MNI China Daily Summary: Friday, February 7
LIQUIDITY: The People's Bank of China (PBOC) conducted CNY183.7 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY100.3 billion after offsetting the maturity of CNY284 billion today, according to Wind Information.
RATES: The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.7629% from 1.8115% on Thursday, Wind Information showed. The overnight repo average increased to 1.8083% from 1.8012%.
YUAN: The currency strengthened to 7.2889 against the dollar from 7.2899 on Thursday. The PBOC set the dollar-yuan central parity rate higher at 7.1699 on Friday, compared with 7.1691 set on Thursday. The fixing was estimated at 7.2801 by Bloomberg survey today.
BONDS: The yield on 10-year China Government Bonds was last at 1.5850%, up from Thursday's close of 1.5800%, according to chinamoney.com.cn.
STOCKS: The Shanghai Composite Index edged up 1.01% to 3,303.67, while the CSI300 index increased 1.30% to 3,892.70. The Hang Seng Index rose 1.16% to 21,133.54.
FROM THE PRESS: Certain Chinese firms can export goods to the U.S. via South-East Asian factories to avoid tariffs, Yicai.com has reported, citing interviews with traders. Other firms said a 10% additional charge did not harm competitiveness, but trade tensions and uncertainty caused U.S. customers to hold back orders. One Chinese firm said a 25% charge on Mexico would impact sales, given the majority of their U.S. exports went through Mexico. (Yicai)
China’s consumer market is expected to grow steadily in Q1, as the government expands its trade-in policy, according to He Yongqian, spokesperson at the Ministry of Commerce. Speaking to reporters, He highlighted household appliance and communication equipment sales increased 10% y/y during the Spring Festival, while catering enterprises increased 6.2%. The total cost of domestic travel during the holiday reached CNY677 billion, up 7.0% y/y, with the box office taking in CNY9.5 billion, a record high, He added. (Source: Securities Daily)
China’s property market shows signs of stabilising, with authorities expected to increase fiscal and financial support for the sector this year, according to Zhao Xiuchi, dean of the Real-Estate Research Institute at the Capital University of Economics and Business. Urban village transformation as well as the revitalisation of commercial housing will further balance the supply and demand relationship this year, Zhao added. Chen Wenjing, director of policy research at the China Index Research Institute, said authorities had room to reduce mortgage interest rates and transaction taxes in some places during 2025.