According to the 10th China Fixed Income Market Outlook Survey in 2019, the central bank is not expected to adjust the deposit benchmark interest rate in October, and there is no expectation of interest rate reduction in the next three months. In addition, few institutions are expected to reduce the accuracy in October, accounting for less than 4% of the institutions, while the expected reduction in the next three months is still relatively strong, accounting for nearly one third of the institutions.
In September, the Federal Reserve cut interest rates again, but the central bank did not follow up, which also shows that the neutral tone of monetary policy has not changed, and the probability of reducing the benchmark deposit and loan interest rate or open market interest rate in the short term is still small.
China's latest PMI data show that although the momentum of economic growth is not strong, but resilience still exists, "flooding" is still unrealistic. The central bank has just lowered its benchmark in September, and two more directional benchmarks will be implemented in October and November. Without any change in monetary policy attitude, the possibility of further benchmarking in the short term is limited.
In terms of cash bonds, China's economy is showing signs of a slight warming up, the policy imagination space is limited after September's reduction, and bond market sentiment is still weak, but the prospects for Sino-US negotiations are still not optimistic, the trade war is worrying, the support for bond market is still in place, the momentum for further weakening after September's adjustment is limited, and the probability of sustaining shocks in October is even greater.
The results show that the average forecast value at the end of October is less than 3 BP (base point) when compared with the actual value at the end of September. Among them, the expectation of the institutions for treasury bonds is slightly optimistic.
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