MNI China Daily Summary: Wednesday, October 16

MNI: ITALY FINAL HICP +1.2% M/M, +0.7%Y/Y

MNI BRIEF: BOJ's Adachi Sees Conditions For Normalisation

MNI: PBOC Net Injects CNY581.4 Bln via OMO Wednesday

CHINA PBOC CONDUCTS CNY642.4 BLN VIA 7-DAY REVERSE REPOS WEDS

MNI: PBOC Sets Yuan Parity Higher At 7.1191 Weds; +2.66% Y/Y

US MBA: REFIS -26% SA; PURCH INDEX -7% SA THRU OCT 11 WK

MNI: US MBA: MARKET COMPOSITE -17.0% SA THRU OCT 11 WK

MNI: UK SEP OUTPUT PPI -0.5% M/M, -0.7% Y/Y

CANADA: Politics Week: Trudeau Faces More Pressure To Resign

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

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GILTS: Rally Extends

GILTS
CEEMEABulletUKGlobalFixed Income BulletsRegionMarkets

The post-CPI rally in gilts extends, with futures through initial reissuance at the 20-day EMA (97.68).

  • Contract last +93 at 97.84, vs. recent session highs of 97.85.
  • Bulls eye key near-term resistance at the September 2 low (98.11).
  • Yields 6-10bp lower, curve bull steepens.
  • 10-Year gilt yields extend yesterday’s move back below broken downtrend resistance drawn off the October ’23 peak. September 2 high (4.061%) the next downside target.
  • 2s10s and 5s30s stick within multi-week ranges.
  • 10-Year spread vs. Bunds back below 190bp, 5.5bp tighter on the day.
  • GBP3.5bln 4.00% Oct-31 supply generated strong demand.
  • BoE-dated OIS show ~25bp of easing for November, 42.5bp of cuts through year-end and 113.5bp of cuts through June ‘25, 3-11bp more dovish on the day.
  • We don’t think the BoE will entertain the idea of a 50bp cut at this juncture, given still elevated (but cooling) wage growth and services inflation.
  • The profile of cuts through the second half of ’25 still looks quite flat, despite today’s repricing.
  • Looking ahead, a more austere Budget (which the latest round of press reports has indicated is in the offing) could facilitate further dovish repricing for ’25 meetings, as well as promoting cross-market gilt tightening.
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The post-CPI rally in gilts extends, with futures through initial reissuance at the 20-day EMA (97.68).

  • Contract last +93 at 97.84, vs. recent session highs of 97.85.
  • Bulls eye key near-term resistance at the September 2 low (98.11).
  • Yields 6-10bp lower, curve bull steepens.
  • 10-Year gilt yields extend yesterday’s move back below broken downtrend resistance drawn off the October ’23 peak. September 2 high (4.061%) the next downside target.
  • 2s10s and 5s30s stick within multi-week ranges.
  • 10-Year spread vs. Bunds back below 190bp, 5.5bp tighter on the day.
  • GBP3.5bln 4.00% Oct-31 supply generated strong demand.
  • BoE-dated OIS show ~25bp of easing for November, 42.5bp of cuts through year-end and 113.5bp of cuts through June ‘25, 3-11bp more dovish on the day.
  • We don’t think the BoE will entertain the idea of a 50bp cut at this juncture, given still elevated (but cooling) wage growth and services inflation.
  • The profile of cuts through the second half of ’25 still looks quite flat, despite today’s repricing.
  • Looking ahead, a more austere Budget (which the latest round of press reports has indicated is in the offing) could facilitate further dovish repricing for ’25 meetings, as well as promoting cross-market gilt tightening.