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Stronger In a Range


Weaker In A Range


Ending The Week On A Soft Note


Bearish Risk Growing


Stronger, But Still Vulnerable


SP500 PE Ratio vs. CPI Inflation

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The PBOC matched injections with maturities today, repo rates are higher but significantly lower than highs seen this week. The overnight repo rate up 3.2bps at 2.022%, this week's high at 2.20%, while the seven day repo rate is at 2.11% from highs of 2.25% earlier this week. Futures climbed from the open, playing catch up with some gains in UST's, while Chinese equity markets are also lower. The 10-year future is up 0.20 at 98.025, a fresh contract high.

  • Elsewhere, China will continue its strong effort to cut capacities of high-polluting industries and strictly control high energy-consuming and high-emission projects, said Vice Premier Han Zheng on Tuesday during his tour at China Research Academy of Environmental Sciences. China must stay committed to realizing carbon neutrality with a clear timetable and roadmap and build a clean, low-carbon, safe and efficient energy system. MNI previously reported that the government may boost coal production to tame skyrocketing prices while controlling the domestic steel production to reach emission controls.
  • Markets look ahead to LPR announcement tomorrow. Consensus is for no change, Citi's own estimate is in line with this: "Citi Economics believes though monetary policy tightening is ongoing, the PBoC will keep the policy rate – 1-year MLF rate unchanged this year. As it is referenced to the MLF rate, the one-year LPR will likely remain at 3.85% in May and the five-year LPR rate will likely remain at 4.65%." The highlight today is CNY 80bn of supply in 2- & 5-year bonds.