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Futures Hit Contract High As Repo Rates Drop

CHINA RATES

The PBOC matched injections with maturities today following a net injection of CNY 40bn in the last two sessions. Repo rates are lower, the overnight repo rate down some 28bps and the 7-day repo rate down 20bps and back below the PBOC's 2.20% rate.

  • Bonds are sharply higher, futures making fresh contract highs with the 10-Year up 40 ticks at 100.66, in the cash space yields are lower across the curve, the 10-Year yield at point touching the lowest since June 2020 at 2.81%. Stocks are in positive territory, recovering earlier losses of up to 1%.
  • On the coronavirus front China reported 98 new coronavirus cases in the past 24 hours up from 75 a day earlier. The latest uptick has seen Beijing effectively close doors to tourists during the summer holiday season and is only allowing "essential travellers" with a negative tests entry. Data from Bloomberg earlier showed China tourism drops as much as 6.6% to lowest since December 21.

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