Cailian Press Bond Market Morning Briefing February 14 | January Social Financing Data Released, Government Bond Financing Accounts for a High Proportion; CSRC Strictly Investigates Tanfeng Securities for Illegal Activities

Bond Market News

【Chinese Central Bank: Plans to Issue 50 Billion RMB Central Bank Bills in Hong Kong on February 25】

The People’s Bank of China announced that on Wednesday, February 25, 2026, it will conduct a bond tender via the Hong Kong Monetary Authority’s Central Maturity and Settlement System (CMU) bond bidding platform, to issue the first and second batches of central bank bills for 2026. The first batch will have a 3-month (91 days) fixed-rate coupon bond, with principal and interest due at maturity, amounting to 30 billion RMB. The issue start date is February 27, 2026, with maturity on May 29, 2026; if this date falls on a holiday, it will be extended accordingly. The second batch will be a 1-year fixed-rate coupon bond, paying interest semiannually, with a total of 20 billion RMB issued. The start date is February 27, 2026, with maturity on February 27, 2027; if this date falls on a holiday, it will be extended accordingly.

【January Financial Data Released: Pre-Holiday Consumption Supports Growth in Personal Loans; Government Bond Financing Surges to Highest Since 2021】

On the 13th, the People’s Bank of China released January financial data. The data shows that as of the end of January 2026, the total social financing stock was 449.11 trillion RMB, up 8.2% year-over-year, 0.2 percentage points higher than the same period last year; in January, the incremental social financing was 7.22 trillion RMB, an increase of 1662 billion RMB compared to the same month last year.

At the end of January, broad money (M2) stood at 347.19 trillion RMB, up 9.0% year-over-year, 0.5 percentage points higher than the previous month, and 2.0 percentage points higher than the same period last year.

In terms of loans, as of the end of January, RMB loans totaled 276.62 trillion RMB, up 6.1% year-over-year. Structurally, inclusive micro and small business loans amounted to 37.16 trillion RMB, up 11.6%; medium- and long-term service sector loans excluding real estate reached 60.03 trillion RMB, up 9.2%. All these growth rates outpaced the overall loan growth.

“Both M2 and social financing growth rates remain high, continuously creating a favorable monetary environment for economic recovery,” said an authoritative expert to Caixin. “Loan issuance in the first quarter is usually substantial, and early policy implementation can produce quick results. Currently, China’s financial supply is ample; to effectively address weak demand, deepening reforms and promoting economic structural transformation are key. Fiscal and financial policies are also working together to expand domestic demand.”

On one hand, moderately loose monetary policy continues to exert effort, with flexible use of various monetary tools to maintain ample liquidity, including a 0.25 percentage point reduction in structural tool rates, improving structural tool design and management, and market-oriented incentives to encourage banks to increase credit to key sectors.

“On the other hand, fiscal policy has adopted a more proactive stance. In January, government bond financing reached 976.4 billion RMB, an increase of 283.1 billion RMB from the same period last year, with issuance of national, local government general, and special bonds all significantly higher. The share of government bond financing in total social financing reached 13.5%, the highest since 2021,” the expert added.

【China’s January Credit Data Released: Social Financing Adds 7.22 Trillion RMB, M2 Grows 9% YoY】

According to the central bank, preliminary data shows that as of the end of January 2026, social financing stock was 449.11 trillion RMB, up 8.2% year-over-year; in January, social financing increased by 7.22 trillion RMB, 1662 billion RMB more than the same period last year. M2 at the end of January was 347.19 trillion RMB, up 9% YoY. RMB loans increased by 4.71 trillion RMB in January.

Market experts note that M2 growth in January accelerated slightly compared to the previous month. This is partly due to a low base effect—January 2025 saw about 5 trillion RMB new M2, which is relatively low historically—and partly related to positive momentum in the capital markets at the start of the year. As the base effect diminishes, M2 growth is expected to stabilize.

【List of Systemically Important Banks in China Announced: Total 21 Banks】

According to the People’s Bank of China website, to build a comprehensive macroprudential management system and strengthen supervision of systemically important financial institutions, the PBOC and the China Banking and Insurance Regulatory Commission recently conducted the 2025 assessment of systemically important banks. A total of 21 domestic banks were identified, including 6 state-owned commercial banks, 10 joint-stock commercial banks, and 5 city commercial banks. The banks are grouped into five tiers based on their systemic importance scores:

• First tier (11 banks): China Minsheng Bank, China Everbright Bank, Ping An Bank, Huaxia Bank, Ningbo Bank, Jiangsu Bank, Bank of Beijing, Bank of Nanjing, GF Bank, Zheshang Bank, Shanghai Bank.
• Second tier (4 banks): Industrial Bank, China CITIC Bank, Shanghai Pudong Development Bank, Postal Savings Bank of China.
• Third tier (2 banks): Bank of Communications, China Merchants Bank.
• Fourth tier (4 banks): Industrial and Commercial Bank of China, Bank of China, China Construction Bank, Agricultural Bank of China.
• Fifth tier: No banks listed.

【People’s Bank of China Shanghai Branch: Foreign Institutions Hold 3.35 Trillion RMB in Interbank Bonds as of End of January】

The Shanghai branch of the PBOC released the January 2026 interbank bond market briefing. As of the end of January, foreign institutions held 3.35 trillion RMB in interbank bonds, accounting for approximately 1.9% of the total interbank bond custody.

In January, three new foreign institutions entered the interbank bond market. As of the end of January, there were 1,188 foreign institutions participating, including 626 via settlement agents and 836 through the Bond Connect channel, with 274 using both channels. In January, foreign institutions traded about 1.36 trillion RMB in bonds in the interbank market, with an average daily trading volume of approximately 647 billion RMB.

【State Administration of Foreign Exchange: January Bank Foreign Exchange Settlement of 20,048 Billion RMB, Sale of 14,457 Billion RMB】

Data from the SAFE shows that in January 2026, banks settled 20,048 billion RMB in foreign exchange, and sold 14,457 billion RMB. In USD terms, this equates to 2,863 billion USD in settlement and 2,065 billion USD in sales.

The SAFE states that despite increased volatility and divergence in international financial markets this year, China’s foreign exchange market remains stable. Cross-border capital flows continued to be net inflows, though slightly lower than last month. In January, the net inflow of foreign exchange through bank settlement and non-bank sectors decreased by 20% and 28%, respectively, compared to last month. Seasonal factors led to rapid increases in corporate receipts and settlement at year-end, but as demand gradually releases, growth in corporate receipts and settlement has slowed recently. Major channels show that January’s net inflow under merchandise trade decreased by 27%, while net outflows under service trade increased by 23%. Securities investment flows remained stable. Overall, China’s foreign exchange market remains active and expectations are steady, with cross-border capital flows becoming more stable.

【CSRC: Strict Investigation of Unlawful Activities at Tianfeng Securities】

According to the CSRC website, the CSRC recently issued a pre-penalty notice to Tianfeng Securities Co., Ltd. regarding suspected illegal financing and information disclosure violations related to Wuhan Contemporary Technology Industry Group Co., Ltd.

Investigation found that from 2020 to 2022, Tianfeng Securities illegally provided financing to the former largest shareholder, Contemporary Group, and failed to disclose related-party transactions as required. The group and Tianfeng Securities engaged in joint illegal activities, severely violating securities laws and regulations. The Hubei CSRC plans to impose a maximum fine of 25 million RMB on Tianfeng Securities and Contemporary Group, with a total fine of 34.8 million RMB on nine responsible personnel. The actual controllers of Contemporary Group, Ai Luming, Tianfeng Securities’ then-chairman Yu Lei, and then-vice president and CFO Xu Xin, will face lifelong securities market bans.

Additionally, Tianfeng Securities and its subsidiary Tianfeng Tianrui Investment Co., Ltd. received pre-penalty notices. Tianfeng Tianrui has issues such as operating beyond its scope and irregular management of some private fund products, and may be suspended from establishing new private funds for one year and issued a warning letter. Tianfeng Securities employees have been found promoting non-company products, collaborating improperly with Wuhan Contemporary Tianxin Wealth Management, selling the private fund FuSheng AnXin Stable No.1 improperly, and making unwise operational decisions. They may face a two-year suspension from private fund distribution, disciplinary actions, and regulatory interviews.

【Shanghai and Shenzhen Exchanges Regulate Bond Repo Education, Strengthen Risk Warnings and Compliance】

According to Zhongzheng Jinniu, the Shanghai and Shenzhen stock exchanges recently issued special notices addressing inaccuracies and insufficient risk warnings in investor education and publicity for bond general pledge repo transactions. The notices clarify regulatory requirements and deadlines for rectification. Both emphasize market behavior regulation and investor rights protection, aligning closely in regulatory direction and core requirements, with slight differences due to their respective rule systems, jointly establishing a compliant framework for bond repo investor education.

【Idle Funds Blindly Buying Bonds ETF During Long Spring Festival Holiday, 8% Premium in Auction】

On the morning of February 13, the government bond ETF “招商国债政金债” on the Shanghai exchange surged to the daily limit during the auction phase, with an opening gain of nearly 9%, and a purchase price of 119.975 yuan. By 2 pm, the ETF traded at 108.773 yuan, resulting in a nearly 10% loss for early buyers in a single day. Given the bond market’s performance, short-term recovery is unlikely.

Initially, this was thought to be a “glitch,” but the reality is more complex. Recent articles about idle funds during the Spring Festival have repackaged bond ETFs as arbitrage strategies, especially under the influence of prominent influencers with insufficient risk warnings and awareness. Funds flowed into bond ETFs, and institutions quickly sold at high prices, causing the price to plummet.

【Extreme Limited Purchase! Commodity Funds Allowed to Buy Only 1, 2, or 5 Yuan Daily—What’s the Reason?】

International oil prices have recently risen sharply, with the onshore premium of oil LOF funds becoming significant. Many fund companies have lowered purchase thresholds for related thematic funds, with some channels allowing as little as 1 yuan or even suspending new subscriptions altogether.

Commodity funds are raising risk alerts. Over the past two weeks, Southern Oil LOF has been restricted three times, with purchase limits dropping from 10 yuan to 1 yuan, and then suspending subscriptions and systematic investments altogether. Other funds, such as Hu’an S&P Global Oil, Jiashi Oil, GF Dow Jones US Oil, and E Fund Oil, have also imposed purchase limits of 2, 5, or 10 yuan. These restrictions are partly due to tight quotas for their D-Share equivalents and partly to prevent excessive arbitrage activity under high premium risks, helping the market return to rational pricing.

【Pre-Set Interest Rates Drop Another 50 Basis Points! Dividend Insurance Yields “Involution” Cooling, Life Insurance Products Accelerate Transition to “Low Guarantee + High Float”】

Less than half a year after the 2025 August cutoff for life insurance product pre-set interest rates, the guaranteed return levels for dividend insurance have fallen further. According to Caixin, some dividend insurance products now feature a pre-set interest rate of 1.25%, down from the regulatory cap of 1.75% last year, marking a clear downward adjustment.

What signals does this new rate convey? Industry experts believe that the trend is shifting from “high guarantees + low float” to “low guarantees + high float,” which is a definite evolution in life insurance products. In the future, more insurers are expected to proactively lower pre-set rates, and customers will increasingly rely on insurers’ long-term investment management expertise and stable operational strength when choosing products.

Caixin has learned that among the “Big Six” life insurers, at least four have prepared and reserved 1.25% dividend insurance products, but they are not yet on the market. In contrast, five mid-sized insurers from Beijing, Shanghai, Guangzhou, Shenzhen, and Tianjin plan to launch such products in 2026 to diversify their offerings and meet customer needs.

【US January CPI Rises 2.4% YoY, Below Expectations; Core CPI at Four-Year Low】

The US January CPI increased by 2.4% year-over-year, below the expected 2.5%, hitting the lowest since May 2025; core CPI rose 2.5% YoY, the lowest since March 2021. The unexpectedly cooling inflation data supports market expectations of a rate cut by the Federal Reserve this year.

Goldman Sachs states that since January’s CPI data was not as strong as feared, the Fed’s “normalization” rate-cut path appears clearer. This will depend on whether the labor market continues to improve, as the FOMC is highly sensitive to labor market weakness. The firm still expects two rate cuts in 2026, with the next one in June.

【Fitch: Eurozone Government Bond Market Lacks Momentum, Yields Lack Direction】

Fitch strategists report that the eurozone government bond market is lacking momentum, with narrow yield spreads and low volatility. They note investors are engaging in spread trades and seeking signals in this low-noise environment. Seasonal factors may cause peripheral country bonds to underperform, but they do not expect this to last long. Political issues, especially Italy’s upcoming referendum on judicial reform in March, are potential sources of volatility. Overall, they do not anticipate political shocks, and any market reactions should be viewed as short-term noise.

Open Market Operations:

The PBOC announced a 145 billion RMB 7-day reverse repo at a fixed rate of 1.40%, with bids totaling 145 billion RMB and an amount of 145 billion RMB awarded. Data shows 31.5 billion RMB of reverse repos matured that day, resulting in a net injection of 113.5 billion RMB.

To maintain ample liquidity, the PBOC will conduct a 100 billion RMB 6-month (182 days) buyback operation via fixed quantity, rate bidding, and multiple price points. On that day, 50 billion RMB of 6-month buybacks matured, indicating a sixth consecutive month of increased volume, totaling 50 billion RMB.

Credit Bond Events:

• Sunac China: 10 new debt defaults and 27 trust violations by the company and subsidiaries.
• Tianyuan Investment Group: Bond guarantor and legal representative received pre-penalty notices.
• CSRC: Issued warning letters to Pacific Securities for weak bond internal controls.
• SSE: Issued a written warning to the former chairman of Guangxi Liuzhou Investment Holding Group.
• ICBC: Completed the first offshore bond secondary market transaction under free trade zone.
• Lianhong Xinke: Approved registration of 1 billion RMB in tech innovation bonds.
• Yangtze Industrial Group: Transferred equity to Sanhuan Group, increasing its stake to 94.59%.
• Qingdao Bank: Approved issuance of up to 6 billion RMB in capital supplement tools.
• Zhongtai Securities: Issued a guarantee letter for a 500 million HKD offshore bank loan to Zhongtai International via self-Guarantee.
• Gemdale Group: “21Gemdale01” scheduled to pay principal and interest on March 2 and delist.

Market Dynamics:

【Money Market | Most Rates Decline】

On Friday, most money market rates fell. The weighted average 1-day repo rate among banks dropped 9.75 basis points to 1.2645%, hitting a one-month low; 7-day rate down 9.98 basis points to 1.4259%; 14-day rate down 9.16 basis points to 1.4949%.

Shibor short-term rates mostly declined: overnight down 9.7 basis points to 1.271%; 7-day down 8.8 basis points to 1.43%; 14-day down 7.2 basis points to 1.511%; 1-month steady at 1.55%.

Interbank repo fixed rates declined across the board: FR001 down 18 basis points to 1.27%; FR007 down 9 basis points to 1.56%; FR014 down 8 basis points to 1.57%.

Interbank repo fixed rates: FDR001 down 10 basis points to 1.27%; FDR007 down 3.53 basis points to 1.47%; FDR014 down 12 basis points to 1.50%.

【Interest Rate Bonds | Central Bank’s Trillion-Scale Reverse Repo Has Little Market Reaction; 10-Year Treasury Yield Falls to 1.8%】

On Friday, treasury futures mostly declined. The 30-year main contract rose 0.04% to 112.840 yuan; the 10-year main contract fell 0.10% to 108.505 yuan; the 5-year main contract fell 0.09% to 105.975 yuan; the 2-year main contract fell 0.03% to 102.436 yuan.

Most yields on interbank key interest rate bonds rose: as of 4:30 pm, the 10-year government bond active coupon 250016 yield rose 0.8 basis points to 1.78%; the 10-year policy bank bond 250220 yield rose 0.25 basis points to 1.9425%; the 30-year government bond 2500006 yield fell 0.15 basis points to 2.222%.

Industry insiders note that the PBOC’s trillion-scale buyback operations have resulted in a net injection of over 1.7 trillion RMB this week, significantly easing liquidity. However, bond markets mostly turned green in early trading, possibly due to rising supply pressures after the holiday. Currently, 4.8 trillion RMB of special bonds are issued, with only 14.5% completed; future issuance volume may test market absorption capacity.

【Credit Bonds | Yields Generally Decline, Total Trading Volume 531 Billion RMB】

On Friday, credit bond yields broadly declined, credit spreads narrowed, and total trading volume shrank sharply to 531 billion RMB. Among high-yield bonds, “23产融10,” “24产融05,” and “23产融K1” had the highest yields at 15.13%, 14.37%, and 13.33%, respectively, with trading volumes of 367,500, 1,000, and 640,000 RMB.

AAA short-term notes: 1-year yield down 1.15 basis points to 1.6673%; 3-year yield down 0.05 basis points to 1.8042%. AAA urban investment bonds: 1-year yield down 0.83 basis points to 1.685%; 3-year yield down 0.28 basis points to 1.8306%.

Only 0 bonds with gains over 2%. Bonds with over 1% gains include “25金旭K2,” “京资K09,” and “23山能K3,” up 1.82%, 1.6%, and 1.6%, with trading volumes of 4,503,900, 100, and 1,000 RMB respectively.

Two bonds declined over 2%: “21山能02” and “21山能04,” down 2.61% and 2.54%, with volumes of 101,200 and 203,000 RMB.

High-yield bonds: 74 bonds with yields above 5%, including “23产融10,” “24产融05,” and “23产融K1,” with yields of 15.13%, 14.37%, and 13.33%, and trading volumes of 367,500, 178,000, and 640,000 RMB.

【European Bond Market | Yields Fall Across the Board, UK 10-Year Gilt Yield Drops 3.7 Basis Points to 4.414%】

On Friday, European bond yields declined collectively. UK 10-year gilt yield fell 3.7 basis points to 4.414%; France’s 10-year bond yield fell 2.3 basis points to 3.339%; Germany’s 10-year bund yield fell 2.3 basis points to 2.753%; Italy’s 10-year BTP yield fell 2 basis points to 3.362%; Spain’s 10-year bond yield fell 1.8 basis points to 3.132%.

【US Bond Market | Yields Decline Across the Board, 2-Year Treasury Yield Falls 4.00 Basis Points to 3.405%】

On Friday, US Treasury yields declined across maturities. The 2-year yield fell 4.00 basis points to 3.405%; the 3-year yield down 4.98 basis points to 3.445%; the 5-year yield down 4.71 basis points to 3.604%; the 10-year yield down 4.79 basis points to 4.048%; the 30-year yield down 4.05 basis points to 4.694%.