Lates News

CITIC Securities research report states that the reform direction of the United States relaxing the Supplementary Leverage Ratio (SLR) regulatory rules is quite certain. The reform plan is expected to be announced and implemented in the coming months, directly lowering the minimum requirement for SLR or narrowing the statistical scope of the SLR denominator can achieve the effect of relaxing regulation. Relaxing SLR regulatory rules can directly improve the liquidity of the U.S. bond market, but can only bring about nearly $200 billion in additional demand for U.S. bonds (based on the assumption that the minimum requirement of eSLR is lowered to 3.5%~4.25%). We estimate that the latter roughly equates to one-ninth of the existing U.S. bond scale potentially affected by Section 899 of the "Big Beautiful Act". This reform may not directly lead to a significant decline in long-term U.S. bond yields, but it could create upward space for the spread on U.S. bond market swaps. Corresponding basis trading opportunities may exist.