Entering the fourth quarter, the market's attention to liquidity and interest rate trends has once again increased. Multiple institutions believe that although October faces temporary disturbances such as government bond issuance and tax periods, the pace of fiscal expenditure remains stable, the central bank's operations are flexible, and overall liquidity pressure is controllable. The funding situation is expected to continue to operate steadily, and the bond market will mainly adopt defensive strategies in the short term, waiting for further clarification of policies and economic signals in the fourth quarter. The liquidity gap in October is weaker than the seasonal outlook for October's funding situation. Several industry experts believe that fiscal spending will steadily advance in October, monetary policy will continue to be moderately loose, and overall liquidity pressure will be controllable. The central market interest rate may slightly fall, and the funding situation is expected to remain stable and loose. From a fiscal perspective, there is still some support in terms of funding. Mingming, Chief Economist of CITIC Securities, stated in a research report that the pressure on government bond supply will ease in October, with an estimated net financing of about 600 billion yuan. Although seasonal tax returns have caused disturbances to liquidity, the overall revenue and expenditure gap is limited against the backdrop of tax cuts and fee reductions, as well as increased fiscal expenditures. Government deposits are expected to increase by about 500 billion yuan, and the impact on market liquidity is generally controllable. In addition, the slight return of M0 and the reduction of payment pressure also provide a certain buffer for the capital side. If MLF and reverse repo maturity factors are not considered, the liquidity gap in October is about 500 billion yuan, and it is expected that there may be periodic fluctuations at some point in the middle of the month. ”Clearly stated. In addition, monetary policy tools remain the key to maintaining stable funding. According to a research report released by Huachuang Securities, the liquidity gap in October was about 2.88 trillion yuan, of which the maturity scale of buyout reverse repurchase was 1.3 trillion yuan (800 billion yuan for 3-month term and 500 billion yuan for 6-month term). However, the central bank has launched a reverse repurchase operation of 1.1 trillion yuan on October 9th, and the pressure has been partially alleviated. According to a research report released by Huachuang Securities, since June, the net investment in buyout style reverse repurchase has remained at around 300 billion yuan. If the funding situation tightens in the future, the central bank may continue to hedge it through excessive renewal of MLF. Overall, the overall funding gap pressure is limited, and the central market interest rate is likely to remain around 1.5%. On the demand side, a research report released by the Financial Market Department of China Construction Bank suggests that there is limited cross month demand for funds in non quarter end months of October, resulting in a decrease in reserve requirements due to the scale of bank loans. The maturity of interbank certificates of deposit has also decreased from 3.5 trillion yuan in September to 1.8 trillion yuan, significantly easing the pressure of renewal. The bond market sentiment tends to be rational while overall liquidity remains stable. The industry believes that the short-term funding environment is still relatively loose, and the pace of interest rate decline may depend on policy signals and fundamental changes. Mingming stated that considering the central bank's monetary policy attitude is still relatively loose, the risk of liquidity tightening in October is low, and the funding situation is likely to remain stable. The steady recovery of the economy requires support from a low interest rate environment, and monetary policy is expected to continue its moderately loose orientation. The possibility of a significant adjustment in the bond market is relatively small. If the central bank cuts interest rates or restarts trading of treasury bond bonds, there is still room for further decline in interest rates. Mingming suggests maintaining a neutral position in the short term, paying attention to the space for short-term coupon and leverage strategies, and waiting for the opportunity for interest rates to decline in the mid to late fourth quarter. From the perspective of liquidity operation rhythm, the central bank's recent operations continue to follow the "forward-looking care" approach. Huachuang Securities believes that with the active operation of the central bank, the overall risk of tightening funds is controllable. From August to September, DR007 returned to a range slightly higher than the policy interest rate. Although there was a brief fluctuation at the end of the quarter, the central bank stabilized the friction caused by the expiration of the reverse repurchase in early October by increasing the 14 day reverse repurchase and pre buyout reverse repurchase. Looking ahead to the fourth quarter, the overall pressure of non bank stratification remains low, and the structural tension in the market is limited. Tan Yiming, Chief Fixed Income Analyst at Tianfeng Securities, stated in a research report that the funding situation in October may continue the seasonal pattern of "loosening first and then tightening". In early October, with the release of fiscal expenditures, cash inflows during holidays, and the cumulative effect of medium - to long-term liquidity, the interest rate on funds is expected to remain stable; After entering the middle stage, the disturbance factors gradually increase. The centralized issuance of treasury bond and the maturity of medium - and long-term instruments superimposed with the payment within the tax period, the rise of cross month demand, the "moving" of high interest fixed deposit due and the landing of new policy financial instruments, and other factors may all push up the capital volatility in stages. The continuation and deployment pace of medium - and long-term liquidity tools by the central bank will become a key variable for balancing supply and demand and stabilizing expectations. ”Tan Yiming stated in the research report. Overall, the market generally expects the funding situation to be controllable in the fourth quarter. The policy direction for maintaining stability remains unchanged, and the loose environment still provides space for interest rates to decline. Although short-term fluctuations are difficult to avoid, analysts believe that the medium - to long-term logic of the bond market remains resilient and should not be overly pessimistic. (New Society)