Short-term interest rates began to peak and fall, and the intraday net value of CDB 0-3 ETF (159651.SZ) hit a new high, achieving net inflows of funds for many consecutive days
On December 15, 2023, the CDB 0-3 ETF (159651.SZ) fluctuated and rose, hitting 7 consecutive yangs, with an intraday turnover of more than 1.1 billion yuan, and the market was actively trading. In terms of capital inflow, as of December 14, 2023, CDB 0-3 ETF has achieved net inflow of funds in the past five consecutive trading days, with a total of more than 100 million yuan, and the inflow of funds has continued to flow.
1. Funding situation
The central bank announced that in order to maintain reasonable and sufficient liquidity in the banking system, 50 billion yuan of 7-day reverse repurchase and 1.45 trillion yuan of 1-year MLF operations were carried out in the form of interest rate bidding on December 15, and the winning interest rates were 1.8% and 2.5% respectively. Wind data shows that 197 billion yuan of reverse repurchase and 650 billion yuan of MLF expired on the same day, so the net investment in a single day was 653 billion yuan. On Friday, the central bank's MLF net injection was the largest in a single month on record, and the funds were warm, and the funding rates of all maturities fell one after another.
This week, the central bank carried out 1,276 billion yuan of reverse repurchase and 1,450 billion yuan of MLF operations, while a total of 1,077 billion yuan of reverse repurchase and 650 billion yuan of MLF expired, so this week's net investment of 999 billion yuan. This week, the central bank has injected a large amount of net money to protect the capital side, interbank liquidity has tightened and loosened, and the interest rate on certificates of deposit has also fallen. On Monday, the central bank increased the net supply, but the interbank liquidity still converged marginally, but as the net injection continued, the capital side turned warm during the month, and the overnight and 7-day funding rate weighted both fell. As we previously expected, this week, the U.S. Treasury interest rate and the U.S. dollar index fell significantly, the yuan rose sharply, the factors restricting the decline in money market interest rates are easing, and the central bank's net escort has led to a decline in fund prices this week, and the interest rate on certificates of deposit has begun to fall out of its historical relative high. In the future, as exchange rate pressures weaken and fiscal investment increases, the above logic may continue to be deduced.
2. Market conditions
This week, spot bonds have strengthened overall, with significantly better short-end performance and a steeper yield curve. On Monday, the bond market continued to be warm, the spot bond interest rate fell by 1-2bp, and the long-term decline was slightly larger; after that, as the capital continued to improve, the stock market weakened, the bond market continued to be strong, and the short-end decline came later; on Thursday, the bond market performance was differentiated, the short-term bonds continued to be strong, and the medium- and long-term bonds fluctuated slightly weaker. Compared to last Friday, the 10-year Treasury bond rate fell 3bp to close at 2.64%, and the 10-year CDB bond fell 2bp to close at 2.75%.
3. Market outlook
Inflation and financial data have been released since the end of last week, showing that real demand still needs to be boosted further. In November, CPI and PPI both widened, showing that short-term demand is relatively insufficient, in addition to the new loans in November increased by 136.8 billion yuan year-on-year, considering that the same period last year is in the period of public health prevention and control, the base is not high, the year-on-year increase in loans reflects the weak demand for real credit, and structurally, the medium and long-term loans of enterprises increased significantly less than the same period last year, and the growth of household loans is also relatively weak. Last month, social finance increased by 455.6 billion yuan year-on-year, but the increase mainly came from the contribution of government bonds, while other financing components were relatively sluggish, and M1 continued to fall to 1.3% year-on-year, indicating that the vitality of corporate funds is still insufficient. At the same time, this week's Central Economic Work Conference landed heavily to make arrangements for next year's economic work. This meeting continued the expression of the previous important meeting in December, pointing out that next year it is necessary to "seek progress in stability, promote stability with progress, and establish first and then break", and the emphasis on "progress" has increased, but in combination with the tone of "stability", next year's macro policy "progress" or not "big progress". On the whole, it is expected that monetary policy may continue to remain accommodative, combined with weak demand for physical financing, and in view of the slowdown in the U.S. economy and the possibility of interest rate cuts by the Federal Reserve next year, it is expected that there may be more RRR and interest rate cuts next year, and bond yields may fall further. This week, the CDB 0-3 ETF and the active treasury bond ETF both recorded significant positive returns, both hitting record highs. In the future, combined with the judgment of the capital and fundamentals mentioned above, the current or still a better allocation time, and the early entry layout is more likely to seize the opportunity to avoid missing the opportunity to game capital gains in the starting stage of interest rate decline.
In terms of credit bonds, looking forward to December, considering that there is a risk of a decline in the scale of wealth management at the end of the quarter, the relationship between supply and demand of credit bonds may fluctuate, but considering that the supply of credit bonds may be difficult to increase when the supply of urban investment bonds falls, if the interest rate does not rise significantly, the pressure on supply and demand should be controllable. In terms of sectors, the market of urban investment bonds will continue, and some urban investment platforms have been affected by the tightening of financing policies recently, and there are certain difficulties in borrowing new to repay the old, but we believe that in the context of maintaining the bottom line risk, the credit risk of urban investment is controllable, and the short-term sinking can continue, but the mining space may be relatively limited. In terms of state-owned enterprise real estate bonds, the main body can be preferred, and the bottom position allocation and swing trading can be carried out when the price is cost-effective. The spreads of medium- and low-rated state-owned enterprises and quasi-urban investment industries may continue to narrow.
Related products: Ping An Bond ETF Three Musketeers
Corporate Bond ETF (511030.SH), CDB 0-3 ETF (159651.SZ), Active Treasury Bond ETF (511020.SH).