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Expiries for Jul29 NY cut 1000ET (Source DTCC)

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Price Signal Summary - USD Faces Selling Pressure

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     BEIJING (MNI) - EXCLUSIVE: Economic fundamentals will tend to support the
Chinese currency in 2020, although it could face volatility if trade talks with
the U.S. run into trouble again, a former senior official at China's foreign
exchange regulator told MNI. While a likely economic growth target of about 6%,
a growing trade surplus and the prospect of U.S. dollar weakness should all
favour the yuan, Guan Tao, former Director General of Balance of Payment at the
State Administration of Foreign Exchange (SAFE) said in an interview that the
greenback could benefit from safe-haven flows in the face of geopolitical
uncertainty, or if China's talks with the U.S. hit turbulence. 
     LIQUIDITY: The People's Bank of China (PBOC) skipped open market operations
for the 13th day, leaving liquidity unchanged, according to Wind Information.
Total liquidity in the banking system is relatively high, PBOC said.
     RATES: The seven-day weighted average interbank repo rate for depository
institutions (DR007) rose to 2.3750% from Thursday's close of 2.2544%, Wind
Information showed. The overnight repo average increased to 1.7688% from
Thursday's 1.6771%.
     YUAN: The currency strengthened to 6.9290 against the dollar from
Thursday's 6.9311 close. PBOC set the dollar-yuan central parity rate 146 bps
lower at 6.9351, strongest in five months. The parity was set at 6.9497
Thursday.
     BONDS: The yield on 10-year China Government Bonds was last at 3.1100%,
down from Thursday's close of 3.1450, according to Wind Information.
     STOCKS: The Shanghai Composite Index edged down 0.08% to 3,092.29. Hong
Kong's Hang Seng Index gained 0.27% to 28,638.20.
     FROM THE PRESS: China will open its oil and gas reserves to private
domestic companies and foreign firms, the Securities Daily reported citing a
document from the Ministry of Natural Resources. Companies registered in China
with net assets of at least CNY300 million are eligible to participate in the
energy markets. The liberalization of the energy market will challenge the three
big state-owned oil giants, namely PetroChina, Sinopec and CNOOC, the newspaper
said.
     China should tap into its smaller cities to boost auto consumption given
eastern coastal markets are increasingly saturated, the China Business News
reported citing Ding Zhangfa, an associate professor at the Economics School of
Xiamen University. The rate of increase in car ownership has fallen over the
last two years after reaching a peak of 23.04 million in 2017. The increase in
2019 was 21.22 million, lower than the level for 2016, the newspaper said.
     Nineteen Chinese provinces unveiled plans for the issuance of
special-purpose bonds in January totalling CNY606.4 billion, almost six times
that of January 2019, according to Securities Daily. 
--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]