Caixin Bond Market Morning Briefing March 9 | February CPI and PPI data to be released, international oil prices surge; Lan Fongan: This year's new government bonds amount to 11.89 trillion yuan, the largest in recent years

Bond Market News

【Today, the National Bureau of Statistics will release February CPI and PPI data】

The National Bureau of Statistics will announce February’s CPI and PPI data today. Analysts believe that the Spring Festival effect will lead to a significant year-on-year increase in February CPI, while rising non-ferrous metal prices will support an upward trend in PPI. Wind statistics show that the average forecast for February CPI is a 0.9% YoY increase, while PPI is expected to narrow further to a 1.2% decline.

【Pan Gongsheng: Strengthen Market Regulation to Improve Transmission of Monetary Policy】

On March 6, at the fourth session of the 14th National People’s Congress, People’s Bank of China Governor Pan Gongsheng stated that this year the central bank will implement a moderately loose monetary policy, flexibly and efficiently use tools such as reserve requirement ratio cuts and interest rate reductions, and leverage the integrated effects of incremental and stock policies, monetary and fiscal policies to promote low social financing costs. He emphasized strengthening regulation of market behaviors that could weaken the transmission of monetary policy, requiring banks to clearly disclose the annualized comprehensive financing costs of loans and standardize intermediary fees.

Pan Gongsheng noted that over the past two months, net long-term funds of about 2 trillion yuan have been injected into the open market through various tools. Overall, social financing conditions remain loose.

In the bond market, yields fluctuate within a reasonable range, with the 10-year government bond yield stable around 1.8%, and corporate bond issuance costs remaining low.

Regarding monetary policy tools, the central bank will continue enriching its toolbox, improve the short- and medium-term monetary base deployment mechanisms, and effectively utilize the 7-day reverse repo rate as a policy rate, continuing bond buy-sell operations.

On financial risk prevention and stability, Pan Gongsheng highlighted five key areas: first, balancing economic growth, structural adjustment, and financial risk prevention to promote high-quality development; second, orderly resolution of risks in key sectors; third, maintaining stable operation of foreign exchange, bond, and capital markets; fourth, preventing external shocks from spilling over, closely monitoring external impacts, and using macroprudential and financial stability tools to mitigate risks; fifth, improving the financial stability safeguard system with enhanced risk monitoring, assessment, and early warning capabilities.

He also mentioned that risks in key sectors are continuing to converge, with significant progress in resolving debt risks of local government financing platforms. As of the end of last year, the number and debt scale of these platforms decreased by over 70% compared to early 2023.

【Finance Minister Lan Fofan: New Government Bonds Scale Reached 11.89 Trillion Yuan, the Largest in Recent Years】

On March 6, at the fourth session of the 14th National People’s Congress, Finance Minister Lan Fofan said that this year China will continue to implement a more proactive fiscal policy. In terms of funding scale, three records were set: first, total expenditure exceeded 30 trillion yuan for the first time; second, the scale of new government bonds reached 11.89 trillion yuan, the largest in recent years; third, central transfers to local governments reached 10.42 trillion yuan, exceeding 10 trillion yuan for four consecutive years. Policy coordination is a highlight of this year’s fiscal policy. Lan Fofan introduced that the central government has allocated 100 billion yuan specifically for a package of fiscal and financial policies to stimulate domestic demand, mobilizing larger social resources to key areas, combined with this year’s 250 billion yuan in old-for-new consumer policies, which are more aggressive than last year. It is preliminarily estimated that this fiscal support can leverage trillions in credit, achieving a “small push with a big effect.”

On March 5, the Ministry of Finance submitted a report on the 2025 central and local budget implementation and the draft budgets for 2026 for review at the fourth session of the 14th National People’s Congress. The summary states that in 2026, the national debt quota is 48.550835 trillion yuan; the general debt quota for local governments is 18.868922 trillion yuan, and the special debt quota is 44.318508 trillion yuan.

【Cai Jianchun: Now is the Golden Era for Developing REITs in China】

On March 7, Cai Jianchun, General Manager of the Shanghai Stock Exchange, said at the CPPCC Economic Sector Panel that now is the golden period for developing REITs, and they should be developed into a market product. Currently, China’s REITs are starting with infrastructure projects, with strong application willingness from enterprises, including central state-owned enterprises, foreign-invested companies, and private firms, with attractive returns. The next step is to integrate REITs into the capital market and develop them into a market.

【People’s Bank of China: Gold Holdings Increased for 16 Consecutive Months; Foreign Exchange Reserves Reached $3.4278 Trillion at End of February】

Data from the PBOC shows that as of the end of February, China’s gold reserves stood at 74.22 million ounces, an increase of 30,000 ounces from January’s 74.19 million ounces, marking the 16th consecutive month of gold accumulation. As of the end of February 2026, China’s foreign exchange reserves totaled $3.4278 trillion, up $28.7 billion from January, a 0.85% increase. The rise was influenced by factors such as the strengthening of the US dollar index amid macroeconomic data, monetary policy expectations, and asset price fluctuations. Despite global uncertainties, China’s economy remains stable and improving, supporting the overall stability of foreign exchange reserves.

【Bond Market Decline and New Regulations Accelerate “Anchoring” of Performance Benchmarks, Numeric Types No Longer Encouraged】

Performance benchmarks for wealth management products are undergoing a major adjustment.

According to multiple wealth management subsidiaries, recent efforts are focused on replacing fixed values or ranges with floating benchmarks linked to market interest rates or indices for existing products. Meanwhile, new products issued this year increasingly adopt index or interest rate-based benchmarks.

An industry insider told Caixin that while regulators do not mandate the change, the trend is clear: numeric benchmarks are no longer encouraged, as they could impact future regulatory evaluations. Completing the “benchmark switch” before the implementation of the “Wealth Management Product Information Disclosure Measures” has become a consensus.

【Private Asset Management Assets Under Management Rise to 12.37 Trillion Yuan, Over 60% from Securities Firms and Asset Management Subsidiaries】

The China Securities Association released January data on private asset management. After two months of decline, the total scale slightly increased by 0.59% to 12.37 trillion yuan in January. The number and scale of new products registered and established in January both declined month-on-month.

In terms of industry structure, securities firms and their asset management subsidiaries remain dominant, with 1,495 registered products and 53.842 billion yuan in established scale, accounting for 64.32%. Their share of new establishment scale has been steadily increasing, surpassing 60%, up from 53.13%, 55.32%, and 57.06% at the end of October, November, and December 2025, respectively.

【Movable Property Trust Registration Pilot Launched: Covering Production Equipment and Precious Metals, “Who Regulates, How to Regulate” Becomes a Challenge】

Following the gradual rollout of real estate trust registration pilots, the registration of movable property trusts is also entering a key phase.

Caixin learned that China Trust Registration Co., Ltd. recently issued a notice on conducting pilot work for movable property trust registration, aiming to better leverage the value of the trust system and promote industry transformation.

【Jilin Province: Successfully Exits Key Local Debt Province, High-Risk Financial Institutions Cleared】

Jilin Province Governor Hu Yuting announced that in 2025, Jilin successfully exited the list of key local debt provinces, with high-risk financial institutions fully cleared. Hu Yuting stated that the province has implemented strict fiscal discipline, pioneered zero-based budgeting reforms, and strengthened fiscal performance management.

【Hunan Province: Exploring Asset Reuse and Debt Swap to Raise Debt Repayment Funds, Increasing “Chain Debt” Repayment】

Hunan Party Secretary and NPC Standing Committee Chairman Shen Xiaoming published an article titled “Hunan Provincial Party Secretary and NPC Standing Committee Chairman Shen Xiaoming: Solidly Carry Out the Enterprise Service Year to Promote High-Quality Development of the Private Economy,” mentioning that in 2026, efforts will focus on resolving overdue payments to private enterprises. The province will use precise and refined measures, including leveraging new local government special bonds, and explore asset reuse and debt swaps to raise funds for debt repayment, intensify “chain debt” repayment, and ensure substantive debt clearance.

【Oil Prices Break $100 for the First Time Since 2022! Ongoing Middle East Conflict and Production Cuts by Oil Countries】

According to Caixin, due to Iran-related conflicts causing the Strait of Hormuz to remain closed, more Middle Eastern oil-producing countries have reduced output. International oil prices surged past $100 per barrel on Monday, the first time since the outbreak of the Russia-Ukraine conflict in 2022.

This rally is the fastest since the 1980s, with no signs of slowing down.

Market data shows that on Monday, both WTI and Brent crude opened sharply higher and quickly surpassed $100, with peaks over $110. As of the latest, WTI crude futures rose 18.67%, to $107.87 per barrel; Brent crude futures increased 16.78%, to $108.24 per barrel.

【Asian High-Yield USD Bonds Underperform Globally; Iran Conflict Highlights Oil Dependency】

Asian high-yield USD bonds have significantly underperformed similar assets globally, mainly due to escalating Iran conflicts, which further highlight the region’s high dependence on imported energy. The Bloomberg Asia High-Yield USD Bond Index shows that bonds issued by Asian corporates and sovereigns have seen their average yield spreads widen by 16 basis points this week, remaining flat on Friday. In contrast, global indices show narrowing spreads for high-yield bonds.

Rising energy prices have globally increased borrowing costs and put pressure on Asian currencies, intensifying financial stress for the region’s weakest borrowers. Pakistan and Sri Lanka, with the lowest sovereign credit ratings in Asia, have seen the worst performance this month, with declines of at least 1.7%.

【U.S. February Non-Farm Payrolls Unexpectedly Decline, First Negative Since October 2025; 10-Year Treasury Yields Drop Briefly】

On March 5, U.S. Labor Department data showed that for the week ending February 28, seasonally adjusted initial unemployment claims were 213,000, unchanged from the previous week and slightly below economists’ expectations of 215,000. However, non-farm payroll employment in February decreased by 92,000, returning to negative territory for the first time since October 2025, versus expectations of a 59,000 increase.

Additionally, the U.S. unemployment rate rose to 4.4% in February, the highest since December 2025, slightly above the expected 4.3%. Following the data release, traders increased bets on rate cuts, with the probability of a Fed rate cut in June rising to about 50%, up from 35% before the data. Meanwhile, spot gold surged over $40 to $5,126 per ounce; spot silver rose $1.6 to $84 per ounce. The dollar index DXY fell over 20 points to 99.1. The 10-year U.S. Treasury yield briefly declined to 4.164%.

Open Market Operations:

The PBOC announced that on March 6, it conducted a 448 billion yuan 7-day reverse repo operation at a rate of 1.40%, with bids totaling 448 billion yuan and the same amount maturing. Wind data shows that 269 billion yuan of reverse repos matured that day, resulting in a net withdrawal of 224.2 billion yuan.

Credit Bond Events

■ Longfor Group 2025 performance forecast: expected net profit attributable to parent of about 1 billion yuan, but core equity profit excluding fair value changes is a loss of 1.5 to 2 billion yuan;

■ Agile Group: plans to sell subsidiaries’ real estate and operational assets to resolve debt risks;

■ Dongfang Fashion: “Dongshi Convertible Bond” due April 8, likely unable to pay principal and interest on time;

■ China Power International: plans to issue the first green Panda bond, with a scale of 1 billion yuan;

■ Deutsche Bank: issued 5.5 billion yuan Panda bonds, a new record for foreign banks;

■ Everbright Financial Leasing: plans to issue 3 billion yuan of green financial bonds within the year;

■ Financial Street Securities: fined 1.412 million yuan for non-compliance with anti-money laundering internal control regulations;

■ “Hongda Debt Repayment” bondholder meeting: four proposals approved, including rectification and debt repayment plans;

■ United Credit: monitoring Kunming Urban Investment’s revocation of supervisory committee and new enforcement cases;

■ Xiamen Bank: involved in a 418.7 million yuan loan dispute entering enforcement;

■ Fitch: upgraded Changhe’s long-term issuer rating to “A” with a “Stable” outlook; removed from positive watchlist;

■ “21 Jiujiang Bonds / 21 Jiujiang Construction Investment Bonds”: early redemption proposals approved by bondholders;

■ Shenzhen Stock Exchange: terminated review of Chengdu Xingguanghua Urban Construction’s 1 billion yuan private placement;

■ CCB New Zealand: issued its first offshore bond in Hong Kong dollars, fully subscribed by offshore funds.

Market Dynamics:

【Money Market | Most Rates Rise】

Last Friday, most money market rates increased. The weighted average rate of interbank pledged repo for 1-day maturity rose by 4.94 basis points to 1.3194%; 7-day rate fell by 0.58 basis points to 1.4149%; 14-day rate rose by 0.91 basis points to 1.4704%; 1-month rate fell by 1.24 basis points to 1.45%.

Shibor short-term rates mostly increased: overnight up 5.2 basis points to 1.319%; 7-day steady at 1.412%; 14-day up 0.1 basis points to 1.462%; 1-month down 0.51 basis points to 1.5417%.

Interbank repo fixed rates mostly rose: FR001 up 5.0 basis points to 1.40%; FR007 steady at 1.52%; FR014 up 1.0 basis points to 1.54%.

Bank-to-bank repo fixed rates mostly increased: FDR001 up 5.0 basis points to 1.32%; FDR007 steady at 1.42%; FDR014 up 1.0 basis points to 1.46%.

【Interest Rate Bonds | Long-term Yields Fall, 30-Year Treasury Yield Breaks 2.23%】

Last Friday, bond futures mostly closed flat. The 30-year main contract rose 0.03% to 112.780 yuan; 10-year main contract steady at 108.535 yuan; 5-year main contract steady at 106.110 yuan; 2-year main contract down 0.01% to 102.496 yuan.

Major interbank interest rate yields mostly increased: as of 16:30, the 10-year government bond yield on active bonds rose 0.45 basis points to 1.7875%; 10-year policy bank bond yield rose 0.35 basis points to 1.955%; 30-year government bond yield rose 0.45 basis points to 2.23%.

Industry experts note that with the central bank continuing to drain liquidity through 8 trillion yuan of 3-month reverse repos, attention will focus on geopolitical risk shifts, market expectations for rate cuts, and inflation trends. Since January, banks have increased bond issuance beyond expectations, easing government debt supply concerns. Volatility in precious metals and geopolitical tensions also support bonds, but after the 10-year yield broke below 1.80%, markets are cautious, waiting for rate cut expectations to rise and open further downward space, likely leading to continued oscillation.

【Credit Bonds | Yields Generally Decline, Total Trading Volume 110.9 Billion Yuan】

Last Friday, credit bond yields broadly declined, with spreads narrowing. Total trading volume was 110.9 billion yuan. Top yields included “23 Vanke MTN003,” “23 Industrial Finance 10,” and “24 Industrial Finance 05,” at 342.74%, 14.19%, and 13.82%, respectively. AAA short-term notes: 1-year yield down 0.78 basis points to 1.6421%; 3-year down 1.18 basis points to 1.7904%. AAA urban investment bonds: 1-year yield down 2.29 basis points to 1.6477%; 3-year down 0.85 basis points to 1.8154%.

One bond with over 2% increase: “23 Vanke MTN003,” “24 Fuzhou Urban Investment MTN002,” “24 Guoxin Holdings MTN001A,” with gains of 78.66%, 1.53%, and 1.52%, respectively, trading volumes of 6.0935 million, 20.0266 million, and 41.5618 million yuan.

Two bonds with over 2% decline: “21 Longgang Bonds 01,” “19 Jinzhong State-Owned Bonds,” and “24 Lushui Expressway Stock MTN001B,” with declines of 3.83%, 3.51%, and 1.51%, trading volumes of 10.0278 million, 4.0345 million, and 20.4915 million yuan.

High-yield bonds: 142 bonds with yields above 5%, including “23 Vanke MTN003,” “23 Industrial Finance 10,” and “24 Industrial Finance 05,” with yields of 342.74%, 14.19%, and 13.82%, and trading volumes of 6.0935 million, 650,000, and 810,000 yuan.

【European Bond Market | Yields Rise Collectively, UK 10-Year Gilt Up 8.7 Basis Points to 4.626%】

Last Friday, European bond yields rose across the board. UK 10-year gilt yield increased 8.7 basis points to 4.626%; France 10-year bond yield up 4.6 basis points to 3.509%; Germany 10-year bund yield up 1.8 basis points to 2.856%; Italy 10-year bond yield up 5.9 basis points to 3.617%; Spain 10-year bond yield up 5 basis points to 3.348%.

【U.S. Bond Market | Yields Mixed, 2-Year Treasury Down 1.38 Basis Points to 3.556%】

Last Friday, U.S. Treasury yields fluctuated: 2-year down 1.38 basis points to 3.556%; 3-year down 0.83 basis points to 3.584%; 5-year up 0.02 basis points to 3.725%; 10-year up 0.20 basis points to 4.138%; 30-year up 0.59 basis points to 4.760%.