【Zhejiang Commercial Bank FICC·Credit Bond Daily Report】Multiple Pressures

(Source: Zhejiang Commercial Bank FICC)

In the primary market, a total of 33.7 billion yuan was issued today, including 12.73 billion yuan of short-term commercial paper, 19.67 billion yuan of medium-term notes, and 1.3 billion yuan of PPN. Regarding short-term commercial paper, the 190D Zhangzhou Transportation CP001 was undervalued at 1.64%, with a total multiple of 6.57; the 227D Chang Transportation SCP001 issued at 6.8E, finally priced at 1.50%, with a total multiple of 5.11; the 270D Gansu Public Investment SCP002 was undervalued at 1.64%, with a total multiple of 4.00, with active participation from funds and wealth management products. For medium-term notes, the 3Y+2Y 26 Xincheng Development MTN001 was finally issued at 1.92%, with a total multiple of 6.03, mainly involving funds and banks; the 3Y+2Y 26 Jinjiang Industrial Investment MTN002 issued 300 million yuan, with a total multiple of 4.23, and was priced near 1.99%; the 1+1+1+1+1Y 26 Suqian Urban Investment PPN005 issued 300 million yuan, with a final slightly undervalued cut at 1.70%, and a total multiple of 5.40.

In the secondary market, trading slightly decreased today, with a total of 1,604 transactions, of which TKN accounted for 72%. The average undervaluation was 0.45 basis points, with a slight decline in undervalued transactions. Within 1 year, 429 credit bonds were traded, placing at the 47th percentile for one-year maturity, with a median undervaluation around 0.6 basis points, and a median transaction yield of 1.65%. For 1-3Y credit bonds, 747 transactions occurred, mainly focusing on AAA-rated bonds, with buying mainly by funds and banks. Most trades were around 1-2 basis points undervalued, with a median yield of 1.92%. Trading sentiment for 3-5Y credit bonds was moderate, with 287 transactions, at the 50.2% percentile for one-year maturity, averaging 0.67 basis points undervalued, and a yield center at 2.25%. Trading of bonds over 5Y was light, with only 35 transactions today, at the 7th percentile for one-year maturity, with an average overvalued of 0.87 basis points.

Market Summary

As tensions escalate, Brent crude oil briefly broke above 105 before retreating. Persistently high oil prices have suppressed equity and bond sentiment. Coupled with the tax season this week, liquidity has been relatively tight compared to last week. Economic data slightly exceeded expectations, leading to a correction in the bond market today. The 10-year yield saw large sell-offs but did not break through the 1.85% level. Overall, credit performance outperformed rates, with the market mainly focusing on AAA-rated bonds with 1-3Y maturities. Trading sentiment for medium and long-term bonds cooled compared to last Friday, with trading volume dropping to the 32nd percentile for one-year maturity, and the market is waiting for better entry points.

Market Data

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