Sino-Singapore Jingwei client, June 22, according to the news of the central bank website on the 22nd, the central bank announced that in order to maintain stable liquidity at the end of the half year, the People's Bank of China launched a 120 billion yuan reverse repurchase operation through interest rate tendering on June 22, 2020 . Among them, 40 billion yuan is a 7-day period, and 80 billion yuan is a 14-day period; the winning bid rates are 2.20% and 2.35%, which are the same as before. Due to the expiry of today's non-reversible repurchase, a net investment of 120 billion yuan was achieved on that day.
Screenshot source: Central Bank website
Last Friday (June 19), Shibor continued the upward movement across the board, and the short-term upward movement was becoming smaller. Overnight varieties increased 0.8bp to 2.131%, 7-day up 4.7bp to 2.147%, and 14-day up 6bp to 2.156%. The 1-month up 2.5bp reported 2.048%.
On June 22, the national bond futures opened slightly higher, the 10-year main contract rose 0.06%, the 5-year main contract rose 0.09%, and the 2-year main contract rose 0.01%.
It is worth noting that the central bank has launched a 14-day reverse repurchase operation for three consecutive trading days, and the winning bid rates are all flat at 2.35%. According to the Shanghai Securities News, market analysts said that the 14-day reverse repurchase was restarted, mainly to ease the liquidity tightening phenomenon at the end of the half year, and there is also an intention to hedge the recent issuance of special government bond tenders. The 14-day period reverse repurchase "rate cut" is actually a supplement to the policy rate of the period.
On June 17, the State Council executive meeting proposed to further lower the interest rate of loans and bonds, issue preferential interest rate loans, implement deferred principal and interest repayment for small and medium-sized enterprise loans, support the issuance of unsecured credit loans for small and micro enterprises, and reduce bank charges, etc. A series of policies promoted the financial system to make reasonable profits of 1.5 trillion yuan to various enterprises throughout the year. Comprehensive use of tools such as RRR cuts and refinancing will keep the market liquidity reasonably ample.
The chief fixed income analyst of CITIC Securities clearly stated that the National Standing Committee made it clear that the next stage of the policy needs to continue to widen credit and reduce costs in both volume and price, mentioning the RRR cut without mentioning interest rate cuts, and the RRR cut is expected to be implemented in the near future, and Interest rate cuts are expected to be postponed. The expression of “leading the bond interest rate down” may also bring more imagination to the market. The relatively large probability that the market’s relatively pessimistic expectations of monetary policy in the early stage will be revised, and changes in the sentiment pendulum will open the bond market trading window.
According to Wang Qing, the chief macro analyst of Dongfang Jincheng, according to the situation in the recent period, there is a high possibility of landing in the next 1 to 2 weeks. At the same time, he analyzed that in the future in less than a month and a half (before the end of July), 1 trillion yuan of special national debt will be issued. It can be seen that the issuance of 1 trillion new local special bond issuances in May brought a more obvious tightening effect on market liquidity. If appropriate hedging measures are not taken, the large-scale issuance of special national bonds in the future may cause some disturbance to the market. (Sino-Singapore Jingwei APP)