MNI China Daily Summary: Monday, July 29

MNI: China CFETS Yuan Index Up 0.15% In Week of Jul 26

MNI: PBOC Net Injects CNY243.37 Bln via OMO Monday

MNI: PBOC Sets Yuan Parity Higher At 7.1316 Mon; -1.56% Y/Y

CHINA PBOC CONDUCTS CNY301.57 BILLION VIA 7-DAY REVERSE REPOS MON

CHINA SETS YUAN CENTRAL PARITY AT 7.1316 MON VS 7.1270

MNI: UK BOE JUN MORTGAGE APPROVALS 59,976

MNI: UK JUN M4 MONEY SUPPLY +0.5% M/M, +1% Y/Y

Riksbank Shouldn’t Place Too Much Weight On The Q2 GDP Indicator

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

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Midday Roundup: Volatile First Half, Yields Lower Ahead FOMC

US TSY FUTURES
  • Relatively volatile first half for a FOMC session:
  • Treasury futures pared gains after higher than expected ADP employment gain of +296k (+148k est). Rates rebounded following the latest Treasury refunding announcement, auction sizes in-line with expectations but reintroducing buybacks in 2024 to smooth liquidity issues around auctions.
  • Little reaction to a minimal downward revision for the final April S&P Global US Service PMI, holding onto its at-the-time surprise increase from 52.6 to 53.6 (initial 53.7) for what is still the highest since Apr’22.
  • Rates extended highs but drew fast selling after ISM Service index data showed ongoing volatile new orders that didn't offset prior weakness (+3.9pts after -10.4pts in Mar)
  • Treasury futures have since see-sawed higher with Jun'23 10Y futures marking 116-03 high, nearing resistance of 116-08 (High Apr 12). A break would reinforce current bullish conditions and signal scope for a climb towards 116-30 (High Apr 5 / 6).
  • Fed funds implied hike for today's FOMC is currently at 22.3bp, Jun'23 cumulative +23.1bp at 5.061%. Projected rate cuts for late 2023 are back near last week's highs: November cumulative currently -22.5bp (-31.1bp on 4/25) at 4.605, Dec'23 cumulative -45.3bp (-52.1bp on 4/25) at 4.377, while, Jan'24 cumulative is at -68.5bp vs. a full three 25bp cuts last week.
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