MNI China Daily Summary: Friday, January 10

MNI BRIEF: China To Adopt Very Proactive Fiscal Policy-Offical

CANADA LIBERAL LEADERHIP VOTE TO REPLACE TRUDEAU SET FOR MAR 9

MNI BRIEF: PBOC Suspends Bonds Trades As Yields Drop

MNI: PBOC Net Drains CNY14.8 Bln via OMO Friday

MNI: PBOC Sets Yuan Parity Higher At 7.1891 Fri; -2.36% Y/Y

MNI: FRANCE NOV INDUSTRIAL PRODUCTION +0.2% M/M, -1.1% Y/Y

MNI: FRANCE NOV CONSUMER SPENDING +0.3% M/M, +0.3% Y/Y

MNI: NORWAY DEC CPI -0.1% M/M, +2.2% Y/Y

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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OAT: Marginal OAT Widening Following PM Announcement

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François Bayrou confirmed as the new French Prime Minister despite various French media reports pushing back against that idea over the last hour or so.

  • Far-right leader Bardella instantly notes that his party's red lines in fiscal discussions remain intact, while highlighting the need for the government to speak with other parties.
  • OAT/Bunds ~1bp wider since those headlines, no meaningful market reaction, with tensions between the government and far-right & left of the political spectrum set to remain in play.
  • Spread last 77bp vs. session lows of 75.5bp, ~1bp tighter on the day, with shallow forays below 75bp not holding in recent sessions, given the elongation of French political and fiscal risks.
  • OATs outperform by 1.5bp on the SPGB/OAT/PGB fly, with that structure edging further away from cycle lows but remaining in a downtrend, last -44bp.
  • Relative fiscal and sovereign credit rating trajectories across France and Iberia have dominated during '24.

Fig. 1: 10-Year Spain/France/Portugal Butterfly

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François Bayrou confirmed as the new French Prime Minister despite various French media reports pushing back against that idea over the last hour or so.

  • Far-right leader Bardella instantly notes that his party's red lines in fiscal discussions remain intact, while highlighting the need for the government to speak with other parties.
  • OAT/Bunds ~1bp wider since those headlines, no meaningful market reaction, with tensions between the government and far-right & left of the political spectrum set to remain in play.
  • Spread last 77bp vs. session lows of 75.5bp, ~1bp tighter on the day, with shallow forays below 75bp not holding in recent sessions, given the elongation of French political and fiscal risks.
  • OATs outperform by 1.5bp on the SPGB/OAT/PGB fly, with that structure edging further away from cycle lows but remaining in a downtrend, last -44bp.
  • Relative fiscal and sovereign credit rating trajectories across France and Iberia have dominated during '24.

Fig. 1: 10-Year Spain/France/Portugal Butterfly

Keep reading...Show less