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The central bank's discussions with some "aggressive trading" Institutions have shaken the market; who are the Block Orders in this round of bond bull market? State-owned large banks have received the most "attention".
① The central bank's morning consultations mainly involved Institutions based in Beijing, with very few Institutions from other cities attending the meeting, including cities like Shanghai where asset management Institutions are concentrated. ② In the past two weeks, the Block Buy Institutions for 10-year government bonds have shifted from Fund to Banks. ③ As incremental policies come into effect, the likelihood of economic stabilization increases, necessitating a reduction in expectations for the bond market in 2025.
Major signal! The central bank takes action again!
A massive shock in the bond bull market.
The 30-year Treasury Bond ETF has increased over 20% this year, while the Bosera CSI Convertible Bond And Exchangeable Bond ETF and the Foko Government Bond ETF have attracted over 20 billion this year.
The scale of Bonds ETFs has exceeded 164.6 billion yuan. Currently, there are five Bonds with a scale exceeding 10 billion in the market, among which the Bosera CSI Convertible Bond And Exchangeable Bond ETF, the Fullgoal Government Securities Bond ETF, the HFT CSI Short-Term Financing ETF, the CHENGTOUETF, and the Ping An Chinabond Medium-High Grade Corporate Bonds Spread Factor ETF have scales of 36.132 billion yuan, 33.495 billion yuan, 28.687 billion yuan, 13.5 billion yuan, and 10.975 billion yuan respectively.
After breaking three barriers, the 10-year government bond hovers around the 1.7% integer mark, and multiple Institutions have begun to issue "warnings": the downward space is limited.
① On one hand, previous Trades have fully realized expectations such as interest rate cuts, and on the other hand, the market mostly anticipates that 1.7% is the latest intervention threshold by the regulators. ② At the end of the year, with the recovery of the economic fundamentals, some Institutions have changed their expectations for a strong ramp-up of stimulus policies in the short term. ③ A further significant decline in interest rates may require the new expectations for a round of MMF easing after the interest rate cuts are implemented.
The bond market is experiencing a "super week," with the 30-year Treasury Bond ETF rising more than 20% this year, and institutions state that volatility may continue after the New Year.
① The bond market experienced a "super week" of policy and trade; ② The 30-year Treasury Bond ETF saw an increase of over 3% in a single week, with an annual ROI of 20%; ③ Institutions do not have strong profit-taking motivation in the short term, and volatility may occur after the New Year.
The interest rates of the same industry certificates of deposit are rapidly declining, and under "moderately loose" conditions, there is hope to drop to 1.30%.
1. After the improvement in MMF transmission efficiency, the CD interest rate and the 7-day OMO rate will integrate within the next year. 2. Due to the faster decline of long-term bonds, the spread between the 10Y government bond and the 1Y CD has been compressing, and is currently at 13BP.