MNI China Daily Summary: Wednesday, July 3

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MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

PPI a Tenth Softer than Exp; Further NEIG HICP Disinflation to Come?

MNI: EUROZONE MAY PPI -0.2% M/M, -4.2% Y/Y

Services PMI points to wage bills increasing operating expenses

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

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GILTS: Off Early Session Highs

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegion

Gilts have faded from early London highs.

  • Futures last +17 at 97.07. Yesterday’s high (97.23) was not tested.
  • Bulls need to retake the 20-day EMA (97.72) to negate some of the recent bearish pressure. Initial support is located at the July 1 low (96.57).
  • Set up for the impending Bund supply factors into wider core global FI trade, as does the latest reduction in French political risk premium, capping the initial rally.
  • A mark higher in the final domestic services PMI data failed to impact.
  • Cash gilt yields are 1bp higher to 2.5bp lower across the curve, sticking within ranges seen since mid-March.
  • 2s10s moves away from this week’s ’24 high, while 5s30s moves away from multi-month highs.
  • BoE-dated OIS is little changed on the day, showing 13.5bp of cuts for August and ~42bp of easing through year end.
  • SONIA futures -2.5 to +2.5.
  • The UK calendar is limited for the remainder of the day, leaving focus on wider macro matters e.g. the ECB’s Sintra forum and U.S. data.

Fig. 1: Gilt Yields Continue To Stick To Ranges In Play Since Mid-March

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Gilts have faded from early London highs.

  • Futures last +17 at 97.07. Yesterday’s high (97.23) was not tested.
  • Bulls need to retake the 20-day EMA (97.72) to negate some of the recent bearish pressure. Initial support is located at the July 1 low (96.57).
  • Set up for the impending Bund supply factors into wider core global FI trade, as does the latest reduction in French political risk premium, capping the initial rally.
  • A mark higher in the final domestic services PMI data failed to impact.
  • Cash gilt yields are 1bp higher to 2.5bp lower across the curve, sticking within ranges seen since mid-March.
  • 2s10s moves away from this week’s ’24 high, while 5s30s moves away from multi-month highs.
  • BoE-dated OIS is little changed on the day, showing 13.5bp of cuts for August and ~42bp of easing through year end.
  • SONIA futures -2.5 to +2.5.
  • The UK calendar is limited for the remainder of the day, leaving focus on wider macro matters e.g. the ECB’s Sintra forum and U.S. data.

Fig. 1: Gilt Yields Continue To Stick To Ranges In Play Since Mid-March

Keep reading...Show less