The current fiscal and monetary policies are showing new features. The fiscal policy emphasizes the combination of support and innovative methods. On the one hand, it promotes the smooth issuance of local bonds, guarantees the amount of capital for infrastructure projects, and on the other hand, innovative policy measures to improve the role of social funds on the basis of existing quotas. In the field of monetary policy, the central bank is actively pursuing liquidity and is increasingly focusing on coordination with fiscal policy. The innovation of policy means has replaced the stimulation of a single amount of funds to a certain extent.
In the next step, we believe that the two policies have a high probability of maintaining the status quo, because the risk of accelerated economic downturn is not large, unless there is a significant decline in large-scale macro data, there will be no further fiscal or monetary policy. In general, as long as consumption remains at around 8.5%, industrial added value remains at around 5.4%, and investment is stable at around 6%, it is unlikely that new policies will be introduced. If large-scale economic data weakens, traditional fiscal policy and monetary policy will leave room for it. The structural interest rate cuts for small and medium-sized banks may be one of the preferred means, and the possibility of policy innovation is also very large.
In addition, the overall market short-term capital interest rate is difficult to further decline. In June, the short-term capital interest rate has dropped to a low in recent years. After July, further downside space is extremely limited, and the possibility of marginal tightening increases. The bond market sentiment may be affected by this, and it also limits the space for future debt.
Overall, the trend of strong debts in the second half of the year is relatively certain, but the pressure is also close at hand. It is expected that the 10-year government bond interest rate is expected to fall to around 3%. On the unilateral strategy, it is recommended to do more dips, and the fourth quarter should pay attention to the directional impact of economic stabilization. Cross-species arbitrage strategy can focus on doing more than 50 spread arbitrage in the process of raising the interest rate of funds. In terms of inter-temporal arbitrage, there is still a certain upside potential for the short-term and second-quarter contract spreads. In the middle and late August, the mainstay will change the opportunity to pay attention to the inter-temporal arbitrage opportunities brought by the price difference.xx