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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessMNI China Daily Summary: Friday, February 2
POLICY: The Chinese economy is expected to grow by 5% in 2024, as consumption and manufacturing investment will likely further recover amid more proactive macroeconomic policies, and upcoming new reforms will help lift expectations, said a policy advisor in an interview with the PBOC-run magazine China Financialyst.
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY83 billion via 7-day reverse repo and CNY14 billion via 14-day reverse repo on Friday, with the rates unchanged at 1.80% and 1.95% respectively. The reverse repo operation has led to a net drain of CNY364 billion reverse repos after offsetting CNY461 billion maturity today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) rose to 1.8440% from 1.8354% on Thursday, Wind Information showed. The overnight repo average increased to 1.7189% from the previous 1.6822%.
YUAN: The currency strengthened to 7.1793 against the dollar from 7.1832 on Thursday. The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1006, compared with 7.1049 set on Thursday. The fixing was estimated at 7.1670 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 2.4250%, down from Thursday's close of 2.4320%, according to Wind Information.
STOCKS: The Shanghai Composite Index edged down 1.46% to 2,730.15, while the CSI300 index was down 1.18% to 3,179.63. The Hang Seng Index was down 0.21% to 15,533.56.
FROM THE PRESS: Authorities should guide banks to support the real economy after becoming increasingly cautious lenders, according to Yi Gang, former governor at the People’s Bank of China. Yi, speaking at a recent seminar, said officials need to increase capital investment in society, promote the use of long-term funds such as insurance, pensions, corporate annuities, and further develop equity investment. (Source: Yicai)
Farmers in China are expecting a short-term increase in pork prices during the Chinese New Year festival, according to the 21st Century Herald. The news outlet said Wumart supermarket had seen pork sales up 10% m/m last week, and analysts reported a decrease of supply due to logistic difficulties during recent bad weather. However Shi Xiangying, a pig researcher at Huarong Rongda Futures believed any price rally could fall back after the festival as demand falls and slaughter volume remains high. (Source: 21st Century Business Herald)
New yuan loans are expected to exceed CNY4 trillion in January, which would be the second highest level on record, Securities Daily reported citing analysts. Wang Qing, chief analyst at Golden Credit Rating estimated new loans will reach about CNY4.6 trillion, slightly lower than the historical high of CNY4.9 trillion over the same period last year, as banks, driven by regulators, decentralized lending in November and December last year. Aggregate finance may reach CNY5.6 trillion, about CNY400 billion less than January 2023, as the issuance of government bonds scales down, though this will be partly offset by the increasing net financing of corporate bonds, said Wang.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.