PBOC: Average Daily Turnover of Two Exchanges Reached 3.11 Trillion Yuan in June, Down 2.1% MoM
Claire Weston
The PBOC released June financial-market data on July 22: daily A-share turnover averaged RMB 3.11 trillion, down 2.1% from May — yet the Shanghai Composite rose 0.6% and the Shenzhen Component jumped 4.0%, pointing to a style rotation under thinner volumes.
Stocks traded less but rose more — what does that mean?
June daily turnover on Shanghai and Shenzhen exchanges averaged RMB 3.114 trillion, down 2.1% month-on-month. Yet the Shanghai Composite closed at 4,094.4 (+0.6%) and the Shenzhen Component at 16,205.6 (+4.0%).
This means → money did not leave the market; it shifted from broad-based buying into selective positioning. Shrinking turnover typically signals retail speculation fading while institutional capital concentrates on fewer sectors.
In plain terms = mid- and small-caps outperformed in June — Shenzhen's 4% gain dwarfed Shanghai's 0.6%, suggesting growth stocks were in favour while large-cap blue chips sat on the sidelines.
Why did the money market get both quieter and more expensive?
June interbank lending averaged RMB 329.2 billion per day, down 21.9% year-on-year. Bond repo turnover averaged RMB 6.2 trillion, down 21.0%.
At the same time, short-end rates rose across the board: DR001 hit 1.38% (+11 bps), DR007 reached 1.45% (+10 bps).
This means → less cash is circulating between banks, and borrowing that cash costs more. In plain terms = the PBOC did not flood the system with liquidity in June — conditions sat in a "not tight, not loose" zone, setting the tone for second-half rate expectations.
What divergence is showing up in the bond market?
Net government bond issuance — new treasury and local-government bonds minus maturing ones — totalled RMB 768.3 billion, down a sharp RMB 582.5 billion year-on-year. The government slowed its borrowing pace significantly.
Corporate bond net issuance came in at RMB 401.2 billion, up RMB 158.97 billion year-on-year — companies were more willing to borrow.
This reflects two things: ① the peak of fiscal stimulus issuance may have passed, and ② corporates see enough economic confidence to lever up. Cash-bond turnover hit RMB 45.7 trillion (+19.9% YoY), so trading activity stayed robust.
The 10-year government bond yield sat at 1.73%, near historic lows. In plain terms = the market is still betting rates will keep falling.
What signals are derivatives and gold sending?
Interbank RMB derivatives turnover reached RMB 7.8 trillion, up 69.6% year-on-year. Treasury-bond futures turnover hit RMB 8.6 trillion (+52.2%), with open interest at 903,000 contracts (+32.4%).
This means → institutions are ramping up hedging and arbitrage activity — expectations for rate volatility are heating up.
Gold: the Au(T+D) contract closed at RMB 878.5 per gram, down 10.7% month-on-month, yet trading volume rose 19.8% year-on-year. In plain terms = the price pulled back but activity picked up — money was "buying the dip," not panicking out.
Is the renminbi holding steady?
The month-end USD/CNY fix closed at 6.7852, a 0.25% depreciation from May — a very small move.
But the CFETS RMB index — measuring the yuan against a basket of currencies — came in at 102.59, up 1.92% month-on-month.
This means → the yuan weakened slightly against the dollar but strengthened against the euro, yen, and other peers. In plain terms = the dollar was unusually strong in June, not the yuan unusually weak — the yuan's overall purchasing power actually rose.
What should investors watch in the second half?
The money market's "lower volume, higher rates" pattern and the bond market's "government pullback, corporate pickup" divergence are the key clues for second-half liquidity.
This means → if the PBOC maintains its "neither loose nor tight" stance in July, short-end rates may stay elevated — bad news for leveraged strategies. But if government bond issuance accelerates again, liquidity could tighten passively.
In plain terms = this is a watch-and-wait window. June's data is not a conclusion — it is a dividing line. Whether money loosens or tightens in H2 depends on policy signals in July and August.
Content is for reference only, not financial advice.