Funding side
On December 15, the central bank issued an announcement that in order to maintain reasonable and sufficient liquidity in the banking system, hedge the impact of short-term factors such as bond issuance and payment, and at the same time appropriately carry out 50 billion yuan of open market reverse repurchase operations and 1.45 trillion yuan of medium-term lending facility (MLF) operations on the same day, with interest rates respectively. 5%, unchanged from the previous year.
Since the beginning of 2023, the MLF rate has been cut by 10 basis points and 15 basis points in June and August, respectively, and the rest of the months have been "on hold", with a cumulative reduction of 25 basis points.
In the case of the shrinking of the traditional policy space and the decline of effectiveness, the central bank may balance liquidity by means of open market operations and other factors, and the structure is also expected to play a greater role in order to achieve "flexibility, moderation, precision and effectiveness".
Figure 1:The overnight repo rate of the bank
Data**: Wind, Great Wall ** Bond Investment Department, data statistics interval is 202312.11-2023.12.15
Bills market
Last week, the interest rate on bills continued to fall in the first quarter, and the interest rate on bills in the second quarter narrowed**. With the continuous allocation of long-term bills and the continuous improvement of the supply of bills at stable prices of major banks, the overall bill interest rate in the second quarter showed a narrow range**, with daily fluctuations ranging from 1-2bp. Due to the scarcity of bills in the first quarter and the gradual release of demand from farmers and businesses in small and medium-sized towns, the interest rate of bills gradually declined in the first quarter.
Figure 2:The full-year bills of the state-owned stock bank are directly posted**
Data**: Wind, Great Wall ** Bond Investment Department, data statistics interval is 202311.15-2023.12.14
Bond market
Certificates of Deposit:The interest rate of interbank certificates of deposit is affected by the capital side, and the yield continues to decline, and the 1-year national stock **260%。In just one week, the interest rate on certificates of deposit fell by 10bp, confirming the previous statement that "the short end is very cost-effective", and with the end of mid-month payments, liquidity has further improved, and it is expected that there is still room for downside in certificates of deposit this week.
Figure 3:AAA rated interbank CD rate
Data**: Wind, Great Wall ** Bond Investment Department, data statistics interval is 202312.01-2023.12.15
Interest Rate Bonds:The yields of major interbank interest rate bonds generally fell, and short- and medium-term bonds performed better. Last week, the yield on the 10-year Treasury bond active bond "23 Interest-bearing Treasury 18" fell by 205bp, the yield of the 5-year treasury bond active bond "23 interest-bearing treasury bond 22" fell by 3bp, and the yield of the 3-year treasury bond active bond "23 interest-bearing treasury bond 25" fell by 325bp。
Figure 4: 1Y and 10Y Treasury yields
Data**: National Bureau of Statistics**, the statistical interval is 202311.01-2023.12.15
Convertible bond market
Last week, the convertible bond market moved first high and then low. As of December 15, the CSI Convertible Bond Index** fell 029%, with a turnover of 4919.7 billion yuan, a total increase of 065%；Wind's Convertible Bond Equal Rights Index** fell 024%, with a turnover of 6459.5 billion yuan. On the disk, 3300 points has become a short-term suppression point, the lack of incremental capital entry, the RMB exchange rate and the recent overseas market, all of which have made the market face pressure to adjust.
Figure 5:Convertible Bond Index** Trend
Data**: Wind, Great Wall ** Bond Investment Department, data statistics interval is 202312.01-2023.12.15
Market hotspots
1) On December 15, Fed's Williams said that there is no real discussion about cutting interest rates, and that it is too early to consider whether to start cutting rates in March next year, and that the question now is whether it is restrictive enough that the Fed must be prepared to raise rates again if needed.
Although the Fed is still hawkish, the capital markets have reacted adequately, and the yield on the 10-year Treasury note has gone from 5.5 in just one month0% down to 4Below 0%, it can be said that "the situation is stronger than the policy". In the short term, U.S. bonds and U.S. stocks are facing adjustment pressure, but in the long run, they still have the most momentum.
2) According to the asset allocation data in the third quarter report of the bank's wealth management products, Wind will calculate the data of major asset holdings before and after penetration. The data shows that among the various asset classes before the penetration of bank wealth management products, asset management products (including public offerings**) are the largest, accounting for 6784%；Among the pre-penetration holdings, fixed income assets ranked second, accounting for 2423%。It can be seen that at present, the proportion of bank wealth management products indirectly investing in other types of assets through asset management products is still relatively large.
The situation of weak stocks and strong debts has continued throughout the year, and looking forward to next year, it is expected to continue.
3) On December 15, the onshore and offshore RMB exchange rates against the US dollar strengthened sharply, and the offshore RMB rose above 7 against the US dollar for the first time in half a year10, after a slight decline, the week rose more than 500 points, and the cumulative increase since November has exceeded 2,000 points. Among them, changes in the external currency environment are one of the driving forces for the appreciation of the RMB exchange rate. The market believes that the Fed's current rate hike cycle has been completed.
The short-term strength of the RMB will provide a good window of time for the central bank to adjust its more flexible monetary policy, and the subsequent RRR and interest rate cuts can still be expected.
Risk Disclosure Letter.
Dear Investors:
Investment is risky and should be cautious. Public offering of **investment** (hereinafter referred to as "**** is a long-term investment tool, its main function is to diversify investment and reduce the individual risks brought about by a single investment**. Unlike financial instruments such as bank savings that can provide fixed income expectations, when you buy a product, you may share the income generated by the investment according to the share you hold, or you may bear the loss caused by the investment. Before you make an investment decision, please carefully read the legal documents of the product such as the contract, the prospectus and the product key facts statement and the risk disclosure, fully understand the risk-return characteristics and product characteristics of the company, carefully consider the various risk factors existing in the company, and according to your own investment objectives, investment period, investment experience, Factors such as asset status fully consider their own risk tolerance, and make rational judgments and prudent investment decisions on the basis of understanding the product situation and sales suitability opinions. In accordance with relevant laws and regulations, Great Wall Management has made the following risk disclosures:
1. According to the different investment objects, **divided into **hybrid**, bonds**, money market**, medium**, commodities** and other different types, you will get different income expectations for investing in different types of **, and will also bear different degrees of risk. In general, the higher the expected return, the greater the risk you take.
2. In the process of investment and operation, it may face various risks, including market risks, as well as its own management risks, technical risks and compliance risks. Huge redemption risk is a risk unique to open-ended**, that is, when the net redemption application on an open day** exceeds a certain percentage of the total share (10% for open-ended** and 20% for regular opening**, except for special products stipulated by the CSRC), you may not be able to redeem all the **shares of the application in time, or the payment of your redemption may be delayed.
3. You should fully understand the difference between regular fixed investment and lump sum deposit and withdrawal. Regular investment is a simple and easy investment method to guide investors to make long-term investment and average investment costs, but it cannot avoid the inherent risks of investment, cannot guarantee investors to obtain returns, and is not an equivalent financial management method to replace savings.
4. Risk disclosure of special types of products:
1.If the product you purchase is a pension target**, the name of the product "pension" does not represent income protection or any other form of income commitment, and the product is not principal protected and may incur losses. Please read the specific risk disclosure carefully to confirm the product features.
2.If the product you purchase is money market**, the purchase of money market** does not mean that the funds are deposited in a bank or depository financial institution, and the manager does not guarantee a certain profit, nor does it guarantee a minimum return.
3.If the product you purchase is a hedging strategy, the introduction of a protection mechanism in the hedging strategy does not necessarily ensure the safety of your investment principal, and there is still a risk of loss of principal for share holders in extreme cases.
4.If you purchase a product that invests in overseas**, in addition to the general investment risks such as market fluctuation risks similar to those of domestic **investment**, this ** is also exposed to special investment risks faced by overseas ** market investments, such as exchange rate risk.
5.If the product you purchased operates in a regular open mode or the contract stipulates a minimum holding period for the shares, you will face liquidity constraints due to the inability to redeem or sell the shares during the closed period or the minimum holding period.
6.If the product you purchase is mainly invested in the STAR Market, in addition to the general investment risks such as market fluctuation risks similar to those of the investment, you will also face the unique risks brought about by changes in the investment target, market system and trading rules.
5. The manager undertakes to manage and use the assets in good faith, diligence and responsibility, but does not guarantee that the company will be profitable, nor does it guarantee the minimum return. China's first operation time is relatively short, which cannot reflect all stages of the development of the first and bond markets. The past performance of the ** and its net worth are not indicative of its future performance, and the performance of other ** managed by the **Manager does not constitute a guarantee of the performance of the **. Great Wall **Management*** reminds you of the "buyer's responsibility" principle of **investment, after making an investment decision, the investment risk caused by the change of **operating conditions and **net value shall be borne by you. The Manager, the Custodian, the Sales Agency and the relevant institutions do not make any promises or guarantees regarding the return on investment.
6. The Great Wall ** Management *** hereinafter referred to as the "** Manager") applies for fundraising in accordance with relevant laws, regulations and agreements, and is licensed and registered by the China ** Supervision and Administration Commission (hereinafter referred to as the "China Securities Regulatory Commission"). This Contract, Prospectus and Key Facts Statement have been publicly disclosed through the CSRC's Electronic Disclosure and Administrator. The registration of this ** by the China Securities Regulatory Commission does not indicate that it has made a substantive judgment or guarantee on the investment value, market prospects and returns of this **, nor does it indicate that there is no risk in investing in this **.
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