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Bonds Higher As PBOC Pledges Support

CHINA RATES

The PBOC matched maturities with injections again today, the twenty fifth straight session of matching maturities, while the bank hasn't injected funds since February 25. The overnight repo rate is essentially flat last up 0.5bps at 1.7750%, while the 7-day repo rate has fallen after rising yesterday, last down 6.9bps at 1.9311%.

  • Futures are higher in China, 10-year up 28 ticks at 97.74, while in the cash space yields are lower with the 10-year yield dropping to 3.16%, the lowest level in two months. Bonds are supported after the PBOC's monetary policy department said it would keep credit growth reasonable and make credit and monetary environment conducive to high-quality economic growth. Sun Guofeng, head of the monetary policy department made the comments late yesterday at a briefing. Sun noted that Monetary supply and aggregate financing growth in 1Q basically matched China's economic growth.
  • Data earlier in the session saw March exports rise 38.7% in yuan terms, while imports rose 19.3%, indicating robust external and internal demand. The trade surplus narrowed to CNY 327.8bn from CNY 516.18bn previously.

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