CITIC Securities: Central Bank may cut reserve requirement ratio by 50bps in December

Jinshi Data News on November 25th, CITIC Securities pointed out that according to calculations, there is basically no liquidity gap in December, but the mismatch between government bond supply and fiscal expenditure will cause disturbances to the funding side at the mid-month point. In addition to MLF maturity and seasonal factors, it is not ruled out that the Central Bank will reduce the reserve requirement ratio by 50bps in December, or use various tools such as buyback-style reverse repurchase and purchase of government bonds to smooth out the funding side fluctuations. For the bond market, the pressure of government bond supply and the game of policy expectations will cause disturbances to interest rates, but as long as the Central Bank's protection for the funding side is sufficient, there is still downward space for interest rates. After the supply gradually lands, trading opportunities brought by following the curve will be available.