The Central Bank'S Monetary Policy Combined With The Financial Supervision Of The CBRC To Govern The Economy.

In 2017, the central bank's monetary policy tone remained "stable", but its connotation has changed significantly since last year. Deleveraging, squeezing bubbles and preventing risks have become an important factor in policy considerations.

According to the insiders, after a long period of time last year and a relatively long time ago, because of the relatively loose financial market, many financial institutions have the opportunity and opportunity to mismatch and arbitrage investment.

In fact, many institutions are able to earn stable returns by borrowing overnight overnight funds and investing in longer term assets. When the overall interbank market interest rate is at a low level, there is almost no risk in this way of profit.

At present, the core problem of the market lies in the two sets of games. On the one hand, the supervision believes that the initial results of the deleveraging and the game that the market thinks the regulation is coming to an end is on the other hand, on the other hand, the short-term capital is loose and the mid term central bank gradually tightens liquidity.

In the short run, these two groups of games seem to be changing to the direction of the market, which has led to the continued optimism of the market's optimism. However, in the medium term, both the central bank's monetary policy and the Banking Regulatory Commission's financial regulation are more definite and continuous, which determines that interest rates are only band market rather than trend opportunities.

We still maintain

The short term is still bottoming up, and there is still room for further uplink.

First, the initial results of stabilizing leverage do not mean the end of regulation.

On Monday, the vice president of the central bank, Yi Gang, said, "first of all, leverage is the lever of leverage, and the growth rate of leverage should be lowered.

Now it appears that preliminary results have been made.

Does this mean that the goal of regulatory deleveraging is basically completed, that the future policy will shift to easing and monetary policy will turn loose? We do not agree with this view.

First of all, stabilizing leverage is not equal to deleveraging.

On the one hand, preliminary results show that the goal of stable leverage has not been achieved yet, but it has achieved initial success. There is still more work to be done in the future. On the other hand, stabilizing leverage is only the first step in the process of deleveraging. The implication is that steady leverage is for deleveraging, and the process of deleveraging has not yet begun.

Second, there is still a long way to go to regulate the future.

From the present point of view, the achievement of regulation is only to slow down the growth of excessive financial leverage in the past, and the level of stock leverage has not really declined.

In the past few years, the financial leverage that has been expanded through interbank business has great risks. Only leverage can really be resolved. At present, this process may just begin.

For the bond market, the core of interbank leveraging in the past few years is the leverage of the bond market. Most of the final banks are mostly bond assets. At present, there is no sign of mass sell-off in the bond market, and it also shows that deleveraging has not yet touched the root.

In the future, with the further advance of deleveraging, the bond market will still face a sell-off.

Second, the scale of financial management has declined a bit faster.

In June 22nd, the deputy director of the Prudential Regulation Bureau of the CBRC introduced the briefing of the State Office of new China office. At the end of 5, the scale of bank financing was 28 trillion and 400 billion yuan, and the ring ratio dropped slightly.

According to the 2016 bank finance annual report and the May 2017 and June CBRC briefing data, we can see that December 2016, March 2017, April and April banks' financial management scale is 29 trillion and 50 billion, 28 trillion and 900 billion, 30 trillion and 28 trillion and 400 billion respectively.

There were seasonal factors in the fluctuation of financial management scale in April March.

In March, there was seasonal factor in the decline of financial management scale, but generally the scale of financial management in March would not be lower than that at the beginning of the year, indicating that the issue of financial issuance was cold in the first quarter of this year. In April, the increase in financial management scale was 1 trillion and 100 billion in a single month, which was in line with seasonal factors.

Under the influence of financial deleveraging, financial management in the same industry shrinks.

In May 2014, the scale of financial management increased by 600 billion, 1 trillion and 20 billion and 280 billion respectively. In May this year, the financial market was affected by financial regulatory policies, and the scale decreased by 1 trillion and 600 billion compared with that in May.

Although there is no structural data of investors, considering that there is a big drop in the amount of interbank financing, this is consistent with the current regulatory direction of financial deleveraging and the compression of the banking industry chain.

General financial management is difficult to replace financial management of the same industry, and the demand for bank configuration is decreasing.

Although banks have gradually increased their expected revenue from personal and institutional financing since May, the scale of financial management has been significantly reduced. This is because the general financial management is mainly determined by the growth of household wealth and the limited growth rate, which can not replace the role of interbank financing in the expansion of bank liabilities.

Therefore, in the process of bank self-examination and rectification, the scale of financing in the three quarter is still difficult to pick up, and the strength of bank allocation will not obviously recover.

Third, the impact of liquidity on the market will gradually emerge.

Although in the short term, affected by the end of the fiscal deposit, even if the Central Bank continues to return liquidity, the capital side will remain relaxed. However, with the continuous pumping of the central bank, the negative impact of liquidity will also gradually appear.

Especially in the second half of this week and the beginning of July, with the end of the season, the need for stability of the central bank has declined significantly. With the increasing maturity of the open market, the central bank will probably continue to return liquidity through the reduction of the sequel.

As the 280 billion half of the second half of this week is about to expire, the reverse maturity of +MLF in early July will be as high as 709 billion 500 million. The negative impact of the central bank's gradual recovery on liquidity will not be ignored. In July, the capital side will return to tension.

Fourth, inflation is generally mild. In June, CPI rose to 1.6% year-on-year or PPI year-on-year or down to 5.5%.

Narrowed by the decline in pork, vegetables rebounded, estimated that food prices in June fell slightly by 0.3%, slightly lower than the historical season mean.

Affected by the price of crude oil, the impact of non food on the CPI weakened. It is estimated that CPI will continue to rise to 1.6% in June compared with the same period last year, and the PPI decline slowed down to 5.5%.

First, the bond market outlook: stable leverage has a preliminary result, which does not mean the end of regulation.

Monday, the bond market in the early trading of the bond market is relatively light, futures open high, but the spot fluctuations are not great, the afternoon is expected to slow down the impact of regulation, futures further higher, spot yield has also been widespread downward, the whole day, the interest rate downward range is generally 2-3bp.

Later we pay attention to:

First, steady leverage does not mean initial results.

The end of it.

According to media reports on Monday, the central bank vice president Yi Gang said in a ninth round dialogue between Chinese and American business leaders and former senior officials that "deleveraging is the first stable lever to reduce the growth of leverage."

Now it appears that preliminary results have been made.

Does this mean that the goal of regulatory deleveraging is basically completed, that the future policy will shift to easing and monetary policy will turn loose? We do not agree with this view.

First of all, stabilizing leverage is not equal to deleveraging.

From the point of view of Yi Gang, we can easily find that, on the one hand, preliminary results show that the goal of stable leverage has not been achieved yet, but it has achieved initial success. There is still more work to be done in the future. On the other hand, stabilizing leverage is just the first step of deleveraging. The implication is that steady leverage is for deleveraging, and the process of deleveraging has not yet begun.

Second, there is still a long way to go to regulate the future.

From the present point of view, the achievement of regulation is only to slow down the growth of excessive financial leverage in the past, and the level of stock leverage has not really declined.

In the past few years, the financial leverage that has been expanded through interbank business has great risks. Only leverage can really be resolved. At present, this process may just begin.

For the bond market, the core of interbank leveraging in the past few years is the leverage of the bond market. Most of the final banks are mostly bond assets. At present, there is no sign of mass sell-off in the bond market, and it also shows that deleveraging has not yet touched the root.

In the future, with the further advance of deleveraging, the bond market will still face a sell-off.

Second, the scale of financial management has declined a bit faster.

According to media reports, the deputy director of the CBRC's Prudential Regulation Bureau introduced the briefing in June 22nd. At the end of 5, the scale of bank financing was 28 trillion and 400 billion yuan, and the ratio fell slightly.

According to the 2016 bank finance annual report and the May 2017 and June CBRC briefing data, we can see that December 2016, March 2017, April and April banks' financial management scale is 29 trillion and 50 billion, 28 trillion and 900 billion, 30 trillion and 28 trillion and 400 billion respectively.

There were seasonal factors in the fluctuation of financial management scale in April March.

In March, there was a seasonal factor in the decline in the scale of financial management. At the end of the quarter, some financial funds would return to the table, but generally the scale of financial management in March was only lower than that in February. It will not be lower than the level at the beginning of the year. This shows that the issuance of financial issues is cold in the first quarter of this year. In April, the 1 trillion and 100 billion increase in the scale of financial pactions in a single month is in line with seasonal factors. In the 2014, 2015 and April 2016, the scale of financial management increased by 1 trillion and 990 billion 1 trillion and 860 billion and 1 trillion and 280 billion respectively.

Under the influence of financial deleveraging, financial management in the same industry shrinks.

In May 2014, the scale of financial management increased by 600 billion, 1 trillion and 20 billion and 280 billion respectively. In May this year, the financial market was affected by financial regulatory policies, and the scale decreased by 1 trillion and 600 billion compared with that in May.

Although there is no structural data for investors, considering that the general personal, institutional clients, private banks and interbank financial growth increased by 1 trillion and 820 billion, 320 billion, 420 billion and 2 trillion and 990 billion respectively in 2016, there was a big drop in the interbank financing. This is consistent with the current regulatory direction of financial deleveraging and the compression of the banking industry chain.

General financial management is difficult to replace financial management of the same industry, and the demand for bank configuration is decreasing.

Although banks have gradually increased their expected revenue from personal and institutional financing since May, the scale of financial management has been significantly reduced. This is because the general financial management is mainly determined by the growth of household wealth and the limited growth rate, which can not replace the role of interbank financing in the expansion of bank liabilities.

Therefore, in the process of bank self-examination and rectification, the scale of financing in the three quarter is still difficult to pick up, and the strength of bank allocation will not obviously recover.

Third,

The impact of liquidity on the market will gradually emerge.

On Monday, the central bank suspended the reverse repurchase operation for second consecutive trading days, and returned net 50 billion, which is the net liquidity of the central bank's fifth consecutive trading days in the open market.

Although in the short term, affected by the end of the fiscal deposit, even if the Central Bank continues to return liquidity, the capital side will remain relaxed. However, with the continuous pumping of the central bank, the negative impact of liquidity will also gradually appear.

Especially in the second half of this week and the beginning of July, with the end of the season, the need for stability of the central bank has declined significantly. With the increasing maturity of the open market, the central bank will probably continue to return liquidity through the reduction of the sequel.

As the 280 billion half of the second half of this week is about to expire, the reverse maturity of +MLF in early July will be as high as 709 billion 500 million. The negative impact of the central bank's gradual recovery on liquidity will not be ignored. In July, the capital side will return to tension.

Fourth, inflation is generally mild. In June, CPI rose to 1.6% year-on-year or PPI year-on-year or down to 5.5%.

On Monday, the Bureau of statistics released 50 urban price data in mid June, which showed that pork chain ratio narrowed, vegetable circulation was negative, leading to a slight rise in food prices in the middle of the month, and prices in circulation were mixed.

To sum up, the core issue of the current market lies in the two sets of games. On the one hand, the supervision believes that the initial result of deleveraging and the game that the market thinks the regulation is coming to an end are on the other hand, on the other hand, the short-term capital is loose and the mid term central bank gradually tightens liquidity.

In the short run, these two groups of games seem to be changing to the direction of the market, which has led to the continued optimism of the market's optimism. However, in the medium term, both the central bank's monetary policy and the Banking Regulatory Commission's financial regulation are more definite and continuous, which determines that interest rates are only band market rather than trend opportunities.

We still maintain that interest rates are still bottoming up in the short term, and there is still room for further uplink in the future.

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