The manager of the China Development Bank ETF Bosera (159650), Lu Ruijun, noted that at the beginning of the month, liquidity conditions were accommodative, with money market rates declining further. On Friday, April 3, the central bank conducted a net withdrawal of 145.2 billion yuan. On Tuesday, April 7, interbank liquidity supply remained ample during the quarter's start, leading to a slight decrease in key funding rates, alongside a net withdrawal of 301.5 billion yuan by the central bank. Additionally, the central bank executed 800 billion yuan in 3-month outright reverse repo operations. With 1.1 trillion yuan in 3-month outright reverse repos maturing this month, this resulted in a net withdrawal of 300 billion yuan. On Wednesday, April 8, loose liquidity conditions persisted, with key funding rates remaining low, and the central bank's net injection for the day was zero. On Thursday, April 9, the accommodative stance continued with little change in major funding rates, and the central bank conducted a net withdrawal of 70 billion yuan. Comparing Thursday to the previous Friday, the DR001 fell by 1 basis point to 1.22%, while the DR007 also dropped by 1 basis point to 1.33%.
Internationally, White House Press Secretary Levitt announced that the US President has decided to send a high-level delegation to Islamabad, Pakistan, for a new round of face-to-face negotiations with Iran. The first round of talks is scheduled for the morning of April 11, local time. Levitt stated that Iran's initial "10-point proposal" was "directly rejected" by the US President and his negotiating team. Iran informed mediators that talks with the US in Pakistan would only proceed if a ceasefire is achieved in Lebanon. Following the outbreak of conflict involving Iran, Federal Reserve officials have been evaluating various scenarios for the US economy, including those that might necessitate interest rate cuts as well as potential rate hikes. The minutes from the March FOMC meeting, released on Wednesday, indicated that most officials are concerned the conflict could impact the labor market, potentially requiring lower interest rates. Simultaneously, many officials emphasized inflation risks, which might ultimately call for interest rate increases. Since the March meeting, several Fed policymakers have expressed a preference for holding rates steady while assessing the conflict's impact. Overall, the policymakers' response to the conflict reflects their attention to risks affecting both sides of their dual mandate.
Domestically, on April 2, Industrial and Commercial Bank of China and China CITIC Bank announced plans to issue 40 billion yuan in Tier 2 capital bonds and 30 billion yuan in perpetual bonds on April 8. The issuance documents included permits issued by the People's Bank of China to the four major state-owned banks, Postal Savings Bank of China, 11 joint-stock commercial banks, and 4 city commercial banks for financial bond issuance. This year's permits were granted in early April, initiating financial bond issuance later than in previous years. Considering the overall bond supply for the year, with ample deposits due to corporate foreign exchange settlement, the issuance volume of negotiable certificates of deposit is likely to remain relatively low. Additionally, the net increase in government bonds, particularly long-term government bonds, may decline year-on-year compared to last year. With supply moderating at the margin, the balance between bond supply and demand may see some improvement.
The China Development Bank ETF Bosera (159650) invests in China Development Bank bonds in the interbank market. Policy financial bonds are characterized by high credit ratings, large scale, and good liquidity, making them worthy investment considerations. Consequently, the China Development Bank ETF Bosera (159650) offers features such as strong liquidity, low credit risk, and relatively low volatility, presenting a reasonable risk-return profile. It allows for flexible cash subscriptions and redemptions, as well as convenient exchange trading, making it a suitable tool for short-duration allocation strategies.
Comments