The bond market remained strong on Wednesday (29th). The central bank’s large net investment for two consecutive days further stabilized the cross-year capital level. Under the weak fundamentals, the expectation of policy easing remained unchanged. The market situation has been heating up in “hesitation” recently. After the continuous decline of cash bond yield, it reached the edge of breaking through again.
According to the institutional view, the yield of new 10-year Treasury bonds has quietly fallen below 2.80%, and will soon become an active bond. The previous important resistance level may be crossed, while the medium-term varieties are still the “leader”, and the strong performance is still expected to continue. At the end of the year, the issuance of interest rate bonds entered a blank window period, and the allocation demand promoted the secondary market more obviously, especially for the policy expectation in the first quarter of next year. However, at the beginning of next year, we still need to pay attention to the supply of new bonds, especially local bonds.
[market tracking]
Treasury bond futures closed up across the board, and the main 10-year t2203 closed up 0.11%, with 51700 transactions; The two-year and five-year main banks closed up 0.05% and 0.1% respectively.
The inter-bank cash bond market continued to strengthen. The latest transaction yield of 10-year Treasury bond 210017 was 2.7825%, down 1.5bp from the end of the previous day. The latest yield of 10-year Treasury bond 210009, the most active transaction, was 2.8275%, down 1.75bp from the end of the previous day; The latest report of 10-year Guokai active bond 210215 was 3.063%, down 1.7bp from the end of the previous day.
In terms of medium-term varieties, the latest transaction yield of 5-year treasury bond 210011 was 2.59%, down 3.5bp from the end of the previous day and more than 25bp from the stage high in mid October. The latest yield of 5-year Guokai active bond 210208 was 2.7625%, down 3.75bp from the end of the previous day and about 40bp from the high in mid October.
[overseas bond market]
Japanese bond yields fell on Wednesday as the Nikkei index of Japanese stocks weakened, and trading was light before the New Year holiday. In late afternoon trading, the yield of 10-year Japanese bonds fell 0.5bp to 0.055%, and the yield of 20-year Japanese bonds fell 0.5bp to 0.465%. In addition, the 10-year Japanese bond futures were almost flat at 151.85.
“The weak Japanese stock market supports the bond market, but at the same time, the issuance of 10-year and 30-year bonds next week also brings pressure,” said kenjun Daoliu, fixed income strategy analyst at Mitsubishi UFJ Morgan Stanley Securities. “But basically, the market feels that it is just drifting with the tide before the new year.”
[capital side]
The central bank announced in the morning that in order to maintain stable liquidity at the end of the year, it launched a 7-day reverse repurchase operation of 200 billion yuan today; In view of the maturity of 10 billion yuan of reverse repurchase and 70 billion yuan of fixed deposit of treasury cash on that day, according to the full caliber calculation, the open market realized a net investment of 120 billion yuan in a single day. This is also the second consecutive trading day for the central bank to carry out reverse repo of 200 billion yuan in the open market.
Yi Gang, governor of the central bank, said on Tuesday that under the triple influence of shrinking demand, supply shock and weakening expectations, the economy is facing downward pressure in the short term and must stabilize the macroeconomic market.
Affected by the change of capital, the overnight varieties of Bank Of Shanghai Co.Ltd(601229) interbank offered rate (Shibor) continued to fall sharply on the 29th, with a cumulative decline of more than 40bp for two consecutive trading days. Specifically, Shibor fell 27.30bp to 1.3430% overnight; Shibor rose 0.50bp to 2.2500% in 7 days; Shibor fell 4.10bp to 3.0580% in 14 days.
[institutional view]
China Merchants Securities Co.Ltd(600999) : next year, the interest rate is more likely to go out of low fluctuation and range shock, and the applicability of band operation ideas will be reduced. Grasping the market of interest rate under the possibility of two factors exceeding expectations will become an important source of income next year; The upward risk may come from the fact that the duration and intensity of inflation are higher than expected, and the downward risk may come from the fact that real estate drags the economy weaker than expected.
Tianfeng Securities Co.Ltd(601162) : the macro pattern faced in January 2022 is three wide – wide currency, wide credit and wide finance. From the perspective of capital, the static capital gap in January next year is about 1.8 trillion. However, under the low demand of residents for cash withdrawal, the increase of fiscal expenditure and the reduction of reserve requirement in December 2021, the central bank maintains a reasonable and abundant liquidity. It is expected that the net investment before the holiday will be less than 1 trillion, and the liquidity will be supplemented by reverse repurchase and MLF.
(Xinhua Finance)
