MNI China Daily Summary: Thursday, April 22

MNI BRIEF: China To Quicken Resolving Local Debt Risks

RPT-MNI INTERVIEW: ECB's Wunsch Sees At Least Two Cuts By Dec

MNI: PBOC Conducts CNY2 Bln Via OMO Mon; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS MON

MNI: PBOC Sets Yuan Parity Lower At 7.1043 Mon; -4.74% Y/Y

NBH Data Watch

INDON Sov Curve Flatter, Trade Surplus Soars, BI Decision Wednesday

MNI: BAKER HUGHES US RIG COUNT 619; OIL RIGS 511; GAS RIGS 106

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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EGB/Gilt: Hawkish CB Speak Fuels Sell-Off

BOND SUMMARY

European government bonds have sold off sharply this morning with UK leading the charge following hawkish comments yesterday from BoE Governor Andrew Bailey.

  • Speaking to the House of Commons Treasury select committee, the BoE's bailey stated “To forecast 10 per cent inflation and to say there isn’t a lot we can do about it is an extremely difficult place to be . . . This is a bad situation to be in", in addition to warning about the risk of an 'apocalyptic' rise in food prices.
  • Gilts opened lower and have remained under pressure. Cash yields are now up 4-15bp with the curve bear flattening.
  • Adding to the hawkish narrative on monetary policy, the ECB's Klaas Knot this morning stated that normalising monetary policy was 'the only option' and that a larger than 25bp hike could be justified by the data, stating specifically the potential for "half a percentage point".
  • Bunds have sold off across the curve with cash yields pushing up 5-9bp.
  • The OAT curve has bear flattened with the 2s30s spread narrowing 3bp.
  • BTPs trade broadly in line with core EGBs with yields up 7-10bp on the day.
  • Supply this morning came from the UK (Gilt, GBP1.75bn), Germany (Schatz, EUR4.115bn allotted), Finland (RFGB, EUR996mn) and the ESM (Bills, EUR1.007bn)
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