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

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

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

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J.P.Morgan Recommend Tactical Longs In GBP 5Y5Y RPI Swaps

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J.P.Morgan recommend entering tactical longs in GBP 5Y5Y RPI swaps.

  • They think “5Yx5Y will trade in a narrow 3.30-3.50% range as BoE easing will be cautious and slow and project only a limited rally in nominal yields.”
  • They go on to note that “as a medium-term view, we have a bearish bias further out the inflation curve in 10Yx10Y RPI given relative valuations and the background RPI-CPIH alignment should drag RPI forwards in the 5Y+ sector lower.”
  • “In real yield space, we have a 10s/30s real yield curve steepening bias.”
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J.P.Morgan recommend entering tactical longs in GBP 5Y5Y RPI swaps.

  • They think “5Yx5Y will trade in a narrow 3.30-3.50% range as BoE easing will be cautious and slow and project only a limited rally in nominal yields.”
  • They go on to note that “as a medium-term view, we have a bearish bias further out the inflation curve in 10Yx10Y RPI given relative valuations and the background RPI-CPIH alignment should drag RPI forwards in the 5Y+ sector lower.”
  • “In real yield space, we have a 10s/30s real yield curve steepening bias.”