was weaker than the seasonality, and the scale of reverse repurchase lending was also relatively limited. The probability of a significant rebound in short - term interest rates after the quarter - end was relatively low [39]. - The net payment of government bonds will decrease next week. With the central bank's support, institutions are likely to achieve a smooth cross - quarter. The exogenous disturbances to funds in early April after the quarter - end are also relatively limited, and the loose pattern is expected to continue in the short term [43][67]. 3. Summary According to the Directory 3.1 Money Market 3.1.1 This Week's Fund Review - The central bank's OMO had a net injection of 231.9 billion yuan this week. On Wednesday, the central bank conducted a 500 - billion - yuan MLF operation, with an over - renewal of 50 billion yuan compared with the maturity on that day. Despite the net withdrawal in the first half of the week and the large supply pressure of government bonds on Monday, the funds remained loose. DR001 remained at 1.32% for 11 consecutive trading days [3][15]. - The trading volume of pledged repurchase fluctuated and declined, with the average daily trading volume decreasing by 0.44 trillion yuan to 7.94 trillion yuan compared with last week. The overall scale of pledged repurchase first decreased and then increased, rising above 12 trillion yuan again on Friday. The net lending of large - scale banks first decreased and then increased, and was lower than last week as a whole; the net lending of small - scale banks continued to rise after Tuesday; the overall net lending of banks also first decreased and then increased, and was higher than last week [4][24]. - The non - bank rigid lending increased slightly continuously, mainly due to the large increase in the lending of money market funds. The non - bank rigid borrowing scale began to increase continuously on Tuesday, mainly due to the large increase in other products and insurance. The seasonally adjusted fund gap index fluctuated at a low level in the first half of the week and continued to rise after Wednesday, rising to - 314.6 billion yuan on Friday, higher than - 866.3 billion yuan last Friday; while the pre - seasonally adjusted index dropped to - 954.7 billion yuan, mainly affected by the large increase in the net lending of small - scale banks excluded from the seasonal adjustment [4][24]. - The cross - quarter progress of funds slowed down further. As of Friday, the cross - quarter progress of inter - bank funds was 35.4%, at the lowest level in the same period of previous years, and the gap with previous years continued to widen; the cross - quarter progress of the exchange slowed down again after accelerating on Tuesday, and the cross - quarter progress on Friday was 34.6%, also dropping to the lowest level in the same period of previous years. The cross - month progress of the whole market was 35.2%, 9.3 percentage points lower than the average from 2020 - 2025 [29]. 3.1.2 Next Week's Fund Outlook - The net payment of government bonds this week was 606.4 billion yuan. There is no treasury bond issuance plan next week. The issuance scale of local bonds in 5 regions such as Henan, Chongqing, and Sichuan is 118.4 billion yuan, including 2.1 billion yuan of new general bonds, 29.7 billion yuan of new special bonds, and 86.6 billion yuan of refinancing bonds, among which the issuance of replacement bonds is 11.7 billion yuan. Considering the time lag between issuance and payment, the payment scale of government bonds next week will drop to 146.4 billion yuan, the maturity scale will drop to 131.4 billion yuan, and the net payment scale will drop to 15 billion yuan [40][43]. - The actual issuance scale of treasury bonds in March was 1.38 trillion yuan, with a net financing of 300 billion yuan, in line with expectations. The issuance scale of local bonds in March was 1.08 trillion yuan, with a net financing of 670 billion yuan, lower than the expected 770 billion yuan. The overall actual issuance scale of government bonds in March was 2.47 trillion yuan, with a net financing of 960 billion yuan, lower than the expected 1.07 trillion yuan. The cumulative net financing of government bonds in the first quarter was 3.56 trillion yuan, lower than 4.1 trillion yuan in the same period of 2025 [56]. - Seven regions newly announced the Q2 local bond issuance plan this week. Currently, 22 regions have announced the Q2 plan, with a total scale of 1.9904 trillion yuan, still lower than the actual issuance of 2.0865 trillion yuan in Q1. It is estimated that the issuance scale of local bonds in April may be 1.03 trillion yuan, with a net financing of about 570 billion yuan, revised down by 130 billion yuan compared with last week's forecast. It is estimated that the issuance scale of local bonds in May and June will be 1.02 trillion yuan respectively, with net financings of 750 billion yuan and 490 billion yuan respectively. It is estimated that the issuance scale of government bonds in April, May, and June 2026 will be 2.36 trillion yuan, 2.39 trillion yuan, and 2.62 trillion yuan respectively, with net financings of 1.07 trillion yuan, 1.42 trillion yuan, and 1.06 trillion yuan respectively. The cumulative net financing scale of government bonds in the second quarter is expected to be about 3.55 trillion yuan, still lower than 3.7 trillion yuan in the same period of 2025 [60][62]. - The maturity scale of 7 - day reverse repurchases next week will rise to 474.2 billion yuan, and the net payment of government bonds will drop from 606.4 billion yuan this week to 15 billion yuan, with net repayments in the first half of the week. The new stock of Beijie Stock Exchange, Saiying Electronics, will be issued online on March 30, with a fundraising scale of about 270 million yuan, which may have a relatively lower impact on the exchange fund prices in the first half of the week. Overall, the maturity volume of reverse repurchases next week is lower than that in previous cross - quarter periods. With the central bank's support, institutions are likely to achieve a smooth cross - quarter. The exogenous disturbances to funds in early April after the quarter - end are also relatively limited, and the loose pattern is expected to continue in the short term [67]. 3.2 Inter - bank Certificates of Deposit - The 1 - year Shibor rate decreased by 1.45 BP to 1.5405% compared with March 20. The 1 - year AAA - grade inter - bank certificate of deposit secondary rate increased by 1 BP to 1.525% compared with March 20 [68]. - The issuance scale of inter - bank certificates of deposit increased while the maturity scale decreased this week, and the certificates of deposit turned to net financing of 7.27 billion yuan, an increase of 48.73 billion yuan compared with last week. The net financing scales of state - owned banks, joint - stock banks, city commercial banks, and rural commercial banks were - 55.4 billion yuan, 131.7 billion yuan, 27.6 billion yuan, and - 11 billion yuan respectively. The 9 - month - term certificates of deposit had the largest issuance volume this week, accounting for 32%, and the issuance proportion of 1 - year certificates of deposit decreased by 5 percentage points to 30% compared with last week. The maturity scale of certificates of deposit next week is about 15.51 billion yuan, a decrease of 54.42 billion yuan compared with this week [74]. - The issuance success rates of joint - stock banks, city commercial banks, and rural commercial banks for certificates of deposit decreased month - on - month, while that of state - owned banks increased. Except for the relatively low issuance success rate of rural commercial banks, the others were near the average level in recent years. The issuance spread of 1 - year certificates of deposit between city commercial banks and joint - stock banks narrowed [75]. - The relative supply - demand strength index of certificates of deposit first decreased and then increased this week, rising by 0.2 percentage points to 29.3% for the whole week. The willingness of money market funds to increase holdings in the primary market increased slightly, the willingness of wealth management products and funds to increase holdings was stable, and the willingness of other products to increase holdings in the secondary market decreased. In terms of different terms, the supply - demand indexes of 1 - month and 1 - year certificates of deposit increased, while those of 3 - month, 6 - month, and 9 - month certificates of deposit decreased, with relatively large declines in 6 - month and 9 - month certificates of deposit [85]. 3.3 Bill Market The bill interest rate declined overall this week. As of March 27, the 3 - month and 6 - month bill interest rates of state - owned and joint - stock banks decreased by 13 BP and 11 BP respectively compared with March 20, to 1.30% and 1.06% [92]. 3.4 Bond Trading Sentiment Tracking - Interest - rate bonds fluctuated downward this week, and the credit spreads of medium - and long - term bonds compressed. Large - scale banks tended to reduce their bond holdings overall, and the scale of their increased holdings of treasury bonds also decreased. They tended to reduce their holdings of treasury bonds within 1 year and 5 - year treasury bonds, the willingness to increase holdings of 7 - year treasury bonds decreased, but they turned to be inclined to increase holdings of treasury bonds over 10 years. At the same time, they tended to reduce their holdings of policy financial bonds within 1 year, the willingness to reduce holdings of 1 - 3 - year policy financial bonds increased, but the willingness to reduce holdings of local bonds decreased [95]. - Trading - type institutions tended to increase their bond holdings overall. Among them, the willingness of securities companies to reduce holdings decreased, the willingness of fund companies to increase holdings increased, but the willingness of other institutions and products to increase holdings decreased [95]. - Allocation - type institutions' willingness to increase bond holdings increased overall. Among them, the willingness of small - and medium - sized banks to reduce holdings decreased, the willingness of wealth management products to increase holdings increased, but the willingness of insurance companies to increase holdings decreased [95].

Core Insights - The report indicates a downward shift in the certificate of deposit (CD) yield curve, with major brokerages continuing to sell bonds, reflecting liquidity and institutional behavior trends [3][5][6] - The average daily lending by large banks decreased slightly, with a total lending scale of 27.84 trillion yuan from March 16 to March 20, showing a week-on-week decline of 0.37 trillion yuan [4] - The issuance of interbank certificates decreased, with a total issuance of 758.69 billion yuan, down by 87.2 billion yuan from the previous week, resulting in a net financing amount of -404.17 billion yuan [4][5] Liquidity and Institutional Behavior - The liquidity situation showed a net withdrawal of 34.2 billion yuan over the week, with the People's Bank of China conducting reverse repos totaling 2.423 trillion yuan [3][4] - The average leverage ratios for banks, securities, insurance, and broad funds were reported at 103.6%, 200.1%, 130.4%, and 104% respectively, indicating slight changes in institutional leverage behavior [6] - The weighted average duration of net purchases by funds decreased to -1.23 years, reflecting a shift in investment strategy among institutional investors [6] Interest Rate Trends - The yield curve for CDs has shifted downward, with AAA-rated commercial bank CDs showing yields of 1.46%, 1.47%, 1.47%, 1.5%, and 1.52% for 1M, 3M, 6M, 9M, and 1Y respectively, indicating a general decline in interest rates [5] - The report notes a decrease in bill rates, with 3M and 6M government bond rates also showing downward trends, suggesting a broader decline in market interest rates [5]

1. Report Industry Investment Rating - The report does not provide a specific industry investment rating. 2. Core Viewpoints of the Report - This week (March 16 - March 20), most of the funding rates declined, the average daily lending of large - scale banks decreased slightly, and funds slightly de - leveraged. The maturity of certificates of deposit (CDs) increased, and most of the CD maturity yields declined. In the cash bond trading, the main buyers were other institutions and funds, with funds still mainly increasing short - term credit holdings, large - scale banks increasing CD holdings, securities firms being the main sellers and selling 5 - 10Y interest - rate bonds, and insurance companies increasing 20 - 30Y interest - rate bond holdings [5]. 3. Summary by Directory 3.1 Monetary Fundamentals - This week, there were 17.65 billion yuan of reverse repurchase maturities. The central bank respectively injected 137.3 billion, 51 billion, 20.5 billion, 13 billion, and 20.5 billion yuan of reverse repurchases from Monday to Friday, with a total injection of 242.3 billion yuan. There were 500 billion yuan of outright reverse repurchase injections and 600 billion yuan of maturities on Monday. The net liquidity withdrawal for the whole week was 3.42 billion yuan. There will be 45 billion yuan of MLF maturing next Wednesday [5][8]. - As of March 20, R001, R007, DR001, and DR007 were 1.4%, 1.48%, 1.32%, and 1.42% respectively, with changes of 0.45BP, - 2.64BP, - 0.09BP, and - 4.07BP compared to March 13, and were at the 19%, 8%, 15%, and 2% historical quantiles respectively [5][11]. - From March 16 to March 20, the total lending scale of large - scale banks was 27.84 trillion yuan, with a daily maximum lending scale of 5.7 trillion yuan and an average daily lending scale of 5.6 trillion yuan, a decrease of 0.37 trillion yuan compared to the previous week's daily average [5][15]. - The trading volume of pledged repurchase decreased. The average daily trading volume was 8.37 trillion yuan, with a daily maximum of 8.50 trillion yuan, a 2.29% decrease compared to the previous week's daily average. The proportion of overnight repurchase transactions increased. The average daily proportion was 91.3%, with a daily maximum of 92.1%, an increase of 0.18 percentage points compared to the previous week's daily average, and was at the 97.6% quantile as of March 20 [5][17]. 3.2 Certificates of Deposit and Bills - This week (March 16 - March 22), the issuance scale of CDs decreased compared to the previous week, and the net financing was negative. The total issuance was 758.69 billion yuan, a decrease of 87.2 billion yuan compared to last week; the total maturity was 1162.86 billion yuan, an increase of 154.66 billion yuan compared to the previous week. The net financing was - 404.17 billion yuan, a decrease of 241.86 billion yuan compared to last week [5][20]. - By bank type, city commercial banks had the highest issuance scale. The issuance scales of state - owned banks, joint - stock banks, city commercial banks, and rural commercial banks were 124.57 billion yuan, 236.04 billion yuan, 338.59 billion yuan, and 32.77 billion yuan respectively, with changes of 5.8 billion yuan, - 109.61 billion yuan, 17.51 billion yuan, and - 11.21 billion yuan compared to the previous week [20]. - By term type, the 1 - year issuance scale was the highest. The issuance scales of 1M, 3M, 6M, 9M, and 1Y CDs were 54.32 billion yuan, 86.99 billion yuan, 202.37 billion yuan, 151.85 billion yuan, and 263.16 billion yuan respectively, with changes of - 5.38 billion yuan, - 30.22 billion yuan, 47.2 billion yuan, - 16.58 billion yuan, and - 82.22 billion yuan compared to the previous week. The 1 - year CD accounted for the highest proportion of the total issuance of CDs by different types of banks, at 34.69%, mainly due to more issuances by joint - stock banks; the 6 - month term accounted for 26.67%, mainly due to more issuances by city commercial banks [20]. - This week, the CD maturity volume increased. The total maturity was 1162.86 billion yuan, an increase of 154.66 billion yuan compared to last week. In the new week (March 22 - March 29), the CD maturity was 698.2 billion yuan [24]. - This week, the issuance interest rates of CDs of all banks and all terms decreased. By bank type, as of March 20, the issuance interest rates of one - year CDs of joint - stock banks, state - owned banks, city commercial banks, and rural commercial banks decreased by - 3.13BP, - 3.5BP, - 5.27BP, and - 3.62BP respectively compared to March 13, and were at the 0%, 2%, 0%, and 0% historical quantiles; by term, as of March 20, the issuance interest rates of 1M, 3M, and 6M CDs decreased by - 3.04BP, - 1.96BP, and - 1.16BP respectively compared to March 13, and were at the 2%, 0%, and 0% historical quantiles [28]. - This week, most of the Shibor rates declined. As of March 20, the overnight, 1 - week, 2 - week, 1M, and 3M Shibor rates changed by - 0.2BP, - 4BP, 2.8BP, - 1.9BP, and - 2BP respectively compared to March 13 to 1.32%, 1.42%, 1.52%, 1.51%, and 1.52% [30]. - This week, the CD maturity yield curve shifted downward as a whole. As of March 20, the 1M, 3M, 6M, 9M, and 1Y maturity yields of AAA - rated ChinaBond commercial bank CDs were 1.46%, 1.47%, 1.47%, 1.5%, and 1.52% respectively, with changes of - 4.5BP, - 3.5BP, - 4BP, - 1.75BP, and - 1.75BP compared to March 13 [32]. - This week, the bill interest rates declined. As of March 20, the 3 - month national stock direct discount rate, 3 - month national stock transfer discount rate, 6 - month national stock direct discount rate, and 6 - month national stock transfer discount rate were 1.58%, 1.48%, 1.23%, and 1.22% respectively, with changes of - 4BP, - 5BP, - 3BP, and - 6BP compared to March 13 [36]. 3.3 Institutional Behavior Tracking - The inter - bank leverage ratio decreased slightly compared to the previous week. As of March 20, the total inter - bank leverage ratio in the bond market decreased by 0.05 percentage points to 105.23% compared to March 13, and was at the 19.90% historical quantile level since 2021 [38]. - The leverage ratio of broad - based funds remained basically unchanged. As of March 20, the leverage ratios of banks, securities firms, insurance companies, and broad - based funds were 103.6%, 200.1%, 130.4%, and 104% respectively, with changes of - 0.05BP, - 10.64BP, - 0.15BP, and 0.01BP compared to March 13, and were at the 30%, 12%, 77%, and 1% historical quantile levels respectively [40]. - The weighted average net - buying duration of funds decreased compared to the previous week, and the duration of insurance companies decreased slightly. As of March 20, the weighted average net - buying duration (MA = 10) of funds was - 1.23 years, a decrease from 1.23 years on March 13, and was at the 15% historical quantile level; the weighted average net - buying duration (MA = 10) of wealth management products was - 0.08 years, a decrease compared to March 13, and was at the 38% historical quantile level; the weighted average net - buying duration (MA = 10) of securities firms was - 4.73 years, a decrease compared to March 13, and was at the 5% historical quantile level; the weighted average net - buying duration (MA = 10) of insurance companies was 15.72 years, a decrease compared to March 13, and was at the 99% historical quantile level [41]. - The duration of medium - and long - term pure - bond funds increased slightly compared to the previous week. As of March 20, the duration of medium - and long - term pure - bond funds increased by 0.01 years to 3.03 years compared to March 13, and was at the 11% historical quantile level since 2025; the duration of short - term pure - bond funds increased by 0.17 years to 1.48 years compared to March 13, and was at the 41% historical quantile level since 2025 [46].

1. Report Industry Investment Rating No information provided regarding the industry investment rating in the document. 2. Core Viewpoints of the Report - Despite increased external disturbances such as tax - period outflows and government bond net payments, the current liquidity remains loose, which may be due to cash inflows and fiscal expenditure. The central bank's attitude of maintaining a wait - and - see stance and downplaying the expectation of interest rate cuts also contributes to the loose liquidity environment. The probability of the central bank's systematic tightening is limited, especially at the end of the quarter, but potential fluctuations in the capital market after the quarter - end need to be monitored [5][50][53]. - The net payment of government bonds will increase next week, and there are multiple external disturbances. However, considering the central bank's strong willingness to maintain stable liquidity, the loose liquidity pattern is expected to continue [11][77][81]. - Forecasts for government bond issuance and net financing in March and the second quarter of 2026 are provided. It is estimated that the net financing of government bonds in March will be 1.07 trillion, and the cumulative net financing in the first quarter will be about 3.67 trillion. The cumulative net financing in the second quarter is expected to be about 3.6 trillion, slightly lower than the same period in 2025 [7][10][72]. 3. Summary According to the Directory 3.1 Money Market 3.1.1 This Week's Capital Review - The central bank's OMO had a net injection of 6.58 billion yuan this week. Despite tax - period outflows and over 30 billion yuan in government bond net payments, the capital remained loose. DR001 stayed at 1.32% for 5 consecutive days, and R007 dropped below 1.5% [3][16]. - The trading volume of pledged repurchase fluctuated within a narrow range, with the daily average trading volume decreasing by 0.2 trillion yuan to 8.37 trillion yuan compared to last week. The overall scale of pledged repurchase remained around 12 trillion yuan, slightly lower than last week. The net lending of large - scale banks decreased, while that of small and medium - sized banks increased. The net lending of non - banks had limited changes, with insurance and wealth management lending increasing, and other products and money market funds lending decreasing. The net borrowing of non - banks first decreased and then increased, generally lower than last week. The capital gap index also fluctuated within a narrow range, remaining at a relatively low level [4][25]. - The progress of cross - quarter capital in mid - to - early March was slow, and the gap compared to previous years widened after 14 - day funds could cross the quarter. As of the 20th, the cross - quarter progress of inter - bank institutions reached the lowest level in recent years; the cross - month progress of the exchange market was only slightly higher than that in 2022; the cross - month progress of the entire market was at a low of 7.0%, 3.9 percentage points lower than the historical average [31]. - The loose capital may be due to cash inflows and fiscal expenditure. The excess reserve ratio in February rose to 1.2%, and the broad fiscal deficit exceeded expectations by 15 billion yuan, leading to a larger - than - expected decrease in government deposits. Even if there is a net withdrawal of 50 billion yuan from OMO and MLF in March, the excess reserve ratio is still expected to reach 1.4% [5][42]. - The stability of DR001 at 1.32% for 6 trading days around the tax period may be related to the central bank's stability - maintenance. The central bank downplayed the expectation of interest rate cuts but maintained a loose environment to avoid potential impacts on the bond market [50][53]. 3.1.2 Next Week's Capital Outlook - This week, the net payment of government bonds was 30.63 billion yuan. Next week, the issuance of 7 - year treasury bonds will be 17.5 billion yuan, and assuming the 91 - day discounted treasury bonds are the same as the previous value, the total treasury bond issuance will be about 21.5 billion yuan. Thirteen regions will issue local bonds with a total scale of 30.86 billion yuan. Considering the 36 billion yuan of treasury bonds issued this Friday will be paid next week, the net payment of government bonds will rise to 60.64 billion yuan [54]. - The 7 - day reverse repurchase maturity scale will rise to 24.23 billion yuan next week, and there will be 45 billion yuan of MLF maturing on Wednesday. The net payment of government bonds will increase, mainly concentrated on Monday and Wednesday. Wednesday is also the reserve payment day. The online issuance of the new stock of Longyuan Co., Ltd. on the Beijing Stock Exchange is expected to have a certain impact on the exchange capital price from Monday to Tuesday. However, considering the central bank's strong willingness to maintain stable liquidity, the loose liquidity pattern is expected to continue [77][81]. 3.2 Inter - bank Certificates of Deposit - This week, the 1 - year Shibor rate decreased by 2.1 BP to 1.555% compared to March 13th. The secondary rate of 1 - year AAA - rated inter - bank certificates of deposit decreased by 1.75 BP to 1.515% [82]. - The issuance scale of inter - bank certificates of deposit decreased while the maturity scale increased. The net financing of state - owned banks, joint - stock banks, city commercial banks, and rural commercial banks was - 31.44 billion yuan, - 8.87 billion yuan, - 3.31 billion yuan, and 0.34 billion yuan respectively. The issuance proportion of 1 - year certificates of deposit decreased by 6 percentage points to 35%. Next week, the maturity scale of certificates of deposit will be about 69.93 billion yuan, a decrease of 47.39 billion yuan compared to this week [83]. - The issuance success rates of state - owned banks and joint - stock banks decreased, while those of city commercial banks and rural commercial banks increased, and all banks were around the average level in recent years. The issuance spread of 1 - year certificates of deposit between city commercial banks and joint - stock banks widened [87]. - The relative supply - demand strength index of certificates of deposit increased overall, with the willingness of money market funds to increase holdings in both the primary and secondary markets significantly enhanced. The demand from funds and wealth management products was relatively stable. The index increased by 6.3 percentage points to 29.1% throughout the week, in line with the seasonal pattern of recovery in March. Except for the 1 - month supply - demand index, the supply - demand indices of other maturities increased [98]. 3.3 Bill Market This week, bill interest rates decreased slightly. As of March 20th, the 3 - month and 6 - month bill interest rates of national - owned and joint - stock banks decreased by 5 BP and 6 BP respectively to 1.43% and 1.17% compared to March 13th [103]. 3.4 Bond Trading Sentiment Tracking - This week, the interest rate curve continued to steepen, and the spread of Tier 2 and perpetual bonds slightly narrowed. Large - scale banks generally tended to increase bond holdings, but their willingness to increase treasury bond holdings declined, especially for 10 - year treasury bonds. Their willingness to increase holdings of 1 - 3 - year and 7 - year treasury bonds and 7 - year policy - financial bonds increased, and their willingness to reduce holdings of Tier 2 and perpetual bonds and 1 - 3 - year policy - financial bonds decreased [105]. - The overall willingness of trading - type institutions to reduce bond holdings decreased. Securities companies' willingness to reduce holdings decreased, fund companies tended to increase holdings, and other institutions and products' willingness to increase holdings increased [105]. - The overall willingness of allocation - type institutions to increase bond holdings significantly decreased. Small and medium - sized banks tended to reduce holdings, and the willingness of insurance companies and wealth management products to increase holdings decreased [105].

Group 1: Credit Market Insights - The lower limit for 1-year certificates of deposit (CDs) is estimated to be 1.5%, with a potential compression towards this limit expected by early April[1] - Recent trends show that both CDs and short-term bonds have been declining, raising concerns about potential overcorrection and subsequent risks of rebound[7] - The current pricing logic for the bond market's short and long ends is significantly different, making mean reversion logic less applicable[7] Group 2: Market Drivers and Trends - The central bank's monetary policy adjustments have led to a gradual decrease in funding volatility, supporting a sustained liquidity environment[9] - The issuance of CDs has been continuously shrinking, reflecting limited enthusiasm from banks to supplement liabilities due to general credit issuance intensity[9] - The recent upgrade in interbank demand deposit self-discipline has positively impacted short-term bonds, with market reactions stronger than anticipated[11] Group 3: Financial Data and Projections - February credit growth showed a year-on-year decrease compared to January, but this is not expected to significantly alter the outlook for credit issuance in 2026[16] - The net maturity of 6-month buyout operations is projected at 100 billion, similar to the previous 3-month buyout of 200 billion, indicating banks are proactively reducing buyout volumes rather than the central bank cutting back on liquidity[16] - The 1-year government bond yield has recently dropped below 1.5%, which may open up further downward space for CDs[10] Group 4: Risk Considerations - Potential risks include unexpected liquidity tightening, accelerated economic recovery, and increased bond supply[46]

Group 1: Monetary Market Overview - The central bank's OMO net withdrawal this week totaled 101.1 billion, with a significant decrease in the scale of OMO maturities, maintaining liquidity support despite government bond repayments [2][16] - The average daily transaction volume of pledged repos slightly decreased to 8.57 trillion, while the overall scale remained above 12 trillion [3][23] - The tightening of interbank liquidity self-discipline has led to a significant decline in short-term interest rates, with the DR001 maintaining around 1.32% [4][28] Group 2: Interbank Certificates of Deposit - The 1-year Shibor rate decreased by 0.88 basis points to 1.576%, while the 1-year AAA-rated interbank certificate of deposit rate fell by 1.75 basis points to 1.5325% [10] - The issuance of interbank certificates of deposit turned into a net repayment of 146.1 billion, indicating a decrease in financing from state-owned banks [10][23] - The supply-demand index for certificates of deposit showed an upward trend, with an increase in willingness to invest in secondary markets [10][29] Group 3: Government Bonds and Financing - The net repayment of government bonds this week was -132.1 billion, with upcoming issuances of 3Y, 5Y, and 10Y bonds totaling approximately 585 billion [5][39] - The average issuance term of local government bonds decreased from 17.2 years in February to 15.0 years in March, indicating a shift in financing strategies [5][39] - The estimated net financing for government bonds in March is approximately 1.07 trillion, which is lower than the same period last year [9][39] Group 4: Market Sentiment and Future Outlook - The central bank's recent statements indicate a reluctance to signal further easing of monetary policy, reflecting concerns over inflation and external pressures [37][38] - The expected net repayment of government bonds will increase to 306.3 billion next week, with significant repayments concentrated in the latter half of the week [5][39] - The overall liquidity environment is expected to remain accommodative, with DR001 likely to stay within the 1.3%-1.35% range [38]

Group 1 - The core viewpoint of the report indicates that the 1-year certificate of deposit (CD) is expected to align with the 1-year MLF marginal interest rate, potentially approaching 1.5% in the future [1][9] - The report discusses the implementation of a self-discipline mechanism for interbank deposits, which will require non-bank interbank demand deposit rates to be included in self-regulation starting from Q1 2025, referencing the 7-day OMO policy rate [7][8] - It is anticipated that the self-discipline mechanism may lead to a reduction in the yields of interbank demand deposits, with an estimated decrease of 5 basis points based on weighted rates [7][8] Group 2 - The report outlines two main pathways through which the self-discipline upgrade will affect the pricing of CDs and short-term bonds: potential outflows of non-bank deposits and a shift in demand towards CDs and short-term bonds due to regulatory changes [8][9] - The pricing anchor for the 1-year CD is expected to be influenced by the 1-year MLF marginal interest rate, with a focus on the relationship between R007, government bonds, and CDs [9] - The liquidity situation in March is expected to remain stable, with credit issuance being moderate and the central bank's support providing a fundamental backing [9]

Liquidity Overview - In the first week of March, the liquidity environment turned loose, with a net withdrawal of 1.56 trillion yuan, including a net withdrawal of 1.36 trillion yuan from reverse repos[1] - The overnight rate (R001) decreased to 1.36% and the 7-day rate (R007) to 1.51%, but R001 rebounded to 1.39% by Friday due to cumulative liquidity pressure[1][14] Certificate of Deposit (CD) Trends - The issuance rate for 1-year CDs has dropped to 1.55-1.56%, the lowest since January 2025, down from a range of 1.58%-1.60% over the past month[1][14] - The net issuance of CDs in the first week of March was 133.4 billion yuan, indicating a shift in supply dynamics as banks prepare for the upcoming quarter-end[2][15] Market Outlook - The liquidity is expected to remain loose in the coming week (March 9-13), with R001 projected to stay around 1.35% and R007 slightly above the OMO by 5-10 basis points[3][20] - The upcoming tax period is anticipated to have a limited impact on liquidity, with historical average tax payments around 1.1 trillion yuan[3][21] Government Debt and Payments - The government debt net payment is projected to be -202.1 billion yuan for March 9-13, indicating a negative net payment scenario[5][20] - The total amount of government debt due during this period is expected to be 4.975 trillion yuan, with a significant portion being rolled over[5][32] Interbank Market and Bill Rates - The 1-month bill rate increased by 8 basis points to 1.53%, while the 3-month and 6-month rates decreased to 1.38% and 1.17%, respectively[6][37] - Major banks have shifted to net selling in the bill market, with a net sell of 13.1 billion yuan during the first week of March[6][40] Pressure on Certificates of Deposit - The upcoming maturity of CDs is set to reach 992.4 billion yuan, significantly higher than the previous week's 583 billion yuan, indicating increased maturity pressure[7][44] - The average issuance term for CDs has lengthened to 8.7 months, up from 7.0 months the previous week, suggesting banks are preparing for the quarter-end[7][48]

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - In January 2026, personal deposits in financial institutions decreased by 3.37 trillion yuan year-on-year, while corporate deposits increased by 2.80 trillion yuan, government deposits increased by 1.79 trillion yuan, and non-bank deposits increased by 2.84 trillion yuan, indicating a trend of deposit migration [12][13] - The net financing of government bonds under the social financing (社融) measure increased by 0.28 trillion yuan year-on-year, but the larger increase in government deposits suggests a potential slowdown in fiscal spending [12] - The overall expansion of bank assets and liabilities is supported by the recovery of interbank asset-liability chains, but the decrease in medium- and long-term loans indicates that the real estate sector still needs to recover [19] Summary by Sections Liabilities - In January 2026, personal deposits saw a significant year-on-year decrease, confirming the trend of deposit migration, while corporate and non-bank deposits increased by a total of 5.63 trillion yuan, which is much larger than the decrease in personal deposits [12][13] - Large banks experienced a greater increase in non-bank deposits compared to small banks, indicating that some deposits from small banks may have migrated to large banks due to stronger custody services [13] - The "other" category in the funding sources of the credit balance sheet decreased by 2.39 trillion yuan year-on-year, likely due to increased interbank certificates of deposit and bank repurchase lending [12] Assets - Personal loans increased year-on-year, primarily driven by short-term loans and medium- to long-term operating loans, while medium- to long-term consumer loans decreased by 0.16 trillion yuan, possibly due to the sluggish recovery in real estate sales [17] - Corporate loans decreased year-on-year, mainly due to a reduction in bill financing by 0.36 trillion yuan, although short-term corporate loans increased by 0.34 trillion yuan [17] - Investment in debt and equity increased by 0.37 trillion yuan year-on-year, aligning with trends of fiscal expansion and non-bank balance sheet growth [17] Overall Analysis - The January 2026 data indicates a significant increase in fiscal financing and a recovery in interbank asset-liability chains, which temporarily supports the expansion of bank assets and liabilities [19] - However, the decrease in medium- and long-term loans suggests ongoing challenges in the real estate sector, and the support from non-bank sectors for bank asset-liability expansion may weaken as high-interest deposits mature [19]