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Futures Lower For Fourth Day


The PBOC matched maturities with injections again today, repo ranges are well within their recent ranges. Overnight repo rate is up 18 bps at 2.0342%, 7-day repo rate is down 28bpd at 2.1705%. Futures are lower as equity markets resume their gains. Futures are lower, on track for a fourth day of declines, with equity markets making gains.

  • There was a piece in the China Securities Journal that China may increase the pace of local government bond sales in August and September due to a slow issuance so far in July. The piece notes that the PBOC could offset the potential impact on liquidity with operations such as boosting reverse repo sales and fully rolling over MLF.
  • Elsewhere the Securities Daily reported that it is not necessary for PBOC to inject liquidity via large-amount reverse repos in open-market operations as the benchmark Shibor rate has fallen significantly since Aug. The piece notes that instead the PBOC may roll over MLF with less amount in Aug. as earlier reserve ratio cut unleashed liquidity
  • On the coronavirus front cases remain elevated, there were 111 new cases in the past 24 hours.

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