Last Friday (October 24), liquidity conditions remained stable, with the central bank injecting a net 32 billion yuan. On Monday, influenced by tax payments and month-end factors, liquidity tightened slightly, prompting a net injection of 348.3 billion yuan by the central bank. On Tuesday, the central bank increased its reverse repo operations, achieving relative equilibrium in supply and demand, with a net injection of 315.8 billion yuan. By Wednesday, liquidity conditions eased further as the central bank boosted net injections to 419.5 billion yuan, leading to lower interbank repo rates. On Thursday, liquidity improved further, with rates declining significantly amid a net injection of 130.1 billion yuan. Compared to last Friday, the DR001 rate fell by 1 basis point to 1.31%, while DR007 rose by 9 basis points to 1.50%.
Overseas, U.S. President Donald Trump indicated he would decide on the next Federal Reserve chair by year-end. Treasury Secretary Scott Bessent confirmed that Kevin Hassett, Kevin Warsh, Christopher Waller, Michelle Bowman, and Rick Rieder are among the candidates. The Fed’s October meeting concluded with a 25-basis-point rate cut, bringing the benchmark rate to 3.75%-4.00%, marking the second reduction this year. The Fed also announced it would end balance sheet tapering by December 1. Chair Jerome Powell noted that another December rate cut is "far from certain," citing potential pauses due to incomplete economic data. Inflation remains slightly above target, though non-tariff inflation is nearing the 2% goal. Current data suggests moderate economic expansion, but uncertainty persists.
Domestically, on October 27, Governor Pan mentioned at the 2025 Financial Street Forum Annual Conference that the central bank would "resume open-market treasury bond transactions." If implemented, this could improve bond market supply-demand dynamics, potentially pushing yields below previous lows. With reduced government bond supply pressure in Q4, such measures may further support favorable conditions for the bond market.
The China Development Bank ETF (159650) invests in interbank CDB bonds, which offer high credit ratings, ample liquidity, and lower volatility. This makes it a suitable tool for short-duration allocation, featuring flexible cash subscriptions and secondary market trading.
Disclaimer: This report relies on publicly available information, and no guarantees are made regarding its accuracy or completeness. The content does not constitute investment advice or actual investment outcomes. Data sources include Wind, Bloomberg, or Bosera Fund’s macro-strategy team unless otherwise stated.
Risk Disclosure: Investors should carefully review fund documents and assess risks based on their financial situation, goals, and risk tolerance. Funds carry inherent risks, including market volatility, liquidity constraints, and management risks. Past performance does not guarantee future results. The Bosera CDB 0-3 Year Bond ETF (159650) is classified as medium-low risk.
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