The European Central Bank's overnight deposits slightly declined, with excess liquidity remaining at historic highs.

⑴ The daily liquidity data released by the European Central Bank on Thursday showed that financial institutions borrowed 64 million euros through the overnight loan facility, a decrease from 74 million euros on the previous day, while the usage of the overnight deposit facility dropped to approximately 1.98 trillion euros, below the previous day's roughly 2.0 trillion euros. ⑵ The current account holdings rose to around 324.7 billion euros, surpassing the previous day's 318.3 billion euros, reflecting that overall liquidity in the banking system remains ample, with low demand for marginal financing facilities in the market. ⑶ Although overnight deposit facility usage declined somewhat compared to the previous day, it remains at an extremely high level close to 2 trillion euros, indicating that financial institutions prefer to deposit excess funds with the central bank rather than channeling them into the credit market or riskier asset allocations. ⑷ From a trading sentiment perspective, the persistently large overnight deposit scale means market participants continue to hold a cautious view regarding short-term interest rate prospects. Going forward, attention will be paid to signals from ECB policy meetings and changes in the scale of main refinancing operations, as these may potentially impact the liquidity landscape.