Liquidity remained eased on Monday with interest rates slightly up. China’s central bank repurchased RMB 20 billion in open market in 7 days and RMB 10 million in 14 days with repo rate unchanged at 2.25 percent and 2.40 percent respectively. A total RMB 120 billion repo bonds were expired. A net RMB 90 billion was injected into the market on Monday. Circulation in tier-1 market increased. Seven ultra short financing bonds were issued in tier-1 market, including RMB 500 million of AAA 270-day16 Wanhua SCP004, RMB 1.5 billion of AAA 120-day 16 ZJ Energy SCP008, RMB 400 million of AA+ 180-day 16 Zijiang SCP005, RMB 1.25 billion of AA+ 270-day 16 Datang Leasing SCP001, RMB 700 million of AA 270-day 16 Hualian SCP003, RMB 200 million of AA 270-day 16 Zhanjiang Port SCP005, RMB 500 million of AA 270-day 16 Yantai Port SCP001. Two short-term financial bonds were issued, including RMB 600 million of AA+ 1-year 16 Shanghai Salvage CP001, and RMB 200 million of AA+ 1-year 16 WJCC CP001. One medium-term bill was issued, including the RMB 200 million of AA+ 5-year GXKG MTN001. Trading was active in tier-2 credit bond market. Yields of short-term financing bonds were slightly down in heavy trading. Yields of AAA one-year credit bonds fell 2 bps at 2.92 percent. Yields of 16 ZDT SCP011 that will expire in 194 days closed at 2.74 percent. Yields of the medium-term bill market turned lower in active trading. Yields of AAA three-year bonds slipped 2 bps at 2.92 percent. Yields of AAA five-year bonds dropped 2 bps at 3.03 percent. Yields of 16 Railway MTN002 that will expire in 4.66 years closed at 2.97 percent. Yields of corporate bonds were little changed in active trading.

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