Morning Insight: January 16, 2026

Morning Insight:January 16, 2026 LinlinGaoCertification：Z0002332gaolinlin@gtht.com Yu Chen Wu (Contact)Certification：F03133175 wuyuchen@gtht.com Main Body Commodity MarketInsight： Treasury Futures:On January 15, the People’s Bank of China announced a25 bp cut to the interest rates on various structural monetary policyinstruments, with the one-year relending rate lowered to 1.25% and ratesfor other tenors adjusted accordingly. Vice Governor Zou Lan stated thatthere remains room this year for both reserve requirement ratio cuts andinterest rate cuts, and that the next step will involve flexible use ofgovernment bond purchase and sale operations. Overall, the PBOC has movedfirst by lowering the rates on structural monetary policy tools and byimproving the toolkit while increasing the intensity of policyimplementation, with eight follow-up measures to be introduced, includingrelending facilities for technological innovation, carbon emissionreduction support tools, and relending for service consumption andelderly care. The decision to cut rates on structural tools rather thanimplementing a broad-based rate cut may reflect several considerations:against the backdrop of US CPI data coming in below expectations andrising expectations for Federal Reserve rate cuts in 2026, the upside forthe US dollar index is limited, significantly easing spilloverdepreciation pressure on the CNY and reducing exchange-rate constraintson monetary easing at thisjuncture. Although the 10-year government bondyield has risen notably since 2025, given the strong influence of theChina–US 10-year yield spread on the CNY, a broad rate cut that drivesthe 10-year yield sharply lower could generate additional depreciationpressure. At the same time, China and the US have reached a phased trade agreement, overall export pressure in 2026 appears limited, and thestronger-than-expected December export data released yesterday furthersuggest that the risk of a sharp near-term cooling in exports is low,reducing the necessity of proactively weakeningthe currency via acomprehensive rate cut to stimulate exports. Structural rate cuts canmore precisely support weak links in the real economy and guide fundstoward key areas such as technological innovation and the green economy,thereby providing targeted support to investment and production in thesesectors. The timing of this rate cut is also related to the large volumeof three-year and five-year long-term deposits maturing in 2026, as lowerstructural policy rates help reduce banks’interest expenses andstabilize net interest margins; however, with the one-year term depositrate already down to 0.95%, commercial banks’net interest margins remainunder significant pressure, which may constrain further cuts to the LPRand in turn limit the downside for 10-year government bond yields.Following the structural rate cut, market sentiment fluctuated briefly,with the intraday 10-year yield falling by about 2 bp before rebounding.Looking ahead, after net interest margins stabilize, there may be one totwobroad-based rate cuts in 2026, each of around 10 bp, and if the RMBstabilizes, a 50 bp RRR cut is also possible. Overall, bond marketvolatility is concentrated in the ultra-long end; higher marginrequirements for margin financing act as a light brake on equities, andA-shares are expected to maintain a stable growth trend throughout 2026.Against the backdrop of improving inflation expectations, limited roomfor rate cuts, and policies encouraging long-term capital to enter themarket, government bond futures are viewed as remaining in a range-boundbut mildly bearish trend since mid-last year, with resilience at theshort end, potential for a modest rebound at the long end in the nearterm, resistance near the 20-day moving average for the TL contract,andnear-term strategies favoring 30–10 spread compression trades andduration substitution, while continuing to recommend selling into rallies for hedging and maintaining bullish calendar spread and positive carrytrades over the medium term. Rapeseed oil:Rapeseed oil rebounded sharply from recent lows, driven bypositive expectations surrounding US biodiesel policy. Media reportsindicate that the Trump administration is advancing biofuel policydiscussions and is expected to finalize the 2026 Renewable VolumeObligations (RVOs) by early March, while also potentially refraining fromcutting the value of Renewable Identification Numbers (RINs) for importedbiofuels and their feedstocks. If implemented, US biodiesel policy wouldon the one hand boost expectations for global vegetable oil demandgrowth, and on the other hand support Canadian rapeseed oil exports tothe US, helping to ease Canada’s rapeseed inventory and export pressuresand providing support to international rapeseed oil prices. Domestically,the rapeseed oil market currently reflects strong spot fundamentals butweak expectations: inventories remain relatively low, yet the marketremains concerned about a potential increa