Market hotspots
(1) In the first four months of this year, the cumulative increase in the scale of China's social financing was 12.73 trillion yuan, 3.04 trillion yuan less than the same period last year. In the first four months of this year, Chinese RMB loans increased by 10.19 trillion yuan. At the end of April, M2 grew 7.2% year-on-year. At the end of April, the stock of social financing was 389.93 trillion yuan, a year-on-year increase of 8.3%. Market experts generally said that the total amount of loans in the month was "not small", the credit structure continued to be optimized, the interest rate level remained low, and the RMB exchange rate remained basically stable at a reasonable and balanced level.
(2) The World Gold Council said that at the end of April, total global holdings of gold-backed ETFs fell by 33t to 3,079t, 6% below the average over the past 12 months. Meanwhile, the rally in gold prices pushed global ETFs up to $229 billion in total assets under management (AUM), up 3% from the previous month and the highest since April 2022.
(3) In April, the real estate policy continued to relax, and at the end of April, the Political Bureau of the Central Committee proposed to "study and digest the stock of real estate and optimize the policy measures of incremental housing, and the follow-up real estate policy is expected to continue to exert force at both ends of supply and demand, and boost demand and reduce inventory by relaxing purchase restrictions, "trade-in", "acquisition of stock housing", and reducing land supply, which may help stabilize the market.
(4) Fed officials have spoken intensively, and the timing of interest rate cuts is still the focus. The European Central Bank released the minutes of its meeting, and the official's speech made the expectation of a rate cut in June a high probability event. The Bank of England kept interest rates unchanged as expected, and the market is looking forward to a June rate cut window.
Funding side
In the open market, the central bank announced that in order to maintain reasonable and sufficient liquidity in the banking system, a 7-day reverse repurchase operation of 2 billion yuan was launched in the form of interest rate bidding on May 11, and the winning interest rate was 1.80%. Wind data shows that there is no reverse repurchase expiration on the same day, so the net investment in a single day is 2 billion yuan.
In terms of funds, the overall capital side of the interbank market was relatively balanced last Saturday, and the main repo rate fluctuated in a narrow range.
The overnight repo rate of the bank
Source: Wind, Bond Investment Department, Great Wall Fund; Time period: 2024.04.22 - 2024.05.12.
Bills market
On the supply side, the issuance volume in the primary market was significantly boosted last week, with the average daily acceptance amount reaching 163.4 billion yuan. The demand for corporate financing discounts was released simultaneously, achieving an average daily discount of 153.856 billion yuan, and the supply of ticket sources continued to be replenished.
On the demand side, last Monday, under the bearish expectation, most of the direct sticker quotations were lowered, and the ticket price fell significantly; From Tuesday to Saturday last week, affected by the repost market and the recovery of supply, the willingness to buy the allocation was flat, and the quotation of the direct post bank was gradually raised.
The state-owned stock bank's half-year bills are directly discounted at the interest rate
Source: Wind, Bond Investment Department, Great Wall Fund; Time range: 2024.04.12-2024.05.12.
Bond market
Certificates of Deposit: The latest trading volume of one-year interbank certificates of deposit of state-owned and major joint-stock banks was around 2.1% last week, a slight increase.
AAA rated interbank CD interest rate
Source: Wind, Bond Investment Department, Great Wall Fund; Time period: 2024.01.03-2024.05.12.
Interest rate bonds: Judging from the trend of the bond market last Saturday, stimulated by the news of the issuance of ultra-long-term special treasury bonds the day before, the 10-year treasury bonds rose rapidly in early trading, rising as high as 2.34%, but with the social finance data released in the evening being lower than expected, the bond market yield plunged sharply, as of the close, the 10-year treasury bonds fell to 2.31%, once again approaching the 2.3% mark, and the single-day amplitude reached 3bp.
1-year vs. 10-year Treasury rates
Source: Wind, Bond Investment Department, Great Wall Fund; Time period: 2024.01.02-2024.05.12.
On the whole, the domestic economy has not changed its upward trend, and the supply and demand of the bond market are expected to be further balanced, and allocation opportunities can be found in short-term shocks.
Convertible bond market
On Friday, the CSI Convertible Bond Index closed up 0.05%, while the Wind Convertible Bond Equal Rights Index fell 0.06%.
CSI Convertible Bond Index
Source: Wind, Bond Investment Department, Great Wall Fund; Time period: 2023.01.03-2024.05.12.
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