Market watchers are on the lookout for a......>

CHINA: Market watchers are on the lookout for a potential move from the PBoC on

Thursday. The PBoC is expected to rollover at least some of the CNY200bn worth

of 1-Year MLF set to mature today, with a focus on the rate applied to the

operations (currently 2.95%) as some look for a cut of up to 20bp.

- Recent policymaker rhetoric has focused on "more powerful" easing and could

help to bolster sentiment ahead of a cascade of bond supply (headlined by LGFV

issuance to back local government infrastructure plans).

- A reminder that last week saw a commentary piece in the China Securities

Journal note that the PBoC may cut reverse ratio requirements for some banks,

and lower the rates of medium-term lending facilities or reverse repos as early

as this month.

- N.B. The PBoC hasn't returned to the OMO market ahead of this maturity. It

could have done so and trimmed reverse repo rates, which would have provided a

signal that the MLF rate could/will fall, although this isn't a pre-requisite

for a move in the MLF rate.