Money Market Activity

In July 2026, the average daily interbank lending volume reached 323.29 billion yuan, marking a 24.3% year-on-year decline. Meanwhile, the average daily bond repurchase turnover in the interbank market hit 6.5 trillion yuan, down 14.2% compared with the same period last year. As of the end of July 2026, outstanding interbank lending balances stood at 1.0 trillion yuan, while outstanding bond repurchase balances in the interbank market totaled 9.8 trillion yuan.

During the month, the monthly weighted average rate for the overnight pledged repo on rate bonds among banking deposit-taking institutions (DR001) was 1.39%, an increase of 1 basis point month-on-month. The DR007 rate averaged 1.43%, down 2 basis points from the previous month. Meanwhile, the overnight pledged repo rate in the interbank market (R001) averaged 1.42%, essentially flat on a monthly basis.

In July 2026, the average daily spread between DR001 and the central bank's 7-day reverse repurchase operation rate was -1 basis point, while the average daily spread between R001 and DR001 stood at 3 basis points.

Bond Market Developments

Net financing of government bonds reached 1,317.64 billion yuan in July 2026, an increase of 69.46 billion yuan year-on-year. Corporate bond net financing totaled 453.59 billion yuan, up 178.75 billion yuan from the same month last year. By the end of July 2026, the total outstanding custody balance in the bond market reached 207.4 trillion yuan.

Cash bond market turnover amounted to 41.4 trillion yuan in July 2026, a slight decrease of 0.6% year-on-year. The turnover ratio for cash bonds in the interbank bond market was 19.2%, down 2.8 percentage points month-on-month. The bid-ask spread for the active 10-year government bond was 0.15 basis points.

At the end of July 2026, the yield on 10-year government bonds stood at 1.71%. The yield spread between 10-year and 1-year government bonds was 57 basis points, narrowing by 4 basis points month-on-month. The spread between 3-year AAA-rated medium-term note yields and 3-year government bond yields was 40 basis points (without excluding bond tax policy factors), widening by 7 basis points from the prior month.

Over the first seven months of 2026, cumulative issuance of panda bonds reached 195.73 billion yuan, with 26 new overseas institutions entering the interbank bond market.

Derivatives Market Overview

In July 2026, turnover in the RMB derivatives market within the interbank market totaled 6.7 trillion yuan, up 5.0% year-on-year. As of end-July 2026, the closing price (average) of the 1-year FR007 interest rate swap rate was 1.44%, rising 2 basis points month-on-month.

Turnover in the treasury bond futures market reached 8.3 trillion yuan in July 2026, a year-on-year decrease of 2.5%. Open interest in treasury bond futures stood at 995,000 contracts at the end of July, up 43.9% year-on-year. The closing price of the main 10-year treasury bond futures contract was 109.4 yuan, an increase of 0.6% month-on-month.

Bill Market Activity

In July 2026, the value of commercial bill acceptance reached 3.9 trillion yuan, while discounting activity totaled 3.2 trillion yuan. By the end of the month, outstanding commercial bill acceptance balances amounted to 22.1 trillion yuan, up 11.1% year-on-year, and outstanding discount balances were 17.7 trillion yuan, an increase of 13.0% from a year earlier.

Among small, medium, and micro enterprises, 118,000 firms issued bills (accounting for 93.5% of all issuing entities), with issuance volume of 2.8 trillion yuan (72.5% of the total). For discounting, 139,000 such enterprises participated (96.5% of all discounting entities), with discounted volume reaching 2.4 trillion yuan (75.1% of the total).

Gold Market Performance

At the end of July 2026, the Au(T+D) contract on the Shanghai Gold Exchange closed at 884.6 yuan per gram, up 0.7% month-on-month. Gold trading volume on the exchange reached 6,942.7 tons in July 2026, an increase of 30.8% year-on-year, while gold trading on the Shanghai Futures Exchange totaled 13,000 tons, down 6.5% from a year earlier.

Foreign Exchange Market

As of end-July 2026, the closing price of the RMB against the US dollar in the interbank foreign exchange market was 6.7476, representing an appreciation of 0.56% from the end of the previous month. The CFETS RMB exchange rate index stood at 102.19, a depreciation of 0.39% month-on-month.

Equity Market Conditions

At the end of July 2026, the Shanghai Composite Index closed at 3,832.3 points, down 6.4% month-on-month, while the Shenzhen Component Index closed at 13,578.9 points, a decrease of 16.2% from the prior month. Average daily turnover across both exchanges was 2,685.88 billion yuan in July, down 13.8% month-on-month.

Holder Structure in the Interbank Bond Market

As of end-July 2026, the interbank bond market had 3,760 institutional members, all of which were financial institutions. In terms of bond holdings, the top 50 investors in corporate credit bonds accounted for 54.2% of total holdings, concentrated mainly in large state-owned commercial banks (proprietary), public funds (asset management), and trust companies (asset management). The top 200 investors held 85.4% of the total.

Regarding individual bond holder distribution, the average number of holders per bond was 12, with a median of 11 and a maximum of 125. Bonds with 20 or fewer holders accounted for 87.4% of all bonds.

In terms of trading volume, the top 50 investors in corporate credit bonds in the interbank bond market accounted for 62.1% of total trading, primarily concentrated among securities companies (proprietary), joint-stock commercial banks (proprietary), and fund companies (asset management). The top 200 investors represented 92.2% of trading activity.

Data sources: China Securities Regulatory Commission, State Administration of Foreign Exchange, China Central Depository & Clearing Co., Ltd., China Foreign Exchange Trade System & National Interbank Funding Center, Shanghai Clearing House, Shanghai Commercial Paper Exchange Corporation, Shanghai Gold Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Financial Assets Exchange.