MNI China Daily Summary: Thursday, July 4

MNI BRIEF: China Has Four Months To Negotiate EU EV Agreement

RPT-MNI INTERVIEW: ISM Choppiness Not A Clear Signal For Worry

MNI: PBOC Net Drains CNY98 Bln Via OMO Thurs; Rates Unchanged

MNI: PBOC Sets Yuan Parity Lower At 7.1305 Thurs; -0.79% Y/Y

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS THURS

Factory Orders Decline as Non-EU Orders Dip

DMP survey increases probability of August cut

MNI: UK JUNE CONSTRUCTION PMI 52.2 (FCST: 54.0); MAY 54.7

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

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

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End of Linker Issuance Due To Excessive Tail Risks

GERMANY

The German Federal Ministry of Finance is quoting an unfavouable risk-reward tradeoff as well as limited market demand as reasoning for the previously announced end to issuance of inflation-linked securities, mirroring MNI's expectations.

  • The ministry noted that the cost risk of linkers in high inflation periods materialized in the last two years, and that the tail risk of similar events happening in the future should not be disregarded, leading to issues from a planning security and financing cost perspective.
  • Additionally, the ministry noted that, even compared to the Green Bund segment, linkers only played a minor role in the market of German fixed income securities due to limited investor demand, and that subsequently, liquidity levels stayed notably below comparable nominal interest-bearing German government securities.
  • As announced before, previously issued linkers will continue to be tradable in the market and will not be withdrawn.
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