In the past week, due to the sharp drop in the bond market, bank wealth management products have suffered large-scale losses. It is reported that from the end of October to November 15, in just over ten trading days, more than 2,600 of the nearly 8,000 fixed income wealth managem

In the past week, due to the sharp drop in the bond market, bank wealth management products have suffered large-scale losses.

It is reported that from the end of October to November 15, in just over ten trading days, more than 2,600 of the nearly 8,000 fixed income wealth management products in the market fell, accounting for 1/3 of the decline. Among them, 22 products had a net value of more than 1%, and 4 products had a drop of more than 2%.

I will just look at a R2-level financial management company and you can see that on November 14, the profits of the past two months have basically dropped.

Many people buy R2-level financial products, mainly because they have low risks and stable returns. As a result, they will lose the returns of the past one or two months in one day, and naturally they have a little mentality.

So why did bank wealth management products fall this time? Also, why did the bond market plummet?

This article will make a detailed analysis of this, welcome to watch.

(1) Why did the sharp drop

Many R2-level financial products are investing in treasury bonds, interbank certificates of deposit, and corporate bonds.

Therefore, if there is a large fluctuation in the bond market, it will affect R2 level financial management.

Therefore, on November 14, there will be large-scale losses in bond funds and bank wealth management products, because the bond market has fallen sharply.

We can take a look at the 10-year treasury bond yield , which is the anchor benchmark of the bond market.

Starting from November 11, our 10-year Treasury bond yield began to soar sharply, and then reached a peak on the 14th.

soared from 2.7% to 2.85% in two trading days.

Bond yield and bond price are inverse relationship.

Therefore, the soaring 10-year Treasury bond yield means that the price of the entire bond market has dropped sharply.

has an index that can more intuitively see the rise and fall of the entire bond market, which is Treasury bond index .

Most R2-level financial products in banks have yield , which is closer to the trend of the Treasury bond index.

We can see that the Treasury bond index is a long-term bullish trend.

This is because the Treasury bond index is basically a reflection of the returns of the entire Treasury bond market.

. Since the returns of bond mainly come from interest, as long as the treasury bond does not default, the treasury bond index will inevitably be bullish for a long time.

But the Treasury bond index will also experience short-term price fluctuations .

Once the bond market price plummets, the Treasury bond index will also experience some short-term downward trend.

From the above figure, we can see that starting from November 11, the Treasury bond index fell.

This is a reflection of the decline of the entire bond market, so it is not surprising that R2-level bank wealth management products anchored in the bond market have suffered losses.

However, normally, there will not be such a large drawdown.

Because R2-level financial products generally have some interbank certificates of deposit.

. Since November 4, the 1-year interbank certificate of deposit maturity rate has soared rapidly, from 2.07% to 2.71% on November 17, and the increase is 30%.

This means that money in the market has become more expensive.

Another data that can prove this is Shanghai Bank loan interest rate (Shibor).

Starting from November 11, the interbank lending interest rate also soared sharply, from 2% to 2.45%.

lending rate rises, which means that the market money has become more expensive, that is, the interbank market lacks money.

lending rate declines, which means that the market money has become cheaper, that is, the interbank market is not short of money.

So, the fundamental reason for the loss of bank wealth management products is that the market's money has become more expensive and the market is a bit short of money.

So someone may ask, not only did the reserve requirement ratio cut this year, but the MLF interest rate also lowered, so why is the market short of money?

(2) Why is there a shortage of money?

This time the market is short of money, and all factors at home and abroad are combined together.

There is one factor, which I think is more important.

is related to the "16 financial support for real estate" published on November 12.

This is called the most powerful real estate stabilization measure.

Simply put, we must make every effort to avoid unfinished buildings, ensure that existing projects can be completed and delivered, and support real estate companies to reasonably extend the existing loans of . At the same time, we support some real estate companies that do not default on debts to to financing to avoid being dragged down by some real estate companies.

mentioned that "actively provide financial services for "protecting the payment of buildings" and support relevant banks with new supporting financing support."

is indeed very strong.

But I think this is more just to temporarily drag the real estate market out of the ICU ward, but it is still in the ordinary ward.

However, many people think that the real estate market can be discharged from the hospital in an instant and can run a marathon to win the championship immediately, which is obviously unrealistic.

In addition, the 16 items this time have a lot of strength, which also means that this requires a lot of funds.

So where does this money come from?

If we treat the national liquidity as a large pool.

So this pool is divided into many pieces, the most important of which are interbank market, bond market, stock market, etc.

These are financial markets with relatively strong liquidity and can be regarded as living water.

In the past, when the real estate boomed, our central bank released the money, most of the money flowed into the real estate market.

But in the past two years, real estate has experienced a cold winter, especially this year, which has been even more bleak.

So, although the central bank has released money this year, the water flows out of the real estate market. In addition, the entire real economy is also relatively sluggish this year, and foreign trade has cooled a lot, so this water flows only part of the water flows to the real economy.

So, this water is mainly transferred in the financial market.

However, this year the stock market fell overall for the whole year due to external factors such as the Fed's aggressive rate hike.

So, the water released this year is mainly idle in the interbank market, and in the bond market, it is also about avoiding risks.

This is because, this year we lowered the MLF interest rate, and our overall interest rate level will lead to a stronger bond market and a decrease in bond yields, which will also cause the real interest rate to fall.

But now we need to stabilize the real estate market, especially to "guaranteed payment", so we need a lot of money. This money mainly involves pumping water from the interbank market and the bond market.

The water pumped out means that a large amount of funds will sell these bonds, which will lead to a decline in bond prices and a rise in yields.

So, there were interbank lending rates and treasury bond yields, which all rose.

In addition, as the Federal Reserve aggressively raises interest rates this year, some foreign capital hot money continues to reduce its holdings in our government bonds, so it is estimated that some foreign capital will take the opportunity to smash the market.

The bond market will experience such a large fluctuation this time, which also shows that this real estate market requires a lot of funds and a lot of water needs to be drained.

also shows that the market expects that we do not intend to stabilize the real estate market by flooding the market.

Although a lot of water is needed to stabilize real estate, if the central bank also pours a lot of water into the pool, then the water level of the pool can be balanced, that is, the bond price will not change too much.

But if the central bank does not pour water into the pool, or only a small amount of water is poured, it is far lower than the scale of funds that stabilize the real estate pumping.

Then the water level of this pool will drop sharply, and bond prices will plummet and yields will soar.

So, although the central bank does not intend to raise interest rates at this stage, as long as the central bank does not let the water out, facing this kind of large pump for stable real estate, it will also lead to an increase in the market interest rate of .

So to judge the future direction of the bond market, the most important thing is to look at the attitude of the central bank.

If the central bank releases money and cuts interest rates , then the bond market will be bullish.

If the central bank collects water and raises interest rates, the bond market will be bearish.

If the central bank does not charge or release it, but the market is continuously pumped by real estate, then the bond market will fall, but the decline will not be too large.How much decline in

depends on how much funds are needed to revitalize the real estate market, and the attitude of the central bank.

The attitude of the central bank can be seen from the recently released third-quarter currency execution report.

It mentioned, "Increase the implementation of prudent monetary policy, do a good job in cross-cycle adjustment, take into account short-term and long-term, economic growth and price stability, internal equilibrium and external equilibrium, and insist on not "flooding" and not exceeding the issuance of currency."

So, it is certain that the central bank will not over-issuance of currency at this stage.

The massive amount of funds required for financial support for 16 real estate items this time may mainly need to be digested by market funds.

But at the same time, the central bank also specifically mentioned that "doing a good job in economic work at the end of the year to provide a suitable liquidity environment."

This shows that although the central bank will not over-issuance of currencies on a large scale to stabilize the real estate market, it will not allow the liquidity of the bond market to dry up.

On November 15, 1 trillion MLF funds expired. The central bank conducted a sequel to shrinking , and only 850 billion MLFs were renewed, which was equivalent to recovering 150 billion funds.

At the same time, in order to stabilize market liquidity, the central bank also released 172 billion yuan in the short term through reverse repurchase .

MLF is a one-year period, which means that the central bank lends money to the market for 1 year.

reverse repurchase is a 7-day period, which means that the central bank lends money to the market for 7 days.

So, this operation is that the central bank will recover long-term funds from the market, but then borrow a short-term funds from the market to save the emergency and avoid liquidity tension.

In addition to the 15th, the central bank also conducted a reverse repurchase operation of 132 billion yuan on the 17th.

Before that, the central bank had basically maintained a small number of reverse repurchases every day.

, and this week the central bank has released a total of 401 billion yuan through reverse repurchases.

However, the 401 billion yuan of funds will be returned in a short term and will be returned in a week. If the central bank does not continue to reverse repurchase so much next week, it will be equivalent to collecting water from the market again.

Overall, the central bank's current attitude is relatively clear. It will not flood the market, but it will still maintain reasonable liquidity in the market.

Our bottom line is that no systemic financial risks occur.

Now is a critical period for us to compete fiercely with the United States, and the Federal Reserve has aggressively raised interest rates and launched an indiscriminate financial war on the world. Our financial system is also facing an increased test.

In such a turbulent time, we will still try our best to ensure that no systemic financial risks occur.

At the same time, as individuals, we also need to improve our risk awareness. It is better to be more cautious.

I am Star Talk Dabai, welcome to like and support.