The People's Bank of China conducts structural interest rate cuts and bond market consolidation; China's September PMI returns to expansion — W40 Domestic Macroeconomic Overview
- The central bank lowered the PSL rate by 25 basis points to 1.5% and expanded the scope of supported sectors, opting for a structural rate cut rather than broad-based monetary easing. The signal for credit expansion is more significant than the liquidity effect. In the short term, the bond market may face consolidation due to profit-taking sentiment and the better-than-expected PMI, but the medium-term bullish trend remains unchanged.
- In September, the three major PMI indices returned to the expansion zone, with production outperforming demand, a rebound in prices, and continued weakness in employment. The bond market may come under short-term pressure, but medium-term support remains, and there is still room for ultra-long term bonds to perform in the second half of the rally.
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