MNI: PBOC Net Drains CNY17.4 Bln via OMO Thursday

MNI: PBOC Sets Yuan Parity Higher At 7.1220 Thurs; +2.76% Y/Y

CHINA PBOC CONDUCTS CNY132.6 BLN VIA 7-DAY REVERSE REPOS THURS

CHINA SETS YUAN CENTRAL PARITY AT 7.1220 THURS VS 7.1191

MNI China Daily Summary: Wednesday, October 16

MNI: PBOC Net Injects CNY581.4 Bln via OMO Wednesday

Australia Sep Unemployment Rate 4.1%

MNI:AUSTRALIA SEP UNEMPLOYMENT RATE +4.1%

Japan Sep Exports -1.7% Y/Y; Imports +2.1% Y/Y

CANADA: Politics Week: Trudeau Faces More Pressure To Resign

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

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BONDS: EGBs-GILTS CASH CLOSE: UK Curve Bull Steepens On Low CPI Surprise

BONDS
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Gilts easily outperformed Bunds in a broad rally for global government bonds Wednesday as UK CPI came in below expectations.

  • UK September core and headline Y/Y CPI each came in 0.2pp low vs consensus Services CPI came in 0.58ppt below the BOE's August projections, and while this was largely driven by airfares and hotel prices, even excluding those categories services inflation was still marginally weaker than the BOE's forecast.
  • That resulted in about 12bp in BoE cuts added to the profile through September 2025 on the day and set a constructive tone for the session, with a continued pullback in oil prices and European equities following Tuesday's rout helping underpin the fixed income space in the afternoon.
  • Both the UK and German curves bull steepened, though the former move was more pronounced as 2Y UK yields saw their biggest drop since early August.
  • Periphery EGB spreads mostly tightened, coming in from early wides as ECB cut pricing increased (7bp more priced through the next year).
  • The ECB is Thursday's highlight - MNI's preview is here (PDF) - while a 25bp cut is expected and priced in, communicating the motivation for such a move will not be straightforward.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

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Gilts easily outperformed Bunds in a broad rally for global government bonds Wednesday as UK CPI came in below expectations.

  • UK September core and headline Y/Y CPI each came in 0.2pp low vs consensus Services CPI came in 0.58ppt below the BOE's August projections, and while this was largely driven by airfares and hotel prices, even excluding those categories services inflation was still marginally weaker than the BOE's forecast.
  • That resulted in about 12bp in BoE cuts added to the profile through September 2025 on the day and set a constructive tone for the session, with a continued pullback in oil prices and European equities following Tuesday's rout helping underpin the fixed income space in the afternoon.
  • Both the UK and German curves bull steepened, though the former move was more pronounced as 2Y UK yields saw their biggest drop since early August.
  • Periphery EGB spreads mostly tightened, coming in from early wides as ECB cut pricing increased (7bp more priced through the next year).
  • The ECB is Thursday's highlight - MNI's preview is here (PDF) - while a 25bp cut is expected and priced in, communicating the motivation for such a move will not be straightforward.

Closing Yields / 10-Yr Periphery EGB Spreads To Germany

Keep reading...Show less