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BOND SUMMARY

EGB/Gilt - Attention turns to the FOMC

EMERGING MARKETS

CZKPLN Approaching Key Resistance at 0.18

US TSY OPTIONS

Range in Underlying Spurring Vol Sales

USD

Extends gains against the Pound and EUR

     TOP NEWS: China's December exports rose 10.9% year-on-year, higher than
MNI's survey median forecast for a 10.0% y/y gain and below the growth rate of
12.3% in November. The rate of growth was the third highest in 2017. 
     Imports rose 4.5% from a year ago, much lower than median forecast for a
15.0% gain and well below the 17.7% rise in November. The rate of growth for
December's imports was the slowest in a year. 
     China posted a $54.69 billion trade surplus in December, higher than the
MNI survey median forecast for a $37.90 billion surplus and above November's
$40.21 billion surplus. For the full-year 2017, trade surplus fell to $422.51
billion from $509.71 billion in 2016. Exports rose 7.9% on year while imports
gained 15.9%.
     RATES: Money market rates fell. The seven-day repo average was last at
2.8961%, compared with Thursday's average of 2.9376%. The overnight repo average
was at 2.8348%, compared with Thursday's 2.8396%.
     RATES: The Ministry of Finance sold CNY10 billion in 182-day treasury bills
at a yield of 3.5258% in an auction on Friday. The yield was lower than 3.5765%
for bonds with the same maturity in the secondary market on Thursday.
     RATES: China's Ministry of Finance auctioned off CNY10 billion in 91-day
treasury bills at a yield of 3.3101% on Friday. The yield was lower than 3.3677%
for bonds with the same maturity in the secondary market yesterday.
     LIQUIDITY: The People's Bank of China injected CNY140 billion in seven-day
reverse repos and CNY130 billion in 14-day reverse repos via open-market
operations. This resulted in a net injection of CNY180 billion, as a total of
CNY90 billion in reverse repos mature on Friday. The PBOC has injected a net of
CNY40 billion via its open market operations this week.
     YUAN: The yuan gained against the U.S. dollar on Friday after the PBOC
stronger a fixing for the day. The yuan was last at 6.4723 against the U.S.
unit, compared with the closing price of 6.5088 on Thursday. The PBOC set the
yuan central parity rate against the dollar at 6.4932, stronger than Thursday's
6.5147. The PBOC has set the yuan stronger for three trading days out of five
this week.
     BONDS: The yield on benchmark 10-year China government bonds was last at
3.8998%, down from the previous close of 3.9500%.
     STOCKS: Stocks rose in Shanghai, led by property companies. The benchmark
Shanghai Composite Index gained 0.11% to close at 3,428.94. Hong Kong's Hang
Seng Index was 0.83% higher at 31,377.63.
     FROM CHINESE PRESS: China will further increase the use of yuan in
cross-border trade and profits remittance for foreign companies to increase its
acceptance in offshore markets, the 21st Century Business Herald reported
Friday. China needs to enrich forex products to attract more foreign investors,
as they may not want to hold the yuan if the currency trends weaker this year
after gaining more than 6% in 2017, the paper said.
     M2 growth may slow further to about 9.5% in 2018, extending a slowdown seen
last year, the 21st Century Business Herald reported, citing economists. Last
year's broad money-supply growth was already the slowest in 20 years, but a
global economic recovery helped revive China's exports, it said. Looking ahead,
the Chinese economy lacks solid new drivers, as innovation and productivity
gains may not be enough to offset declining and aging labor, the newspaper said.
     China is further probing entrusted loans that channeled massive
asset-management funds into risky borrowers outside the normal markets, Caixin
reported Friday. Security regulators have banned the investment of the so-called
collective asset management plans into entrusted loans and other non-standard
assets, it said. These plans are funds managed by brokerages for as much as 200
retail investors, Caixin cited unidentified sources as saying.
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
[TOPICS: M$A$$$,M$Q$$$,MBQ$$$]