MNI China Press Digest July 2: PBOC, FDI, Land Revenue

MNI: PBOC Net Drains CNY298 Bln Via OMO Tues; Rates Unchanged

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

MNI: PBOC Sets Yuan Parity Higher At 7.1291 Tues; -0.09% Y/Y

CHINA SETS YUAN CENTRAL PARITY AT 7.1291 TUES VS 7.1265

MNI China Daily Summary: Monday, July 1

June CPI Below Market Expectations, Headline Y/Y At 2.4%

MNI: UK JUN BRC SHOP PRICES -0.2% M/M, +0.2% Y/Y

Multivariate Core Trend Inflation Falls To Post-2020 Low

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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CONSUMER CYCLICALS
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  • Government approval (Labour well ahead on polls for July election) seems to be largest/last obstacle left for EP to close on IDS. Some comments today from shadow business secretary (bbg) but gave little away. The revised offer from EP has done legwork to address a lot of the concerns voiced thus far (not splitting business for 3yrs, no compulsory redundancies until April 2025, headquarters in London etc.).
  • Equities show confidence; up +4% today & +56% from pre-April initial bid & now only 11% shy of takeover €370 price.
  • Re. bonds, looks like market is quiet today (mids unch). We still see value on the 28s after EP affirmed an IG rating target today. Note if CoC is triggered it is a put option (at investors control) and call options for co outside that look standard in docs (B+45 or 3m/June 28 par call) - neither impacts secondary screen.
  • We do price to BBB- ratings from S&P (on standalone operating performance) after little BS progress in FY24 results. Risk is tilted to upside (S&P waits out consensus earnings recovery).
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  • Government approval (Labour well ahead on polls for July election) seems to be largest/last obstacle left for EP to close on IDS. Some comments today from shadow business secretary (bbg) but gave little away. The revised offer from EP has done legwork to address a lot of the concerns voiced thus far (not splitting business for 3yrs, no compulsory redundancies until April 2025, headquarters in London etc.).
  • Equities show confidence; up +4% today & +56% from pre-April initial bid & now only 11% shy of takeover €370 price.
  • Re. bonds, looks like market is quiet today (mids unch). We still see value on the 28s after EP affirmed an IG rating target today. Note if CoC is triggered it is a put option (at investors control) and call options for co outside that look standard in docs (B+45 or 3m/June 28 par call) - neither impacts secondary screen.
  • We do price to BBB- ratings from S&P (on standalone operating performance) after little BS progress in FY24 results. Risk is tilted to upside (S&P waits out consensus earnings recovery).