Futures Slide On Return

PBOC sold 10b yuan of 7-day reverse repurchase agreements at the usual rate of 2.2%, draining a net CNY 330bnbn. Leading up to the Golden Week holiday the Central Bank had been injecting between CNY 100bn and CNY 120bn each day in order to ensure liquidity heading into quarter end, while uncertainty around Evergrande also likely increased the need for liquidity. Repo rates are broadly stable and holding around recent averages. As a reminder approximately CNY 1 trillion of policy loans, including MLF, are due next week. Futures have dropped sharply, the 10-Year future last down 33 tick at 99.56 the biggest one day slide since August.