The 1 - Year Central Bank Rate Is Still Stable &Nbsp; Interest Rate Increases Are Expected To Fade.

As the interest rate vane, the yield of the 1 - year central issue continues to be stable. Insiders say this indicates that the central bank will not start raising interest rates in the short term.

At the macro level, industry experts also said that despite the inflationary pressures, the situation at home and abroad is still more complicated. It is expected that the central bank will have little chance of raising interest rates in the near future.

On Thursday, it will also issue a 3 year central bank note that has attracted much attention from the industry. The industry thinks that the central bank may increase the frequency of issuing the 3 year central bank in order to meet the market demand and thus recover the market funds.

Short term tickets are "chicken ribs"

At present, the market's attitude towards short and long term varieties is "ice and fire".

Insiders said that the 1 and March central bank votes were originally open market mainstream votes, but now they have become chicken ribs.

Since the Spring Festival, the central bank has made efforts to recover liquidity. The circulation of central issue in the 1 and March periods has been refreshed frequently, reaching 100 billion scale.

However, since the end of 4, the circulation of the two varieties has been shrinking gradually. Since May, the circulation of the 1 and March periods has been running in the scale of 12 billion.

The central bank announced on Tuesday (May 18th) that the open market would issue a 20 billion yuan 1 year central bank ticket, while the 28 day repo was suspended for third weeks.

A large trader told the "daily economic news" that the short term central bank became "chicken ribs" because the demand for the market was very weak, and the central bank was unwilling to adjust interest rates at this point.

Traders said that although the two day 1 years or so of the central bank some warmer, but still can not change the market "avoid short from long" mentality.

The central bank's announcement on Tuesday also showed that the yield of the 1 - year central issue continued for nearly 4 months and was unchanged at 1.9264% for sixteenth consecutive times.

This shows that the central bank's intention to maintain interest rate stability remains unchanged.

3 year central bank or a Monday issue.

Last week, the central bank launched a net investment of 152 billion yuan in the open market, ending a 11 week net return.

But if we consider the factors contributing to the reserve requirement, the central bank will effectively return more than 100 billion yuan last week.

Data show that the funds expended this week are only 95 billion yuan, down nearly 6 from last week.

Insiders said that this week the central bank hedging pressure is not large, and there are 3 years of central bank issue, the central bank to achieve net return is not a problem.

A trader in East China said that even if the issue of the 3 - year central bank did not exceed 100 billion scale this week, the yield of the issue is expected to continue downward.

The trader said that the issuance scale of the 1 - and March central banks was reduced, while the 3 - year central bank issuance remained high, which meant that the time limit for the open market to lock in liquidity was longer.

Data also show that the open market due to the end of May and the first week of June is still under 180 billion yuan, but from June to mid June, the funds for 3 consecutive weeks are over 210 billion yuan, and the central bank's hedge pressure will increase significantly.

Zhang Jing, an analyst with Huatai Securities, believes that in order to hedge the large maturity funds in June, the central bank is likely to increase the frequency of issuing 3 - year central bank votes to once a week, relying on 3 - year central bank votes to complete the hedging task of more than 200 billion yuan a week.

CPI or moderate rise in interest rates is hard to say again.

Insiders pointed out that judging from the situation of the money market, the issuance scale of the 1 - year central bank decreased gradually, but the yield continued to stabilize, indicating that the central bank would not raise interest rates in the short term.

Premier Wen Jiabao recently said that China's current economic recovery has been improving, but the situation at home and abroad is still extremely complex. There are many difficulties faced by macroeconomic regulation and control, and the negative effects of multiple policies should be prevented.

NDRC expects the two quarter CPI will continue to maintain a slight upward trend. The average increase in CPI in the first half of the year will be around 2.5%, lower than the target of 3% of the annual increase.

The NDRC said that although the new price increase factor will decrease in the two quarter, it is estimated that the CPI increase in May and June will probably be around 3%.

CITIC interest rate strategy week reported that from the current situation, the interest rate margin is limited, and it may not increase interest rates or increase only once a year. The timing will most likely be at the beginning of the two quarter or the beginning of the three quarter. Liquidity will remain moderate and moderate, but there will be a slight tightening in the two quarter.

Li Wei, a macroeconomic analyst at Standard Chartered Bank, told reporters in the daily economic news that there is no possibility of hyperinflation this year, but the situation is still grim.

"The rise of CPI is not a simple food pull; at present, the domestic economy is in the early stage of inflation to the middle of inflation."

Li Wei also predicted that CPI will continue to rise to July and August, and then it will gradually decline. The annual CPI growth will be around 3.5%.

"The CPI growth rate in July and August may exceed 4%."

He pointed out that although inflation pressure exists and there is room for interest rate increase, the central bank will not necessarily use interest rate tools in the short term.

"It is estimated that there will be two increases in interest rates by mid September."