20 Sessions With No Extra Liquidity

The PBOC matched maturities with injections again today, the twentieth straight day of matching maturities, while the bank hasn't injected funds since February 25. Repo rates have declined from elevated levels yesterday, overnight repo rate last at 1.7215% after touching 2.20% yesterday, 7-day repo rate last at 1.99%, down from peaks of 2.60% earlier this week.

• Futures are higher, 10-year contract up 0.115 at 97.50, running into resistance at the level which was the high from March 31. 2-year future seeing less of a bid, up 0.015 at 100.195.
• China sold CNY 55.7bn of local government bonds in February, with an average tenor of 8.9 years and average yield of 3.45%. Performance data for Q1 showed Chinese government bonds were resilient to the global bond sell off, and boasted lower volatility and correlation with global bonds.
• Sino-US tensions continued to summer, in the latest development US Senate minority leader McConnell said the US must work with partners to impose consequences on China over Hong Kong.
• Elsewhere, there are reports that Li Bo has stepped down as vice mayor of Chongqing in order to accept an appointment as a deputy governor of the PBOC.
• Several markets are closed for holidays today, (details available in previous bullets), which is expected to keep newsflow light and volumes thin during the session.