1. Report Industry Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints of the Report - In June, the excess reserve ratio rose to 1.3%, still at a low level for the end - of - quarter month and lower than expected. The central bank maintained the normalization of capital prices by supporting bank lending. In July, the central bank aimed to keep liquidity relatively loose within the existing framework, with the excess reserve ratio expected to be around 1.2%. In August, the excess reserve ratio is projected to be about 1.1%, remaining at a neutral level in recent years. The probability of reserve requirement ratio cuts and interest rate cuts in August is low, but the central bank may still maintain relatively loose liquidity [2][3]. - The fluctuation of the capital market in July was related to the improvement of the equity market sentiment, especially the freezing of funds due to new stock listings on the Beijing Stock Exchange. The capital market in August may continue the tone of July, and attention should be paid to whether DR001 can break through the lower limit of 1.3% at the beginning of the month [2][33][61]. 3. Summary by Relevant Catalogs 3.1. Quarter - end Central Bank Claims Did Not Rise Unexpectedly, and the Increase in the Excess Reserve Ratio in June Was Weaker than Seasonal - In June, the excess reserve ratio rose by about 0.3pct to 1.3%, lower than the expected 1.5%, due to the central bank's claims on other depository corporations not rising additionally as expected to offset the previous decline. After the central bank announced the liquidity injection of various tools in May, the difference between the central bank's claims on other depository corporations and high - frequency data decreased, and its follow - up normalization needs attention [6]. - In June, the fiscal deposit decreased by 5722 billion yuan, less than the expected 7400 billion yuan. The expenditure progress of special refinancing bonds was slow, and the repurchase of treasury cash time deposits might have led to an additional increase in government deposits. Other factors such as currency issuance, central bank legal deposit reserves, and foreign exchange funds were close to expectations [8]. - Despite the relatively low excess reserve ratio, the net lending scale of banks continued to rise in June, and the central DR001 rate dropped below 1.4%, indicating that the central bank was normalizing capital prices by supporting bank lending [15]. 3.2. In July, the Central DR001 Rate Was Stable but with Increased Fluctuations, and the Central Bank Maintained Relative Looseness within the Existing Framework - In July, although the supply pressure of government bonds remained high, the general fiscal revenue and expenditure might show an anti - seasonal deficit, and the expenditure of replacement bonds was expected to bring additional government deposit injections. It was estimated that government deposits would increase by about 450 billion yuan, and the consumption of excess reserves would weaken marginally. Credit lending decline might lead to a decrease in bank reserve payments by about 90 billion yuan. Currency issuance might increase by about 30 billion yuan, and foreign exchange funds might continue to withdraw about 50 billion yuan. In the open market, the central bank's claims on other depository corporations might rise by about 260 billion yuan, and the excess reserve ratio was expected to be about 1.2% [15]. - In July, DR001 once exceeded 1.35%, and 1.3% seemed to become the new lower limit. The average DR001 for the whole month did not decline significantly but fluctuated more. The decline in non - bank capital demand led to a decline in DR007 despite the decrease in bank net lending. This might indicate that the central bank had achieved policy normalization and hoped to maintain relatively loose liquidity within the existing framework, resulting in stable but more volatile capital interest rates [27]. - The increased fluctuation of the capital market in late July might be related to the improvement of the equity market sentiment, especially the freezing of funds due to new stock listings on the Beijing Stock Exchange. The freezing and unfreezing of funds on the Beijing Stock Exchange might only impact the inter - bank liquidity under special circumstances [33]. - The cross - month progress of institutions in July was generally slow, but the abundant capital supply ensured the looseness of the capital market at the end of the month [37]. 3.3. In August, Relative Looseness May Still Be Maintained within the Existing Framework, and Attention Should Be Paid to Whether the Central Bank Continues to Relax Controls and Amplify Fluctuations - In August, although the general fiscal deficit might be higher than the same period in previous years, and the expenditure of replacement bonds might still cause additional leakage of government deposits, the net supply of government bonds was also at a high level. It was estimated that government deposits would decrease by about 50 billion yuan. Reserve payments might increase seasonally, currency issuance might increase by about 50 billion yuan, and foreign exchange funds might continue to withdraw about 50 billion yuan. In the open market, the central bank's claims on other depository corporations might decline by about 430 billion yuan, and the excess reserve ratio was expected to be about 1.1% [3][43]. - Since July, the central bank has emphasized the implementation of existing policies. The threshold for reserve requirement ratio cuts and interest rate cuts has increased, and it is not the baseline expectation for August. However, the central bank's concern about bond investment risks has decreased, and it may still tend to maintain relatively loose liquidity within the existing framework in August [3][56]. - In August, the capital market may continue the tone of July. Attention should be paid to whether DR001 can break through the lower limit of 1.3% at the beginning of the month. If so, the central bank may further relax controls on bank lending, increasing the fluctuation of the capital market. Although the exogenous disturbances such as the tax period in August may decrease, the decline in the central DR001 and DR007 rates may be limited [61].

Group 1 - The People's Bank of China (PBOC) emphasizes the continuation of a moderately loose monetary policy, utilizing various monetary policy tools to maintain ample liquidity and guide financial institutions to achieve reasonable credit growth [1][2] - The PBOC plans to implement 1-2 interest rate cuts in the second half of the year, with a total reduction of 20-30 basis points, and a potential 50 basis points reserve requirement ratio (RRR) cut [1] - The focus remains on supporting the real economy, enhancing financial services, and promoting financing for key sectors such as technology and innovation [4] Group 2 - The PBOC aims to prevent and mitigate financial risks in key areas, including supporting local government financing platforms and enhancing risk monitoring and macro-prudential management [4] - The central bank is committed to advancing the internationalization of the Renminbi, expanding its use in trade, and improving the offshore market for Renminbi [5] - The PBOC is also focused on financial market reform, including the development of a technology board for bonds and enhancing the regulatory framework for financial markets [5]

Core Viewpoint - The People's Bank of China (PBOC) emphasizes the continuation of a moderately accommodative monetary policy to support economic growth and financial stability, focusing on key areas such as technology innovation, consumption, small and micro enterprises, and foreign trade [1][6]. Monetary Policy Implementation - The PBOC plans to maintain liquidity and guide financial institutions to ensure reasonable credit growth, utilizing various monetary policy tools [1][6]. - The central bank aims to enhance the effectiveness of monetary policy transmission and improve the efficiency of fund utilization [6][7]. Financial Support for Small and Micro Enterprises - As of June, loans to small and micro enterprises reached 35.6 trillion yuan, with a year-on-year growth of 12.3%, indicating a robust increase in financial support for these entities [3]. - The weighted average interest rate for newly issued loans to small and micro enterprises was 3.48% in June, down 66 basis points from the previous year, reflecting ongoing efforts to lower borrowing costs [3]. Sector-Specific Loan Growth - Loans in sectors such as technology, green finance, and digital economy showed significant growth, with technology loans increasing by 12.5% and green loans by 25.5% year-on-year [3]. - The PBOC has been actively promoting financial support for technology-oriented small and medium enterprises, with a loan growth rate of 22.9% for this segment [3]. Internationalization of the Renminbi - The PBOC is accelerating the use of the renminbi in trade settlements, aiming to enhance its role in international finance amid a changing global economic landscape [9]. - The central bank is also focusing on developing the offshore renminbi market and optimizing policies for domestic enterprises listed abroad [9].

Core Viewpoint - The article emphasizes the continuation of a moderately loose monetary policy by the People's Bank of China (PBOC) to support economic growth and financial stability, particularly focusing on small and micro enterprises, technological innovation, and consumption [1][6]. Group 1: Monetary Policy Implementation - The PBOC has implemented a moderately loose monetary policy since 2025, utilizing various tools to maintain ample liquidity and lower financing costs [1][6]. - The central bank aims to support key areas such as technological innovation, consumption, small and micro enterprises, and stabilize foreign trade while preventing financial risks [1][6]. - The PBOC plans to enhance the execution of existing policies and utilize liquidity tools like reverse repos and medium-term lending facilities to create a conducive monetary environment [6]. Group 2: Support for Small and Micro Enterprises - As of June, loans to small and micro enterprises reached 35.6 trillion yuan, growing by 12.3% year-on-year, indicating a strong focus on providing financial support to these entities [3]. - The weighted average interest rate for newly issued loans to small and micro enterprises was 3.48% in June, down 12 basis points from March and 66 basis points from the previous year [3]. - The PBOC has successfully increased the loan support for technology-based small and medium enterprises, with a loan balance growth of 22.9% year-on-year [3]. Group 3: Financial Market and Risk Management - The PBOC is committed to addressing structural contradictions in key industries and enhancing the supervision of electronic invoice business to mitigate risks [8]. - The central bank is also focused on promoting the internationalization of the renminbi, particularly in trade settlements, to enhance its currency functionality [8][9]. - The article highlights the growing importance of renminbi assets for global investors as a means of diversifying risk and enhancing returns amid fluctuating international financial markets [9].

Core Viewpoint - The People's Bank of China (PBOC) is continuing its trend of increasing medium-term lending facility (MLF) operations to maintain liquidity in the banking system, with a net injection of 1000 billion yuan in July, marking the fifth consecutive month of increased MLF operations [1][4]. Group 1: MLF Operations - On July 25, the PBOC will conduct a 4000 billion yuan MLF operation with a one-year term, following the maturity of 3000 billion yuan MLF this month, resulting in a net injection of 1000 billion yuan [1]. - The MLF operations have shifted to a fixed quantity, interest rate bidding, and multiple price bidding approach since March, indicating a reduced reliance on MLF as a monetary policy tool and a focus on liquidity provision [4]. - The MLF is expected to become a primary channel for medium-term liquidity provision, helping alleviate pressure on banks' net interest margins [4]. Group 2: Monetary Policy Stance - The PBOC is committed to maintaining an appropriately accommodative monetary policy, ensuring ample liquidity in the banking system [5]. - The central bank has successfully implemented a net injection of 2000 billion yuan through reverse repos this month, contributing to a total net liquidity injection of 3000 billion yuan in July [4]. - The PBOC's liquidity toolkit is becoming more robust and well-distributed in terms of maturity, with various tools available for different time frames, including long-term reserve requirement ratio cuts and government bond transactions [4].

Core Viewpoint - The People's Bank of China (PBOC) is continuing its trend of increasing liquidity in the banking system through a series of monetary policy tools, including the Medium-term Lending Facility (MLF), to maintain a stable and adequate liquidity environment [1][4][5]. Group 1: MLF Operations - On July 25, the PBOC will conduct a 400 billion yuan MLF operation with a one-year term, resulting in a net injection of 100 billion yuan for July, marking the fifth consecutive month of increased MLF operations [1]. - The MLF has shifted to a fixed quantity, interest rate bidding, and multiple price bidding method since March, indicating a reduced reliance on MLF as a monetary policy tool and focusing on liquidity provision [4]. - The MLF is expected to become a primary channel for medium-term liquidity provision, alleviating pressure on banks' net interest margins, as it offers stability and predictability for financial institutions [4]. Group 2: Overall Monetary Policy - The PBOC has achieved a net injection of 300 billion yuan in liquidity for July, combining 200 billion yuan from reverse repos, reflecting a continued moderate easing stance in monetary policy [4]. - The central bank aims to maintain a reasonable and adequate liquidity state through various tools, including pledged repos, MLF, and reverse repos, to support domestic demand and mitigate external pressures [5]. - The PBOC's liquidity toolbox is becoming more robust and well-distributed in terms of maturity, with long-term, medium-term, and short-term tools available to manage liquidity effectively [4].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - The bond market has returned to the main theme of oscillation, with short - term performance relatively strong. The central bank's series of operations, including conducting large - scale outright reverse repurchases and considering canceling the freeze of collateral in bond repurchases, aim to release liquidity and stabilize market expectations. Logically, short - term interest - rate bonds and high - liquidity credit products may benefit, but the long - term market may still be affected by various factors and maintain an oscillatory pattern [1][6][9]. 3. Summary According to Relevant Catalogs 3.1 Bond Market Trends - From July 14 - 18, the bond market maintained an oscillatory pattern, with most interest - rate bond yields declining. The adjustment pressure was mainly concentrated on long - term and ultra - long - term bonds, especially 30 - year treasury bonds. As of July 18, the yields of 1Y, 2Y, 10Y, 30Y, and 50Y treasury bonds changed by - 2.1BP, - 1.9BP, 0.0BP, + 1.4BP, - 0.7BP respectively compared to last week, reaching 1.35%, 1.38%, 1.67%, 1.89%, 1.95% [1][9]. - The bond market showed a "reverse V - shaped" trend due to the combination of multiple factors such as the central bank's operations, economic data releases, and the central bank's public consultation on canceling the freeze of collateral in bond repurchases [9]. 3.2 Central Bank's New Movements - During the tax payment period this week, the central bank continuously maintained net reverse repurchase injections and conducted 1.4 trillion yuan of outright reverse repurchases, with a net injection of 200 billion yuan, releasing a signal of caring for the capital market. The central bank's 7 - day reverse repurchases totaled 1.7268 trillion yuan, with 425.7 billion yuan due, achieving a net injection of 1.3011 trillion yuan. MLF due was 100 billion yuan, and the outright reverse repurchase injection was 1.4 trillion yuan, with a net injection of 200 billion yuan [9][17]. - As of July 18, R001 and R007 changed by + 8.4BP and - 0.1BP respectively compared to last week, reaching 1.49% and 1.51%; DR001 and DR007 increased by 11.4BP and 3.5BP respectively, reaching 1.46% and 1.51% [17]. - After the central bank cut the reserve requirement ratio by 0.5 percentage points in May and carried out outright reverse repurchases in advance in June, it conducted another 1.4 trillion yuan of outright reverse repurchases in July, making outright operations gradually normalized, which shows the central bank's attitude of caring for liquidity and supporting broad credit and further stabilizes market expectations [2][19]. - The reasons for the central bank to conduct outright reverse repurchases are to hedge the capital gap and relieve the pressure on the bank's liability side to support the real - economy credit supply [19][21]. - Compared with pledged repurchases, outright reverse repurchases have longer terms, reduce the pressure of short - term tool roll - overs, weaken the dependence on the credit quality of bank collateral, lower the financing threshold for small and medium - sized banks, and improve the efficiency of liquidity release [3][23]. 3.3 Understanding the Central Bank's Cancellation of the Freeze of Collateral in Bond Repurchases - On July 18, the central bank publicly solicited opinions on the "Decision of the People's Bank of China on Amending Some Rules (Draft for Comment)", which included canceling the freeze of collateral in bond repurchases, aiming to facilitate monetary policy operations such as open - market treasury bond trading and promote the high - level opening of the bond market [25]. - The reasons for the central bank to propose canceling the freeze of collateral in bond repurchases are that the current pledged repurchase model in China leads to a large "precipitation" of high - grade bonds and low efficiency in collateral disposal when the financing party defaults, while international mature markets generally use outright repurchases where collateral can be circulated again. Also, canceling the freeze can unfreeze the 6 - trillion - yuan daily repurchase market and enhance the flexibility of domestic liquidity management [4][27]. - If the freeze of collateral in bond repurchases is canceled, the capital market is expected to see a pattern of "stable quantity and falling price". Short - term interest - rate bonds may benefit and have downward space, while long - term bonds may maintain an oscillatory pattern, and the yield curve is more likely to steepen [5][32]. 3.4 Next Week's Key Points of Attention - Monday (July 21): China's 1Y and 5Y LPR quotes. - Tuesday (July 22): China's June bank foreign exchange settlement, US July Richmond Fed Manufacturing Index. - Wednesday (July 23): US June M2 month - on - month, EU July Consumer Confidence Index. - Thursday (July 24): Eurozone July benchmark interest rate, Eurozone July overnight deposit rate. - Friday (July 25): China's July MLF injection, Eurozone June M2 year - on - year [37].

Core Viewpoint - The People's Bank of China (PBOC) is proactively managing liquidity in the banking system by conducting significant reverse repo operations to address liquidity gaps and support credit stability [1][3][5]. Group 1: Liquidity Management - On July 15, the PBOC announced a 1.4 trillion yuan reverse repo operation, including 800 billion yuan for 3-month and 600 billion yuan for 6-month terms, indicating a continued effort to maintain ample liquidity in the banking system [1][3]. - The central bank's actions are a response to increasing liquidity disturbances in July, with a net injection of 200 billion yuan achieved through these operations [3][5]. - The PBOC's strategy includes a shift from end-of-month to mid-month announcements for reverse repo operations, enhancing market communication and expectations [7]. Group 2: Market Conditions and Expectations - The market is facing a notable liquidity gap, exacerbated by tax payment periods and increased local government bond issuances, which are expected to exceed 1 trillion yuan in net financing [4][5]. - Analysts suggest that the PBOC's recent actions signal a commitment to a reasonably accommodative monetary policy, aiming to support credit growth and alleviate pressure on bank liabilities [5][8]. - The PBOC is expected to continue utilizing various monetary policy tools, including reverse repos and medium-term lending facilities (MLF), to ensure liquidity remains sufficient [8].

Core Viewpoint - The People's Bank of China (PBOC) maintains a supportive monetary policy stance, implementing various measures to bolster economic recovery and stabilize financial markets, with expectations for further easing in the second half of the year [1][2][3]. Group 1: Quantity Tools - In May, the PBOC lowered the reserve requirement ratio by 0.5 percentage points, providing approximately 1 trillion yuan in long-term liquidity [1]. - From March to June, the PBOC conducted four consecutive months of excess renewals of the Medium-term Lending Facility (MLF) and utilized reverse repos to manage liquidity [1]. - The PBOC's flexible use of quantity-based monetary policy tools has maintained ample liquidity, supporting the ongoing economic recovery [1]. Group 2: Price Tools - In May, the PBOC reduced the policy interest rate by 0.1 percentage points, leading to a corresponding decrease in the Loan Prime Rate (LPR) [2]. - The average interest rate for newly issued corporate loans was approximately 3.2% in May, down about 50 basis points year-on-year, while the average for personal housing loans was around 3.1%, down about 55 basis points [2]. - The continuous deepening of interest rate marketization reforms has created a favorable environment for price-based monetary policy tools [2]. Group 3: Structural Tools - The PBOC increased the quotas for re-lending to support agriculture and small enterprises by 300 billion yuan each, and established a 500 billion yuan re-lending facility for consumer services and elderly care [3][4]. - The central bank is expected to continue enhancing structural monetary policy tools to support key sectors such as technology innovation and consumption [3][4]. - New policy tools are anticipated to be introduced, focusing on technology, consumption, foreign trade, and real estate [4][5].

Core Viewpoint - The People's Bank of China (PBOC) is actively managing liquidity through various monetary policy tools to address seasonal liquidity pressures and support economic stability amid increasing market uncertainties [1][2][6]. Group 1: Monetary Policy Actions - On June 25, 2025, the PBOC conducted a 300 billion MLF operation with a one-year term to maintain ample liquidity in the banking system, following the maturity of 182 billion MLF in June [1]. - The PBOC has implemented a total of 1.4 trillion yuan in reverse repos in June, including 1 trillion yuan for 91 days and 400 billion yuan for 182 days, resulting in a net liquidity injection of 318 billion yuan for the month [1][2]. - The adjustment of MLF operations to a fixed quantity, interest rate bidding, and multiple price levels indicates a shift in its role from a policy interest rate tool to a mid-term liquidity management tool [4][5]. Group 2: Market Conditions and Expectations - The liquidity supply-demand imbalance is particularly pronounced at mid-year, with significant seasonal increases in bank reserve requirements and a record high of 4.2 trillion yuan in maturing certificates of deposit [2]. - The government bond issuance pressure remains high, with an average net financing pressure of around 1 trillion yuan from June to December, necessitating PBOC's intervention to stabilize liquidity [2][6]. - The expectation of increased government bond issuance in August and September could further strain liquidity, with a projected monthly net financing scale of 1.5 to 1.6 trillion yuan [6][7]. Group 3: Fiscal Policy Outlook - The Ministry of Finance plans to implement more proactive fiscal policies to stabilize employment, businesses, and market expectations, with potential incremental fiscal measures expected in the second half of the year [9][10]. - The central government's focus on enhancing fiscal support for consumption and investment indicates a strategic shift towards using fiscal policy as a primary tool for economic stabilization, with an expected additional funding of 500 to 1 trillion yuan [10].