The change in the comparison of interest rate data between Chinese and US treasury bonds has become the focus of attention in the near future. On Friday, in particular, interest rates on one-year Treasuries were upside down for the first time in a decade.

With the "separate ways" of monetary policy between China and the United States, interest rates on one-year government bonds between China and the United States have been upside down for the first time in a decade. Moreover, judging from the interest rate on 10-year Treasuries, the interest rate on Chinese government bonds is only 27 basis points higher than that on US Treasuries. This figure is very important for institutional investors because the narrowing or even reversal of interest rate spreads between China and the US is bound to dampen the enthusiasm of foreign institutions to buy renminbi assets and attract the impulse of domestic funds to exchange foreign exchange.

The two major interest rate data are more intuitive:

One is the interest rate of large certificates of deposit.

According to Bank of America Corporation interest rate Statistics (BANKRATE) website statistics, large US banks, including Barclays Bank, Goldman Sachs Group, National Bank and other banks, US dollar one-year large certificate of deposit CD interest rate, the interest rate level is between 2.55% and 2.70%. Look at the interest rate of RMB one-year fixed certificate of deposit in China. According to the large certificate of deposit interest rate data of 35 banks monitored by Rong 360, the average large certificate of deposit interest rate was stable in October, with an average of 2.268%.

Second, the reference interest rate of US dollar interbank offered at home and abroad.

At the same time, there is a higher premium space for US dollar assets in China. The most typical is the price of US dollars at home and abroad, with a huge gap. According to the statistics of China Monetary Network, the domestic dollar interbank offered rate (USD CIROR) is still much higher than the foreign dollar interest rate for the same period, and the more forward the dollar price is, the more expensive it is!

In the overnight lending rate, there is little difference in the price of US dollar funds between domestic and overseas. The domestic interest rate is 2.20%, while the overseas interest rate is 2.1794%. The domestic interest rate is 2 basis points higher than that abroad. However, on the six-month dollar loan, the overseas dollar lending rate is 2.8602%, while the domestic dollar lending rate is as high as 3.35%, and the domestic dollar interest rate is 50 basis points higher than the overseas dollar interest rate. On the one-year lending rate, the domestic US dollar lending rate is as high as 3.69%, while the overseas US dollar lending rate is 3.12%, and the domestic US dollar lending rate is 57 basis points higher than the overseas US dollar lending rate.

Obviously, the market is impacting the degree of allocation of RMB assets from two aspects. On the one hand, the narrowing or even upside-down interest rates of Sino-US treasury bonds are hitting the enthusiasm of foreign institutions to buy Chinese treasury bonds; on the other hand, deposit businesses such as large certificates of deposit such as US dollars at home and abroad are significantly higher than domestic savings interest rates in the same period, attracting the impulse of domestic funds to exchange foreign exchange.

The interest rate of Chinese and American one-year treasury bonds is upside down.

On Friday, different monetary policies in China and the United States were extending interest rates upside down from the short end to one-year Treasury bonds.

The yield on Chinese one-year Treasuries is now 2.53%, while that on US Treasuries is 2.68%. The two are now about 16 basis points upside down, the first time that two sets of data have been compiled by Bloomberg in 2008.

The yield on China's one-year government bonds has fallen by about 130 basis points so far this year. Previously, three-month and six-month interest rates had been upside down.

Obviously, with the advance of the interest rate hike cycle in the United States, the upward trend of treasury bond interest rates is obvious, while China continues to increase market liquidity, resulting in lower treasury bond interest rates, so the interest rates of the two countries are upside down.

However, in terms of the interest rate on 10-year Chinese US debt, the yield on Chinese 10-year Treasury bonds is 27 basis points higher than that of US Treasuries over the same period.

The domestic one-year dollar interbank offered rate is still much higher than that outside the country.

It is worth noting that although the interest rates of one-year government bonds in their respective currencies of China and the United States are upside down, as reflected in the price of US dollar funds at home and abroad, there is a huge gap. According to the statistics of China Monetary Network, the domestic dollar interbank offered rate (USD CIROR) is still much higher than the foreign dollar interest rate in the same period.

From the comparison of the above three pictures, the dollar lending rates at home and abroad in the same period are still much higher than those outside the country, and the more forward the dollar is, the more expensive it is! For example, in the overnight lending rate, there is little difference in the price of US dollar funds between domestic and overseas, with a domestic interest rate of 2.20% and an overseas interest rate of 2.1794%, which is 2 basis points higher than that outside the country. However, in the six-month dollar loan, the overseas dollar lending rate is 2.8602%, while the domestic dollar lending rate is as high as 3.35%, and the domestic dollar interest rate is nearly 50 basis points higher than the overseas dollar interest rate.

On the one-year lending rate, the domestic US dollar lending rate is as high as 3.69%, while the overseas US dollar lending rate is 3.12%, and the domestic US dollar lending rate is 57 basis points higher than the overseas US dollar lending rate.

The CD interest rate of one-year large certificates of deposit in China and the United States is clearer.

According to the statistics of American bank stock interest rate statistics (BANKRATE) website, according to the CD interest rate of one-year large certificates of deposit in the United States, the interest rates of large banks in the United States, including Barclays Bank, Goldman Sachs Group, National Bank and other banks, are between 2.55% and 2.70%.

After looking at the interest rate of one-year fixed deposit certificate of US dollars abroad, then take a look at the interest rate of one-year fixed deposit certificate of RMB in China. According to the large certificate of deposit interest rate data of 35 banks monitored by Rong 360, the average large certificate of deposit interest rate was stable in October, with an average of 2.268%.

Changes in the average interest rate of each term of large certificates of deposit from August to October 2018 (%)

Compared with the above data, the domestic one-year RMB large certificate of deposit interest rate has been lower than the above Bank of America Corporation's US dollar large certificate of deposit interest rate level.

The average one-year interest rate for RMB ordinary deposits is 1.985%.

Rong 360 collected deposit interest rate data from 615 bank outlets in 48 banks in 35 cities across the country. through various dimensions of deposit interest rate statistics in October, the average one-year deposit interest rate is 1.985%.

Average time deposit interest rate for each maturity from July to October (%)

Average time deposit interest rate of various types of banks in October 2018 (%)

Average time deposit interest rate TOP10 (%) in October 2018

According to the monitoring of Rong360 data, Postal Savings Bank of China's time deposit interest rate still ranked first among all kinds of banks in October, and each term interest rate rose slightly, especially the two-year and three-year deposit rates rose the most, both 4BP higher than in September.

The deposit interest rates of state-owned banks are lower than those in September, basically by about 1BP, while joint-stock banks, city commercial banks and foreign banks have not changed much.

The above picture is from the central bank's third-quarter monetary implementation report. Judging from the content, in terms of large US dollar deposits, the upward trend of US dollar deposit interest rates for three months and other maturities is very obvious.