MNI BRIEF: China SME Index Down Slightly In May

MNI: PBOC Net Drains CNY2 Bln Via OMO Tues; Rates Unchanged

MNI: PBOC Sets Yuan Parity Higher At 7.1135 Tues; -1.61% Y/Y

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

CHINA SETS YUAN CENTRAL PARITY AT 7.1135 TUES VS 7.1106

MNI BRIEF: HNB Flash Analysis Sees May CPI, Core At 4.0%

Pay data sticky in finance, business and manufacturing

Labour market data broadly in line with expectations

MNI: UK MAY PAYROLLS -3k TO 30.3 MN: HMRC/ONS

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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Fiscal Stimulus Hopes Continue To Push Markets

US TSYS SUMMARY
Good is Bad / Bad is Good theme held (at least for rates in the first half) on premise bad data improves chances on the margin of robust fiscal stimulus. Disappointing weekly claims (+13K TO 861K), Jan Housing Starts below expected at 1.58M, weighed on rates in the first half. But equities, US$, gold and WTI crude all traded weaker as well (though equities were recovering losses in second half: ESH1 3915.0 vs. 3881.0 low. Bbg headline noted US vaccine supply more than double by April.
  • Midmorning reversal: Tsys have bounced back into mildly higher territory after nearly trading through late Tue lows (Yds neared 1Y highs tapped late Tue: 10YY 1.3159H vs. 1.3310% late Tue; 30YY 2.099% vs. 2.110% late Tue). Gold bounced off lows around the same time while US$ and equities remained weaker.
  • Sources report real$ buying 10s, rolling in 20s as rates consolidated on equity weakness on desk said. Mar/Jun rolls continue at slower than expected pace.
  • Some chatter made the rounds that another duration drop on Tue's magnitude could usher in mortgage convexity selling (unlikely). Some insurance portfolio unwinds in swaps Tuesday did add to the rout, however. Yield curves back to bear steepening mode, futures volumes picking up while Mar/Jun rolls improved: TYH >1.8M; TYH/TYM> 96k.
  • The 2-Yr yield is up 0.4bps at 0.1069%, 5-Yr is up 0.3bps at 0.5497%, 10-Yr is up 1.5bps at 1.2855%, and 30-Yr is up 3.7bps at 2.0745%.
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