SMM News: on Monday, China's bond market bonds and futures both fell.
Treasury and financial bond markets
After the low opening of national debt futures, unilateral downward, afternoon decline increased. Towards the end of trading, CICC 10-year Treasury futures widened to 0.65%. The 5-year main contract fell 0.23% in early trading, and the 2-year main contract fell 0.1%.
The yield of Treasury bonds generally rose in varying degrees, and the yield of the main interest rate of 10-year bonds rose by about 4 basis points. The 190006 yield on the 10-year active note rose 3.5 basis points to 3.3450 per cent. The latest transaction price of the 10-year active Treasury note 180027 was 3.34%, with an upward yield of 3.61bp. The latest transaction price of the five-year active Treasury note 180016 was 3.135%, with an upward yield of 3.48bp.
The recent good times, but the bond market is obviously weak, after the late April opened after the overrun rebound market after showing a weak trend. Last week, the bond market fluctuated within a narrow range, and yields were basically unchanged from last week.
The Guotai Junan Qin Han and Xiao Chengzhe teams believe that at present, economic fundamentals and equity markets do not seem to be the main concerns of the market, and there are two factors worthy of attention:
The bond market is still sensitive to capital fluctuations, but the positive and negative reactions are asymmetrical. Last week, the capital side was tight and then loose, in line with the long-term interest rate. But it is worth noting that DR007 and R007 have essentially returned to their previous weekend levels, but long-term interest rates have yet to "recover their losses".
Last Tuesday, under the "falling rate of Oolong", the rate of return had been rapidly explored, and then it was found that it was the refinement of the implementation of the rate reduction by the Agricultural and Commercial Bank, and the long-end interest rate then came out of the V-shaped reversal.
Summing up the above two clues, we believe that the market still trades with fluctuations on the capital side, but at the same time, there are some long-term concerns that passivate the positive response. Rising inflation and falling exchange rates may be the main reasons for the pressure on monetary policy.
Citic Securities Mingming team believes that after the central bank delayed the reduction of the standard and slightly increased open market operations, the central bank suspended the contraction of the meter in April, but the active expansion was not strong, and commercial banks slowed down the pace of meter expansion. Under a counter-cyclical monetary policy framework anchored by credit, policy fine-tuning will still lead to broad credit and bank expansion. Well, on the premise that monetary policy will not relax beyond expectations, the bond market is expected to continue the trend of weak volatility, with the yield on the 10-year bond between 3.2% and 3.6%.
Credit debt market
Bloomberg quoted traders as saying that in the pre-08:40 session this morning, a number of institutions made 4% quotations for many of the interbank certificates of deposit of the contractor banks, which were valued at around 3.3% on Friday. Yields rose by about 70 basis points.
The agency quoted a person from the trading center as saying that the transfer of current bonds related to the Chinese contractor Bank was suspended pending the receiver's confirmation of the subsequent disposal arrangements.
The Beijing Banking Insurance Supervision Bureau issued an emergency notice this morning saying that individual banking institutions took the opportunity to seize the sources of capital from customers of contractors and banks, demanding that such malicious competition incidents that undermine market order be resolutely eliminated and that internal accountability be launched in a timely manner. All institutions should earnestly fulfill their responsibilities as the main body of risk prevention and control, and must not speculate, make small moves to rob customers, dig up deposits, or engage in series connections. All institutions should take good care of their own ranks, standardize market competition, and resolutely put an end to such malicious competition incidents that undermine market order.
Yin Ruizhe and Li Yuze's team of China Merchants Securities said that "more attention should be paid to the possible liquidity shock caused by this incident." if regulatory expectations are not stable in time, the "contractor Bank" incident may be the first to impact the certificate of deposit yield curve. Then to the short-end interest rate debt and the middle and high grade short-end credit debt transmission; In the credit debt, the interest rate spread of the middle and high grade medium and short end city investment bond is insufficient, and the probability of being linked by interest rate debt is greater. "We propose to pay close attention to whether adjustments in the certificate of deposit market will spread towards the interest rate and credit markets."
Shibor rose to 2.6660% overnight, up 32.4 basis points, Shibor rose 11.9 basis points to 2.7110% in seven days, and Shibor rose 0.2 basis points to 2.9040% in 3 months.
The inter-bank repo fixing rate rose across the board. FDR001 was up 33 basis points at 2.67%, FDR007 at 2.70%, up 13 basis points, and FDR014 at 2.80%, up 6.13 basis points. FR001 was up 33 basis points at 2.68%, FR007 at 2.80%, up 23 basis points, and FR014 at 2.85%, down 5 basis points.
The seven-day mortgage repurchase weighted rate (DR007) in the Chinese interbank market rose to 2.75 per cent in early trading, a new high in the month, rising 20 basis points in the day.
The central bank launched a 80 billion yuan reverse repo operation, due to the expiration of no reverse repo today, achieved a net investment of 80 billion yuan on the same day.
In the process of continuous update.
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